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): September 9, 2003
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)

Item 3. Bankruptcy or Receivership.
On September 9, 2003, the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the "Bankruptcy Court") confirmed the sixth amended joint plan of reorganization (the "Plan") of Conseco, Inc., an Indiana corporation ("Old Conseco").
On September 10, 2003, under the terms of the Plan, Conseco, Inc., a Delaware corporation and successor to Old Conseco (the "Company"), emerged with a new capital structure consisting of: (1) a $1.3 billion secured bank facility;
(2) new convertible preferred stock with an aggregate liquidation preference of approximately $860 million; (3) new warrants to purchase 6 million shares of common stock at an exercise price of $27.60 per share; and (4) approximately 100 million shares of new common stock. On September 15, 2003, the Company issued these securities pursuant to the terms of the Plan.
The new common stock is listed on the New York Stock Exchange ("NYSE") under the symbol "CNO," and the new warrants are listed on the NYSE under the symbol "CNO WS." The new convertible preferred stock is trading in the over the counter market under the symbol "CNSJP." The Company intends to submit a supplemental listing application to list the preferred stock on the NYSE as soon as the new preferred stock is held by at least 100 holders (one of the conditions for listing the security on the NYSE), and currently expects to receive approval for listing once this condition is satisfied and the supplemental application is approved. Old Conseco's common stock (OTCBB:CNCEQ) and all of its other securities have been cancelled.
Under the terms of the Plan, the new convertible preferred stock is being distributed to the prepetition lenders, the new warrants are being distributed to the holders of the Trust Preferred Securities commonly known as "TOPrS," and the new common stock is being distributed to the holders of the following prepetition claims: (1) bonds, which were separately classified as the Exchange Note Claims (those who had exchanged their bonds in 2002) and the Original Note Claims (those who had not); (2) general unsecured claims against Conseco, Inc.;
(3) general unsecured claims against CIHC, Incorporated (CIHC); and (4) TOPrS. The initial distribution of approximately 98 million shares of new common stock is being made as follows:
o Exchange Note Claims are receiving approximately 60.6 million shares, which corresponds to a projected recovery of approximately 72%.
o Original Note Claims are receiving approximately 32.3 million shares, which corresponds to a projected recovery of approximately 42%.
o Conseco General Unsecured Claims are receiving approximately 1 million shares, which corresponds to a projected recovery of approximately 22%.
o CIHC General Unsecured Claims are receiving approximately 1.9 million shares, which corresponds to a projected recovery of approximately 100%.
o TOPrS are receiving 1.5 million shares, which corresponds to a projected recovery of approximately 1.27% (excluding the new Conseco warrants and other collection rights).
In each case, the projected recoveries are based on an estimated value of the common stock of $16.40 per share for purposes of the plan. The initial distributions represent approximately 98% of all new common stock to be distributed under the Plan. The Company may make additional distributions to holders of prepetition bonds and/or general unsecured claims on account of disputed claims. Under the Plan, there will be only one distribution of new common stock to holders of the TOPrS.
A copy of the Plan is attached hereto as Exhibit 2.2. Pursuant to the Plan, the Company adopted an Amended and Restated Certificate of Incorporation, Amended and Restated By-laws and a Certificate of Designations with respect to the new convertible preferred stock. It also entered into a Warrant Agreement, Credit Agreement, Common Stock Registration Rights Agreement and Preferred Stock Registration Rights Agreement. Copies of each of these documents and agreements are filed as exhibits to this Current Report on Form 8-K. A copy of the final confirmation order is attached hereto as Exhibit 2.3. Related exhibits and court filings can be obtained at www.bmccorp.net/conseco.

The most recent unaudited consolidated balance sheet of the Company is included in Old Conseco's Quarterly Report on Form 10-Q for the period ended June 30, 2003, which is incorporated herein by reference.
The Company adopted "fresh-start" reporting as of its emergence from Chapter 11, in accordance with Statement of Position 90-7 "Financial Reporting by Entities in Reorganization under the Bankruptcy Code". These rules require the Company to revalue its assets and liabilities to current estimated fair value, re-establish shareholders' equity at the reorganization value determined in connection with the Plan, and record any portion of the reorganization value which cannot be attributed to specific tangible or identified intangible assets as goodwill. The adoption of fresh start accounting will have a material effect on the Company's financial statements. As a result, the Company's financial statements published for periods following September 9, 2003, will not be comparable with those of Old Conseco prepared before that date.
Item 5. Other Events.
Pursuant to Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company's common stock, par value $0.01 per share ("Common Stock"), is deemed registered under Section 12(g) of the Exchange Act. The Common Stock has also been registered under Section 12(b) of the Exchange Act in order to facilitate listing on the NYSE.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
2.2 Sixth Amended Joint Plan of Reorganization of Conseco, Inc. and its affiliated Debtors dated September 9, 2003.
2.3 Order Confirming Reorganizing Debtors' Sixth Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code dated September 9, 2003.
3.1 Amended and Restated Certificate of Incorporation of the Company.
3.2 Amended and Restated By-Laws of the Company.
4.1 Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Class A Senior Cumulative Convertible Exchangeable Preferred Stock and Qualifications, Limitations and Restrictions Thereof.
4.2 Warrant Agreement between the Company and Wachovia Bank, N.A., as Warrant Agent.
10.1 Credit Agreement dated as of September 10, 2003 among Conseco, Inc., Bank of America, N.A., as Agent, and other financial institutions.
10.2 Common Stock Registration Rights Agreement.
10.3 Preferred Stock Registration Rights Agreement.
99.1 Press release dated September 9, 2003.
99.2 Press release dated September 10, 2003.

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.
September 15, 2003

By:  /s/ John R. Kline
     ------------------------
     John R. Kline
       Senior Vice President and
       Chief Accounting Officer	

Exhibit 2.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

In re:                                            ) Chapter 11
                                                  )
Conseco, Inc., et al.,(1)                         )
                                                  ) Case No. 02 B49672
                        Debtors.                  ) Honorable Carol A. Doyle
                                                  ) (Jointly Administered)
                                                  )	

REORGANIZING DEBTORS' SIXTH AMENDED JOINT PLAN OF REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
James H.M. Sprayregen, P.C.
Anne M. Huber
Anup Sathy
Ross M. Kwasteniet
KIRKLAND & ELLIS LLP
 200 East Randolph Drive
Chicago, Illinois 60601
(312) 861-2000
Counsel for the Debtors and Debtors in Possession Dated: September 9, 2003

1 The Reorganizing Debtors are the following entities: (i) Conseco, Inc.,
(ii) CIHC, Incorporated, (iii) CTIHC, Inc., and (iv) Partners Health Group, Inc., (defined herein, collectively, as the "Debtors" or "Reorganizing Debtors"). This Plan is not a chapter 11 plan for the Finance Company Debtors (as defined herein).

TABLE OF CONTENTS

                                                                                                               Page
Article I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW..........................1
         A.       Rules of Interpretation, Computation of Time and Governing Law..................................1
         B.       Proponents of Plan..............................................................................1
         C.       Severability of Plan Provisions.................................................................1
         D.       Substantive Consolidation.......................................................................2
         E.       Defined Terms...................................................................................2
Article II. ADMINISTRATIVE AND PRIORITY TAX CLAIMS AGAINST ALL OF THE DEBTORS....................................18
         A.       Administrative Claims..........................................................................18
         B.       Priority Tax Claims............................................................................19
Article III. CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND EQUITY INTERESTS..............................19
         A.       Summary........................................................................................19
         B.       Classification and Treatment of Classified Claims and Equity Interests: CNC....................21
         C.       Classification and Treatment of Classified Claims and Equity Interests: CIHC...................25
         D.       Classification and Treatment of Classified Claims and Equity Interests: CTIHC..................30
         E.       Classification and Treatment of Classified Claims and Equity Interests:
                  Partners Health Group, Inc.....................................................................31
Article IV. ACCEPTANCE OR REJECTION OF THE PLAN..................................................................33
         A.       Voting Classes.................................................................................33
         B.       Acceptance by Impaired Classes.................................................................33
         C.       Presumed Acceptance of Plan....................................................................33
         D.       Presumed Rejection of Plan.....................................................................34
         E.       Non-Consensual Confirmation....................................................................34
Article V. MEANS FOR IMPLEMENTATION OF THE REORGANIZING SUBPLANS.................................................34
         A.       Corporate Existence and Vesting of Assets in the Reorganizing Debtors and Old CNC..............34
         B.       Cancellation of Old Notes, Old Preferred Stock and Old Common Stock............................34
         C.       Issuance of New Securities; Execution of Related Documents.....................................35
         D.       Creation of Residual Trust.....................................................................35
         E.       Liquidation of Old CNC.........................................................................35
         F.       Intercompany Settlement........................................................................35
         G.       Implementation of Senior Management KERP.......................................................36
         H.       Assumption of the Senior Management Employment Agreements......................................36
         I.       TOPrS Settlement...............................................................................36
         J.       Creation of Professional Escrow Account........................................................38
         K.       Corporate Governance, Directors and Officers, and Corporate Action.............................38
         L.       Sources of Cash for Plan Distribution..........................................................41
         M.       Retiree Benefits...............................................................................41
         N.       GM Building Sale...............................................................................41
Article VI. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................................41
         A.       Executory Contracts and Unexpired Leases.......................................................41
         B.       Claims Based on Rejection of Executory Contracts or Unexpired Leases...........................42
         C.       Cure of Defaults for Executory Contracts and Unexpired Leases Assumed..........................42
         D.       Indemnification of Directors, Officers and Employees...........................................42
         E.       Compensation and Benefit Programs..............................................................42
         F.       Assumption of D&O Insurance....................................................................43
Article VII. PROVISIONS GOVERNING DISTRIBUTIONS..................................................................43
         A.       Distributions for Claims and Equity Interests Allowed as of the Effective Date.................43
         B.       Distributions by the Distribution Agent(s).....................................................44
         C.       Delivery and Distributions and Undeliverable or Unclaimed Distributions........................44
         D.       Timing and Calculation of Amounts to be Distributed............................................45
         E.       Minimum Distribution...........................................................................45
         F.       Setoff.........................................................................................45	

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         G.       Surrender of Canceled Instruments or Securities................................................46
         H.       Failure to Surrender Canceled Instruments......................................................46
         I.       Lost, Stolen, Mutilated or Destroyed Securities................................................46
Article VIII. PROCEDURES FOR RESOLUTION OF DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS OR EQUITY INTERESTS......46
         A.       Resolution of Disputed Claims..................................................................46
         B.       Allowance of Claims and Equity Interests.......................................................47
         C.       Controversy Concerning Impairment..............................................................47
         D.       Reserve of New CNC Common Stock................................................................47
Article IX. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN....................................48
         A.       Conditions to Confirmation.....................................................................48
         B.       Conditions Precedent to Consummation...........................................................48
         C.       Waiver of Conditions...........................................................................49
         D.       Effect of Non-Occurrence of Conditions to Consummation.........................................49
Article X. RELEASE, INJUNCTIVE AND RELATED PROVISIONS............................................................49
         A.       Compromise,  Settlement and Discharge..........................................................49
         B.       Releases by the Debtors........................................................................50
         C.       Releases by Holders of Claims..................................................................50
         D.       Exculpation....................................................................................50
         E.       Preservation of Rights of Action...............................................................51
         F.       Discharge of Claims and Termination of Equity Interests........................................52
Article XI. RETENTION OF JURISDICTION............................................................................52
Article XII. MISCELLANEOUS PROVISIONS............................................................................53
         A.       Modification of Plan Supplement................................................................53
         B.       Effectuating Documents, Further Transactions and Corporation Action............................53
         C.       Dissolution of Committee(s)....................................................................53
         D.       Payment of Statutory Fees......................................................................53
         E.       Modification of Plan...........................................................................53
         F.       Revocation of Plan.............................................................................54
         G.       Successors and Assigns.........................................................................54
         H.       Reservation of Rights..........................................................................54
         I.       Section 1146 Exemption.........................................................................54
         J.       Further Assurances.............................................................................55
         K.       Service of Documents...........................................................................55
         L.       Transactions on Business Days..................................................................55
         M.       Filing of Additional Documents.................................................................55
         N.       Term of Injunctions or Stays...................................................................55
         O.       Entire Agreement...............................................................................55	

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REORGANIZING DEBTORS' SIXTH AMENDED JOINT PLAN OF REORGANIZATION PURSUANT
TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE

Pursuant to Title 11 of the United States Code, 11 U.S.C. ss.ss. 101 et seq., the Debtors and Debtors in Possession in the above-captioned and numbered cases, hereby respectfully propose the following Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code:
Article I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
A. Rules of Interpretation, Computation of Time and Governing Law
1. For purposes herein: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and the neuter gender; (b) any reference herein to a contract, instrument, release, indenture or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (c) any reference herein to an existing document or exhibit Filed, or to be Filed, shall mean such document or exhibit, as it may have been or may be amended, modified or supplemented; (d) unless otherwise specified, all references herein to Sections and Articles are references to Sections and Articles hereof or hereto; (e) the words "herein," "hereof" and "hereto" refer to the Plan in its entirety rather than to a particular portion of this Plan; (f) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation hereof; (g) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; and
(h) any term used in capitalized form herein that is not otherwise defined but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to such term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be.
2. In computing any period of time prescribed or allowed hereby, the provisions of Bankruptcy Rule 9006(a) shall apply.
3. Except to the extent that the Bankruptcy Code or Bankruptcy Rules are applicable, and subject to the provisions of any contract, instrument, release, indenture or other agreement or document entered into in connection herewith, the rights and obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.
B. Proponents of Plan
This Plan is proposed by the Reorganizing Debtors. The classification and treatment of Claims and Equity Interests against the Reorganizing Debtors is contained in Article III.
C. Severability of Plan Provisions
1. The Plan comprises four subplans of reorganization. The confirmation requirements of section 1129 of the Bankruptcy Code must be satisfied separately with respect to each subplan. If any subplan is not confirmed, the Debtors reserve the right, with the prior written consent of the Conseco Creditors Committee, to either (a) request that the other subplans be confirmed or (b) withdraw some or all subplans; provided that (i) the subplan for CIHC may not be confirmed unless the subplan for CNC is confirmed and (ii) the subplan for CNC may not be confirmed unless the subplan for CIHC is confirmed. Subject to the preceding provision, the Debtors' inability to confirm or election to withdraw any subplan(s) shall not impair the confirmation of any other subplan(s).

D. Substantive Consolidation
The estates of the Debtors have not been substantively consolidated. The Claims held solely against one of the Debtors will be satisfied solely from the cash and assets of such Debtor except as provided for herein. Except as specifically set forth herein, nothing in this Plan or the Disclosure Statement shall constitute or be deemed to constitute an admission that one of the Debtors is subject to or liable for any Claim against any other Debtor. Except as specifically set forth herein, the Claims of Creditors that hold Claims against multiple Debtors will be treated as separate Claims with respect to each Debtor's estate for all purposes (including, but not limited to, distributions and voting), and such Claims will be administered as provided in the Plan. Any Claims against any Debtor will be satisfied according to the terms of the Plan.
E. Defined Terms
Unless the context otherwise requires, the following terms shall have the following meanings when used in capitalized form herein:
1. "93/94 Notes" means, collectively, (i) 8.125% Senior Notes; and (ii) 10.5% Senior Notes.
2. "93/94 Note Claims" means all unpaid principal and interest (prepetition and postpetition) on the 93/94 Notes, through the Effective Date, plus costs and fees provided for under the indentures governing the 93/94 Notes.
3. "93/94 Notes Distribution" means, at CNC's option, (A) New CNC Common Stock issued on the Effective Date having a value (based on Plan Value) equal to the amount of the Allowed Class 4A 93/94 Note Claims, (B) the New Senior Notes issued on the Effective Date with a principal amount equal to the amount of the Allowed Class 4A 93/94 Note Claims in accordance with the terms summarized in the 93/94 Notes Term Sheet as found in the Plan Supplement or (C) some combination of (i) New CNC Common Stock (based on Plan Value) and (ii) New Senior Notes that, in the aggregate, equal the value of the Allowed Class 4A 93/94 Note Claims. The Class 4A Notice (to be mailed to holders of the 93/94 Note Claims 30 days before the Voting Deadline) will disclose whether CNC chose option (A) or option (B) for the 93/94 Notes Distribution, provided that such election shall revert to option (A) above if CFC asserts a Class 4A Claim by virtue of CFC previously satisfying the Holders of the 93/94 Notes, which is not satisfied herein.
4. "93/94 Notes Term Sheet" means that document in the Plan Supplement summarizing the new notes that may be issued pursuant to the 93/94 Notes Distribution.
5. "6.4% Original Notes" means the $250 million original principal amount 6.4% senior notes due February 10, 2003, issued by CNC, with $246,880,305 in principal and accrued but unpaid interest outstanding as of the Petition Date.
6. "6.8% Original Notes" means the $250 million original principal amount 6.8% senior medium-term notes, Series A, due June 15, 2005, issued by CNC, with $102,646,601 in principal and accrued but unpaid interest outstanding as of the Petition Date.
7. "8.5% Original Notes" means the $450 million original principal amount 8.5% senior notes due October 15, 2002, issued by CNC with $237,808,925 outstanding in principal and accrued but unpaid interest as of the Petition Date.
8. "8.75% Original Notes" means the $800 million original principal amount 8.75% senior notes due February 9, 2004, issued by CNC pursuant to the senior indenture dated as of November 13, 1997, and pursuant to prospectus supplement filed with the SEC on February 3, 2000, with $455,528,087 in principal and accrued but unpaid interest outstanding as of the Petition Date.
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9. "9.0% Original Notes" means the $550 million original principal amount 9.0% senior notes due October 15, 2006, issued by CNC, with $159,961,100 in principal and accrued but unpaid interest outstanding as of the Petition Date.
10. "10.75% Original Notes" means the $400 million original principal amount 10.75% senior notes due June 15, 2008, issued by CNC, with $39,619,881 in principal and accrued but unpaid interest outstanding as of the Petition Date.
11. "6.4% Exchange Notes" means the $14,936,000 original principal amount 6.4% senior notes due February 10, 2004, issued by CNC and guaranteed by CIHC, with $15,763,476 in principal and accrued but unpaid interest outstanding as of the Petition Date.
12. "6.8% Exchange Notes" means the $150,783,000 original principal amount 6.8% senior notes due June 15, 2007, issued by CNC and guaranteed by CIHC, with $156,092,447 in principal and accrued but unpaid interest outstanding as of the Petition Date.
13. "8.5% Exchange Notes" means the $991,000 original principal amount 8.5% senior notes due October 15, 2003, issued by CNC and guaranteed by CIHC, with $1,048,499 in principal and accrued but unpaid interest outstanding as of the Petition Date.
14. "8.75% Exchange Notes" means the $364,294,000 original principal amount 8.75% senior notes due August 9, 2006, issued by CNC and guaranteed by CIHC, with $391,889,271 in principal and accrued but unpaid interest outstanding as of the Petition Date.
15. "9.0% Exchange Notes" means the $399,200,000 original principal amount 9.0% senior notes due April 15, 2008, issued by CNC and guaranteed by CIHC, with $423,709,217 in principal and accrued but unpaid interest outstanding as of the Petition Date.
16. "10.75% Exchange Notes" means the $362,433,000 original principal amount 10.75% senior notes due June 15, 2009, issued by CNC and guaranteed by CIHC, with $382,472,525 in principal and accrued but unpaid interest outstanding as of the Petition Date.
17. "8.125% Senior Notes" means the $200,000,000 original principal amount 8.125% senior notes due February 15, 2003, issued by CNC, with $67,892,689 in principal and accrued but unpaid interest outstanding as of the Petition Date.
18. "10.5% Senior Notes" means the $200,000,000 original principal amount 10.5% senior notes due December 15, 2004, issued by CNC, with $25,855,090 in principal and accrued but unpaid interest outstanding as of the Petition Date.
19. "1997 D&O Credit Facility" means the Credit Agreement dated as of May 13, 1996 among certain officers, directors and employees of CNC and its subsidiaries, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time, including, without limitation, pursuant to the following instruments: Amended and Restated Credit Agreement dated as of August 26, 1997, Agreement dated as of September 22, 2000, Credit Agreement dated as of November 22, 2000, First Amendment dated as of August 21, 2001, First Stage Amendment and Agreement dated as of March 20, 2002, Waiver No. 1 dated as of August 14, 2002, Waiver No. 2 dated as of September 8, 2002 and Waiver No. 3 dated as of October 18, 2002. The 1997 D&O Credit Facility is guaranteed by CNC and CIHC.
20. "1998 D&O Credit Facility" means the Credit Agreement dated as of August 21, 1998 among certain officers, directors and employees of CNC and its subsidiaries, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented,
3

waived, extended, renewed, replaced or otherwise modified from time to time, including, without limitation, pursuant to the following instruments: Agreement dated as of September 22, 2000, Credit Agreement dated as of November 22, 2000, First Amendment dated as of August 21, 2001, Second Amendment dated as of December 7, 2001, First Stage Amendment and Agreement dated as of March 20, 2002, Waiver No. 1 dated as of August 14, 2002, Waiver No. 2 dated as of September 8, 2002 and Waiver No. 3 dated as of October 18, 2002. The 1998 D&O Credit Facility is guaranteed by CNC and CIHC.
21. "1998 Non-Refinanced D&O Credit Facility" means the Credit Agreement dated as of August 21, 1998 among certain officers, directors and employees of CNC and its subsidiaries, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time, including, without limitation, pursuant to the following instruments: Agreement dated as of September 22, 2000, First Stage Amendment and Agreement dated as of March 20, 2002, Waiver No. 1 dated as of August 14, 2002, Waiver No. 2 dated as of September 8, 2002 and Waiver No. 3 dated as of October 18, 2002. The 1998 Non-Refinanced D&O Credit Facility is guaranteed by CNC and CIHC.
22. "1999 D&O Credit Facility" means the Credit Agreement dated as of September 15, 1999 among certain officers, directors and employees of CNC and its subsidiaries, JPMorgan Chase Bank, as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time, including, without limitation, pursuant to the following instruments: Termination and Replacement Agreement dated as of May 30, 2000, Agreement dated as of September 22, 2000, Credit Agreement dated as of November 22, 2000, First Stage Amendment and Agreement dated as of March 20, 2002, Waiver No. 1 dated as of August 14, 2002, Waiver No. 2 dated as of September 8, 2002 and Waiver No. 3 dated as of October 18, 2002. The 1999 D&O Credit Facility is guaranteed and secured by CNC and CIHC.
23. "Accrued Professional Compensation" means, at any given moment, all accrued fees and expenses (including but not limited to success fees) for services rendered by all Professionals in the Chapter 11 Cases that the Bankruptcy Court has not denied by Final Order, to the extent such fees and expenses have not been paid regardless of whether a fee application is filed for such amount. To the extent a court denies by Final Order a Professional's fees or expenses, such amounts shall no longer be considered Accrued Professional Compensation.
24. "Administrative Claim" means a Claim for costs and expenses of administration under sections 503(b), 507(a)(1), 507(b) or 1114(e)(2) of the Bankruptcy Code, including, but not limited to: (a) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Estate and operating the business of the Debtors (such as wages, salaries or commissions for services and payments for goods and other services and leased premises); (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses awarded or allowed under sections 328, 330(a) or 331 of the Bankruptcy Code or otherwise for the period commencing on the Petition Date and ending on the Confirmation Date; and (c) all fees and charges assessed against the Estate under chapter 123 of title 28 United States Code, 28 U.S.C. ss.ss. 1911-1930.
25. "Allowed" means, with respect to Claims or Equity Interests, any Claim against or Equity Interest in a Debtor, proof of which is timely Filed, or by order of the Bankruptcy Court is not or will not be required to be Filed, any Claim or Equity Interest that has been or is hereafter listed in the Schedules as neither disputed, contingent or unliquidated, and for which no timely proof of Claim has been Filed, or (c) any Claim Allowed pursuant to the Plan; provided, however, that with respect to any Claim or Equity Interest described in clauses (a) or (b) above, such Claim or Equity Interest shall be Allowed only if (x) no objection to the allowance thereof has been interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court or (y) such an objection is so interposed and the Claim or Equity Interest shall have been Allowed by a Final Order (but only if such allowance was not solely for the purpose of voting to accept or reject the Plan). Except as otherwise specified in the Plan or a Final Order of the Bankruptcy Court, the amount of an Allowed Claim shall not include interest on such Claim from and after the Petition Date.
26. "Allowed Claim" means an Allowed Claim in the particular Class described.
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27. "Allowed Equity Interest" means an Allowed Equity Interest in the particular Class described.
28. "Allowed Lender Claims" means the Allowed Claims of the Lenders and the Lenders' Agents consisting of (a) all unpaid principal, interest, Waiver Consideration and other charges accrued through the Petition Date (including, without limitation, interest at default contract rates) in respect of the Senior Credit Facility and respective D&O Credit Facilities, together with all Claims arising from the CIHC Guarantee of Senior Credit Facility Claims, and the Guarantees of D&O Credit Facilities, plus (b) all reasonable fees and expenses (including, without limitation, the fees and expenses of counsel and financial advisors to the Lenders and Lenders' Agents), and other charges. The Claims referred to in clause (a) of the preceding sentence will be Allowed in the following amounts: (i) Senior Credit Facility: $1,537,808,635.55; (ii) 1997 D&O Credit Facility: $206,426,597.90; (iii) 1998 D&O Credit Facility:
$134,205,323.05; (iv) 1998 Non-Refinanced D&O Credit Facility: $10,133,691.23; and (v) 1999 D&O Credit Facility: $146,375,210.76; the fees and expenses referred to in clause (b) of the preceding sentence will be separately quantified through the Effective Date.
29. "Available Proceeds" means the amount of Cash received at any time by Old CNC from its liquidation of Residual Assets, after the payment in full in Cash of (a) the reasonable costs and expenses associated with the liquidation (including, without limitation, the payment of any taxes, assessments, insurance premiums, repairs, legal fees and costs, rent, storage and sales commissions), and (b) if applicable, the reasonable costs and expenses associated with the Residual Trust.
30. "B-2 Guarantee Claims" means all Claims based on or derived from the CFC guarantee of those certain certificates commonly known as "B-2 certificates".
31. "Ballots" mean the ballots accompanying the Disclosure Statement upon which Holders of Impaired Claims or Impaired Equity Interests entitled to vote shall indicate their acceptance or rejection of the Plan in accordance with the Plan and the Voting Instructions.
32. "Bankruptcy Code" means Title 11 of the United States Code and applicable portions of Titles 18 and 28 of the United States Code.
33. "Bankruptcy Court" means the United States Bankruptcy Court for the Northern District of Illinois, or any other court having jurisdiction over the Chapter 11 Cases.
34. "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as amended from time to time, as applicable to the Chapter 11 Cases, promulgated under 28 U.S.C. ss. 2075 and the General, Local and Chambers Rules of the Bankruptcy Court.
35. "Bar Date for the Reorganizing Debtors" means February 21, 2003, except as otherwise specified by order of the Bankruptcy Court.
36. "Beneficial Holder" means the Person or Entity holding the beneficial interest in a Claim or Equity Interest.
37. "Business Day" means any day, other than a Saturday, Sunday or "legal holiday" (as defined in Bankruptcy Rule 9006(a)).
38. "Cash" means cash and cash equivalents.
39. "Cause of Action" means any and all claims, causes of action, demands, rights, actions, suits, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses and franchises of any kind or character whatsoever, known, unknown, contingent or non-contingent, matured or unmatured, suspected or unsuspected, whether arising before, on or after the Petition Date, in contract or in tort, in law or in equity, or under any other theory of law. Without limiting the generality of the foregoing, when referring to Causes of Action of the Debtors or their Estates, "Causes of Action" shall include, but not be limited to (i) rights of setoff, counterclaim or recoupment and claims on contracts or for breaches of duties imposed by law; (ii) the right to object to Claims or
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Equity Interests; (iii) Claims pursuant to sections 362, 510, 542, 543, 544 through 550, or 553 of the Bankruptcy Code; and (iv) such Claims and defenses as fraud, mistake, duress and usury.
40. "CFC" means Conseco Finance Corp., a Delaware corporation.
41. "CFC/CIHC Intercompany Note" means that certain $1,460,799,080 note due May 11, 2005, issued September 9, 2000, by CFC to CIHC, with $277,376,671 in principal and accrued but unpaid interest outstanding as of the Petition Date.
42. "CFC Preferred Stock" means those 750 shares of 9% Redeemable Cumulative Preferred Stock of CFC, held by CNC, with a stated value of $1 million per share.
43. "CFC Residual Intercompany Claims" means the amount (if any) that CIHC owes to CFC on account of the CIHC/CFC Intercompany Note after setoff of the CFC/CIHC Intercompany Note.
44. "CFC Subsidiary Guarantee" means the CIHC guarantee of up to $250 million of indebtedness of CFC based on CIHC's guarantee of (i) up to $125 million of CFC residual and warehouse facilities with Lehman Brothers; and (ii) up to $125 million of CFC swingline debt and cash management facility with U.S. Bank.
45. "CFC Subsidiary Guarantee Claims" means any and all Claims derived from or based upon the CFC Subsidiary Guarantee.
46. "Chapter 11 Cases" means the chapter 11 bankruptcy proceedings filed by the Debtors on the Petition Date in the Bankruptcy Court, with case numbers 02-49671 through 02-49674.
47. "CIHC" means CIHC, Incorporated, a Delaware corporation.
48. "CIHC General Unsecured Claims Cap" means the Deemed amount of the Reorganizing Debtor General Unsecured Claims against CIHC, not to exceed $60 million in the aggregate.
49. "CIHC Guarantee of D&O Credit Facilities" means, collectively, the guarantees by CIHC of the D&O Credit Facilities.
50. "CIHC Guarantee of Exchange Notes" means those guarantees by CIHC of the Exchange Notes, pursuant to the first senior indenture and terms resolutions dated as of April 24, 2002.
51. "CIHC Guarantee of Senior Credit Facility" means that CIHC guarantee of the Senior Credit Facility.
52. "CIHC Guarantee of Senior Credit Facility Claims" means any and all Claims derived from or based upon the CIHC Guarantee of Senior Credit Facility.
53. "CIHC Unsecured Distribution Cap" means the lesser of (A) 1.00 and (B) a number equal to (i) $3.8 billion, less the Allowed Class 5A Lender Claims, divided by (ii) the sum of Allowed Class 6B Reorganizing Debtor General Unsecured Claims and Total Exchange Note Claims.
54. "CIHC Unsecured Distribution" means a percentage of the New CNC Common Stock to be issued on the Effective Date equal to the product of (1) (A) the amount of Allowed Class 6B Reorganizing Debtor General Unsecured Claims, divided by (B) $3.8 billion less the sum of (x) the Total Bank Debt Balance plus (y) the amount of Allowed Class 4A 93/94 Note Claims, multiplied by (2) the CIHC Unsecured Distribution Cap.
55. "CIHC/CFC Intercompany Note" means the $400 million original principal amount note dated May 11, 2002, issued by CIHC to CFC, with approximately $315,030,986 in principal and accrued but unpaid interest as of the Petition Date.
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56. "CIHC/CNC Intercompany Payables" means certain payables owed by CIHC to CNC, including $88,202,660 on account of cash transfers, $523,785,034 on account of intercompany notes payable, $159,087,485 on account of accrued but unpaid interest on intercompany notes and $272,600 on account of accrued but unpaid dividends on certain preferred stock.
57. "Claim" means a claim (as defined in section 101(5) of the Bankruptcy Code) against a Debtor, including, but not limited to: (a) any right to payment from a Debtor whether or not such right is reduced to judgment, liquidated, unliquidated, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (b) any right to an equitable remedy for breach of performance if such performance gives rise to a right of payment from a Debtor, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
58. "Claims Objection Bar Date" means the one hundred and eightieth day following the Confirmation Date.
59. "Class" means a category of Holders of Claims or Equity Interests as set forth in Article III herein (including, in the case of Class 5A and Class 4B, each subclass thereof).
60. "Class 4A Notice" means a notice Filed with the Bankruptcy Court that discloses the treatment of the 93/94 Notes.
61. "CNC" means Conseco Inc., an Indiana corporation.
62. "CNC Guarantee of D&O Credit Facilities" means, collectively, the guarantees by CNC of the D&O Credit Facilities.
63. "CNC Guarantees of Trust Preferred Securities" means the limited and subordinated guarantees by CNC of the Trust Preferred Securities, which guarantees were limited to the extent that the issuing Trust had funds available for such distributions.
64. "CNC Guarantee of Trust Preferred Securities Claims" means any and all Claims derived from or based upon the CNC Guarantees of Trust Preferred Securities. Pursuant to its terms, the CNC Guarantee of Trust Preferred Securities is limited to the extent the Trusts have funds available for distribution. As of the Petition Date, the Trusts had no funds available for distribution and, therefore, the CNC Guarantee of Trust Preferred Securities Claims are Allowed in the amount of $0.
65. "CNC Old CIHC Preferred Stock Interests" means any and all Interests of CNC in the Old CIHC Preferred Stock.
66. "CNC Unsecured Distribution" means a percentage of the New CNC Common Stock equal to the result of (A) the CNC Unsecured Numerator, divided by (B) $3.8 billion less (i) Allowed Class 5A Lender Claims plus (ii) the difference between Total Bank Debt Balance and Allowed Class 5A Lender Claims.
67. "CNC Unsecured Numerator" means an amount equal to the product of (A) the result of (i) $140 million (the assumed amount of Allowed Class 8A Reorganizing Debtor General Unsecured Claims) divided by (ii) the sum of (w) $140 million (the assumed amount of Allowed Class 8A Reorganizing Debtor General Unsecured Claims), (x) Allowed Class 7A Original Note Claims, (y) Total Exchange Note Claims multiplied by 1.7 and (z) Allowed Class 10A Trust Related Claims, multiplied by (B) the First Stepdown Amount, provided however that the CNC Unsecured Numerator shall not exceed $39.4 million.
68. "Confirmation" means the entry of the Confirmation Order, subject to all conditions specified in Article IX herein having been satisfied or waived pursuant to Article IX herein.
69. "Confirmation Date" means the date upon which the Confirmation Order is entered by the Bankruptcy Court in its docket, within the meaning of Bankruptcy Rules 5003 and 9021.
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70. "Confirmation Order" means the order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
71. "Confirmation Hearing" means the hearing at which the Confirmation Order is considered by the Bankruptcy Court.
72. "Conseco Creditors Committee" means the Official Committee of Unsecured Creditors of the Reorganizing Debtors.
73. "Consenting Parties" means, collectively, each Holder of a Claim (not to include any TOPrS Holder) (i) who has accepted the Plan and is a Holder in a Class that has, as a Class, voted to accept the Plan, or (ii) who (a) receives a distribution of property if the Plan is Confirmed, and (b) has not properly and timely submitted an Opt Out Notice; provided, however, that any person who is a Participant with respect to the Stock Programs, as defined in Article V.K.5 of the Plan, who is not an Ineligible Person, also defined in Article V.K.5 of the Plan, will not become a Consenting Party until such Person executes an Adjustment Agreement, as defined in Article V.K.5 of the Plan.
74. "Consummation" means the occurrence of the Effective Date.
75. "Convenience Class Claims" means (i) any Reorganizing Debtor General Unsecured Claim that is under $500 or (ii) any Reorganizing Debtor General Unsecured Claim in excess of $500, which by election of the Holder thereof pursuant to such Holder's ballot elects to have its claim reduced to an amount of $500 and to be treated in Class 9A or Class 7B.
76. "Creditor" means any Holder of a Claim.
77. "CTIHC" means CTIHC, Inc., a Delaware corporation.
78. "D&O Credit Facilities" means the 1997 D&O Credit Facility, the 1998 D&O Credit Facility, the 1998 Non-Refinanced D&O Credit Facility and the 1999 D&O Credit Facility.
79. "D&O Lenders" means those Holders of Allowed Claims based on, derived from, or under the D&O Credit Facilities.
80. "D&O Transfer Agreement" means a transfer agreement as described in Article III.C.4 hereof, to be executed on the Effective Date.
81. "Debtor" shall mean, as the context requires, any of the Reorganizing Debtors.
82. "Debtors" means the Reorganizing Debtors, as debtors in the Chapter 11 Cases.
83. "Debtors in Possession" means the Reorganizing Debtors, as debtors in possession in the Chapter 11 Cases.
84. "Declaration of Trust" means the declaration of trust to be executed and delivered by CNC and accepted by the Residual Trustee on the Effective Date in substantially the form contained in the Plan Supplement.
85. "Deemed" means, for any particular Claim, (a) the scheduled amount of the Claim, unless a proof of claim was Filed, in which case the proof of claim amount supersedes the scheduled amount, (b) the amount asserted in Filed proofs of claim for which there are not corresponding scheduled amounts, and (c) if a Filed proof of claim does not assert a sum certain the Deemed amount shall be determined by court order. In all events, if the amount of a Claim is determined or estimated for any purposes by Final Order or stipulation, then that amount shall be the Deemed amount for that Claim.
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86. "Discharged Intercompany Claims" means those intercompany claims and interests which are not Reinstated Intercompany Claims, including, but not limited to, the CNC Old CIHC Preferred Stock Interests.
87. "Disclosure Statement" means the Disclosure Statement for Plan of Reorganization of the Debtors under Chapter 11 of the Bankruptcy Code dated January 31, 2003, as amended, supplemented, or modified from time to time, describing the Plan, that is prepared and distributed in accordance with sections 1125, 1126(b) and/or 1145 of the Bankruptcy Code and Bankruptcy Rule 3018 and/or other applicable law.
88. "Disputed" means, with respect to any Claim or Equity Interest, any Claim or Equity Interest that is not Allowed.
89. "Distribution Agent" means Old CNC or entity or entities chosen by Old CNC to make or to facilitate distributions required by the Plan.
90. "Distribution Record Date" means the date for determining which Holders of Claims and Equity Interests are eligible to receive distributions hereunder, and shall be the Confirmation Date or such other date as designated in an order of the Bankruptcy Court.
91. "Effective Date" means the date selected by the Debtors and consented to by the Conseco Creditors Committee, which is a Business Day after the Confirmation Date on which: (a) no stay of the Confirmation Order is in effect, and (b) all conditions specified in Article IX herein have been (i) satisfied or
(ii) waived pursuant to Article IX.C.
92. "Entity" means an entity as defined in section 101(15) of the Bankruptcy Code.
93. "Equity Interest" means all equity interests in any of the Reorganizing Debtors, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock, together with any warrants, options or contract rights to purchase or acquire such interests at any time.
94. "Estates" means the estates of the Debtors created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.
95. "Exchange Notes" means, collectively, the (i) 8.5% Exchange Notes; (ii) 6.4% Exchange Notes; (iii) 8.75% Exchange Notes; (iv) 6.8% Exchange Notes; (v) 9.0% Exchange Notes; and (vi) 10.75% Exchange Notes.
96. "Exchange Note Claims" means any and all Claims derived from or based upon the Exchange Notes.
97. "Exchange Note Distribution" means a percentage of the New CNC Common Stock to be issued on the Effective Date equal to the result of (A) Exchange Note Numerator, divided by (B) $3.8 billion less (i) the Allowed 5A Lender Claims and plus (ii) the difference between Total Bank Debt Balance and Allowed 5A Lender Claims.
98. "Exchange Note Numerator" means an amount equal to the product of (A) the result of (i) the Total Exchange Note Claims multiplied by 1.7, divided by
(ii) the sum of (w) Allowed Class 7A Original Note Claims, plus the Total Exchange Note Claims multiplied by 1.7, multiplied by (B) the Second Stepdown Amount.
99. "File" or "Filed" means file or filed with the Bankruptcy Court in the Chapter 11 Cases.
100. "Final Decree" means the decree contemplated under Bankruptcy Rule 3022.
101. "Final Order" means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the subject matter, which has not been reversed, stayed, modified or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken,
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or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought, provided, however, that if the lower court order is not stayed, then the lower court order shall be deemed a Final Order.
102. "Finance Company Creditors' Committee" means the official committee of unsecured creditors appointed in the Finance Company Debtors' Cases.
103. "Finance Company Debtors" means Conseco Finance Corp., Conseco Finance Servicing Corp., Conseco Finance Corp. - Alabama, Conseco Finance Credit Corp., Conseco Finance Consumer Discount Company, Conseco Finance Canada Holding Company, Conseco Finance Canada Company, Conseco Finance Loan Company, Rice Park Properties Corporation, Landmark Manufactured Housing, Inc., Conseco Finance Net Interest Margin Finance Corp. I, Conseco Finance Net Interest Margin Finance Corp. II, Green Tree Finance Corp. - Two, Conseco Agency of Nevada, Inc., Conseco Agency of New York, Inc., Green Tree Floorplan Funding Corp., Conseco Agency, Inc., Conseco Agency of Alabama, Inc., Conseco Agency of Kentucky, Inc., Crum-Reed General Agency, Inc., Green Tree Finance Corp. - Five, Green Tree Residual Finance Corp. I, and Conseco Finance Credit Card Funding Corp.
104. "Finance Company Debtors' Cases" means the chapter 11 bankruptcy proceedings filed by the Finance Company Debtors.
105. "Finance Company Plan" means the plan of reorganization filed by the Finance Company Debtors in the Finance Company Debtors' Cases, as amended from time to time.
106. "First Stepdown Amount" means $3.8 billion, less (i) the Allowed Class 5A Lender Claims, (ii) the difference between (x) Total Bank Debt Balance and
(y) Allowed Lender Claims, (iii) the Allowed Class 6B Reorganizing Debtor General Unsecured Claims, (iv) the Allowed Class 4A 93/94 Note Claims and (v) the aggregate amount of the Convenience Class Claims.
107. "GM Building" means the office building commonly known as the GM Building, located at 767 5th Avenue, New York, New York 10153.
108. "Guarantees of D&O Credit Facilities" means, collectively, the CNC Guarantee of D&O Credit Facilities and CIHC Guarantee of D&O Credit Facilities.
109. "Guarantee of Senior Notes" means the CIHC Guarantee of the Senior Notes.
110. "Holder" means a Person or Entity holding an Equity Interest or Claim.
111. "Holding Company Shared Recovery Allocation Amount" means 30% of the Cash or assets in the Shared Recovery Escrow Account (as defined in the Finance Company Plan).
112. "Impaired" means with respect to any Class of Claims or Equity Interests, a Claim or Equity Interest that is impaired within the meaning of section 1124 of the Bankruptcy Code.
113. "Impaired Claim" means a Claim classified in an Impaired Class.
114. "Insurance Subsidiary" means those subsidiaries of the Debtors authorized or licensed to issue or write insurance.
115. "Lehman" means, collectively, Lehman ALI Inc., Lehman Brothers Inc., Lehman Commercial Paper Inc., and Lehman Brothers Holdings Inc. and their affiliates.
116. "Lenders' Agents" means Bank of America, N.A. and JPMorgan Chase Bank, in their respective roles as Administrative Agents under the Senior Credit Facility and D&O Credit Facilities.
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117. "Lender Claims" means any and all Claims based on or derived from the
(i) Senior Credit Facility; (ii) CIHC Guarantee of Senior Credit Facility, (iii) CNC Guarantee of D&O Credit Facilities, or (iv) CIHC Guarantee of D&O Credit Facilities.
118. "Lender Subcommittee" means a subcommittee of the Conseco Creditors Committee consisting of Bank of America, N.A., Angelo Gordon & Co. and The Bank of New York, together with JPMorgan Chase Bank as an ex officio member of such subcommittee.
119. "Lenders" means all Holders of Lender Claims, the Lenders' Agents, and their respective officers, directors, employees, agents, professionals and representatives.
120. "Management Incentive Plan" means a post-Effective Date management incentive compensation plan on terms substantially as set forth in the Plan Supplement, as such plan may be modified or supplemented after the Effective Date by the Board of Directors of New CNC.
121. "Market Value" means the then average daily closing price of New CNC Common Stock measured over the preceding 60 trading days.
122. "Master Ballots" mean the master ballots accompanying the Disclosure Statement upon which Holders of Impaired Claims or Impaired Equity Interests shall indicate their acceptance or rejection of the Plan in accordance with the Voting Instructions.
123. "Net D&O Litigation Proceeds" means the aggregate of all net proceeds and collections (net of costs, fees and expenses), whether by judgment, settlement, or otherwise, from claims based on or derived from the D&O Credit Facilities or other derivative claims brought by the Reorganized Debtors against those current or former directors and officers of the Reorganizing Debtors or Reorganized Debtors who are not eligible to participate in the programs described in Article V.K.5 below.
124. "New CNC" means a corporation that is incorporated under the laws of the State of Delaware and pursuant hereto.
125. "New CNC By-laws" means the by-laws of New CNC, substantially in the form contained in the Plan Supplement.
126. "New CNC Charter" means the Certificate of Incorporation of New CNC, substantially in the form contained in the Plan Supplement.
127. "New CNC Common Stock" means approximately 8,000,000,000 shares of common stock in New CNC, par value $.01 per share, to be authorized pursuant to the New CNC Charter of which approximately 101,000,000 shares shall be initially issued pursuant hereto on the Effective Date.
128. "New CNC Common Stock Holdback" means the New CNC Common Stock held in reserve, as of the Effective Date, for distributions to Holders of Class 4A, 8A, and 6 B Claims and Equity Interests that are Disputed or do not assert a sum certain. The Deemed amount shall determine the New CNC Common Stock Holdback.
129. "New CNC Preferred Stock" means Class A Preferred Stock of New CNC to be distributed on the Effective Date to the Holders of Allowed Claims in Classes 5A-1, 5A-2, 4B-1 and 4B-2 pursuant to the Plan with terms substantially as set forth in the Plan Supplement, and an initial liquidation preference equal to the Remaining Bank Debt Balance.
130. "New CNC Warrant Agreement" means the warrant agreement substantially in the form contained in the Plan Supplement.
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131. "New CNC Warrants" means those certain warrants of New CNC to be distributed on the Effective Date to the Holders of Allowed Claims in Class 10A, as described in Article V.I below, and substantially in the form contained in the New CNC Warrant Agreement.
132. "New Credit Facility" means a senior secured Credit Agreement among New CNC, as borrower, Bank of America, N.A., as Agent, and the Holders of Lender Claims, substantially in the form included in the Plan Supplement providing for the New Tranche A Bank Debt and the New Tranche B Bank Debt, the Security Agreement (as defined in the New Credit Facility) among New CNC, Reorganized CIHC and certain other subsidiaries of New CNC, as Guarantors, and Bank of America, N.A., as Agent, and all other documents entered into in connection therewith or contemplated thereby.
133. "New Senior Notes" means the new senior notes issued by CNC with terms substantially as set forth in the Class 4 A Notice and in the 93/94 Notes Term Sheet.
134. "New Tranche A Bank Debt" means that portion of indebtedness of New CNC under the New Credit Facility that constitutes Tranche A Term Loans as defined therein having a principal amount of $1 billion.
135. "New Tranche B Bank Debt" means that portion of the indebtedness of New CNC under the New Credit Facility that constitutes Tranche B Term Loans as defined therein in a principal amount equal to the New Tranche B Bank Debt Amount.
136. "New Tranche B Bank Debt Amount" means $300 million.
137. "Nominee" means any broker, dealer, commercial bank, trust company, savings and loan, financial institution or other nominee in whose name securities were registered or held of record on behalf of a Beneficial Holder.
138. "Non-D&O Lenders" means Holders of Allowed Lender Claims based on, derived from, or under the Senior Credit Facility.
139. "Noteholder Subcommittee" means a subcommittee of the Conseco Creditors Committee consisting of Appaloosa Management, L.P., HSBC Bank USA, and First Pacific Advisors, Inc., together with Allfirst Trust Company, N.A. as an ex officio member of such subcommittee.
140. "Official Committees" means the Conseco Creditors Committee and the TOPrS Committee.
141. "Old CIHC Common Stock" means all of the issued and outstanding shares of common stock of CIHC as of immediately prior to the Effective Date.
142. "Old CIHC Common Stock Interest" means all Equity Interests evidenced by Old CIHC Common Stock.
143. "Old CIHC Preferred Stock" means all issued and outstanding shares of preferred stock of CIHC as of immediately prior to the Effective Date.
144. "Old CNC" means CNC or any successor thereto (other than New CNC), by merger, consolidation or otherwise, on and after the Effective Date.
145. "Old CNC Common Stock" means all of the issued and outstanding shares of CNC common stock, as of immediately prior to the Effective Date.
146. "Old CNC Common Stock Interest" means all Equity Interests evidenced by Old CNC Common Stock.
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147. "Old CNC Other Preferred Stock" means all preferred Equity Interests in Old CNC that are not Series F Preferred Stock.
148. "Old CNC Other Preferred Stock Interests" means all Equity Interests evidenced by the Old CNC Other Preferred Stock.
149. "Old CNC Preferred Stock" means all Equity Interests evidenced by (i) the Old CNC Series F Preferred Stock and (ii) the Old CNC Other Preferred Stock.
150. "Old CNC Preferred Stock Interest" means all Equity Interests evidenced by Old CNC Preferred Stock.
151. "Old CNC Series F Preferred Stock" means those certain Equity Interests evidenced by Series F preferred stock in Old CNC, as of immediately prior to the Effective Date.
152. "Old CNC Series F Preferred Stock Interests" means all Equity Interests evidenced by Old CNC Series F Preferred Stock.
153. "Old CTIHC Common Stock" means all of the issued and outstanding shares of CTIHC common stock, as of immediately prior to the Effective Date.
154. "Old CTIHC Common Stock Interest" means all Equity Interests evidenced by Old CTIHC Common Stock.
155. "Old PHG Common Stock" means all of the issued and outstanding shares of PHG common stock, as of immediately prior to the Effective Date.
156. "Old PHG Common Stock Interest" means all Equity Interests evidenced by Old PHG Common Stock.
157. "Opt Out Notice" means those certain notices, approved by the Bankruptcy Court, to be sent to Holders of Allowed Class 4A, 5A, 6A, 7A, 8A, 4B, 5B, and 6B Claims, giving such Holders the option to opt out of the release provision set forth in Article X.C hereof.
158. "Original Notes Distribution" means a percentage of the New CNC Common Stock to be issued on the Effective Date equal to the result of (A) Original Notes Numerator, divided by (B) $3.8 billion less (i) the Allowed 5A Lender Claims, plus (ii) the difference between Total Bank Debt Balance and Allowed 5A Lender Claims.
159. "Original Notes" means, collectively: (i) 8.5% Original Notes; (ii) 6.4% Original Notes; (iii) 8.75% Original Notes; (iv) 6.8% Original Notes; (v) 9.0% Original Notes; and (vi) 10.75% Original Notes.
160. "Original Notes Numerator" means an amount equal to the product of (A) the result of (i) the Allowed Class 7A Original Note Claims divided by (ii) the sum of (w) Allowed Class 7A Original Note Claims, plus the Total Exchange Note Claims multiplied by 1.7, multiplied by (B) the Second Stepdown Amount.
161. "Other Priority Claims" means any and all Claims accorded priority in right of payment under section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim or an Administrative Claim.
162. "Other Secured Claims" means any and all Secured Claims against the Debtors not specifically described herein, excluding, without limiting the generality of the foregoing, the 93/94 Note Claims and the Lender Claims arising under or derived from the 1999 D&O Credit Facility.
163. "Person" means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, trustee, United States Trustee, estate,
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unincorporated organization, government, governmental unit (as defined in the Bankruptcy Code), agency, or political subdivision thereof, or other entity.
164. "Petition Date" means December 17, 2002.
165. "PHG" means Partners Health Group, Inc., an Illinois corporation.
166. "Plan" means this Joint Plan of Reorganization pursuant to Chapter 11 of the Bankruptcy Code, together with all exhibits hereto, either in its present form or as it may be altered, amended, modified or supplemented from time to time in accordance with the terms hereof, the Bankruptcy Code and the Bankruptcy Rules.
167. "Plan Supplement" means the compilation of documents and form of documents, schedules and exhibits to be Filed prior to the hearing on the Disclosure Statement, as modified or supplemented prior to the Confirmation Hearing in accordance with Article XII.A of the Plan.
168. "Plan Value" means $3.8 billion as the value of New CNC.
169. "Priority Tax Claim" means a Claim of a governmental unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.
170. "Professional Escrow Account" means an interest-bearing savings account funded and maintained by the Reorganized Debtors on and after the Effective Date solely for the purpose of paying all fees and expenses of Professionals in these Chapter 11 Cases.
171. "Professional", or collectively "Professionals" means a Person or Entity (a) employed pursuant to a Final Order in accordance with sections 327 and 1103 of the Bankruptcy Code and to be compensated for services rendered prior to the Confirmation Date, pursuant to sections 327, 328, 329, 330 and 331 of the Bankruptcy Code, or (b) for which compensation and reimbursement has been allowed by the Bankruptcy Court pursuant to section 503(b)(4) of the Bankruptcy Code.
172. "Pro Rata" means the proportion that an Allowed Claim or an Allowed Equity Interest in a particular Class bears to the aggregate amount of Allowed Claims or the aggregate number of Allowed Equity Interests in such Class.
173. "Registration Rights Agreement" means agreements entered into by New CNC for the benefit of certain holders of New CNC Preferred Stock and New CNC Common Stock, substantially in the form set forth in the Plan Supplement.
174. "Reinstated CIHC Preferred Stock" means such preferred stock issued by CIHC to certain CIHC non-debtor insurance subsidiaries, pursuant to which amounts owed to certain CIHC non-debtor insurance subsidiaries include (i) $43,387,976 owed to Bankers Life and Casualty Company, $35,300,140 owed to Conseco Annuity Assurance Company and $16,986,835 owed to Conseco Life Insurance Company on account of 1994 series preferred stock, (ii) $10,224,000 owed to Bankers Life and Casualty Company, $23,004,000 owed to Conseco Life Insurance Company and $12,780,000 owed to Washington National Insurance Company on account of 1998 series preferred stock, and (iii) $4,709,250 owed to Conseco Life Insurance Company on account of the CIHC $2.32 redeemable callable preferred stock.
175. "Reinstated CIHC Preferred Stock Dividends" means those amounts owed to certain CIHC non-debtor insurance subsidiaries on account of accrued but unpaid dividends on Reinstated CIHC Preferred Stock.
176. "Reinstated CIHC Preferred Stock Interest" means all Equity Interests evidenced by Reinstated CIHC Preferred Stock.
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177. "Reinstated Intercompany Claims" means those intercompany Claims set forth on Exhibit G to the Disclosure Statement, including, but not limited to the Reinstated CIHC Preferred Stock Dividends, plus any Claims arising from executory contracts (i) between or among the Debtors or (ii) between or among a Debtor or Debtors and an Insurance Subsidiary or Insurance Subsidiaries of the Debtors which have been assumed on or prior to the Effective Date, including but not limited to intercompany tax sharing agreements.
178. "Releasees" means all current and former officers, directors, employees, attorneys, financial advisors, accountants, investment bankers, agents and representatives of the Reorganizing Debtors and their subsidiaries except for (i) the Finance Company Debtors and (ii) the subsidiaries of the Finance Company Debtors, in each case in their capacity as such, and only if serving in one such capacity on the Petition Date or thereafter.
179. "Remaining Bank Debt Balance" means the Total Bank Debt Balance minus
(i) the aggregate initial principal amount of New Tranche A Bank Debt and New Tranche B Bank Debt and (ii) any portion of the Allowed Lender Claims paid in cash on the Effective Date under the Plan.
180. "Reorganized CIHC" means CIHC, or any successor thereto, by merger, consolidation, or otherwise, on and after the Effective Date.
181. "Reorganized Debtors" means the Reorganizing Debtors and New CNC, in each case, on or after the Effective Date.
182. "Reorganizing Debtor" shall mean, as the context requires, CIHC, CNC, CTIHC and/or PHG (collectively, the "Reorganizing Debtors").
183. "Reorganizing Debtor General Unsecured Claims" means any Claim against the Reorganizing Debtors that is not a/an: (i) Administrative Claim; (ii) Priority Tax Claim; (iii) Other Priority Claim; (iv) Other Secured Claim; (v) Secured Claim; (vi) Reinstated Intercompany Claim; (vii) 93/94 Note Claim (to the extent secured); (viii) Lender Claim; (ix) Exchange Note Claim; (x) Original Note Claim; (xi) Convenience Class Claim; (xii) Trust Related Claim; (xiii) Discharged Intercompany Claim; or (xiv) Securities Claim. Without limiting the generality of the foregoing, "Reorganizing Debtor General Unsecured Claims" includes, without limitation, the CFC Residual Intercompany Claims (after giving effect to Article VII.F hereof).
184. "Reorganizing Debtors" means CNC, CIHC, CTIHC and PHG.
185. "Reorganizing Subplans" means the individual Plans of reorganization, provided herein, for each of the Reorganizing Debtors.
186. "Residual Assets" means only the following assets of Old CNC: the Residual Subsidiaries and to the extent not included in the assets of the Residual Subsidiaries, an amount of Cash required to satisfy (a) the reasonable costs and expenses associated with the liquidation of Old CNC (including, without limitation, the payment of any taxes, assessments, insurance premiums, repairs, legal fees, Residual Trustee's fees and costs, rent, storage and sales commissions), and (b) if applicable, the reasonable costs and expenses associated with the Residual Trust.
187. "Residual Claims" means the Claims assigned to the Residual Trust pursuant to the provisions herein.
188. "Residual Share" means the authorized capital stock of Old CNC, which shall consist of a single share of common stock, no par value.
189. "Residual Subsidiaries" means those direct or indirect subsidiaries of CNC set forth on the Residual Subsidiary Schedule contained in the Plan Supplement.
190. "Residual Trust" means the grantor trust to be created on the Effective Date to hold the equity interests in Old CNC.
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191. "Residual Trustee" means Wilmington Trust Company, who will be appointed pursuant to the Declaration of Trust to serve as trustee of the Residual Trust.
192. "Schedules" mean the schedules of assets and liabilities, schedules of executory contracts, and the statement of financial affairs as the Bankruptcy Court requires the Debtors to file pursuant to section 521 of the Bankruptcy Code, the Official Bankruptcy Forms and the Bankruptcy Rules, as they may be amended and supplemented from time to time.
193. "Second Stepdown Amount" means the First Stepdown Amount less (i) the value of the CNC Unsecured Distribution and (ii) the value of the TOPrS Settlement Equity Recovery based upon Plan Value.
194. "Secured Claim" means (a) a Claim that is secured by a lien on property in which the Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, or that is subject to setoff under section 553 of the Bankruptcy Code, to the extent of the value of the Creditor's interest in the Estate's interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code, or (b) a Claim Allowed under this Plan as a Secured Claim.
195. "Securities Act" means the Securities Act of 1933, 15 U.S.C. sections 77a-77aa, as now in effect or hereafter amended, or any similar federal, state or local law.
196. "Securities Claims" means Claims of the type described in, and subject to subordination under, section 510(b) of the Bankruptcy Code, including any and all Claims whatsoever, whether known or unknown, foreseen or unforeseen, currently existing or hereafter arising, arising from rescission of a purchase or sale of a security of the Debtors or an affiliate of the Debtors, for damages arising from the purchase, sale or holding of such securities, or for reimbursement, indemnification or contribution allowed under section 502 of the Bankruptcy Code on account of such a Claim.
197. "Senior Credit Facility" means the $1,500,000,000 Five-Year Credit Agreement dated as of September 25, 1998 among CNC, Bank of America, N.A., as Agent, and the financial institutions signatory thereto, as amended, supplemented, waived or otherwise modified from time to time, including, without limitation, pursuant to the following instruments: Amendment dated as of September 22, 2000, Amendment dated as of May 30, 2001, Amendment dated as of March 20, 2002, Waiver No. 1 dated as of August 14, 2002, Waiver No. 2 dated as of September 8, 2002 and Waiver No. 3 dated as of October 18, 2002. The Senior Credit Facility is guaranteed by CIHC.
198. "Senior Management Employment Agreements" means, except as executives otherwise agree, those employment agreements included in the Plan Supplement.
199. "Senior Management KERP" means that certain key employee retention program described in the Debtors' motion for an order authorizing the Debtors to implement a key employee retention program for senior management, filed February 5, 2003, and approved by the Bankruptcy Court on February 24, 2003.
200. "Senior Note Claims" means, collectively, the (i) Exchange Note Claims and (ii) Original Note Claims.
201. "Stated Cure Amounts" means those cure amounts for contracts to be assumed by the Debtors on or prior to the Effective Date, notice of which shall be sent to affected contract counterparties no later than 10 days before the Confirmation Hearing.
202. "Stated Intercompany Cure Amounts" means those Stated Cure Amounts that relate to assumed contracts between the Debtors or between the Debtors and their subsidiaries.
203. "Subordinated Debentures" means those certain subordinated deferrable interest debentures that are held by the Trusts and issued under (A) a subordinated indenture dated November 14, 1996 from CNC to State Street Bank and Trust Company as successor trustee to Fleet National Bank, as trustee, as supplemented and (B) a
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subordinated indenture dated December 8, 1997 (as supplemented) between CNC and the First National Bank of Chicago (n/k/a Bank One), including: (i) 9.16% subordinated deferrable interest debentures dated November 14, 1996, due November 30, 2026, (ii) 8.70% subordinated deferrable interest debentures dated November 22, 1996, due November 15, 2026, (iii) 8.796% subordinated deferrable interest debentures dated March 26, 1997, due April 1, 2027, (iv) 8.70% subordinated deferrable interest debentures dated August 24, 1998, due September 30, 2028, (v) 9.00% subordinated deferrable interest debentures dated October 14, 1998, due December 31, 2028, (vi) 9.44% subordinated deferrable interest debentures dated August 31, 1999, due September of 2029, and (vii) 6.75% subordinated deferrable interest debentures due February 16, 2003.
204. "Subordinated Debenture Claims" means all Claims derived from or based upon the Subordinated Debentures.
205. "TOPrS 9019 Motion" means that certain motion Filed in the Bankruptcy Court seeking approval of the settlement as described in Article V.I hereof.
206. "TOPrS Appeals" means those appeals filed by the TOPrS Committee with respect to (i) that certain order of the Bankruptcy Court dated July 16, 2003
[docket no. 4448], granting Debtors' motion for order approving amended employment agreement with M. Bublitz; and (ii) that certain order of the Bankruptcy Court dated June 18, 2003, ordering the dismissal of the TOPrS Committee's adversary proceeding against Bank of America, N.A. and JPMorgan Chase Bank, docketed in the Bankruptcy Court as adversary proceeding number 03-A-00659.
207. "TOPrS Committee" means the Official Committee of Trust Originated Preferred Securities Holders.
208. "TOPrS Opt Out Notice" means that certain notice approved by the Bankruptcy Court, to be sent to Holder of Allowed Class 10A Claims, giving such Holders the option to opt out of the TOPrS Settlement.
209. "TOPrS Settlement D&O Litigation Recovery" means 45% of the Net D&O Litigation Proceeds, in an aggregate amount not to exceed $30 million, payable in (i) Cash, or (ii) in the sole discretion of New CNC, through the issuance of New CNC Common Stock based on the Market Value of such New CNC Common Stock at the time such payment is due and payable, on terms and conditions more fully described in Article V.I hereof.
210. "TOPrS Settlement Equity Recovery" means 1.5% of the New CNC Common Stock outstanding as of the Effective Date.
211. "TOPrS Settlement Recovery" means (i) the TOPrS Settlement D&O Litigation Recovery Amount, (ii) the TOPrS Settlement Equity Recovery and (iii) the New CNC Warrants. 212. "TOPrS Settlement Representative" means a member of the TOPrS Committee or such other representative acceptable to the Debtors designated in writing by the TOPrS Committee.
213. "Total Bank Debt Balance" means the aggregate amount of the Allowed Lender Claims, plus all interest, Waiver Consideration and accrued but unpaid interest thereon (at the contractual default rate), compounded monthly, through the Effective Date in a manner consistent with the Senior Credit Facility and D&O Credit Facilities. Such amount is intended to include all obligations under the Senior Credit Facility and the D&O Credit Facilities, and the respective guarantees thereof by CIHC that benefit from the contractual subordination of other Allowed Claims.
214. "Total Exchange Note Claims" means the aggregate of the Allowed Exchange Note Claims plus, to the extent permitted under the Bankruptcy Code, interest through the Effective Date.
215. "Trust Preferred Securities" means the following securities that have been issued by the Trusts: (i) 9.16% Trust Originated Preferred Securities, (ii) 8.70% Trust Pass-Through Securities, (iii) 8.796% Capital
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Securities, (iv) 8.70% Trust Originated Preferred Securities, (v) 9% Trust Originated Preferred Securities, (vi) 9.44% Trust Originated Preferred Securities, and (vii) 6.75% Trust Originated Preferred Securities.
216. "Trust Indenture Act" means the Trust Indenture Act of 1939, 15 U.S.C. section 77aaa, as now in effect or hereafter amended.
217. "Trust Related Claims" means collectively, (a) the Subordinated Debenture Claims and (b) the CNC Guarantee of Trust Preferred Securities, and to the extent related thereto, the Trust Preferred Securities.
218. "Trusts" means those certain Delaware business trusts which (a) issued common securities to CNC, (b) issued the Trust Preferred Securities, and (c) are the Holders of the Subordinated Debentures.
219. "Unimpaired" means, with respect to a Class of Claims or Equity Interests, a Claim or Equity Interest that is unimpaired within the meaning of section 1124 of the Bankruptcy Code.
220. "Unofficial Bank Committee" means that certain steering committee of the Lenders formed prior to the Petition Date and comprised of Bank of America, N.A., JPMorgan Chase Bank, The Bank of New York, Deutsche Bank, AG, Angelo, Gordon and Co. L.P. and General Electric Capital Corporation.
221. "Unofficial Noteholder Committee" means that certain unofficial committee of Noteholders formed prior to the Petition Date and comprised of Appaloosa Management, L.P., Barclays Bank, Calvert Group, Ltd., First Pacific Advisors, Inc., HSBC Bank USA, Metropolitan West Asset Management and Whippoorwill Associates.
222. "Voting Deadline" means June 6, 2003, as extended from time to time.
223. "Voting Instructions" means the instructions for voting on the Plan contained in the section of the Disclosure Statement entitled "SOLICITATION; VOTING PROCEDURES" and in the Ballots and the Master Ballots.
224. "Waiver Consideration" means the aggregate amount of "Waiver Consideration" as defined in each of the Waivers No. 2 dated as of September 8, 2002 with respect to the D&O Credit Facilities.
225. "Work-Down Plan" means the Conseco, Inc. 2000 Employee Stock Purchase Program Work-Down Plan, and the Conseco, Inc. 2000 Non-Employee Stock Purchase Program Work-Down Plan.
Article II.
ADMINISTRATIVE AND PRIORITY TAX CLAIMS AGAINST ALL OF THE DEBTORS
A. Administrative Claims
Subject to the provisions of sections 328, 330(a) and 331 of the Bankruptcy Code, each Holder of an Allowed Administrative Claim will be paid the full unpaid amount of such Allowed Administrative Claim in Cash (i) on the Effective Date or as soon thereafter as is practicable, (ii) if such Administrative Claim is Allowed after the Effective Date, on the date such Administrative Claim is Allowed, or as soon thereafter as is practicable, or (iii) upon such other terms as may be agreed upon by such Holder and the respective Reorganized Debtor or otherwise upon an order of the Bankruptcy Court; provided that Allowed Administrative Claims representing obligations incurred in the ordinary course of business or otherwise assumed by the Debtors pursuant to the Plan will be assumed on the Effective Date and paid or performed by the respective Reorganized Debtor when due in accordance with the terms and conditions of the particular agreements governing such obligations. The Reorganizing Debtors (and the Reorganized Debtors) are not obliged to pay Administrative Claims (other than the Administrative Claims of the U.S. Internal Revenue Service to the extent the U.S. Internal Revenue Service is entitled to assert such claims under applicable nonbankruptcy law) against any Finance Company Debtors.
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Notwithstanding anything in this Plan to the contrary, the U.S. Internal Revenue Service shall not be required to file an Administrative Claim for taxes (or penalties and interest with respect to such taxes) for a tax period after the Petition Date until the Reorganizing Debtors have first filed with the U.S. Internal Revenue Service any and all required tax returns and the time for assessment and collection of such liability, as provided under the nonbankruptcy statutory authority governing such time limits, has expired.
B. Priority Tax Claims
On the Effective Date or as soon as practicable thereafter, each Holder of an Allowed Priority Tax Claim due and payable on or prior to the Effective Date shall be paid, at the option of the respective Debtor, (a) Cash in an amount equal to the amount of such Allowed Priority Tax Claim, or (b) Cash over a six-year period from the date of assessment as provided in section 1129(a)(9)(C) of the Bankruptcy Code, with interest payable at a fixed rate determined as of the Confirmation Date by the formula provided in section 6621(a)(2) of the Internal Revenue Code and compounded daily (as provided in section 6622 of the Internal Revenue Code). Any deferred payments made pursuant to section 1129(a)(9)(C) of the Bankruptcy Code shall be by equal monthly Cash payments beginning on the first day of the calendar month following the Effective Date. The amount of any Priority Tax Claim that is not an Allowed Claim or that is not otherwise due and payable on or prior to the Effective Date, and the rights of the Holder of such Claim, if any, to payment in respect thereof shall (x) be determined in the manner in which the amount of such Claim and the rights of the Holder of such Claim would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced, (y) survive the Effective Date and Consummation of the Plan as if the Chapter 11 Cases had not been commenced, and (z) not be discharged pursuant to section 1141 of the Bankruptcy Code. If the Reorganizing Debtors substantially default on the payments of a tax due to the U.S. Internal Revenue Service under this Plan, then the total amount still owed to the U.S. Internal Revenue Service under this Plan shall become due and payable, and the U.S. Internal Revenue Service may collect such amount through the administrative and judicial collection provisions of the Internal Revenue Code or as otherwise permitted under nonbankruptcy law. In this context, "substantial default" shall mean that the Reorganizing Debtors have defaulted on a series of Plan payments to the U.S. Internal Revenue Service and have ceased making any payments under the Plan, and, after receiving notice of such default from the U.S. Internal Revenue Service, have not attempted to cure the default and satisfy their Plan obligations.
Article III.
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND EQUITY INTERESTS
A. Summary
The categories of Claims and Equity Interests listed below classify Claims and Equity Interests in or against the Reorganizing Debtors for all purposes, including voting, confirmation and distribution pursuant hereto and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Equity Interest shall be deemed classified in a particular Class only to the extent that the Claim or Equity Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Equity Interest qualifies within the description of such different Class. A Claim or Equity Interest is in a particular Class only to the extent that such Claim or Equity Interest is Allowed in that Class and has not been paid or otherwise satisfied prior to the Effective Date.
1. CNC: Summary of Classification and Treatment of Claims and Equity Interests

------------ ------------------------------------------------------ ----------------- ----------------------
Class        Claim                                                  Status            Voting Right
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
1A           Other Priority Claims                                  Unimpaired        Deemed to Accept
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2A           Other CNC Secured Claims                               Unimpaired        Deemed to Accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
3A           Reinstated Intercompany Claims                         Unimpaired        Deemed to Accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
4A           93/94 Note Claims                                      Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
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5A           Lender Claims
------------ ------------------------------------------------------ ----------------- ----------------------	

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------------ ------------------------------------------------------ ----------------- ----------------------
Class        Claim                                                  Status            Voting Right
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
                Subclass 5A-1                                       Impaired          Entitled to vote
                Subclass 5A-2                                       Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
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6A           Exchange Note Claims                                   Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
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7A           Original Note Claims                                   Impaired          Entitled to vote
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------------ ------------------------------------------------------ ----------------- ----------------------
8A           Reorganizing Debtor General Unsecured Claims           Impaired          Entitled to vote
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9A           Convenience Class Claims                               Unimpaired        Deemed to Accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
10A          Trust Related  Claims                                  Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
11A          Old CNC Preferred Stock Interests
                Subclass 11A-1                                      Impaired          Deemed to reject
                Subclass 11A-2                                      Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
12A          Old CNC Common Stock Interests                         Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------
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13A          Discharged Intercompany Claims                         Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------
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14A          Securities Claims                                      Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------	

2. CIHC: Summary of Classification and Treatment of Claims and Equity Interests

------------ ------------------------------------------------------ ----------------- ----------------------
Class        Claim                                                  Status            Voting Right
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
1B           Other Priority Claims                                  Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
2B           Other Secured Claims                                   Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
3B           Reinstated Intercompany Claims                         Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
4B           Lender Claims
                Subclass 4B-1                                       Impaired          Entitled to vote
                Subclass 4B-2                                       Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
5B           Exchange Note Claims                                   Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
6B           Reorganizing Debtor General Unsecured Claims           Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
7B           Convenience Class Claims                               Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
8B           Reinstated CIHC Preferred Stock Interests              Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
9B           Old CIHC Common Stock Interests                        Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
10B          Discharged Intercompany Claims                         Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
11B          Securities Claims                                      Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------	

3. CTIHC: Summary of Classification and Treatment of Claims and Equity Interests

------------ ------------------------------------------------------ ----------------- ----------------------
Class        Claim                                                  Status            Voting Right
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
1C           Other Priority Claims                                  Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
2C           Other Secured Claims                                   Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
3C           Reorganizing Debtor General Unsecured Claims           Impaired          Entitled to vote
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
4C           Old CTIHC Common Stock Interests                       Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------	

4. PHG: Summary of Classification and Treatment of Claims and Equity Interests

------------ ------------------------------------------------------ ----------------- ----------------------
Class        Claim                                                  Status            Voting Right
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
1D           Other Priority Claims                                  Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
2D           Other Secured Claims                                   Unimpaired        Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
3D           Reorganizing Debtor General Unsecured Claims           Impaired          Deemed to accept
------------ ------------------------------------------------------ ----------------- ----------------------
------------ ------------------------------------------------------ ----------------- ----------------------
4D           Old PHG Common Stock Interests                         Impaired          Deemed to reject
------------ ------------------------------------------------------ ----------------- ----------------------	

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B. Classification and Treatment of Classified Claims and Equity Interests: CNC
1. Class 1A--Other Priority Claims
(a) Classification: Class 1A consists of the Other Priority Claims against CNC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 1A Claims are unaltered by the Plan. Unless otherwise agreed to by the Holders of the Allowed Other Priority Claim and CNC, each Holder of an Allowed Class 1A Claim shall receive, in full and final satisfaction of such Allowed Class 1A Claim, one of the following treatments, in the sole discretion of CNC:
(i) CNC or the Distribution Agent will pay the Allowed Class 1A Claim in full in Cash on the Effective Date or as soon thereafter as is practicable; provided that, Class 1A Claims representing obligations incurred in the ordinary course of business will be paid in full in Cash when such Class 1A Claims become due and owing in the ordinary course of business; or
(ii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
(c) Voting: Class 1A is Unimpaired and the Holders of Class 1A Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1A are not entitled to vote to accept or reject the Plan.
2. Class 2A--Other Secured Claims
(a) Classification: Class 2A consists of the Other Secured Claims against CNC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Class 2A Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Class 2A Claim and CNC, each Holder of an Allowed Class 2A Claim shall receive, in full and final satisfaction of such Allowed Class 2A Claim, one of the following treatments, in the sole discretion of CNC:
(i) the Allowed Class 2A Claims shall be reinstated as an obligation of New CNC;
(ii) CNC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or further recourse against CNC; provided that, such surrender must render such Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code; or
(iii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
On the Effective Date or as soon as practicable thereafter, the Allowed Class 2A Claims of the U.S. Internal Revenue Service, if any, shall be paid, at the option of the respective Reorganizing Debtor or Reorganized Debtor, (a) Cash in an amount equal to the amount of such Allowed Class 2A Claim, or (b) Cash over a six-year period from the date of assessment of the tax to which the claim relates, with interest payable at a fixed rate determined as of the Confirmation Date by the formula provided in section 6621(a)(2) of the Internal Revenue Code and compounded daily (as provided in section 6622 of the Internal Revenue Code). Any deferred payments made pursuant to this provision of the Plan shall be by equal monthly Cash payment beginning on the first day of the calendar month following the Effective Date.
Notwithstanding any other provision of this Plan, any oversecured Allowed Class 2A Claim of the U.S. Internal Revenue Service shall be entitled to postpetition interest at the rate provided for in section 6621(a)(2) of the Internal Revenue Code up to the amount by which the value of the property securing the
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oversecured Allowed Class 2A Claim of the U.S. Internal Revenue Service exceeds the value of such claim.
The U.S. Internal Revenue Service shall retain the tax liens and rights to setoff securing its Allowed Class 2A Claims and, in the event the Reorganizing Debtors substantially default on the payment of such claims (as provided for in this Plan), then the total amount still owed to the U.S. Internal Revenue Service under this Plan shall become due and payable, and the U.S. Internal Revenue Service may collect such amount through the administrative or judicial collection provisions of the U.S. Internal Revenue Code or as otherwise permitted under nonbankruptcy law. In this context, "substantial default" shall mean that the Reorganizing Debtors have defaulted on a series of Plan payments to the U.S. Internal Revenue Service and have ceased making any payments under the Plan, and, after receiving notice of such default from the U.S. Internal Revenue Service, have not attempted to cure the default and satisfy their Plan obligations.
(c) Voting: Class 2A is Unimpaired and the Holders of Class 2A Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2A are not entitled to vote to accept or reject the Plan.
3. Class 3A--Reinstated Intercompany Claims
(a) Classification: Class 3A consists of the Reinstated Intercompany Claims against CNC.
(b) Allowance: The Reinstated Intercompany Claims are Allowed in the amount of the Reinstated CIHC Preferred Stock Dividends plus all Stated Intercompany Cure Amounts.
(c) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 3A Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of such Claim and CNC, each Allowed Class 3A Claim shall be reinstated as obligations of New CNC in full and final satisfaction of such Class 3A Claim. The relevant agreements, instruments and documents underlying Allowed Class 3A Claims will be also be unimpaired.
(d) Voting: Class 3A is Unimpaired and the Holders of Class 3A Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 3A are not entitled to vote to accept or reject the Plan.
4. Class 4A--93/94 Note Claims
(a) Classification: Class 4A consists of the 93/94 Note Claims against CNC.
(b) Treatment: Pursuant to the Class 4A Notice, in full and final satisfaction of their Claims against the Reorganizing Debtors and the Finance Company Debtors, Holders of Allowed 93/94 Note Claims shall receive a distribution specified under the Finance Company Plan and shall receive no distribution under this Plan, and shall be deemed to release all prepetition liens on any assets of, and all security interests they may have held in or against, the Debtors or any of the Debtors' Subsidiaries or their respective assets as of the Petition Date, including, but not limited to, the CFC/CIHC Intercompany Note.
(c) Voting: Class 4A is Impaired and the Holders of Class 4A Claims are entitled to vote to accept or reject the Plan.
5. Class 5A--Lender Claims
(a) Classification: Class 5A consists of two subclasses of the Lender Claims against CNC: Lender Claims under or derived from the 1999 D&O Credit Facility (Class 5A-1), which are partially Secured Claims, and all other Lender Claims (Class 5A-2).
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(b) Allowance: The respective Class 5A Claims are Allowed for all purposes of the Chapter 11 Cases, without the need to File proofs of claim, in the amount of the Allowed Lender Claims, but due to the contractual subordination of certain other Allowed Claims, distributions will be made on account of the Total Bank Debt Balance, and such Allowed Class 5A Claims and the distributions hereunder in respect of Class 5A Claims shall not be subject to offset, reduction or counterclaim in any respect.
(c) Treatment: On or as soon as practicable after the Effective Date,
(i) each Holder of an Allowed Class 5A-1 Claim shall receive on account of its Allowed Class 5A-1 Claim and its related Allowed Class 4B-1 Claim, the treatment as set forth for Class 4B-1 in Article III.C.4 below, and (ii) each Holder of an Allowed Class 5A-2 Claim shall receive on account of its Allowed Class 5A-2 Claim and its related Allowed Class 4B-2 Claim, the treatment as set forth for Class 4B-2 in Article III.C.4 below. Such treatments shall be in full and final satisfaction of all Class 5A Claims. In addition, immediately prior to the Effective Date, but subject in all respects to the immediate occurrence of the Effective Date, the Holders of Class 5A Claims shall be deemed to release all prepetition liens on and security interests in the CFC/CIHC Intercompany Note.
(d) Voting: Classes 5A-1 and 5A-2 are Impaired Classes and Holders of Class 5A-1 and 5A-2 Claims are entitled to vote separately to accept or reject the Plan.
6. Class 6A--Exchange Note Claims Against CNC
(a) Classification: Class 6A consists of the Exchange Note Claims against CNC.
(b) Allowance: The Class 6A Claims are Allowed for all purposes under this Plan, without the need to File proofs of claim, along with Class 5B Claims, in an aggregate amount of $1,370,975,431.97, but to the extent that the Holders of Exchange Note Claims are entitled to postpetition interest under the Bankruptcy Code, distributions will be made on account of the Total Exchange Note Claims. Allowed Class 6A Claims and the distributions hereunder in respect thereof shall not be subject to offset, reduction or counterclaim in any respect.
(c) Treatment: On or as soon as practicable after the Effective Date, each Holder of an Allowed Class 6A Claim shall receive in full and final satisfaction of all such Allowed Class 6A Claims, and related Allowed Class 5B Claims, the treatment set forth for Class 5B in Article III.C.5 below.
(d) Voting: Class 6A is Impaired and Holders of Class 6A Claims are entitled to vote to accept or reject the Plan.
7. Class 7A--Original Note Claims
(a) Classification: Class 7A consists of the Original Note Claims against CNC.
(b) Allowance: The Class 7A Claims are Allowed for all purposes under this Plan, without the need to file Proofs of Claim, in an aggregate amount of $1,242,444,895.76 and such Allowed Class 7A Claims and the distributions hereunder in respect thereof shall not be subject to offset, reduction or counterclaim in any respect.
(c) Treatment: On or as soon as practicable after the Effective Date, each Holder of an Allowed Class 7A Claim shall receive, in full and final satisfaction of all such Allowed Class 7A Claims, its Pro Rata share of the Original Note Distribution. In addition, Houlihan Lokey Howard & Zukin and any other professionals of the Unofficial Noteholders Committee will be paid on the Effective Date their unpaid fees and expenses (whether incurred prior to or after the Petition Date) in accordance with their prepetition engagement letters.
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(d) Voting: Class 7A is Impaired and Holders of Class 7A Claims are entitled to vote to accept or reject the Plan.
8. Class 8A - Reorganizing Debtor General Unsecured Claims
(a) Classification: Class 8A consists of the Reorganizing Debtor General Unsecured Claims against CNC.
(b) Treatment: On or as soon as practicable after the Effective Date, each Holder of an Allowed Class 8A Claim will receive, in full and final satisfaction of all such Allowed Class 8A Claims, its Pro Rata share of the CNC Unsecured Distribution.
(c) Voting: Class 8A is Impaired and Holders of Class 8A Claims are entitled to vote to accept or reject the Plan.
9. Class 9A-- Convenience Class Claims
(a) Classification: Class 9A consists of the Convenience Class Claims against CNC.
(b) Treatment: CNC will treat such Allowed Class 9A Claims in a manner that will render such Claims Unimpaired by the Bankruptcy Code. Each holder of an Allowed Class 8A Claim may elect to be treated as a Holder of an Allowed Class 9A Convenience Class Claim. Any such election must be made on the Ballot, and no Creditor can elect Class 9A Claim treatment after the Voting Deadline. Each Holder of an allowed Class 9A Claim shall receive the lesser of (i) $500 or (ii) the amount of their Allowed Class 8A Claim. Any Allowed Class 8A Claim that exceeds $500, but whose Holder elects to be treated as a Class 9A Claim shall be automatically reduced in complete satisfaction of such Class 8A Claim to the amount of distribution made on account of such Convenience Class Claim.
(c) Voting: Class 9A is Unimpaired and the Holders of Class 9A Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.
10. Class 10A-- Trust Related Claims
(a) Classification: Class 10A consists of the Trust Related Claims against CNC.
(b) Allowance: The Subordinated Debenture Claims will be Allowed in the aggregate amount of $2,019,100,000, but distributions thereon will be made to the holders of the Trust Preferred Securities.
(c) Treatment: Class 10A is deemed to reject; provided that holders of the Trust Preferred Securities shall receive the TOPrS Settlement Recovery, as set forth in Article V.I, below, in settlement of all Class 10A Claims.
Restriction on recovery: The TOPrS Settlement Recovery being offered to Class 10A is subject to contractual subordination between the Holders of the Trust Related Claims, on the one hand, and the Lender Claims and Senior Note Claims, on the other hand, and is being provided by the Holders of the Lender Claims and Senior Note Claims in order to facilitate a consensual Plan subject to and in accordance with the TOPrS Settlement. The TOPrS Settlement Recovery is being provided with the consent of the Holders of the Lender Claims and Senior Note Claims, subject to and in accordance with the TOPrS Settlement. The Debtors reserve the right (i) to request that the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy Code and/or (ii) to modify the Plan in accordance with the terms hereof.
(d) Voting: Class 10A is deemed to reject.
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11. Class 11A--Old CNC Preferred Stock Interests
(a) Classification: Class 11A consists of the two subclasses of Old CNC Preferred Stock Interests: Old CNC Series F Preferred Stock Interests (Class 11A-1) and Old CNC Other Preferred Stock Interests (Class 11A-2).
(b) Treatment: On the Effective Date Class 11A-1 and 11A-2 Interests will be cancelled and Holders thereof will not receive a distribution under the Plan in respect of such Interests.
(c) Voting: Holders of Class 11A-1 and 11A-2 Interests are conclusively deemed to reject the Plan and are not entitled to vote to accept or reject the Plan.
12. Class 12A--Old CNC Common Stock Interests
(a) Classification: Class 12A consists of the Allowed Old CNC Common Stock Interests.
(b) Treatment: On the Effective Date Class 12A Interests will be cancelled and Holders thereof will not receive a distribution under the Plan in respect of such Interests.
(c) Voting: Class 12A is Impaired and is conclusively deemed to reject the Plan. Holders of Class 12A Old CNC Common Stock Interests are not entitled to vote to accept or reject the Plan.
13. Class 13A-- Discharged Intercompany Claims
(a) Classification: Class 13A consists of the Discharged Intercompany Claims against CNC.
(b) Treatment: Class 13A Claims will be cancelled and Holders thereof will not receive a distribution under the Plan in respect of such Claims.
(c) Voting: Class 13A is Impaired and is conclusively deemed to reject the Plan. Holders of Class 13A Discharged Intercompany Claims are not entitled to vote to accept or reject the Plan.
14. Class 14A--Securities Claims
(a) Classification: Class 14A consists of the Securities Claims against CNC.
(b) Treatment: Class 14A Claims will be cancelled and Holders thereof will not receive a distribution under the Plan in respect of such Claims.
(c) Voting: Class 14A is Impaired, and is conclusively deemed to reject the Plan. Holders of Class 14A Claims are not entitled to vote to accept or reject the Plan.
C. Classification and Treatment of Classified Claims and Equity Interests:
CIHC
1. Class 1B--Other Priority Claims
(a) Classification: Class 1B consists of the Other Priority Claims against CIHC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 1B Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Other Priority Claim and CIHC, each Holder of an Allowed Class 1B Claim shall receive, in full and final satisfaction of such Allowed Class 1B Claim, one of the following treatments, in the sole discretion of CIHC:
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(i) Reorganized CIHC or such Distribution Agent will pay the Allowed Class 1B Claim in full in Cash on the Effective Date or as soon thereafter as is practicable; provided that, Class 1B Claims representing obligations incurred in the ordinary course of business will be paid in full in Cash when such Claim becomes due and owing in the ordinary course of business; or
(ii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
(c) Voting: Class 1B is Unimpaired and the Holders of Class 1B Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1B are not entitled to vote to accept or reject the Plan.
2. Class 2B--Secured Claims
(a) Classification: Class 2B consists of the Secured Claims against CIHC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Class 2B Claims are Unimpaired by the Plan. Unless otherwise agreed to by the Holder of the Allowed Class 2B Claim and CIHC, each Holder of an Allowed Class 2B Claim shall receive, in full and final satisfaction of such Allowed Class 2B Claim, one of the following treatments, in the sole discretion of CIHC:
(i) the Allowed Class 2B Claims shall be reinstated as an obligation of Reorganized CIHC;
(ii) Reorganized CIHC or such Distribution Agent shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or further recourse against CIHC, Reorganized CIHC or such Distribution Agent provided that, such surrender must render such Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code; or
(iii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code;
On the Effective Date or as soon as practicable thereafter, the Allowed Class 2B Claims of the U.S. Internal Revenue Service, if any, shall be paid, at the option of the respective Reorganizing Debtor or Reorganized Debtor, (a) Cash in an amount equal to the amount of such Allowed Class 2B Claim, or (b) Cash over a six-year period from the date of assessment of the tax to which the claim relates, with interest payable at a fixed rate determined as of the Confirmation Date by the formula provided in section 6621(a)(2) of the Internal Revenue Code and compounded daily (as provided in section 6622 of the Internal Revenue Code). Any deferred payments made pursuant to this provision of the Plan shall be by equal monthly Cash payment beginning on the first day of the calendar month following the Effective Date.
Notwithstanding any other provision of this Plan, any oversecured Allowed Class 2B Claim of the U.S. Internal Revenue Service shall be entitled to postpetition interest at the rate provided for in section 6621(a)(2) of the Internal Revenue Code up to the amount by which the value of the property securing the oversecured Allowed Class 2B Claim of the U.S. Internal Revenue Service exceeds the value of such claim.
The U.S. Internal Revenue Service shall retain the tax liens and rights to setoff securing its Allowed Class 2B Claims and, in the event the Reorganizing Debtors substantially default on the payment of such claims (as provided for in this Plan), then the total amount still owed to the U.S. Internal Revenue Service under this Plan shall become due and payable, and the U.S. Internal Revenue Service may collect such amount through the administrative or judicial collection provisions of the U.S. Internal Revenue Code or as otherwise permitted under nonbankruptcy law. In this context, "substantial default" shall mean that the Reorganizing Debtors have defaulted on a series of Plan payments to the U.S. Internal Revenue Service and have ceased making any payments under the
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Plan, and, after receiving notice of such default from the U.S. Internal Revenue Service, have not attempted to cure the default and satisfy their Plan obligations.
(c) Voting: Class 2B is Unimpaired and the Holders of Class 2B Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2B are not entitled to vote to accept or reject the Plan.
3. Class 3B--Reinstated Intercompany Claims
(a) Classification: Class 3B consists of the Reinstated Intercompany Claims against CIHC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 3B Claims are Unimpaired by the Plan. Unless otherwise agreed to by the Holder of such Claim and CIHC, each Allowed Class 3B Claim shall be reinstated by Reorganized CIHC in full and final satisfaction of such Class 3B Claim.
(c) Voting: Class 3B is Unimpaired and the Holders of Class 3B Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 3B are not entitled to vote to accept or reject the Plan.
4. Class 4B-- Lender Claims
(a) Classification: Class 4B consists of two subclasses of the Lender Claims against CIHC: Lender Claims under or derived from the 1999 D&O Credit Facility (Class 4B-1), which are partially Secured Claims, and all other Lender Claims (Class 4B-2).
(b) Allowance: The Class 4B Claims are Allowed for all purposes of the Chapter 11 Cases, without the need to File proofs of claim, in the amount of the Allowed Lender Claims, but due to the contractual subordination of certain other Allowed Claims, distributions will be made on account of the Total Bank Debt Balance, and such Allowed Class 4B Claims and the distributions hereunder in respect of Class 4B Claims shall not be subject to offset, reduction or counterclaim in any respect.
(c) Treatment: On or as soon as practicable after the Effective Date, each Holder of an Allowed Class 4B Claim shall receive on account of and in full and final satisfaction of its Allowed Class 4B Claim and its related Allowed Class 5A Claim its Pro Rata share of the (i) New Tranche A Bank Debt; (ii) the New Tranche B Bank Debt; and (iii) the New CNC Preferred Stock; provided, however, that, in connection with the compromise and settlement of the TOPrS Committee's objections to confirmation of the Plan and certain Lender Claims, and in consideration of the contributions of the Non-D&O Lenders to such compromise and the TOPrS Settlement, the amount of the New CNC Preferred Stock distributable to each D&O Lender in respect of its Lender Claims based on or derived from the D&O Credit Facilities shall be reduced by such D&O Lender's pro rata share of New CNC Preferred Stock having an initial liquidation preference of $7 million and the amount of New CNC Preferred Stock distributable to each Non-D&O Lender in respect of its Lender Claims based on or derived from the Senior Credit Facility shall be increased by such Non-D&O Lender's pro rata share of New CNC Preferred Stock having an initial liquidation preference of $7 million. CIHC will guaranty the New Tranche A Bank Debt and the New Tranche B Bank Debt and the obligations in respect thereof will be secured as contemplated by the New Credit Facility. Such treatment shall be in full and final satisfaction of all Class 4B and Class 5A Claims, and of any rights to contractual subordination of other Allowed Claims for the benefit of Class 4B and Class 5A Claims. In addition, immediately prior to the Effective Date, but subject in all respects to the immediate occurrence of the Effective Date, the Holders of Class 4B and Class 5A Claims shall be deemed to release all prepetition liens on and security interests in the CFC/CIHC Intercompany Note. In addition, the Lenders' Agents and each of the Lenders shall receive in Cash on the Effective Date an amount equal to all of its fees, expenses and other amounts (including, without limitation, all fees and expenses of counsel and financial advisors including, without limitation, Greenhill & Co., LLC) payable in connection with the Senior Credit Facility or the D&O Credit Facilities, as the case may be, including, without limitation, in
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connection with the Chapter 11 Cases, the Plan, the implementation of the Plan or any documentation relating thereto. The New Tranche A Bank Debt and New Tranche B Bank Debt shall be issued in separate tranches as follows:
(i) to Holders of Claims under the Senior Credit Facility, (ii) to Holders of Claims under or derived from the 1999 D&O Facility and (iii) to Holders of Claims under or derived from the other D&O Credit Facilities. The Lenders under the respective D&O Credit Facilities shall be deemed to have transferred to New CNC, pursuant to the terms of the D&O Transfer Agreement to be executed on the Effective Date, all loans made to the individual borrowers under the D&O Credit Facilities as a result of satisfaction of the Guarantees of D&O Credit Facilities and all rights and remedies in respect thereof to New CNC, and all amounts paid by such borrowers (net of the TOPrS Settlement D&O Litigation Recovery, regardless of whether such amounts are paid in cash or New CNC Stock under the terms of the TOPrS Settlement) shall be applied to the loans under the New Credit Facility as set forth in the New Credit Facility.
(d) Voting: Classes 4B-1 and 4B-2 are Impaired Classes and Holders of Class 4B-1 and 4B-2 Claims are entitled to vote separately to accept or reject the Plan.
5. Class 5B-- Exchange Note Claims
(a) Classification: Class 5B consists of the Exchange Note Claims against CIHC.
(b) Allowance: Notwithstanding any provision to the contrary contained in this Plan, the Class 5B Claims shall be deemed Allowed Class 5B Claims for all purposes of the Chapter 11 Cases, without the need to File proofs of claim, along with Class 6A Claims, in an aggregate amount of $1,370,975,431.97, but to the extent that the Holders of Exchange Note Claims are entitled to postpetition interest under the Bankruptcy Code, distributions will be made on account of the Total Exchange Note Claims.
(c) Treatment: Each Holder of an Allowed Class 5B Claim shall receive in full and final satisfaction of all such Allowed Class 6A and Class 5B Claims, its Pro Rata share of (i) the Exchange Note Distribution on or as soon as practicable after the Effective Date, and (ii) any Available Proceeds, when and if such proceeds are available, as determined by the Residual Trustee. In addition, Houlihan Lokey Howard & Zukin and any other professionals of the Unofficial Noteholders Committee will be paid on the Effective Date the unpaid fees and expenses (whether incurred prior to or after the Petition Date) in accordance with their prepetition engagement letters.
(d) Voting: Class 5B is Impaired and is entitled to vote to accept or reject the Plan.
6. Class 6B--Reorganizing Debtor General Unsecured Claims
(a) Classification: Class 6B consists of the Reorganizing Debtor General Unsecured Claims against CIHC, including the CIHC/CFC Intercompany Note.
(b) Treatment: On or as soon as practicable after the Effective Date, each Holder of an Allowed Class 6B Claim shall receive in full and final satisfaction of such Class 6B Claims, its Pro Rata share of the CIHC Unsecured Distribution.
(c) Voting: Class 6B is Impaired and Holders of Class 6B Claims are entitled to vote to accept or reject the Plan.
7. Class 7B-- Convenience Class Claims
(a) Classification: Class 7B consists of the Convenience Class Claims against CIHC.
(b) Treatment: CIHC will treat such Allowed 7B Claims in a manner that will render such Claims Unimpaired under the Bankruptcy Code. Each Holder of an Allowed Class 6B General Unsecured
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Claim may elect to be treated as a Holder of an Allowed Class 7B Convenience Class Claim. Any such election must be made on the Ballot, and no Creditor can elect Class 7B Claim treatment after the Voting Deadline. Each Holder of an Allowed Class 7B Claim shall receive the lesser of (i) $500 or (ii) the amount of their Allowed Class 6B Claim. Any Allowed Class 6B Claim that exceeds $500 but whose Holder elects to be treated as a Class 7B Claim shall be automatically reduced in complete satisfaction of such Class 6B Claim to the amount of distribution made on account of such Convenience Class Claim.
(c) Voting: Class 7B is Unimpaired and the Holders of Class 7B Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.
8. Class 8B--Reinstated CIHC Preferred Stock Interests
(a) Classification: Class 8B consists of the Reinstated CIHC Preferred Stock Interests.
(b) Treatment: Reorganized CIHC will reinstate the Allowed Reinstated CIHC Preferred Stock Interests.
(c) Voting: Class 8B is Unimpaired and the Holders of Class 8B Interests are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Interests in Class 8B are not entitled to vote to accept or reject the Plan.
9. Class 9B--Old CIHC Common Stock Interests
(a) Classification: Class 9B consists of the Old CIHC Common Stock Interests.
(b) Treatment: Reorganized CIHC will reinstate the Allowed Old CIHC Common Stock Interests.
(c) Voting: Class 9B is Unimpaired and the Holders of Class 9B Old Common Stock Interests are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Interests in Class 9B are not entitled to vote to accept or reject the Plan.
10. Class 10B-- Discharged Intercompany Claims
(a) Classification: Class 10B consists of the Discharged Intercompany Claims against CIHC.
(b) Treatment: Class 10B Claims will be cancelled and the Holders thereof will receive no distribution under the Plan in respect of such Claims.
(c) Voting: Class 10B is Impaired and is conclusively deemed to reject the Plan. Holders of Class 10B Discharged Intercompany Claims are not entitled to vote to accept or reject the Plan.
11. Class 11B--Securities Claims
(a) Classification: Class 11B consists of the Securities Claims against CIHC.
(b) Treatment: Class 11B will be cancelled and the Holders thereof will receive no distribution under the Plan in respect of such Claims.
(c) Voting: Class 11B is Impaired, and is conclusively deemed to reject the Plan. Holders of Class 11B Claims are not entitled to vote to accept or reject the Plan.
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D. Classification and Treatment of Classified Claims and Equity Interests:
CTIHC
1. Class 1C--Other Priority Claims
(a) Classification: Class 1C consists of the Other Priority Claims against CTIHC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 1C Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Other Priority Claim and CTIHC, each Holder of an Allowed Class 1C Claim shall receive, in full and final satisfaction of such Allowed Class 1C Claim, one of the following treatments, in the sole discretion of CTIHC:
(i) the Distribution Agent will pay the Allowed Class 1C Claim in full in Cash on the Effective Date or as soon thereafter as is practicable, provided that, Class 1C Claims representing obligations incurred in the ordinary course of business will be paid in full in Cash when such Class 1C Claims become due and owing in the ordinary course of business; or
(ii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
(c) Voting: Class 1C is Unimpaired and the Holders of Class 1C Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1C are not entitled to vote to accept or reject the Plan.
2. Class 2C--Secured Claims
(a) Classification: Class 2C consists of the Secured Claims against CTIHC.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Class 2C Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Class 2C Claim and CTIHC, each Holder of an Allowed Class 2C Claim shall receive, in full and final satisfaction of such Allowed Class 2C Claim, one of the following treatments, in the sole discretion of CTIHC:
(i) the Allowed Class 2C Claims shall be reinstated as an obligation of Reorganized CTIHC;
(ii) CTIHC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against CTIHC or Reorganized CTIHC, provided that, such surrender must render such Claim Unimpaired pursuant to Section 1124 of the Bankruptcy Code; or
(iii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
On the Effective Date or as soon as practicable thereafter, the Allowed Class 2C Claims of the U.S. Internal Revenue Service, if any, shall be paid, at the option of the respective Reorganizing Debtor or Reorganized Debtor, (a) Cash in an amount equal to the amount of such Allowed Class 2C Claim, or (b) Cash over a six-year period from the date of assessment of the tax to which the claim relates, with interest payable at a fixed rate determined as of the Confirmation Date by the formula provided in section 6621(a)(2) of the Internal Revenue Code and compounded daily (as provided in section 6622 of the Internal Revenue Code). Any deferred payments made pursuant to this provision of the Plan shall be by equal monthly Cash payment beginning on the first day of the calendar month following the Effective Date.
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Notwithstanding any other provision of this Plan, any oversecured Allowed Class 2C Claim of the U.S. Internal Revenue Service shall be entitled to postpetition interest at the rate provided for in section 6621(a)(2) of the Internal Revenue Code up to the amount by which the value of the property securing the oversecured Allowed Class 2C Claim of the U.S. Internal Revenue Service exceeds the value of such claim.
The U.S. Internal Revenue Service shall retain the tax liens and rights to setoff securing its Allowed Class 2C Claims and, in the event the Reorganizing Debtors substantially default on the payment of such claims (as provided for in this Plan), then the total amount still owed to the U.S. Internal Revenue Service under this Plan shall become due and payable, and the U.S. Internal Revenue Service may collect such amount through the administrative or judicial collection provisions of the U.S. Internal Revenue Code or as otherwise permitted under nonbankruptcy law. In this context, "substantial default" shall mean that the Reorganizing Debtors have defaulted on a series of Plan payments to the U.S. Internal Revenue Service and have ceased making any payments under the Plan, and, after receiving notice of such default from the U.S. Internal Revenue Service, have not attempted to cure the default and satisfy their Plan obligations.
(c) Voting: Class 2C is Unimpaired and the Holders of Class 2C Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2C are not entitled to vote to accept or reject the Plan.
3. Class 3C -- Reorganizing Debtor General Unsecured Claims against CTIHC
(a) Classification: Class 3C consists of the Reorganizing Debtor General Unsecured Claims against CTIHC.
(b) Treatment: If there are any Allowed Class 3C Claims, Holders thereof will receive a Pro Rata share of the Old CTIHC Common Stock.
(c) Voting: Class 3C is Impaired and Holders of Class 3C Reorganizing Debtor General Unsecured Claims are entitled to vote to accept or reject the Plan.
4. Class 4C-- Old CTIHC Common Stock Interests
(a) Classification: Class 4C consists of the Old CTIHC Common Stock Interests.
(b) Treatment: Class 4C Interests will be allocated to the Holders of Allowed Class 3C Claims, if any, and if none, shall be held by Reorganized CIHC.
(c) Voting: Class 4C is Impaired and is conclusively deemed to reject the Plan. Holders of Class 4C Old CTIHC Common Stock Interests are not entitled to vote to accept or reject the Plan.
E. Classification and Treatment of Classified Claims and Equity Interests:
Partners Health Group, Inc.
1. Class 1D--Other Priority Claims
(a) Classification: Class 1D consists of the Other Priority Claims against PHG.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Class 1D Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Other Priority Claim and PHG, each Holder of an Allowed Class 1D Claim shall receive, in full and final satisfaction of such Allowed Class 1D Claim, one of the following alternative treatments, in the sole discretion of PHG:
(i) the Distribution Agent will pay the Allowed Class 1D Claim in full in Cash on the Effective Date or as soon thereafter as is practicable, provided that, Class 1D Claims
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representing obligations incurred in the ordinary course of business will be paid in full in Cash when such Class 1D Claims become due and owing in the ordinary course of business; or
(ii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
(c) Voting: Class 1D is Unimpaired and the Holders of Class 1D Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1D are not entitled to vote to accept or reject the Plan.
2. Class 2D--Secured Claims
(a) Classification: Class 2D consists of the Secured Claims against PHG.
(b) Treatment: The legal, equitable and contractual rights of the Holders of Class 2D Claims are unaltered by the Plan. Unless otherwise agreed to by the Holder of the Allowed Class 2D Claim and PHG, each Holder of an Allowed Class 2D Claim shall receive, in full and final satisfaction of such Allowed Class 2D Claim, one of the following alternative treatments, in the sole discretion of PHG:
(i) the Allowed Class 2D Claims shall be reinstated as an obligation of Reorganized PHG;
(ii) the Distribution Agent shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against PHG or Reorganized PHG, provided that, such surrender must render such Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code; or
(iii) such Claim will be treated in any other manner so that such Claim shall otherwise be rendered Unimpaired pursuant to section 1124 of the Bankruptcy Code.
On the Effective Date or as soon as practicable thereafter, the Allowed Class 2D Claims of the U.S. Internal Revenue Service, if any, shall be paid, at the option of the respective Reorganizing Debtor or Reorganized Debtor, (a) Cash in an amount equal to the amount of such Allowed Class 2D Claim, or (b) Cash over a six-year period from the date of assessment of the tax to which the claim relates, with interest payable at a fixed rate determined as of the Confirmation Date by the formula provided in section 6621(a)(2) of the Internal Revenue Code and compounded daily (as provided in section 6622 of the Internal Revenue Code). Any deferred payments made pursuant to this provision of the Plan shall be by equal monthly Cash payment beginning on the first day of the calendar month following the Effective Date.
Notwithstanding any other provision of this Plan, any oversecured Allowed Class 2D Claim of the U.S. Internal Revenue Service shall be entitled to postpetition interest at the rate provided for in section 6621(a)(2) of the Internal Revenue Code up to the amount by which the value of the property securing the oversecured Allowed Class 2D Claim of the U.S. Internal Revenue Service exceeds the value of such claim.
The U.S. Internal Revenue Service shall retain the tax liens and rights to setoff securing its Allowed Class 2D Claims and, in the event the Reorganizing Debtors substantially default on the payment of such claims (as provided for in this Plan), then the total amount still owed to the U.S. Internal Revenue Service under this Plan shall become due and payable, and the U.S. Internal Revenue Service may collect such amount through the administrative or judicial collection provisions of the U.S. Internal Revenue Code or as otherwise permitted under nonbankruptcy law. In this context, "substantial default" shall mean that the Reorganizing Debtors have defaulted on a series of Plan payments to the U.S. Internal Revenue Service and have ceased making any payments under the Plan, and, after receiving notice of such default from the U.S. Internal Revenue Service, have not attempted to cure the default and satisfy their Plan obligations.
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(c) Voting: Class 2D is Unimpaired and the Holders of Class 2D Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2D are not entitled to vote to accept or reject the Plan.
3. Class 3D-- Reorganizing Debtor General Unsecured Claims against PHG
(a) Classification: Class 3D consists of the Reorganizing Debtor General Unsecured Claims against PHG.
(b) Treatment: Class 3D Claims will voluntarily waive any right to receive a distribution under the Plan.
(c) Voting: CIHC is the only creditor in Class 3D and approves of its treatment under this subplan.
4. Class 4D-- Old PHG Common Stock Interests
(a) Classification: Class 4D consists of the Old PHG Common Stock Interests.
(b) Treatment: PHG is a Residual Subsidiary and the Old PHG Common Stock will be transferred to the Residual Trust.
(c) Voting: CIHC is the indirect parent of PHG. CIHC and intermediate holding company approve of their treatment under this subplan.
Article IV.
ACCEPTANCE OR REJECTION OF THE PLAN
A. Voting Classes
Each Holder of an Allowed Claim or Allowed Equity Interest in Classes 4A, 5A-1, 5A-2, 6A, 7A, 8A, 4B-1, 4B-2, 5B, 6B and 3C shall be entitled to vote to accept or reject the Plan.
B. Acceptance by Impaired Classes
An Impaired Class of Claims shall have accepted the Plan if (a) the Holders
(other than any Holder designated under section 1126(e) of the Bankruptcy Code)
of at least two-thirds in amount of the Allowed Claims actually voting in such Class have voted to accept the Plan and (b) the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of more than one-half in number of the Allowed Claims actually voting in such Class have voted to accept the Plan. An Impaired Class of Equity Interests shall have accepted the Plan if Holders (other than any Holder designated under Section 1126(e) of the Bankruptcy Code) that hold at least two-thirds in amount of the Allowed Equity Interests actually voting in such Class have voted to accept the Plan.
C. Presumed Acceptance of Plan
Classes 1A, 2A, 3A, 9A, 1B, 2B, 3B, 7B, 8B, 9B, 1C, 2C, 1D, and 2D are Unimpaired under the Plan, and, therefore, are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.
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D. Presumed Rejection of Plan
Except as otherwise stated herein, Classes 10A, 11A, 12A, 13A, 14A, 10B, 11B, 4C and 4D are Impaired and shall receive no distributions, and, therefore, are presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.
E. Non-Consensual Confirmation
The Debtors will seek Confirmation of the Plan under section 1129(b) of the Bankruptcy Code with respect to the Impaired Classes presumed to reject the Plan, and reserve the right to do so with respect to any other rejecting Class and/or to modify the Plan in accordance with Article X.E hereof.
Article V.
MEANS FOR IMPLEMENTATION OF THE REORGANIZING SUBPLANS
A. Corporate Existence and Vesting of Assets in the Reorganizing Debtors and Old CNC
1. On the Effective Date: (i) Old CNC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Indiana and its Articles of Incorporation and By-laws; provided that the Articles of Incorporation shall be amended and restated to limit Old CNC's activity to the implementation of the Plan, the liquidation of its Residual Assets and the winding-up of its affairs; (ii) New CNC shall exist as a separate corporate entity and initially as a wholly-owned subsidiary of Old CNC, with all corporate powers in accordance with the laws of the State of Delaware, the New CNC Charter and the New CNC By-laws; and (iii) (1) the Residual Trust shall be settled and exist as a grantor trust and/or liquidating trust under the laws of the State of Delaware and pursuant to the Declaration of Trust; (2) Reorganized CIHC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Delaware and its existing charter and by-laws; (3) Reorganized CTIHC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Delaware and its existing charter and by-laws; and (4) Reorganized PHG shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Illinois and its existing charter and by-laws.
2. Except as otherwise contemplated by the Plan, on and after the Effective Date, all property of the Estate, and any property retained or acquired by the Debtors, Reorganizing Debtors or Reorganized Debtors under the Plan, shall vest in the respective Debtor, Reorganizing Debtor or Reorganized Debtor free and clear of all Claims, liens, charges, or other encumbrances. On and after the Effective Date, each Debtor or Reorganized Debtor may operate its business and may use, acquire or dispose of property and compromise or settle any Claims or Equity Interests, without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the Confirmation Order.
3. On the Effective Date, all assets of Old CNC, other than the Residual Assets, shall be transferred by Old CNC to New CNC in exchange for the New CNC Common Stock, New CNC Preferred Stock, New CNC Warrants and the assumption of the New Tranche A Bank Debt and the New Tranche B Bank Debt.
B. Cancellation of Old Notes, Old Preferred Stock and Old Common Stock
On the Effective Date, except to the extent otherwise expressly provided herein, all notes, instruments, certificates, and other documents evidencing the
(i) Senior Credit Facility, (ii) Exchange Notes, (iii) Original Notes, (iv) Subordinated Debentures, (v) 93/94 Notes, (vi) Old CNC Common Stock, and (vii) Old CNC Preferred Stock and any and all other Claims and Equity Interests shall be canceled and the obligations of the Reorganizing Debtors or Reorganized Debtors thereunder or in any way related thereto shall be discharged. On the Effective Date, except to the extent otherwise expressly provided herein, any indenture or similar instrument relating to any of the foregoing shall be deemed to be canceled, as permitted by section 1123(a)(5)(F) of the Bankruptcy Code, and the
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obligations of the respective Reorganizing Debtors or Reorganized Debtors thereunder, shall be discharged and no such obligations will be assumed by the Reorganized Debtors.
C. Issuance of New Securities; Execution of Related Documents
1. On or as soon as practicable after the Effective Date, the Reorganized Debtors shall distribute or issue all securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Plan, including, without limitation, (i) the New Credit Facility, (ii) New CNC Common Stock, (iii) New CNC Preferred Stock, and (iv) New CNC Warrants, each of which shall be distributed as provided herein. The Reorganized Debtors shall execute and deliver such other agreements, documents and instruments as are required to be executed pursuant to the terms hereof.
2. On the Effective Date, Old CNC shall issue the Residual Share to the Residual Trust.
3. The Debtors and New CNC (and each of their respective affiliates, agents, directors, officers, employees, advisors and attorneys), the Unofficial Noteholders' Committee, the Unofficial Lenders' Committee, and the Official Committees, and each of the members of such committees (and each of their respective affiliates, agents, directors, officers, employees, advisors, and attorneys) have, and upon confirmation of this Plan will be deemed to have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the distributions of the securities under this Plan, and therefore are not, and on account of such distributions will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of this Plan or such distributions made pursuant to this Plan.
D. Creation of Residual Trust
On the Effective Date the Residual Trust shall be settled and exist as a grantor trust and/or liquidating trust under the laws of the State of Delaware and pursuant to the Declaration of Trust. The sole asset of the Residual Trust shall be the Residual Share.
E. Liquidation of Old CNC
On or as soon as practicable after the Effective Date, Old CNC will be liquidated and go out of existence under applicable state law. Thus, the Residual Trust will hold the Residual Assets directly.
F. Intercompany Settlement
1. Except as otherwise explicitly provided herein, as between the Finance Company Debtors and their affiliates, on the one hand, and the Reorganizing Debtors and their affiliates, on the other hand, there shall be no distributions made on account of prepetition intercompany claims, including intercompany notes (including the CFC/CIHC Intercompany Note and the CIHC/CFC Intercompany Note) and unpaid interest thereon.
2. The Finance Company Debtors shall have (i) an Allowed Class 8A General Unsecured Claim of $70 million against CNC and (ii) an Allowed Class 6B General Unsecured Claim against CIHC equal to $38 million less the value (based on Plan Value) on the Effective Date of New CNC Common Stock received on account of their $70 million Allowed Class 8A General Unsecured Claim on the Effective Date. Other than such New CNC Common Stock received on the Effective Date, the Finance Company Debtors shall not be entitled to any other recovery on account of such Class 8A General Unsecured Claims.
3. The Reorganizing Debtors shall be entitled to receive the Holding Company Shared Recovery Allocation Amount.
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4. The Reorganizing Debtors and their affiliates do not waive and shall not be deemed to have waived their rights to receive payment on account of any B-2 Guarantee Claims they may hold.
5. The Reorganizing Debtors and their Affiliates and the Finance Company Debtors and their Affiliates shall mutually release each other from any and all Claims (as defined in section 101(5) of the Bankruptcy Code), obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative Claims asserted on behalf of such party, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity or otherwise, that the party or its subsidiaries would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Equity Interest or other Person or Entity, based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, other than Claims or liabilities arising out of or relating to any Releasee's obligations to repay its obligations under the D&O Credit Facilities.
G. Implementation of Senior Management KERP
To the extent the Debtors have not already implemented all or part of the Senior Management KERP prior to the Effective Date, on the Effective Date the Debtors are directed to implement the Senior Management KERP with regard to Edward M. Berube, Eugene M. Bullis, Charles H. Cremens, Eric R. Johnson, and William J. Shea, and the Debtors and/or Reorganized Debtors shall perform any and all obligations thereunder, including the payment of performance bonuses, emergence bonuses and severance amounts contemplated thereby.
H. Assumption of the Senior Management Employment Agreements
To the extent the Debtors have not already assumed the Senior Management Employment Agreements prior to the Effective Date (to the extent such agreements apply to the Debtors), on the Effective Date the Reorganized Debtors shall be deemed to have assumed the Senior Management Employment Agreements, and to the extent such agreements apply to affiliated non-debtors, they shall be affirmed and restated in all respects by the Reorganized Debtors and the applicable affiliated non-debtors on the Effective Date.
I. TOPrS Settlement
Set forth below are the material terms and conditions of the proposed settlement with the Holders of Trust Preferred Securities (the "TOPrS Settlement"). A Holder of a Trust Preferred Security may opt out of the TOPrS Settlement pursuant and subject to the TOPrS Opt-Out Notice.
1. The TOPrS Settlement Recovery. On the Effective Date, the Holders of Trust Preferred Securities who have not opted out of the TOPrS Settlement will receive their Pro Rata share of the TOPrS Settlement Recovery from the Debtors and the Holders of Claims in Classes 5A, 6A, 7A, 4B and 5B. The TOPrS Settlement Recovery consists of the following:
(a) The TOPrS Settlement Equity Recovery. The TOPrS Settlement Equity Recovery is 1.5% of the New CNC Common Stock to be issued and outstanding pursuant to the Plan on or as soon as practicable after the Effective Date.
(b) The New CNC Warrants. Pursuant to and subject to the New CNC Warrant Agreement, the New CNC Warrants will (i) be exercisable for the purchase of 6% of the New CNC Common Stock, (ii) have a term of 5 years from the Effective Date, and (iii) have an exercise price based on a $4.9 billion enterprise valuation of New CNC, all in accordance with the terms of the New CNC Warrant Agreement.
(c) The TOPrS Settlement D&O Litigation Recovery. Under the TOPrS Settlement D&O Litigation Recovery, the Holders of Allowed Trust Preferred Securities who have not opted out of the TOPrS Settlement will be entitled from and after the Effective Date to receive 45% of Net D&O Litigation
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Proceeds in an aggregate amount not to exceed $30 million, payable in (i) Cash or (ii) in the sole discretion of New CNC, New CNC Common Stock (valued at the Market Value of such New CNC Common Stock at the time a distribution is due to be made to Holders of Trust Preferred Securities). As such Net D&O Litigation Proceeds are received by New CNC, New CNC shall promptly deposit the TOPrS Settlement D&O Recovery in a separate interest-bearing account, and the interest accrued thereon shall be included in the proceeds distributed to the Holders of Trust Preferred Securities as of the Distribution Record Date who have not opted out of the TOPrS Settlement. New CNC will make distributions of the TOPrS Settlement D&O Recovery (in cash or New CNC Common Stock) to Holders of Trust Preferred Securities who have not opted out of the TOPrS Settlement on the first anniversary of the Effective Date and annually thereafter; provided that a distribution shall not be made if there is less than $10 million in value to distribute, in which case such amount shall be distributed on the next distribution date, unless there has been no distribution for 24 months, in which event the available funds shall be distributed subject to the right of the TOPrS Settlement Representative to further defer such distribution until the next anniversary of the Effective Date. All distributions shall be made only to the Holders of Trust Preferred Securities as of the Distribution Record Date who have not opted out of the TOPrS Settlement. All costs arising out of the distributions contemplated in this paragraph shall be paid from the TOPrS Settlement D&O Recovery to be distributed in any given distribution. The right to receive the TOPrS Settlement D&O Litigation Recovery is not transferable to any party. New CNC will provide the TOPrS Settlement Representative with a semi-annual status report of New CNC's efforts to recover the Net D&O Litigation Proceeds. To the extent provided in the D&O Transfer Agreement, the Reorganized Debtors shall have the sole discretion to pursue, settle, compromise or otherwise resolve all claims based on or derived from the D&O Credit Facilities against those current or former directors and officers of the Reorganizing Debtors or Reorganized Debtors who are not eligible to participate in the programs described in Article V.K.5 of the Plan; and the Reorganized Debtors and their officers, directors, employees agents and professionals shall have no liability to any Holder of a Trust Preferred Security (or the TOPrS Settlement Representative) on account of or related to any decisions, actions or omissions related to such collections of such Claims (if any) other than a breach of the Reorganized Debtors' obligations to make distributions or deposits of the TOPrS D&O Litigation Recovery or to make reports pursuant to this paragraph.
2. TOPrS Release Provision. Holders of Trust Preferred Securities that have not validly submitted a TOPrS Opt Out Notice shall be deemed to have released, expunged and discharged any and all Claims, obligations, rights, suits, damages, causes of action, and remedies whatsoever, whether known or unknown, existing or hereafter arising in law, equity or otherwise, based in whole or in part on any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date that could be asserted by a Holder of a Trust Preferred Security against any third party (including, the Releasees (including Gary Wendt) and the holders of Claims in Classes 5A, 6A, 7A, 4B and 5B) relating in any way to Conseco or its subsidiaries, provided, however, that such release shall not include claims based upon insurance policies, annuities, or other similar contracts between a Holder of a Trust Preferred Security and any of the Reorganized Debtors or their subsidiaries. The TOPrS Committee will withdraw with prejudice all objections and appeals relating in any way to the Plan or the Debtors' chapter 11 cases. Without limiting the generality of the foregoing, on the Effective Date, to the extent they have not already been dismissed with prejudice, the TOPrS Appeals will be deemed dismissed with prejudice promptly upon the occurrence of the Effective Date.
3. Level of TOPrS Opt Out Participation. The Reorganizing Debtors and the Conseco Creditors' Committee shall each have the right to withdraw from the TOPrS Settlement if either of the following conditions (a "Cancellation Condition") is met: (i) more than 750 Holders of Trust Preferred Securities opt out of the TOPrS Settlement or, (ii) Holders of Trust Preferred Securities holding more than $45 million in value in the aggregate opt out of the TOPrS Settlement. However, if the Holders opting out of the TOPrS Settlement do not either (i) exceed 2500 in number or (ii) hold in excess of $100 million in value in the aggregate, such withdrawal by the Reorganizing Debtors or the Conseco Creditors' Committee, as the case may be, would have to be approved by the Bankruptcy Court, based upon a business judgment standard.
In the case that either the Reorganizing Debtors or the Conseco Creditors' Committee withdraws from the TOPrS Settlement or if the Court does not approve the TOPrS Settlement, the Plan will be modified to provide for distributions to Classes 5A, 6A, 7A, 10A, 4B, and 5B to be as set forth in the Fourth Amended Plan, notwithstanding any other provision of this Article V.I. herein. In addition, in such event, notwithstanding any other
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provision of Article V.I. herein, the TOPrS Settlement or the Plan, in the event of a Cancellation Condition that is not waived by the Reorganizing Debtors and the Conseco Creditors' Committee prior to the Confirmation Date, or if the Court does not approve the TOPrS Settlement set forth herein, the TOPrS Settlement will be null and void as if the parties had never entered into it, and each party shall be restored to their claims, rights, objections and defenses without prejudice; and in particular and without limitation, the TOPrS' Appeals shall not be dismissed, and the TOPrS Committee's objections to confirmation of the Fourth Amended Plan (and its predecessor Plans or any subsequent Plans) shall remain in full effect.
J. Creation of Professional Escrow Account
On the Effective Date, the Reorganized Debtors shall establish the Professional Escrow Account and reserve the amounts necessary to ensure the payment of all Accrued Professional Compensation.
K. Corporate Governance, Directors and Officers, and Corporate Action
1. Amended Certificate of Incorporation and By-laws
On or before the Effective Date, New CNC will file the New CNC Charter with the Secretary of State of Delaware in accordance with Section 103 of the Delaware General Corporation Law. The New CNC Charter and the New CNC By-laws will, among other things, authorize approximately 8,000,000,000 shares of New CNC Common Stock and approximately 265,000,000 shares of New CNC Preferred Stock. In addition, the New CNC Charter shall prohibit the issuance of non-voting equity securities to the extent required by the provisions of Section 1123(a)(6) of the Bankruptcy Code. After the Effective Date, New CNC may amend and restate the New CNC Charter and other constituent documents as permitted by Delaware law.
2. Directors and Officers of the Reorganized Debtors
The Boards of Directors of each of New CNC, Reorganized CIHC and the other Debtors as reorganized immediately following the Effective Date shall consist of the individuals specified in the Plan Supplement.
3. Management Incentive Plan
On the Effective Date, New CNC will implement the Management Incentive Plan substantially in the form set forth in the Plan Supplement.
4. Employment Agreements
On the Effective Date, New CNC shall enter into the Senior Management Employment Agreements.
5. Resolution of the Directors & Officers Stock Purchase Program for Certain Participants
Within fifteen (15) days after the Effective Date, New CNC and Reorganized CIHC shall take the following actions with respect to the individuals and entities (each a "Participant" and collectively, the "Participants") that, as of the Effective Date (i) owe amounts under the D&O Credit Facilities or to New CNC and Reorganized CIHC pursuant to the various directors, officers and key employees stock purchase programs (the "Stock Programs") and (ii) purchased 40,000 or less shares of Conseco, Inc. common stock pursuant to the Stock Programs and owe amounts under the D&O Credit Facilities or to New CNC and Reorganized CIHC as part of the Stock Programs:
(a) New CNC and Reorganized CIHC, in settlement of any good faith claims(2) such Participant may have in any manner relating to the D&O Credit Facilities, the Stock Programs, or any

2 Pursuant to an order entered on February 19, 2003, the claims bar date for Participants is 60 days after the Effective Date. As of the date this amended Plan was filed with the Bankruptcy Court, it appears that very few Participants have filed a proof of claim against any Reorganizing Debtor. Any Participant who executes an Adjustment Agreement will release his or her claims against the Reorganizing Debtors related to the D&O Credit Facilities, Stock Programs and any Work-Down Plan.

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Work-Down Plan, shall offer a Purchase Price Adjustment Agreement substantially in the form attached as Exhibit H to the Disclosure Statement (the "Adjustment Agreement") to such Participant pursuant to which (i) the Participant's initial loan amounts shall be reduced to an amount equal to an agreeable price(3) per share for the shares purchased by such Participant (the "Adjusted Purchase Amount"), and (ii) New CNC and Reorganized CIHC shall cause their affiliate Conseco Services, LLC ("LLC") to execute the Adjustment Agreement and to reduce any loans such Participant owes to LLC related to the D&O Credit Facilities and/or the Stock Programs to an amount calculated on an agreeable price per share for the shares purchased by such Participant (the "Adjusted Interest Amount"); provided, however, that under the Adjustment Agreement:
(i) Participant shall (A) pay to New CNC the Adjusted Purchase Amount and (B) pay to LLC the Adjusted Interest Amount within 90 days after the Participant signs the Adjustment Agreement, but if payment is not made on such date, Participant shall owe (A) New CNC 4% per annum simple interest on the Adjusted Purchase Amount, accruing as of the 91st day, and (B) LLC 4% per annum simple interest on the Adjusted Interest Amount, accruing as of the 91st day.
(ii) Participant releases New CNC, Reorganized CIHC, the original lenders under the D&O Credit Facilities (and their successors and assigns), their respective affiliates, and the respective officers, directors, employees, agents (including financial consultants) and attorneys of the original lenders under the D&O Credit Facilities (and of their successors and assigns) (collectively, the "SP Releasees") from any and all claims the Participant may have with respect to the D&O Credit Facilities, his or her participation in the Stock Programs or any Work-Down Plan, and/or this Plan, but Participant reserves all rights against the Ineligible Persons (defined in paragraph c. below) and all others (other than the SP Releasees) who were involved in the D&O Credit Facilities and/or the Stock Programs (such others (other than the SP Releasees) together with the Ineligible Persons, the "Non-Released Entities") and waives no causes of action, setoffs, claims, rights, defenses, powers, and/or remedies (or similar matters), whether under the pertinent loan documents, applicable law or otherwise, against the Non-Released Entities and/or the Non-Released Entities' past, present or future property (including any such property that may be in the hands of any immediate or mediate transferee), all regardless of whether New CNC or Reorganized CIHC asserts or exercises (or does not assert or exercise, as the case may be) similar causes of action, setoffs, claims, rights, defenses and/or remedies (or similar matters) (in any combination) against any other person or entity.
(iii) Upon Participant's payment of (A) the Adjusted Purchase Amount to New CNC and (B) the Adjusted Interest Amount to LLC, New CNC, Reorganized CIHC, and LLC and their respective affiliates shall release the Participant from any claims with respect to the D&O Credit Facilities, Stock Programs or any Work-Down Plan, but New CNC, Reorganized CIHC and LLC (A) waive no other causes of action, setoffs, claims, rights, defenses, powers, and/or remedies (or similar matters) against Participant and (B) New CNC, Reorganized CIHC and LLC reserve all rights against Non-Released Entities (as defined in paragraph a.2. above) and waive no causes of action, setoffs, claims, rights, defenses, powers, and/or remedies (or similar matters), whether under the pertinent loan documents, applicable law or otherwise, against the Non-Released Entities and/or the Non-Released Entities' past, present or future property (including any such property that may be in the hands of any immediate or mediate transferee), all regardless of whether New CNC or Reorganized CIHC asserts or exercises (or does not assert or exercise, as the case may be) similar causes of action, setoffs, claims, rights, defenses and/or remedies (or similar matters) (in any combination) against any other person or entity.

3 New CNC and Reorganized CIHC shall negotiate with each Participant an agreeable price per share unique to such Participant. New CNC and Reorganized CIHC shall not be obliged to offer the same price to all Participants.

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(iv) Participant assigns to New CNC his or her rights against the Non-Released Entities (as defined in paragraph (a)(ii) above).
The Adjustment Agreement annexed as Exhibit H to the Disclosure Statement shall be executed on an individualized basis by the Reorganized Debtors and Participants that are offered it and choose to sign it and, in addition to the other restrictions set forth herein, no Participant shall be entitled to the benefits of the Adjustment Agreement absent such execution and delivery of the Adjustment Agreement. Participants who are offered the Adjustment Agreement may choose to decline to sign it, but in such event, any such declining Participants shall become Ineligible Persons (defined in paragraph c. below).
The Debtors have determined based on several different business and legal considerations to offer an Adjustment Agreement to such Participants subject to the foregoing conditions, and their decision to do so shall in no manner be deemed to be an admission by either of them (or by any other Person) as to the accuracy of any factual statement or legal theory underlying any such good faith claims on the part of any such Participant or any other borrower under the D&O Credit Facilities, but on the contrary, the Debtors deny the legal validity or enforceability of any such claims or defenses and expressly reserves any and all of their claims, defenses, rights, powers and/or remedies against any such Participant in the event that this Plan is not confirmed and against Ineligible Persons, whether or not this Plan is confirmed. The decision to offer an Adjustment Agreement to a Participant under the terms and conditions of this Article V.K.5.a has been made in connection with and is a part of this Plan and, as such, is independent of and is expressly not a renewal or extension of any Work-Down Plan, and shall not be deemed to be a renewal or extension of any Work-Down Plan under any circumstances.
(b) Pursuant to Article III.C.4.(c) of this Plan, New CNC shall succeed to the lenders' right, title and interest in the loans underlying the D&O Credit Facilities.
(c) The following are ineligible to enter into an Adjustment Agreement (collectively, "Ineligible Persons"): (i) persons or entities that purchased more than 40,000 shares of Conseco, Inc. common stock and owe amounts under the D&O Credit Facilities or to New CNC or Reorganized CIHC as part of the Stock Programs, (ii) Participants who are offered an Adjustment Agreement under paragraph a. above but who, for whatever reason, refuse to sign an Adjustment Agreement, (iii) Participants who are not offered an Adjustment Agreement under paragraph d. below, and (iv) any director or executive officer (or the equivalent thereof) for purposes of the Sarbanes-Oxley Act.
(d) Notwithstanding Article F.5.a above, New CNC and Reorganized CIHC may choose not to offer an Adjustment Agreement to any Participant who purchased 40,000 or less shares who New CNC and Reorganized CIHC reasonably believe directed and/or authorized (1) the implementation of the Stock Program, (2) the number of shares (or aggregate purchase price) of Conseco, Inc. common stock to be purchased in the aggregate pursuant to the Stock Program and/or (3) the selection of individuals eligible to participate in the Stock Program and/or their permitted level of participation. The fact that a Participant is or is not a current employee of New CNC, Reorganized CIHC or any affiliate shall not be a factor in determining whether New CNC and Reorganized CIHC offer a Participant an Adjustment Agreement.
6. Listing/Registration Rights
On the Effective Date New CNC shall (a) be a reporting company under the Exchange Act, and (b) execute and deliver the Registration Rights Agreements substantially in the form set forth in the Plan Supplement. After the Confirmation Date, New CNC shall take all reasonable steps to cause the shares of New CNC Preferred Stock, New CNC Common Stock and New CNC Warrants to be listed, as soon as practicable after the Effective Date, on the New York Stock Exchange or such other securities exchange as agreed with the Conseco Creditors Committee, if the listing requirements for such securities exchange are satisfied with respect to such securities.
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7. Corporate Action
On the Effective Date (or on the Confirmation Date with respect to actions taken prior to the Effective Date), the adoption and filing of the New CNC Charter and New CNC By-laws, the appointment of directors and officers for the Reorganized Debtors, the adoption of the Management Incentive Plan, and all actions contemplated hereby shall be authorized and approved in all respects (subject to the provisions hereof) pursuant to this Plan. All matters provided for herein involving the corporate structure of the Debtor, Reorganizing Debtors, or Reorganized Debtors and any corporate action required by the Debtors, Reorganizing Debtors or Reorganized Debtors in connection with the Plan, shall be deemed to have occurred and shall be in effect, without any requirement of further action by the security holders or directors of the Debtors, Reorganizing Debtors or Reorganized Debtors. On or before the Effective Date, the appropriate officers of the Reorganized Debtors and members of the board of directors of the Reorganized Debtors are authorized and directed to issue, execute and deliver the agreements, documents, securities and instruments contemplated by the Plan in the name of and on behalf of the Reorganized Debtors without the need for any required approvals, authorizations or consents except for express consents required under this Plan.
L. Sources of Cash for Plan Distribution
All Cash necessary for the Reorganizing Debtors and Reorganized Debtors to make payments pursuant hereto shall be obtained from existing Cash balances of the Debtors.
M. Retiree Benefits
The Reorganizing Debtors and/or Reorganized Debtors shall timely pay any retiree benefits as defined in Section 1114(a) of the Bankruptcy Code to the extent that such retiree benefits are payable by the Reorganizing Debtors and/or Reorganized Debtors. Such retiree benefits include those that arise from the plans, funds or programs described in the Plan Supplement.
N. GM Building Sale
The sale or transfer of the GM Building (or entities owning the GM Building or interests therein) pursuant to or consistent with an Order of the Bankruptcy Court shall be deemed a transfer under, pursuant to and in furtherance of this Plan.
Article VI.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Executory Contracts and Unexpired Leases
Immediately prior to the Effective Date, except as otherwise provided herein, all executory contracts including, without limitation, the prepetition engagement letters for the financial and legal advisors to the Unofficial Bank Committee and the Unofficial Noteholder Committee, respectively, stipulation agreements entered into with Distribution Agents during the course of these Chapter 11 Cases, or unexpired leases of the Reorganizing Debtors will be deemed assumed in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code except those executory contracts and unexpired leases that (1) have been rejected by order of the Bankruptcy Court, (2) have previously been assumed by order of the Bankruptcy Court, (3) are the subject of a motion to reject pending on the Effective Date, (4) are identified in the Plan Supplement to be rejected, or (5) relate to the purchase or other acquisition of Equity Interests. Entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such assumptions and rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code.
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B. Claims Based on Rejection of Executory Contracts or Unexpired Leases
All Proofs of Claims with respect to Claims arising from the rejection of executory contracts or unexpired leases, if any, must be Filed with the Bankruptcy Court within thirty (30) days after the date of entry of an order of the Bankruptcy Court approving such rejection. Any Claims arising from the rejection of an executory contract or unexpired lease not Filed within such time will be forever barred from assertion against any Debtor or Reorganized Debtor, any Estate, or property of any Debtor or Reorganized Debtor, unless otherwise ordered by the Bankruptcy Court. All Allowed Claims arising from the rejection of executory contracts or unexpired leases of the Reorganizing Debtor will be classified as Reorganizing Debtor General Unsecured Claims.
C. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed
Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to the Plan is in default shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash on the Effective Date, or as soon thereafter as is practicable, or on such other terms as the parties to such executory contracts or unexpired leases may otherwise agree. In the event of a dispute regarding: (1) the amount of any cure payments, (2) the ability of the relevant Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (3) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving the assumption. Ten days before the Confirmation Hearing, the Debtors will contact relevant contract counterparties with the Stated Cure Amounts (if any) for all executory contracts and unexpired leases to be assumed pursuant to the Plan.
D. Indemnification of Directors, Officers and Employees
The prepetition obligations of any Debtor to indemnify any Releasee serving at any time on or after the Petition Date as one of its directors, officers or employees by reason of such Releasee's service in such capacity, or as a director, officer or employee of any other corporation or legal entity, to the extent provided in such Debtor's constitutive documents, by a written agreement with such Debtor or under applicable state corporate law (to the maximum extent permitted thereunder), shall be deemed and treated as executory contracts that are assumed by the relevant Reorganized Debtor (it being understood that New CNC is the relevant Reorganized Debtor of CNC) pursuant hereto and section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such indemnification obligations shall survive Unimpaired and unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date. Notwithstanding any of the foregoing or the terms of any bylaws, agreements or documents to the contrary, the aggregate direct payments made by the Reorganized Debtors for prepetition indemnity under this section for all Releasees who no longer serve after the Effective Date as a director, officer or employee of a Reorganized Debtor and for insurance premiums under Article VI.F. shall not exceed $3,000,000 in the aggregate. Nothing in this Plan shall limit or cap the prepetition indemnification obligations arising under the by-laws in effect on the Petition Date(4) that are owed to Releasees who continue to serve as directors, officers or employees of a Reorganized Debtor after the Effective Date, which shall be assumed as set forth above. Furthermore, the prepetition obligations of any Debtor to indemnify any officer, director or employee who is not a Releasee shall be deemed terminated as of the Effective Date by the relevant Reorganizing Debtor. As set forth above, nothing in this Plan shall affect the rights of any Releasee or the obligations of the Reorganizing Debtors or the Reorganized Debtors with respect to postpetition obligations to indemnify any Releasee with respect to postpetition actions.
E. Compensation and Benefit Programs
Except as otherwise expressly provided herein, all employment and severance agreements and policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their respective employees, former employees, retirees and non-employee directors and the employees, former employees and retirees of its

4 The by-laws in effect as of the Petition Date are dated October 3, 2002.

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subsidiaries, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit agreements and plans, incentive plans, deferred compensation plans and life, accidental death and dismemberment insurance plans shall be treated as executory contracts under the Plan and on the Effective Date shall be deemed assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code; and the Debtors' obligations under such programs to Persons shall survive confirmation of this Plan, except for (i) executory contracts or employee benefit plans specifically rejected pursuant to this Plan (to the extent such rejection does not violate sections 1114 and 1129(a)(13) of the Bankruptcy Code), (ii) all employee equity or equity-based incentive plans, and (iii) such executory contracts or employee benefit plans as have previously been rejected, are the subject of a motion to reject as of the Confirmation Date, or have been specifically waived by the beneficiaries of any employee benefit plan or contract; provided however, that the Debtors' obligations, if any, to pay all "retiree benefits" as defined in section 1114(a) of the Bankruptcy Code shall continue.
F. Assumption of D&O Insurance
All directors' and officers' liability insurance policies maintained by the Debtors are hereby assumed. Entry of the order confirming the Plan by the clerk of the Bankruptcy Court shall constitute approval of such assumptions pursuant to section 365(a) of the Bankruptcy Code. The Reorganized Debtors shall maintain for a period not less than 6 years from the Effective Date coverage for the individuals covered, as of the Petition Date, under policies on terms not substantially less favorable to such individuals than the terms provided for under the policies assumed pursuant to the Plan. Solely with respect to directors and officers of any of the Debtors who served in such capacity at any time on or after the Petition Date, the Debtors shall be deemed to assume, as of the Effective Date, their respective obligations to indemnify such individuals (and only such individuals) with respect to or based upon any act or omission taken or omitted in any of such capacities, or for or on behalf of any Debtor, pursuant to and to the extent provided by the Debtors' respective articles of incorporation, certificates of formation, corporate charters, bylaws, and similar corporate documents as in effect as of the date of entry of the Confirmation Order. Notwithstanding anything to the contrary contained herein, such assumed indemnity obligations shall not be discharged, Impaired, or otherwise modified by confirmation of this Plan and shall be deemed and treated as executory contracts that have been assumed by the Debtors pursuant to this Plan as to which no proofs of claim need be Filed. Notwithstanding any of the foregoing or the terms of any bylaws, agreements or documents to the contrary, aggregate direct payments made by the Reorganized Debtors for insurance premiums under this section and for prepetition indemnity payments for Releasees who no longer serve on the Effective Date as a director, officer or employee of a Reorganized Debtor under Article VI.D shall not exceed $3,000,000 in the aggregate, provided that no more than an additional $2,000,000 of indirect costs of the Reorganizing Debtors shall be used to pay for such insurance; and further provided that no provision of this Plan shall limit any Releasee's rights to seek recovery or reimbursement under any directors' and officers' liability insurance policy.
Article VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Distributions for Claims and Equity Interests Allowed as of the Effective Date
Except as otherwise provided herein or as may be ordered by the Bankruptcy Court, distributions to be made on the Effective Date on account of Claims and Equity Interests that are Allowed as of the Effective Date and are entitled to receive distributions under the Plan shall be made on the Effective Date or as soon as practicable thereafter. If allowance or disallowance of a Claim affects the New CNC Common Stock Holdback, distributions of New CNC Common Stock that are consequently no longer reserved will occur annually on each anniversary of the Effective Date, or more frequently, as determined by New CNC in its sole and absolute discretion.
For purposes of determining the accrual of interest, dividends or rights in respect of any other payment from and after the Effective Date, the New Tranche A Bank Debt, the New Tranche B Bank Debt, New CNC Preferred Stock, New CNC Warrants and New CNC Common Stock shall be deemed issued as of the Effective Date regardless of the date on which they are actually dated, authenticated or distributed; provided that, the respective Reorganized Debtor shall withhold any actual payment until such distribution is made.
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B. Distributions by the Distribution Agent(s)
The Debtors shall have the authority, in their sole discretion, to enter into agreements with one or more Distribution Agents, to facilitate the solicitation of votes on the Reorganizing Subplans and distributions required under the Reorganizing Subplans. As a condition to serving as a Distribution Agent, a Distribution Agent must (i) affirm its obligation to facilitate the prompt distribution of any documents or solicitation materials, (ii) affirm its obligation to facilitate the prompt distribution of any recoveries or distributions required under the Reorganizing Subplan at issue, and (iii) waive any right or ability to setoff against, deduct from, or assert any lien or encumbrance against the distributions required under the Reorganizing Subplan that are to be distributed by such Distribution Agent. In consideration for waiving its rights to setoff, deduct from or assert any lien or encumbrance against such distributions, the Debtors shall pay all reasonable fees and expenses (whether prepetition or postpetition) of such Distribution Agent. The Distribution Agent shall submit detailed invoices to the Debtors for all fees and expenses for which the Distribution Agent seeks reimbursement. The Debtors, upon review of such invoices, shall pay those amounts the Debtors, in their sole discretion, deem reasonable, and shall object in writing to those fees and expenses, if any, that the Debtors deem to be unreasonable. In the event that the Debtors object to all or any portion of a Distribution Agent's invoice, the Debtors and such Distribution Agent will endeavor, in good faith, to reach mutual agreement on the amount of such disputed fees and/or expenses. In the event that the Debtors and a Distribution Agent are unable to resolve any differences regarding disputed fees or expenses, either party shall be authorized to move to have such dispute heard by the Bankruptcy Court. To the extent the Debtors and any Distribution Agent entered into a stipulation during these Chapter 11 Cases concerning the fees of such Distribution Agent, such stipulations are assumed hereunder and the payment obligations evidenced thereby shall become obligations of the Reorganized Debtors to the extent such obligations remain unpaid as of the Effective Date.
C. Delivery and Distributions and Undeliverable or Unclaimed Distributions
1. Delivery of Distributions in General
Distributions to Holders of Allowed Claims and Allowed Equity Interests shall be made to the Holders of such Allowed Claims and Allowed Equity Interests as of the Distribution Record Date. Except as otherwise provided herein, distributions to Holders of Allowed Claims and Allowed Equity Interests shall be made at the address of the Holder of such Claim or Equity Interest as indicated on the records of the Debtors as of the date that such distribution is made.
2. Undeliverable Distributions
(a) Holding of Undeliverable Distributions
If any distribution to a Holder of an Allowed Claim or Allowed Equity Interest is returned to a Distribution Agent as undeliverable, no further distributions shall be made to such Holder unless and until such Distribution Agent is notified in writing of such Holder's then-current address. Undeliverable distributions shall remain in the possession of such Distribution Agent subject to Subsection (b) below until such time as a distribution becomes deliverable. Undeliverable Cash shall not be entitled to any interest, dividends or other accruals of any kind. As soon as reasonably practicable, a Distribution Agent shall make all distributions that become deliverable.
(b) Failure to Claim Undeliverable Distributions
In an effort to ensure that all Holders of Allowed Claims and Equity Interests receive their allocated distributions, ninety (90) days after the Effective Date, the Reorganized Debtors will file with the Bankruptcy Court a listing of unclaimed distributions. This list will be maintained for as long as the Chapter 11 Cases stay open. Any Holder of an Allowed Claim or Equity Interest (irrespective of when a Claim or Equity Interest became an Allowed Claim or Equity Interest) that does not assert a Claim or Equity Interest pursuant hereto for an undeliverable distribution (regardless of when not deliverable) within two years after the Effective Date shall have its Claim or Equity Interest for such undeliverable distribution discharged and shall be forever barred from asserting any such Claim or Equity Interest against the relevant Reorganized Debtor or its property. In such cases: (i) any Cash held
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for distribution on account of such Claims or Equity Interests shall be property of the relevant Reorganized Debtor free of any restrictions thereon; and (ii) any securities issued hereunder held for distribution on account of such Claims or Equity Interests shall be canceled and of no further force or effect. Nothing contained herein shall require any Reorganized Debtor or any Distribution Agent to attempt to locate any Holder of an Allowed Claim or Allowed Equity Interest.
3. Compliance with Tax Requirements/Allocations
In connection with the Plan, to the extent applicable, each Reorganizing Debtor, Reorganized Debtor and Distribution Agent shall comply with all tax withholding and reporting requirements imposed on it by any governmental unit, and all distributions pursuant hereto shall be subject to such withholding and reporting requirements. Each Reorganizing Debtor, Reorganized Debtor and Distribution Agent shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements. For tax purposes, distributions received in respect of Allowed Claims will be allocated first to the principal amount of Allowed Claims, with any excess allocated to unpaid interest that accrued on such Claims. If any Reorganizing Debtor, Reorganized Debtor or Distribution Agent determines that withholding is required with respect to any distribution, a Creditor will have the option of (a) paying to the Reorganized Debtor or the Distribution Agent an amount of such tax liability with respect to such distribution, and the recipient of such funds shall remit such funds to the appropriate taxing authority, or (b) making arrangements satisfactory to the Reorganized Debtor and the Distribution Agent for the Creditor to liquidate a portion of the Plan distribution and to remit such proceeds as necessary to cover required withholding taxes, with any remaining Plan distribution being distributed to the Creditor.
D. Timing and Calculation of Amounts to be Distributed
On the Effective Date or as soon as practicable thereafter, each Holder of an Allowed Claim against or Allowed Equity Interest in the Debtors shall receive the full amount of the distributions that the Plan provides for Allowed Claims or Allowed Equity Interests in the applicable Class. If and to the extent that there are Disputed Claims or Disputed Equity Interests, distributions on account of such Disputed Claims or Equity Interests shall be made pursuant to the provisions set forth in Article VIII.A.3.
E. Minimum Distribution
Any other provision of the Plan notwithstanding, payments of fractions of shares of New CNC Common Stock or New CNC Preferred Stock or fractions of New CNC Warrants will not be made and will be deemed to be zero. Any other provision of the Plan notwithstanding, the Reorganized Debtors or a Distribution Agent will not be required to make distributions or payments of fractions of dollars. Whenever any payment of a fraction of a dollar under the Plan would otherwise be called for, the actual payment will reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars or less being rounded down.
F. Setoff
Except as expressly provided for herein, each Reorganizing Debtor and Reorganized Debtor may, as the case may be, pursuant to the Bankruptcy Code (including, without limitation, section 553) or applicable non-bankruptcy law or as may be agreed to by the Holder of a Claim, set off against any Allowed Claim or Equity Interest and the distributions to be made pursuant hereto on account of such Allowed Claim or Equity Interest (before any distribution is made on account of such Allowed Claim or Equity Interest), any Claims, Equity Interests, rights and Causes of Action of any nature that such Reorganizing Debtor or Reorganized Debtor, as the case may be, may hold against the Holder of such Allowed Claim or Equity Interest to the extent the Claims, Equity Interests, rights or Causes of Action against such Holder have not been compromised or settled on or prior to the Effective Date (whether pursuant to the Plan or otherwise); provided that, neither the failure to effect such a setoff nor the allowance of any Claim or Equity Interest hereunder shall constitute a waiver or release by such Reorganizing Debtor or Reorganized Debtor of any such Claims, Equity Interests, rights and Causes of Action that such Reorganizing Debtor or Reorganized Debtor may possess against such Holder.
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G. Surrender of Canceled Instruments or Securities
Subject to Subsection I below, each record Holder of an Allowed Claim or Equity Interest relating to the (i) Exchange Notes, (ii) Original Notes, (iii) Subordinated Debentures, (iv) CNC Common Stock, or (v) CNC Preferred Stock shall surrender the certificates or other documentation underlying such Claim or Equity Interest, and all such surrendered certificates and other documentations shall be marked as canceled. Any certificate or other documentation underlying Claims related to (i) Senior Credit Facility, (ii) CIHC Guarantee of Senior Credit Facility, (iii) CNC Guarantee of D&O Credit Facilities, (iv) CIHC Guarantee of D&O Credit Facilities shall be deemed to be surrendered and cancelled.
H. Failure to Surrender Canceled Instruments
Any Holder of Allowed Claims or Equity Interests relating to the (i) Exchange Notes, (ii) Original Notes, (iii) Subordinated Debentures, (iv) CNC Common Stock, or (v) CNC Preferred Stock that fails to surrender or is deemed to have failed to surrender its certificates or other documentation representing such Claim or Equity Interest required to be tendered hereunder within one year after the Effective Date shall have its Claim for a distribution pursuant hereto on account of such Allowed Claim or Allowed Equity Interests discharged and shall be forever barred from asserting any such Claim or Equity Interest against any Reorganizing Debtor, Reorganized Debtor, Distribution Agent or their assets.
I. Lost, Stolen, Mutilated or Destroyed Securities
Any Holder of Allowed Claims or Equity Interests relating to the (i) Exchange Notes, (ii) Original Notes, (iii) Subordinated Debentures, (iv) CNC Common Stock, or (v) CNC Preferred Stock that is evidenced by a note or by a stock certificate which has been lost, stolen, mutilated or destroyed shall, in lieu of surrendering such note or stock certificate, deliver to such relevant Distribution Agent: (a) an affidavit of loss reasonably satisfactory to the Distribution Agent setting forth the unavailability of the note or the stock certificate; and (b) such additional indemnity as may reasonably be required by the Distribution Agent to hold the Distribution Agent harmless from any damages, liabilities or costs incurred in treating such individual as a Holder of an Allowed Claim or Equity Interest. Upon compliance with this procedure by a Holder of an Allowed Claim or Equity Interest evidenced by such a lost, stolen, mutilated or destroyed note or stock certificate, such Holder shall, for all purposes under the Plan, be deemed to have surrendered such note or certificate.
Article VIII.
PROCEDURES FOR RESOLUTION OF DISPUTED, CONTINGENT
AND UNLIQUIDATED CLAIMS OR EQUITY INTERESTS
A. Resolution of Disputed Claims
1. Prosecution of Objections to Claims
After the Effective Date, the Reorganized Debtors (for Claims against the Reorganized Debtors) shall have the exclusive authority on or before the Claims Objection Bar Date to file objections, settle, compromise, withdraw or litigate to judgment objections to Claims or Equity Interests. From and after the Effective Date, the Debtors and Reorganized Debtors may settle or compromise any Disputed Claim or Equity Interest without approval of the Bankruptcy Court. The Debtors, Reorganizing Debtors and Reorganized Debtors also reserve the right to resolve any Disputed Claims or Equity Interests outside the Bankruptcy Court under applicable governing law.
2. Estimation of Claims and Equity Interests
The Reorganizing Debtors and the Reorganized Debtors may, at any time, request that the Bankruptcy Court estimate any contingent or unliquidated Claim or Equity Interest pursuant to section 502(c) of the Bankruptcy Code regardless of whether such Reorganizing Debtor or Reorganized Debtor has previously objected to such Claim
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or Equity Interest or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim or Equity Interest at any time during litigation concerning any objection to any Claim or Equity Interest, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the relevant Reorganizing Debtor or Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the aforementioned Claims or Equity Interests and objection, estimation and resolution procedures are cumulative and not necessarily exclusive of one another. Claims and Equity Interests may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.
3. Payments and Distributions on Disputed Claims
Notwithstanding any provision herein to the contrary, except as otherwise agreed by a Reorganizing Debtor or Reorganized Debtor (for Claims against such Reorganizing Debtors) in its sole discretion, no partial payments and no partial distributions will be made with respect to a Disputed Claim until the resolution of such disputes by settlement or Final Order. No later than a Business Day that is 20 calendar days after the calendar quarter in which a Disputed Claim becomes an Allowed Claim, the Holder of such Allowed Claim will receive all payments and distributions to which such Holder is then entitled under the Plan. Notwithstanding the foregoing, any Person or Entity who holds both an Allowed Claim(s) and a Disputed Claim(s) will not receive the appropriate payment or distribution on the Allowed Claim(s) except, as otherwise agreed by such Reorganizing Debtor or Reorganized Debtor, as the case may be, in its sole discretion, until the Disputed Claim(s) are resolved by settlement or Final Order. In the event that there are Disputed Claims requiring adjudication and resolution, the Reorganizing Debtors and Reorganized Debtors reserve the right, or upon order of the Court, to establish appropriate reserves for potential payment of such Claims.
B. Allowance of Claims and Equity Interests
Except as expressly provided herein or in any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), no Claim or Equity Interest shall be deemed Allowed, unless and until such Claim or Equity Interest is deemed Allowed under the Bankruptcy Code or the Bankruptcy Court enters a Final Order in the Chapter 11 Cases allowing such Claim or Equity Interest. Except as expressly provided in the Plan or any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), the Reorganizing Debtors (for Claims against the Reorganizing Debtors) or Reorganized Debtors after Confirmation will have and retain any and all rights and defenses such Debtor had with respect to any Claim or Equity Interest as of Petition Date.
C. Controversy Concerning Impairment
If a controversy arises as to whether any Claims or Equity Interests, or any Class of Claims or Equity Interests, are Impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy before the Confirmation Date.
D. Reserve of New CNC Common Stock
On the Effective Date, CNC shall maintain in reserve shares of New CNC Common Stock as the New CNC Common Stock Holdback. Deemed amounts shall determine the New CNC Common Stock Holdback. The New CNC Common Stock Holdback, along with any dividends or other distributions accruing with respect thereto, shall be held for the Holders of Class 4A, 8A, and 6B Claims that are Disputed or do not assert a sum certain. As Disputed and unliquidated Class 4A, 8A, and 6B Claims are resolved by the Bankruptcy Court, or higher court if a stay is obtained, (a) CNC shall distribute, in accordance with the terms hereof, New CNC Common Stock to Holders of Allowed Class 4A, 8A, and 6B Claims (along with dividends and distributions that accrue after the Effective Date), and (b) the New CNC Common Stock Holdback shall be adjusted. If allowance or disallowance of a Claim
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affects the New CNC Common Stock Holdback, distributions of New CNC Common Stock that are consequently no longer reserved will occur annually on each anniversary of the Effective Date, or more frequently, as determined by New CNC in its sole and absolute discretion.
Article IX.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. Conditions to Confirmation
The following are conditions precedent to confirmation of this Plan that must be (i) satisfied or (ii) waived in accordance with Article IX.C below:
1. The Bankruptcy Court shall have entered an order, in form and substance reasonably acceptable to the Debtors, the Noteholder Subcommittee, and the Lender Subcommittee, approving the Disclosure Statement with respect to this Plan as containing adequate information within the meaning of section 1125 of the Bankruptcy Code.
2. The proposed Confirmation Order shall be in form and substance reasonably acceptable to the Debtors, the Noteholder Subcommittee, and the Lender Subcommittee.
3. The Plan Supplement and all of the schedules, documents, and exhibits contained therein shall be in form and substance satisfactory to the Debtors, the Noteholder Subcommittee, and the Lender Subcommittee.
4. The Deemed amount of the Reorganizing Debtor General Unsecured Claims against CIHC being no greater than the CIHC General Unsecured Claims Cap.
5. The TOPrS 9019 Motion shall have been approved by the Bankruptcy Court.
B. Conditions Precedent to Consummation
The following are conditions precedent to Consummation of this Plan that must be (i) satisfied or (ii) waived in accordance with Article IX.C below:
1. The Confirmation Order becoming a Final Order in form and substance reasonably satisfactory to the Debtors, the Noteholder Subcommittee and the Lender Subcommittee;
2. The Plan Supplement and all of the schedules, documents and exhibits contained therein shall be in form and substance satisfactory to the Debtors, the Noteholder Subcommittee and the Lender Subcommittee.
3. The following agreements, instruments and documents, in form and substance satisfactory to the relevant Debtor, the Noteholder Subcommittee and the Lender Subcommittee, becoming effective:
(a) the New CNC Charter, New CNC By-laws and any certificate of designation providing for the New CNC Preferred Stock;
(b) the New Credit Facility;
(c) the New CNC Warrant Agreement;
(d) the Registration Rights Agreements;
4. Obtaining all necessary regulatory approvals for (a) Consummation of the Plan and (b) approval of the application for change of control as a result of stock ownership.
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5. CIHC distributing all of the capital stock of the Residual Subsidiaries and to the extent not included in the assets of the Residual Subsidiaries, any other Residual Assets of CIHC or its Subsidiaries to CNC in the form of a dividend;
6. The Residual Trust being established, and the Residual Assets being vested in Old CNC without further action on the part of Old CNC, CIHC, the Residual Trustee or any other Person;
7. The Residual Trustee being identified and being duly appointed and qualified to serve;
8. Old CNC issuing the Residual Share to the Residual Trust;
9. The Deemed amount of the Reorganizing Debtor General Unsecured Claims against CIHC being no more than the CIHC General Unsecured Claims Cap;
10. The CFC Subsidiary Guarantee Claims shall have been released, cancelled or estimated at zero.
11. The board of directors of New CNC shall have been selected.
C. Waiver of Conditions
The Debtors, with the prior written consent of the Conseco Creditors Committee, in the Debtors' reasonable discretion, may waive any of the conditions to Confirmation of the Plan and/or Consummation of the Plan set forth in Article IX at any time, without notice, without leave or order of the Bankruptcy Court, and without any formal action other than proceeding to conform and/or consummate the Plan; provided that (i) the conditions set forth in sections A.1, A.2, A.3, A.4, B.1, B.2, B.3, B.9 and B.11 of this Article IX may be waived only with the prior written consent of the Debtors, the Noteholder Subcommittee and the Lender Subcommittee in their respective reasonable discretion, and (ii) the condition set forth in section B.4.(b) may only be waived with the prior written consent of the applicant of the referred-to application, consistent with its fiduciary duties.
D. Effect of Non-Occurrence of Conditions to Consummation
If the Consummation of the Plan does not occur, the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver or release of any Claims by or against, or any Equity Interests in any Debtor; (2) prejudice in any manner the rights of any Debtor; or (3) constitute an admission, acknowledgment, offer or undertaking by any Debtor in any respect.
Article X.
RELEASE, INJUNCTIVE AND RELATED PROVISIONS
A. Compromise, Settlement and Discharge
The allowance, classification and treatment of all Allowed Claims and Equity Interests and the respective distributions and treatments hereunder take into account and/or conform to the relative priority and rights of the Claims and Equity Interests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code or otherwise, and, as of the Effective Date, any and all such rights are settled, compromised, discharged and released pursuant hereto. In addition, the allowance, classification and treatment of Allowed Claims in Classes 4A, 5A, 6A, 4B, 5B and 6B takes into account any Causes of Action, claims or counterclaims, whether under the Bankruptcy Code or otherwise applicable law, that may exist between the Debtors and the Holders of such Claims or among the Holders of such Claims and other Holders of Claims or Equity Interests, and, as of the Effective Date, any and all such Causes of Action, claims and counterclaims are settled, compromised and released pursuant hereto. The Confirmation Order shall approve the releases by all Persons and Entities of such contractual, legal and equitable subordination rights or Causes of Action, claims or counterclaims against such Holder satisfied,
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compromised and settled in this manner, provided, however, the Guarantees of D&O Credit Facilities are not cancelled or discharged solely to empower New CNC to collect amounts the Ineligible Persons (as defined in Article V.K.5 hereof) owe under the D&O Credit Facilities and related documents.
B. Releases by the Debtors
Except as otherwise specifically provided herein or in the Plan Supplement, for good and valuable consideration, including the service of the Releasees to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by the Plan, and the settlement with Lehman, the Releasees and Lehman, on and after the Effective Date, are deemed released by the Debtors and Reorganized Debtors from any and all Claims (as defined in section 101(5) of the Bankruptcy Code), obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative Claims asserted on behalf of a Debtor, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity or otherwise, that the Debtors, Reorganized Debtors or their subsidiaries would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Equity Interest or other Person or Entity, based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, other than Claims or liabilities arising out of or relating to (a) any act or omission of a Releasee that constitutes (1) a failure to perform the duty to act in good faith, with the care of an ordinarily prudent person and in a manner the Releasee reasonably believed to be in the best interests of the corporation
(to the extent such duty is imposed by applicable non-bankruptcy law), or (2)
such failure to perform constitutes willful misconduct, or recklessness, or gross negligence, or (b) any Releasee's obligations to repay its obligations under the D&O Credit Facilities or related documents; provided, however, that any such Release is conditional upon the Releasee's waiver of any prepetition claim of such Releasee against the Debtors or Reorganized Debtors other than for compensation in the ordinary course of business, as set forth in the Plan, or claims related to such Releasee's obligations to repay its obligations under the D&O Credit Facilities or related documents.
C. Releases by Holders of Claims
On and after the Effective Date, each Consenting Party shall be deemed to have unconditionally released the Releasees from any and all Claims (as defined in section 101(5) of the Bankruptcy Code), obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative Claims asserted on behalf of a Debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person or Entity would have been legally entitled to assert (whether individually or collectively), based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date in any way relating or pertaining to (w) the purchase or sale, or the rescission of a purchase or sale, of any security of a Debtor,
(x) a Debtor or Reorganized Debtor, (y) the Chapter 11 Cases, or (z) the negotiation, formulation and preparation of the Plan, or any related agreements, instruments or other documents. No portion of the limited releases by the Consenting Party in any way impairs any Cause of Action, liability, Claim or right arising out of or relating to (a) any act or omission of a Releasee that constitutes (1) a failure to perform the duty to act in good faith, with the care of an ordinarily prudent person and in a manner the Releasee reasonably believed to be in the best interests of the corporation (to the extent such duty is imposed by applicable non-bankruptcy law), or (2) constitutes willful misconduct, gross negligence, or recklessness, or (b) any Releasee's obligations to repay its obligations under the D&O Credit Facilities or related documents; provided, however, that any such Release is conditional upon the Releasee's waiver of any prepetition claim of such Releasee against the Debtors or Reorganized Debtors other than for compensation in the ordinary course of business, as set forth in the Plan, or claims related to such Releasee's obligations to repay its obligations under the D&O Credit Facilities or related documents.
D. Exculpation
The Debtors, Reorganizing Debtors, Releasees, Noteholder Subcommittee, Lender Subcommittee, Official Committees, Unofficial Noteholder Committee, Unofficial Bank Committee and their respective members, and the employees, agents, and professionals of each of the foregoing (acting in such capacity) shall neither have nor incur any liability to any Person or Entity for any prepetition or postpetition act taken, or omitted to be taken, in
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connection with, or related to formulating, negotiating, preparing, disseminating, implementing, administering, Confirming or Consummating the Plan, the Disclosure Statement, or any contract, instrument, release or any other agreement or document created, or entered into, in connection with the Plan, including but not limited to the TOPrS Settlement Recovery and the TOPrS Settlement as reflected in the TOPrS 9019 Motion, or any other pre- or postpetition act taken, or omitted to be taken, in connection with, or in contemplation of the Debtors' restructuring, provided, however, that the foregoing provisions of this Article X.D shall have no effect on the liability of any Person or Entity that results from any such act or omission that is determined in a Final Order to have constituted gross negligence, recklessness or willful misconduct, and, provided further, that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her or its duties pursuant to, or in connection with, the Plan.
E. Preservation of Rights of Action
1. Maintenance of Causes of Action
Except as otherwise provided in the Plan, the Reorganized Debtors shall retain all rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, in any court or other tribunal including, without limitation, in an adversary proceeding Filed in one or more of the Chapter 11 Cases including the actions specified in the Plan Supplement.
Except as otherwise provided in the Plan, in accordance with section 1123(b)(3) of the Bankruptcy Code, any Claims, rights, and Causes of Action that the respective Reorganizing Debtors may hold against any Entity shall vest in the Reorganized Debtors, as the case may be. The applicable Reorganized Debtor, through its authorized agents or representatives, shall retain and may exclusively enforce any and all such Claims, rights or Causes of Action. The Reorganized Debtors shall have the exclusive right, authority, and discretion to institute, prosecute, abandon, settle, or compromise any and all such Claims, rights, and Causes of Action without the consent or approval of any third party and without any further order of court.
2. Preservation of All Causes of Action Not Expressly Settled or Released
Unless a Claim or Cause of Action against a Creditor or other Person is expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order, the Debtors expressly reserve such Claim or Cause of Action for later adjudication by the Debtors, and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, Claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches shall apply to such Claims or Causes of Action upon or after the confirmation or Consummation of the Plan based on the Disclosure Statement, the Plan or the Confirmation Order, except where such Claims or Causes of Action have been waived, relinquished, released, compromised or settled in the Plan or a Final Order. In addition, the Debtors and the successor entities under the Plan expressly reserve the right to pursue or adopt any Claims not so waived, relinquished, released, compromised or settled that are alleged in any lawsuit in which the Debtors are a defendant or an interested party, against any person or entity, including, without limitation, the plaintiffs or co-defendants in such lawsuits.
Any Person to whom the Debtors have incurred an obligation (whether on account of services, purchase or sale of goods or otherwise), or who has received services from the Debtors or a transfer of money or property of the Debtors, or who has transacted business with the Debtors, or leased equipment or property from the Debtors should assume that such obligation, transfer, or transaction may be reviewed by the Debtors subsequent to the Effective Date and may, to the extent not theretofore waived, relinquished, released, compromised or settled, be the subject of an action after the Effective Date, whether or not
(i) such Person has Filed a proof of Claim against the Debtors in the Chapter 11 Cases; (ii) such Person's proof of Claim has been objected to; (iii) such Person's Claim was included in the Debtors' Schedules; or (iv) such Person's scheduled Claim has been objected to by the Debtors or has been identified by the Debtors as disputed, contingent, or unliquidated.
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F. Discharge of Claims and Termination of Equity Interests
Except as otherwise provided herein: (1) the rights afforded herein and the treatment of all Claims and Equity Interests herein, shall be in exchange for and in complete satisfaction, discharge and release of Claims and Equity Interests of any nature whatsoever, including any interest accrued on Claims from and after the Petition Date, against the Reorganizing or Reorganized Debtors or any of their assets or properties, (2) on the Effective Date, all such Claims against, and Equity Interests in, the Reorganizing or Reorganized Debtors shall be satisfied, discharged and released in full, and (3) all Persons shall be precluded from asserting against the Reorganizing or Reorganized Debtors, their successors or their assets or properties any other or further Claims or Equity Interests based upon any act or omission, transaction or other activity of any kind or nature that occurred prior to the Confirmation Date.
Article XI.
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases after the Effective Date as legally permissible, including jurisdiction to:
1. allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim or Equity Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the allowance or priority of Claims or Equity Interests;
2. grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on or before the Confirmation Date;
3. resolve any matters related to the assumption, assumption and assignment or rejection of any executory contract and unexpired lease to which a Debtor is party or with respect to which a Debtor may be liable and to hear, determine and, if necessary, liquidate, any Claims arising therefrom, including those matters related to the amendment after the Effective Date pursuant to Article V herein to add any executory contracts or unexpired leases to the list of executory contracts and unexpired leases to be rejected;
4. ensure that distributions to Holders of Allowed Claims and Allowed Equity Interests are accomplished pursuant to the provisions hereof;
5. decide or resolve any motions, adversary proceedings (including turnover actions and efforts to collect loans due the Reorganizing Debtors), contested or litigated matters and any other matters and grant or deny any applications involving a Debtor that may be pending on the Effective Date;
6. enter such orders as may be necessary or appropriate to implement or consummate the provisions hereof and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Plan or the Disclosure Statement;
7. resolve any cases, controversies, suits or disputes that may arise in connection with the Consummation, interpretation or enforcement of the Plan or any Person's obligations incurred in connection with the Plan;
8. issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with Consummation or enforcement of the Plan, except as otherwise provided herein;
9. resolve any cases, controversies, suits or disputes with respect to the releases, injunction and other provisions contained in Article XI hereof and enter such orders as may be necessary or appropriate to implement such releases, injunction and other provisions;
52

10. enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated;
11. determine any other matters that may arise in connection with or relate to this Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement; and
12. enter an order and/or final decree concluding the Chapter 11 Cases.
Article XII.
MISCELLANEOUS PROVISIONS
A. Modification of Plan Supplement
Modification of or amendments to the Plan Supplement, may be Filed with the Bankruptcy Court no later than the Confirmation Date. Any such modification or supplement shall be considered a modification of the Plan and shall be made in accordance with Article XII.E hereof. Upon its Filing, the Plan Supplement may be inspected in the office of the clerk of the Bankruptcy Court or its designee during normal business hours. Holders of Claims and Equity Interests may obtain a copy of the Plan Supplement by contacting Bankruptcy Management Corporation at 1-888-909-0100 or review such documents on the internet at www.bmccorp.net/Conseco. The documents contained in the Plan Supplement are an integral part of the Plan and shall be approved by the Bankruptcy Court pursuant to the Confirmation Order.
B. Effectuating Documents, Further Transactions and Corporation Action
Each of the Debtors and Reorganized Debtors is authorized to execute, deliver, file or record such contracts, instruments, releases and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement and further evidence the terms and conditions hereof and the notes and securities issued pursuant hereto.
Prior to, on or after the Effective Date (as appropriate), all matters provided for hereunder that would otherwise require approval of the shareholders or directors of the Debtors or Reorganized Debtors shall be deemed to have occurred and shall be in effect prior to, on or after the Effective Date (as appropriate) pursuant to the general corporation laws of the State of Delaware, the State of Indiana, or the State of Illinois (as appropriate) without any requirement of further action by the shareholders or directors of the Debtors or Reorganized Debtors.
C. Dissolution of Committee(s)
Upon the Effective Date, the Official Committees shall dissolve, except with respect to any appeal of an order in the Chapter 11 Cases and applications for Professional Fees, and members shall be released and discharged from all rights, duties and liabilities arising from, or related to, the Chapter 11 Cases.
D. Payment of Statutory Fees
All fees payable pursuant to section 1930(a) of Title 28 of the United States Code, as determined by the Bankruptcy Court at the hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid for each quarter (including any fraction thereof) until the Chapter 11 Cases are converted, dismissed or closed, whichever occurs first.
E. Modification of Plan
Subject to the limitations contained in the Plan,
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(1) the Debtors reserve the right, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify the Plan prior to the entry of the Confirmation Order; and
(2) after the entry of the Confirmation Order, the Debtors or Reorganized Debtors, as the case may be, may (with the consent of the Conseco Creditors Committee whose consent shall not be unreasonably withheld, delayed or denied)), upon order of the Bankruptcy Court, amend or modify the Plan, in accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or reconcile any inconsistency in the Plan in such manner as may be necessary to carry out the purpose and intent of the Plan, provided however, that (i) no material modification of the Plan that adversely affects the treatment of Classes 6A, 7A, or 5B shall be made without the written consent of the Noteholder Subcommittee and (ii) no material modification of the Plan that adversely affects the treatment of Classes 5A or 4B shall be made without the written consent of the Lender Subcommittee.
F. Revocation of Plan
The Debtors reserve the right (with the prior consent of the Conseco Creditors Committee) to revoke or withdraw the Plan prior to the Confirmation Date and to file subsequent plans of reorganization. If a Debtor revokes or withdraws the Plan, or if Confirmation or Consummation does not occur, then (a) the Plan shall be null and void in all respects, (b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Equity Interest or Class of Claims or Equity Interests), assumption or rejection of executory contracts or leases affected by the Plan, and any document or agreement executed pursuant hereto, shall be deemed null and void, and (c) nothing contained in the Plan shall (i) constitute a waiver or release of any Claims by or against, or any Equity Interests in, such Debtor or any other Person, (ii) prejudice in any manner the rights of such Debtor or any other Person, or (iii) constitute an admission of any sort by such Debtor or any other Person.
G. Successors and Assigns
The rights, benefits and obligations of any Person named or referred to herein shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign of such Person.
H. Reservation of Rights
Except as expressly set forth herein, this Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. None of the filing of this Plan, any statement or provision contained herein, or the taking of any action by any Debtor with respect to this Plan, the Disclosure Statement or Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of any Debtor with respect to the Holders of Claims or Equity Interests prior to the Effective Date.
I. Section 1146 Exemption
Pursuant to section 1146(c) of the Bankruptcy Code, under this Plan, (i) the issuance, distribution, transfer or exchange of any debt, equity security or other interest in the Debtors or Reorganized Debtors; (ii) the creation, modification, consolidation or recording of any mortgage, deed of trust, or other security interest, or the securing of additional indebtedness by such or other means; (iii) the making, assignment or recording of any lease or sublease; or (iv) the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, this Plan, including any deeds, bills of sale, assignments or other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to this Plan shall not be subject to any document recording tax, mortgage recording tax, stamp tax or similar government assessment, and the appropriate state or local government official or agent shall be directed by the Bankruptcy Court to forego the collection of any such tax or government assessment and to accept for filing and recording any of the foregoing instruments or other documents without the payment of any such tax or government assessment.
All subsequent issuances, transfers or exchanges of securities, or the making or delivery of any instrument of transfer by the Debtors in the Chapter 11 Cases, whether in connection with a sale under section 363 of the
54

Bankruptcy Code or otherwise, shall be deemed to be or have been done in furtherance of this Plan. Specifically, because sale of the GM Building (or the entities owning the GM Building or the interest therein), is being conducted pursuant to this Plan, any instrument of transfer that would effect transfer of the GM Building as proposed in pleadings filed in these Chapter 11 Cases may not be taxed under any law imposing a stamp tax or similar tax.
J. Further Assurances
The Debtors, Reorganized Debtors and all Holders of Claims or Equity Interests receiving distributions hereunder and all other parties in interest shall, from time to time, prepare, execute and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of this Plan.
K. Service of Documents
Any pleading, notice or other document required by the Plan to be served on or delivered to the Debtors or Reorganized Debtors shall be sent by first class U.S. mail, postage prepaid to:

                                            with copies to:
Conseco, Inc.                               --------------
CIHC, Incorporated
CTIHC, Inc.                                 Kirkland & Ellis LLP
Partners Health Group, Inc.                 200 E. Randolph Drive
11825 N. Pennsylvania Street                Chicago, Illinois 60601
P.O. Box 1911 (46082)                       Attn:   James H.M. Sprayregen, P.C.
Carmel, Indiana 46032                               Anne M. Huber	

Attn: General Counsel Anup Sathy
L. Transactions on Business Days
If the date on which a transaction may occur under this Plan shall occur on a day that is not a Business Day, then such transaction shall instead occur on the next succeeding Business Day.
M. Filing of Additional Documents
On or before the Effective Date, the Debtors may file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions hereof.
N. Term of Injunctions or Stays
Unless otherwise provided herein or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in this Plan or the Confirmation Order) shall remain in full force and effect until the Effective Date. All injunctions or stays contained in this Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.
O. Entire Agreement
This Plan and the Plan Supplement (as amended) supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings and representations on such subjects, all of which have become merged and integrated into this Plan. Specifically, the Plan filed on January 31, 2003, and the First Amended Plan filed on March 12, 2003, and iterations of such documents are void and of no legal effect.
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Respectfully Submitted, 
CONSECO, INC.

By: /s/ William J. Shea
   ----------------------------
Name:  William J. Shea
Title: President and Chief Executive Officer	

CIHC, INCORPORATED

By: /s/ William J. Shea
   ----------------------------
Name:  William J. Shea
Title: President	

CTIHC, Inc.

By: /s/ William J. Shea
   ----------------------------
Name:  William J. Shea
Title: President	

Partners Health Group Inc.

By: /s/ William J. Shea
   ----------------------------
Name:  William J. Shea
Title: President	

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Prepared by:
James H.M. Sprayregen, P.C. (ARDC No. 6190206) Anne Marrs Huber (ARDC No. 6226828)
Anup Sathy (ARDC No. 6230191)
Roger J. Higgins (ARDC No. 6257915)
Ross M. Kwasteniet (ARDC No. 6276604)
KIRKLAND & ELLIS LLP
 200 East Randolph Drive
Chicago, IL 60601-6636
(312) 861-2000 (telephone)
(312) 861-2200 (facsimile)
COUNSEL TO DEBTORS AND DEBTORS IN POSSESSION
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Exhibit 2.3
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

In re:                                )  Chapter 11
                                      )
Conseco, Inc., et al.,(1)             )
                                      )
                                      )  Case No. 02 B49672
                   Debtors.           )  Honorable Carol A. Doyle
                                      )  (Jointly Administered)
                                      )	

ORDER CONFIRMING REORGANIZING
DEBTORS' SIXTH AMENDED JOINT PLAN OF REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
The above-captioned debtors and debtors in possession (collectively, the "Reorganizing Debtors" or the "Debtors") having filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") on December 17, 2002 (the "Petition Date");
The Debtors having filed, on March 18, 2003, the Second Amended Disclosure Statement for Reorganizing Debtors' Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (as amended, the "Disclosure Statement"), which Disclosure Statement was approved by the Court pursuant to that certain Order dated March 18, 2003 (the "Solicitation Procedures Order");
The Debtors having filed the Second Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code on March 18, 2003 (the "Second Amended Plan"), which was an exhibit to the Disclosure Statement;

1 The Reorganizing Debtors are the following entities: (i) Conseco, Inc.;
(ii) CIHC, Incorporated; (iii) CTIHC, Inc.; and (iv) Partners Health Group, Inc. (defined herein, collectively, as the "Debtors" or "Reorganizing Debtors"). This Order does not apply to the Finance Company Debtors (as defined in the Plan).

The Debtors having filed on August 13, 2003 Debtors' Emergency Motion for Entry of an Order (I) Approving (A) Notice of the TOPrS Settlement to the Lenders and TOPrS Holders and (B) Release Provision Opt-Out Notices and (II) Setting a Hearing Date for Plan Confirmation and Approval of the TOPrS Settlement and having issued on August 15, 2003 a Notice of Settlement Regarding TOPrS Claims Pursuant to Fed. R. Bankr. P. 9019 and Opt-Out Form;
The Debtors having filed on September 5, 2003, the Third Amended Plan Supplement and the Addendum on September 9, 2003 (the "Plan Supplement"), which includes the New CNC Warrant Agreement; the Debtors having filed on September 9, 2003, the Reorganizing Debtors' Sixth Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (as amended, the "Plan"); the Debtors having distributed the Second Amended Plan and Disclosure Statement to all Holders of Impaired Claims against the Debtors, together with a solicitation of votes to accept or reject the Plan, beginning on or about April 3, 2003, consistent with the Solicitation Procedures Order;(2)
This Court having set May 28, 2003, at 11:00 a.m. central as the date and time of a hearing pursuant to Rules 3017 and 3018 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and sections 1126, 1128 and 1129 of the Bankruptcy Code to consider the Confirmation of the Plan (the "Confirmation Hearing"); this Court having rescheduled the Confirmation Hearing to June 13, 2003, at 9:00 a.m. central and thereafter until September 9, 2003, at 1:30 p.m. central;

2 Capitalized terms not defined herein shall have those meanings ascribed to them in the Plan or in Exhibit A. The rules of interpretation set forth in Article I.A of the Plan shall apply to these Findings of Fact, Conclusions of Law and Order (this "Confirmation Order"). If there is any direct conflict between the terms of the Plan, the Plan Supplement and the terms of this Confirmation Order, the terms of this Confirmation Order shall control.

2

The documents listed on Exhibit A having been filed on the dates listed on Exhibit A;
Objections to Confirmation of the Plan having been filed by numerous parties, and each such objection having been resolved, withdrawn or overruled; and an objection (the "TOPrS' Objection") to Confirmation of the Plan having been filed by the TOPrS' Committee; and the TOPrS' Objection and all evidence submitted by the TOPrS Committee having been withdrawn as part of the TOPrS Settlement as defined in the Plan;
This Court having reviewed the Second Amended Plan, the Plan and Disclosure Statement and the documents listed on Exhibit A and all filed pleadings, exhibits, statements and comments regarding Confirmation; this Court having heard the statements of counsel in respect of Confirmation; this Court having considered all testimony, documents and affidavits regarding Confirmation;
This Order is divided into two parts: (I) Findings of Fact and Conclusions of Law and (II) the Order;
After due deliberation thereon and good cause appearing therefor, this Court hereby makes and issues the following Findings of Fact, Conclusions of Law and Orders:(3)
I
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Jurisdiction and Venue
a) On the Petition Date, each Reorganizing Debtor commenced a Chapter 11 Case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The

3 This Confirmation Order constitutes this Court's findings of fact and conclusions of law under Fed. R. Civ. P. 52, as made applicable by Bankruptcy Rules 7052 and 9014. Any and all findings of fact shall constitute findings of fact even if they are Stated as conclusions of law, and any and all conclusions of law shall constitute conclusions of law even if they are Stated as findings of fact.

3

Debtors were and are qualified to be debtors under section 109 of the Bankruptcy Code. Venue in the Northern District of Illinois was proper as of the Petition Date and continues to be proper. Confirmation of the Plan is a core proceeding under 28 U.S.C. ss. 157(b)(2). This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. ss. 1334; and the Court has exclusive jurisdiction to determine whether the Plan complies with the applicable provisions of the Bankruptcy Code and should be confirmed.
Modifications to the Plan
b) With the exception of the Lender Claims (Classes 5A and 4B) and the Trust Related Claims (Class 10A), the Plan does not adversely change the treatment of the Claim of any creditor as compared to the treatment proposed in the Second Amended Plan attached to the Disclosure Statement. Therefore, under Rule 3019, creditors who voted to accept the Second Amended Plan (other than the Lenders and the Trust Related Claims) are deemed to accept the Plan, except to the extent the Plan provides otherwise. Class 10A is deemed to reject the Plan and therefore holders of Class 10A Claims were not resolicited. As evidenced by the Voting Report (as later defined, and as listed as item 29 in Exhibit A), the Lenders, as Classes 5A-1, 5A-2, 4B-1 and 4B-2, have voted to accept the Plan.
c) On September 8, 2003, the Debtors served the "Notice of Intent to be Listed on The New York Stock Exchange and Proposed Modifications of the Certificate of Designations for New CNC Preferred Stock," listed on Exhibit A as item 32 (the "Preferred Stock Modifications"). The Preferred Stock Modifications do not adversely change the Plan's treatment of any claim under the Plan and therefore creditors who voted to accept the Plan will be deemed to have accepted the Plan, as amended by the Preferred Stock Modifications.
d) Pursuant to an order of this Court dated August 15, 2003, and as evidenced by the Declaration listed on Exhibit A as item 18.d, the Reorganizing Debtors sent
4

notices (collectively, the "Creditor Release Provision Opt-Out Notices") on August 16, 2003, to Holders of Claim in Classes 4A, 6A, 7A, 8A, 5B and 6B. The Release Provision Opt-Out Notice gave Holders who had not previously voted to accept the Plan, but who nonetheless would be entitled to receive a distribution under the Plan, the option to opt-out of the third-party release provision set forth in Art. X.C. of the Plan (the "Release Provision") by 5:00 p.m. central September 8, 2003. Holders who had previously voted to accept the Plan are bound by the Release Provision and thus are not entitled to opt-out pursuant to the Creditor Release Provision Opt-Out Notice.
e) Pursuant to orders dated August 15, 2003 and August 20, 2003, and as evidenced by declarations listed as items 18.d and 19.e in Exhibit A, the Reorganizing Debtors' agent sent notices (collectively, the "TOPrS Opt-Out Notices" and with the Creditor Release Provision Opt-Out Notices, the "Opt-Out Notices") to the intermediaries for all holders of Trust Preferred Securities in compliance with such orders. The TOPrS Opt-Out Notices gave all holders of Trust Preferred Securities the option to opt-out of the TOPrS Settlement by 5:00 p.m. central September 8, 2003.
Solicitation Procedures Order
f) On March 18, 2003, the Court entered the Solicitation Procedures Order that, among other things: (a) approved the Disclosure Statement as containing adequate information within the meaning of section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017; (b) fixed time for voting to accept or reject the plan; (c) fixed May 28, 2003, at 11:00 a.m. central, continued to June 13, 2003, at 9:00 a.m. central, as the date and time for the commencement of the Confirmation Hearing; (d) established the objection deadline and procedures for objecting to the Plan; (e) approved the form and method of notice of the
5

Confirmation Hearing (the "Confirmation Hearing Notice"), and (f) established the record date and certain procedures for soliciting and tabulating votes with respect to the Plan.
Publication of Confirmation Hearing Notice
g) As evidenced in the documents listed as items 2, 3, 4 and 5 on Exhibit A, the Debtors published the Confirmation Hearing Notice in the national editions of The Wall Street Journal on April 7, 2003, the Indianapolis Star on April 7, 2003, and the Chicago Tribune on April 7, 2003; and in USA Today on April 7, May 2, and May 13, 2003.
Voting Report
h) On June 12, 2003, as amended on July 2, 2003 (item 12 in Exhibit A) and September 9, 2003 (item 29 in Exhibit A), the Debtors filed with the Court a report certifying the method and results of the Ballot tabulation for each of the Voting Classes to accept or reject the Plan (as amended, the "Voting Report").
i) All procedures used to distribute solicitation materials to the applicable Holders of Claims and Equity Interests and to tabulate the Ballots were fair and conducted in accordance with the Solicitation Procedures Order, the Bankruptcy Code, the Bankruptcy Rules, the local rules of the Bankruptcy Court for the Northern District of Illinois, Eastern Division, and all other applicable rules, laws and regulations.
j) As evidenced by the Voting Report, as amended, changed Ballots received after the Voting Deadline were properly tabulated. Pursuant to sections 1124 and 1126 of the Bankruptcy Code, all Impaired Classes entitled to vote on the Second Amended Plan have voted to accept the Plan, with the exception of Class 10A Trust Related Claims against CNC. The Trust Related Claims (Class 10A) are deemed to reject the Plan.
6

Judicial Notice
k) The Court takes judicial notice of the docket of the Chapter 11 Cases maintained by the Clerk of the Court and/or its duly appointed agent, including, without limitation, all pleadings and other documents on file, all orders entered, and all evidence (that was not subsequently withdrawn) and arguments made, proffered or adduced at the hearings held before the Court during the pendency of the Chapter 11 Cases. The Court admits into evidence the documents listed on Exhibit A. Resolutions of objections to Confirmation explained on the record at the Confirmation Hearing are hereby incorporated by reference.
Transmittal and Mailing of Materials; Notice
l) As evidenced by the Declaration of Voting Agent regarding solicitation listed as item 11 in Exhibit A, due, adequate and sufficient notice of the Disclosure Statement and Plan and of the Confirmation Hearing, along with all deadlines for voting on or objecting to the Plan and notice of the TOPrS Settlement, has been given to (a) all known Creditors and Holders of Equity Interests; (b) parties that requested notice in accordance with Bankruptcy Rule 2002; (c) all parties to unexpired leases and executory contracts with the Debtors, and (d) all taxing authorities listed on the Debtors' Schedules or in the Debtors' Claims database, in accordance with the procedures set forth in the Solicitation Procedures Order, in substantial compliance with Bankruptcy Rules 2002(b), 3017 and 3020(b) and the Solicitation Procedures Order, and such transmittal and service were adequate and sufficient. Adequate and sufficient notice of the Confirmation Hearing, as continued from time-to-time, and other bar dates and hearings described in the Solicitation Procedures Order was given in compliance with the Bankruptcy Rules and Solicitation Procedures Order, and no other or further notice is or shall be required.
7

Transmittal of Opt-Out Notices; Notice
m) The Opt-Out Notices were properly served pursuant to the Declaration of Service listed as item 18.d in Exhibit A and the Declaration of Service listed as item 19.e in Exhibit A. Such notices provided adequate and sufficient opportunity for entities receiving an Opt-Out Notice to return such opt-out forms in accordance with applicable law.
Solicitation
n) Votes for acceptance and rejection of the Plan were solicited in good faith and complied with sections 1125 and 1126 of the Bankruptcy Code, Rules 3017 and 3018 of the Bankruptcy Rules, the Disclosure Statement, the Solicitation Procedures Order, all other applicable provisions of the Bankruptcy Code and all other applicable rules, laws and regulations.
o) The Debtors, the Official Committees (and their current and former members and ex officio members), and their respective directors, officers, agents, affiliates, representatives, attorneys and advisors have solicited votes on the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code and the Solicitation Procedures Order and are entitled to the protections afforded by section 1125(e) of the Bankruptcy Code and the exculpation provisions set forth in Article X.D of the Plan.
Burden of Proof
p) The Debtors, as proponents of the Plan, have met their burden of proving the elements of section 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence, which is the applicable evidentiary standard in this Court. The Court also finds that the Debtors have satisfied the elements of section 1129(a) and (b) of the Bankruptcy Code by clear and convincing evidence.
8

Compliance with the Requirements of Section 1129 of the Bankruptcy Code
Section 1129(a)(1) - Compliance of the Plan with Applicable Provisions of the Bankruptcy Code
q) The Plan complies with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code, including, without limitation, sections 1122 and 1123. Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article III of the Plan designates Classes of Claims and Equity Interests, other than Administrative Claims and Priority Tax Claims.(4) As required by section 1122(a) of the Bankruptcy Code, each Class of Claims and Equity Interests contains only Claims or Equity Interests that are substantially similar to the other Claims or Equity Interests within that Class.
r) Pursuant to section 1123(a)(2) and (3) of the Bankruptcy Code, Article III of the Plan specifies all Claims that are not Impaired and specifies the treatment of all Claims and Equity Interests that are Impaired. Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article III of the Plan also provides the same treatment for each Claim or Equity Interest within a particular Class.
s) Pursuant to section 1123(a)(5) of the Bankruptcy Code, the Plan provides adequate and proper means for the Plan's implementation. The Debtors will have, immediately upon the Effective Date of the Plan, sufficient Cash to make all payments required to be made on the Effective Date pursuant to the terms of the Plan. Moreover, Article V and various other provisions of the Plan specifically provide adequate means for the Plan's implementation, including, without limitation: (a) the continuation of the corporate existence and the vesting of assets in the Reorganized Debtors; (b) the adoption of the New CNC Charter and New CNC

4 The Administrative Claims and the Priority Tax Claims are not required to be designated pursuant to section 1123(a)(1) of the Bankruptcy Code. 11 U.S.C. ss. 1123(a)(1).

9

By-laws;(5) (c) the cancellation of the Senior Credit Facility, Exchange Notes, Original Notes, Subordinated Debentures, the 93/94 Notes, Old CNC Common Stock, and Old CNC Preferred Stock; (d) the authorization and issuance or distribution of the New Credit Facility, New CNC Common Stock, New CNC Preferred Stock, and New CNC Warrants, and the execution of related documents; (e) the selection of the initial directors and officers of New CNC, subject to applicable state insurance regulatory approval; (f) the creation of the Residual Trust; (g) the liquidation of Old CNC; (h) the Intercompany Settlement (as described in Article V.F of the Plan); (i) the TOPrS Settlement (as described in Article V.I of the Plan); (j) the sale of the GM Building, and (k) the sources of Cash for distributions under the Plan.
t) The New CNC Charter and New CNC By-laws in the Plan Supplement comply with section 1123(a)(6) and section 1123(a)(7).
Section 1129(a)(2) - Compliance with Applicable Provisions of the Bankruptcy Code
u) The Debtors, as proponents of the Plan, have complied with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(2) of the Bankruptcy Code, including, without limitation, sections 1125 and 1126 and Bankruptcy Rules 3017, 3018 and 3019. In particular, the Reorganizing Debtors are proper debtors under section 109 of the Bankruptcy Code and proper proponents of the Plan under section 1121(a) of the Bankruptcy Code. Furthermore, the solicitation of acceptances or rejections of the Plan was (i) pursuant to the Solicitation Procedures Order; (ii) in compliance with all applicable laws, rules and regulations governing the adequacy of disclosure in connection with such solicitation; and (iii) solicited after disclosure to Holders of Claims or Interests of adequate information as defined in

5 Article V.I(1) of the Plan provides for the inclusion in the New CNC Charter and New CNC By-laws of all provisions required to be included in the corporate charter of the Reorganized Debtors under section 1123(a)(6) of the Bankruptcy Code.

10

section 1125(a) of the Bankruptcy Code. Accordingly, the Debtors, the Official Committees (and their current and former members and ex officio members), and their respective directors, officers, employees, agents, affiliates and Professionals have acted in "good faith" within the meaning of section 1125(e) of the Bankruptcy Code.
Section 1129(a)(3) - Proposal of Plan in Good Faith
v) The Debtors have proposed the Plan in good faith and not by any means forbidden by law. In determining that the Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases, the Plan itself, and the process leading to its formulation. See Bankruptcy Rule 3020(b). The Chapter 11 Cases were filed, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to reorganize and emerge from bankruptcy with a capital structure that will allow them to satisfy their obligations with sufficient liquidity and capital resources.
Section 1129(a)(4) - Bankruptcy Court Approval of Certain Payments as Reasonable
w) Pursuant to section 1129(a)(4) of the Bankruptcy Code, the payments to be made by the Reorganized Debtors for services or for costs in connection with the Chapter 11 Cases or the Plan, as described (a) in the "Reorganized Debtors'
Section 1129(a)(4) Disclosure" filed on September 4, 2003 or (b) in the Plan, are approved.
x) State Street Bank and Trust Company shall hold an Allowed Administrative Claim in the amount of $50,000, but it shall be precluded from asserting additional claims against the Debtors and/or holders of the Trust Preferred Securities. Before receiving payment of the $50,000 Allowed Administrative Claim specified herein, State Street Bank and Trust Company shall return to New CNC the Subordinated Debentures and related
11

documents as reasonably requested by New CNC. State Street Bank and Trust Company shall cooperate with New CNC and its agents regarding distributions to be made under the Plan.
y) In addition, fees and expenses incurred by professionals retained by the Debtors or an Official Committee shall be payable according to the Orders approving such firms' retention.
Section 1129(a)(5) - Disclosure of Identity of Proposed Management, Compensation of Insiders and Consistency of Management Proposals with the Interests of Creditors and Public Policy
z) Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors have disclosed the identity of the proposed directors and officers of the Reorganized Debtors following Confirmation of the Plan and the identity and compensation of insiders who will be employed or retained by the Reorganized Debtors in the Plan Supplement.
Section 1129(a)(6) - Approval of Rate Changes
aa) The Debtors' current businesses do not involve the establishment of rates over which any regulatory commission has or will have jurisdiction after Confirmation. Section 1129(a)(6) of the Bankruptcy Code is thus not applicable to these Chapter 11 Cases.
Section 1129(a)(7) - Best Interests of Creditors and Equity Interest Holders
bb) The liquidation analysis annexed to the Disclosure Statement as Exhibit B, and the other evidence related thereto that was proffered or adduced at or prior to, or in affidavits in connection with, the Confirmation Hearing, is reasonable. The methodology used and assumptions made in the liquidation analysis, as supplemented by the evidence proffered or adduced at or prior to, or in affidavits filed in connection with, the Confirmation Hearing, are reasonable.
cc) With respect to each Impaired Class, each Holder of an Allowed Claim or Equity Interest in such Class has accepted the Plan or will receive under the Plan on account of
12

such Claim or Equity Interest property of a value, as of the Effective Date, that is not less than the amount such Holder would receive if the Debtors were liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code.
Section 1129(a)(8) - Acceptance of the Plan by Each Impaired Class
dd) As indicated in Articles III and IV of the Plan, the following Classes are Unimpaired and conclusively presumed to have accepted the Plan:

-------------------------------------------------------------- -------------------------------------------------------
Description of Class                                           Class Designation
-------------------------------------------------------------- -------------------------------------------------------
-------------------------------------------------------------- -------------------------------------------------------
Other Priority Claims                                          1A, 1B, 1C, 1D
-------------------------------------------------------------- -------------------------------------------------------
Other CNC Secured Claims                                       2A
-------------------------------------------------------------- -------------------------------------------------------
Other Secured Claims                                           2B, 2C, 2D
-------------------------------------------------------------- -------------------------------------------------------
Reinstated Intercompany Claims                                 3A, 3B
-------------------------------------------------------------- -------------------------------------------------------
Reinstated CIHC Preferred Stock Interests                      8B
-------------------------------------------------------------- -------------------------------------------------------
Convenience Class Claims                                       9A, 7B
-------------------------------------------------------------- -------------------------------------------------------
Old CIHC Common Stock Interests                                9B
-------------------------------------------------------------- -------------------------------------------------------	

ee) As indicated in the Voting Report, as amended, every Impaired Class that was entitled to vote has voted to accept the Plan. The following Impaired Classes voted in favor of the Plan:

--------------------------------------------------------------- ------------------------------------------------------
Description of Class                                            Class Designation
--------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------- ------------------------------------------------------
93/94 Note Claims                                               4A
--------------------------------------------------------------- ------------------------------------------------------
Lender Claims                                                   5A-1, 5A-2, 4B-1, 4B-2
--------------------------------------------------------------- ------------------------------------------------------
Exchange Note Claims                                            6A, 5B
--------------------------------------------------------------- ------------------------------------------------------
Original Note Claims                                            7A
--------------------------------------------------------------- ------------------------------------------------------
Reorganizing Debtor General Unsecured Claims                    8A, 6B, 3C
--------------------------------------------------------------- ------------------------------------------------------	

ff) Because the Plan provides that the Classes listed below will not receive any distribution or retain any property under the Plan, they are "Deemed Rejected Classes" and are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code:
13

--------------------------------------------------------------- ------------------------------------------------------
Class of Claims                                                 Class Designation
--------------------------------------------------------------- ------------------------------------------------------
--------------------------------------------------------------- ------------------------------------------------------
Old CTIHC Common Stock Interests                                4C
--------------------------------------------------------------- ------------------------------------------------------
Old PHG Common Stock Interests                                  4D
--------------------------------------------------------------- ------------------------------------------------------
Discharged Intercompany Claims                                  10B
--------------------------------------------------------------- ------------------------------------------------------
Old CNC Series F Preferred Stock Interests                      11A-1
--------------------------------------------------------------- ------------------------------------------------------
Old CNC Other Preferred Stock Interests                         11A-2
--------------------------------------------------------------- ------------------------------------------------------
Old CNC Common Stock Interests                                  12A
--------------------------------------------------------------- ------------------------------------------------------
Discharged Intercompany Claims                                  13A
--------------------------------------------------------------- ------------------------------------------------------
Securities Claims                                               14A, 11B
--------------------------------------------------------------- ------------------------------------------------------
Trust Related Claims                                            10A
--------------------------------------------------------------- ------------------------------------------------------	

Section 1129(a)(9) - Treatment of Claims Entitled to Priority Pursuant to
Section 507(a) of the Bankruptcy Code
gg) The treatment of Administrative, Priority Tax, and Other Priority Claims under Articles II.A, II.B and III of the Plan, respectively, satisfies the requirements of section 1129(a)(9) of the Bankruptcy Code.
hh) To resolve the objection of the Illinois Department of Revenue
("IDOR"), Allowed Claims of the IDOR that have priority under section 507(a)(8)
of the Bankruptcy Code are to be paid, at the option of the Reorganizing Debtors, either (i) in Cash on the Effective Date or (ii) in Cash over a period not to exceed six years from the date of assessment of the tax to which the Allowed Priority Tax Claim relates, with interest at a 9% annual rate (compounded annually).
Section 1129(a)(10) - Acceptance By At Least One Impaired Class
ii) As set forth in the Voting Report each Impaired Class, other than the Deemed Rejected Classes, has voted to accept the Plan. Accordingly, section 1129(a)(10) of the Bankruptcy Code is satisfied.
Section 1129(a)(11) - Feasibility of the Plan
jj) The Plan satisfies section 1129(a)(11) of the Bankruptcy Code. Based upon the evidence proffered or adduced at, or prior to, or in affidavits filed in connection with the Confirmation Hearing, the Plan is feasible and Confirmation of the Plan is not likely to be
14

followed by the liquidation, or the need for further financial reorganization, of the Debtors, the Reorganized Debtors or any successor to the Reorganized Debtors under the Plan. Furthermore, the Reorganized Debtors will have adequate capital to meet their ongoing obligations.
Section 1129(a)(12) - Payment of Bankruptcy Fees
kk) In accordance with section 1129(a)(12) of the Bankruptcy Code, Article
XII.D of the Plan provides for the payment of all fees payable under 28 U.S.C. ss. 1930(a). The Reorganizing Debtors have adequate means to pay all such fees.
Section 1129(a)(13) - Retiree Benefits
ll) In accordance with section 1129(a)(13) of the Bankruptcy Code, Article
VI.E of the Plan provides for the timely payment post-Confirmation of retiree benefits (as that term is defined in section 1114 of the Bankruptcy Code), if any, to the extent such retiree benefits are payable by the Reorganizing Debtors. Such retiree benefits include those that arise from the plans, funds or programs described in the Plan Supplement.
Section 1129(b) - Confirmation of Plan Over Nonacceptance of Impaired Class
mm) Pursuant to section 1129(b)(1) of the Bankruptcy Code, the Plan may be confirmed notwithstanding the fact that not all Impaired Classes have voted to accept the Plan. All of the requirements of section 1129(a) of the Bankruptcy Code other than section 1129(a)(8) have been met. All Classes of Impaired Claims have voted to accept the Plan other than the Deemed Rejected Classes.
nn) With respect to the Deemed Rejected Classes, no Holders of Claims or Interests subordinate to the Holders of the Claims and Interests in the Deemed Rejected Classes will receive or retain any property under the Plan. Accordingly the requirements of sections
15

1129(b)(2)(B)(ii) and 1129(b)(2)(C)(ii) are satisfied with respect to Class 10A and the Deemed Rejected Classes, and the Plan is fair and equitable with respect to such Classes.
oo) Pursuant to section 1129(b) of the Bankruptcy Code, the Court finds that the Plan is "fair and equitable" (as defined in section 1129(b) of the Bankruptcy Code) with respect to Impaired Classes that have not voted to accept the Plan and the Plan does not unfairly discriminate against such Classes.
pp) The Plan provides for distribution to Classes 7A (Original Note Claims), 8A (CNC General Unsecured Claims) and 6B (CIHC General Unsecured Claims), notwithstanding that Classes 6A and 5B (Exchange Note Claims) will not receive full payment on their Claims. The distributions to such junior Classes do not violate the absolute priority rule of section 1129(b)(2) of the Bankruptcy Code because such distributions are based on the agreement of Classes 6A and 5B (Exchange Note Claims) to voluntarily allocate a portion of the value that they would otherwise receive to these Classes. Such value was provided to Classes 7A and 8A to ensure that the Debtors' reorganization efforts are completed consensually and as expeditiously as possible. The subordination provisions in the prepetition documents that govern the Subordinated Debentures and the Trust Preferred Securities are enforceable in a bankruptcy proceeding and therefore the Plan's distributions do not violate the absolute priority rule.
Principal Purpose of the Plan Is Not Avoidance of Taxes
qq) The principal purpose of the Plan is not the avoidance of taxes or the avoidance of the application of Section 5 of the Securities Act of 1933 (15 U.S.C. ss. 77e), and no governmental entity has filed any objection asserting such avoidance.
16

Objections to Confirmation of the Plan
rr) All objections to Confirmation filed with the Court have been withdrawn, settled, or are overruled on their merits.
Issuance and Distribution of the New Securities
ss) The Debtors and each of the current and former members and ex officio members of the Official Committees (and each of their respective affiliates, agents, directors, officers, employees, advisors, and attorneys) have, and upon Confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the distribution of the New Securities (as defined below) under the Plan, and therefore are not, and on account of such distributions will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.
tt) The issuance and distribution of all of the New Credit Facility, New CNC Common Stock, New CNC Warrants, and the New CNC Preferred Stock (collectively, the "New Securities") when issued or distributed as provided in the Plan, will be duly authorized, validly issued and, if applicable, fully paid and nonassessable. The issuance of the New Securities (including, without limitation, the fee payable to Houlihan Lokey Howard & Zukin under its engagement letter, which includes 462,444 shares of New CNC Common Stock) are in exchange for Claims against or Interests in the Debtors, or principally in such exchange and partly for cash or property, within the meaning of section 1145(a)(1) of the Bankruptcy Code. In addition, under section 1145 of the Bankruptcy Code, to the extent, if any, that the above-listed items constitute "securities" (a) the offering of such items is exempt and the issuance and distribution of such items will be exempt from Section 5 of the Securities Act and any State or local law requiring registration prior to the offering, issuance, distribution, or sale of securities and (b) all
17

of the above-described items will be freely tradeable by the recipients thereof, subject to (i) the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in Section 2(a)(11) of the Securities Act, and compliance with any rules and regulations of the SEC, if any, applicable at the time of any future transfer of such securities or instruments; (ii) the restrictions, if any, on the transferability of such securities and instruments; and (iii) applicable regulatory approval.
Executory Contracts and Unexpired Leases
uu) On or about May 16, 2003, July 24, 2003, and July 31, 2003, the Debtors sent notice to counterparties to contracts and leases that the Debtors intend to assume pursuant to the Plan, including a proposed cure amount, if any. Annexed hereto as Exhibit B is a list of contracts and leases that the Debtors have assumed pursuant to such notices (the "Assumed Contracts") and the Claims asserted by the contract counterparties. The Claims listed on Exhibit B are hereby deemed disallowed.
Releases and Discharges
vv) The releases and discharges of Claims and Causes of Action described in Article X of the Plan and this Order, including releases by Holders of Claims, constitute good faith compromises and settlements of the matters covered thereby and are consensual. Such compromises and settlements are made in exchange for consideration and are in the best interest of Holders of Claims, are fair, equitable, reasonable, and are integral elements of the resolution of the Chapter 11 Cases in accordance with the Plan. Each of the discharge, release, indemnification and exculpation provisions set forth in the Plan and this Order
(i) is within the jurisdiction of the Court under 28 U.S.C. ss.ss. 1334(a), 1334(b) and 1334(d); (ii) is an essential means of implementing the Plan pursuant to section 1123(a)(6) of the Bankruptcy Code; (iii) is an integral element of the transactions incorporated into the Plan; (iv) confers material benefit
18

on, and is in the best interests of, the Debtors, their estates and their creditors; (v) is important to the overall objectives of the Plan to finally resolve all Claims among or against the parties-in-interest in the Chapter 11 Cases with respect to the Debtors; and (vi) is consistent with sections 105, 1123, 1129 and other applicable provisions of the Bankruptcy Code.
Preservation of Causes of Action
ww) It is in the best interests of the Creditors and Interest Holders of the Debtors' Estates that all Causes of Action not expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order be retained by the Reorganizing Debtors (before the Effective Date) and the Reorganized Debtors (after the Effective Date) pursuant to Article X of the Plan, to preserve the value of the Debtors' Estates.
Approval of Settlements and Compromises
xx) Pursuant to Bankruptcy Rule 9019 and any applicable State law, and as consideration for the distributions and other benefits provided under the Plan, all settlements and compromises of Claims, Causes of Action and objections to Claims that are embodied in the Plan (including, without limitation, the Intercompany Settlement in Article V.F of the Plan and the TOPrS Settlement of Article V.I. of the Plan) constitute a good faith compromise and settlement of any Claims, Causes of Action and objections to Claims, which compromises and settlements are hereby approved as fair, equitable, reasonable, and appropriate in light of the relevant facts and circumstances underlying such compromise and settlement, and are in the best interests of the Debtors and their Estates and Creditors.
Satisfaction of Conditions to Confirmation
yy) Each of the conditions precedent to the entry of this Confirmation Order, as set forth in Article IX.A of the Plan, has been satisfied or waived in accordance with the Plan.
19

Likelihood of Satisfaction of Conditions Precedent to Consummation
zz) Each of the conditions precedent to the Effective Date, as set forth in Article IX.B of the Plan, is reasonably likely to be satisfied.
Retention of Jurisdiction
aaa) The Court may properly retain jurisdiction over the matters set forth in Article XI of the Plan.
Exemptions from Taxation
bbb) No property located in the State of Illinois that would be the subject of an Illinois transfer tax that would be the subject of a section 1146(c) exclusion has been sold by the Reorganizing Debtors during the course of these Chapter 11 Cases.
Based on the foregoing, it is hereby ORDERED:
II
ORDER
Confirmation of the Plan
1. The Plan and Plan Supplement, substantially in the form as amended, and each of its provisions are confirmed in each and every respect pursuant to section 1129 of the Bankruptcy Code. The terms of the Plan, the Plan Supplement, and exhibits thereto are incorporated by reference into, and are an integral part of, this Confirmation Order. The terms of the Plan, the Plan Supplement, all exhibits thereto, and all other relevant and necessary documents, shall be effective and binding as of the Effective Date of the Plan. Notwithstanding the foregoing, if there is any direct conflict between the terms of the Plan or the Plan Supplement and the terms of this Confirmation Order, the terms of this Confirmation Order shall control. All objections and responses to and Statements and comments regarding the Plan, to the extent not
20

already withdrawn, waived, or settled, and all reservation of rights included therein, shall be, and hereby are, overruled.
Plan Modifications
2. All modifications or amendments to the Plan since the solicitation (including those summarized in the Notice listed as item 32 of Exhibit A) are approved pursuant to section 1127(a) of the Bankruptcy Code and do not require additional disclosure or resolicitation under Rule 3019.
Plan Classification Controlling
3. The classification of Claims and Equity Interests for purposes of the distributions to be made under the Plan shall be governed solely by the terms of the Plan. The classifications set forth on the Ballots tendered to or returned by the Debtors' Creditors in connection with voting on the Plan (a) were set forth on the Ballots solely for purposes of voting to accept or reject the Plan;
(b) do not necessarily represent, and in no event shall be deemed to modify or otherwise affect, the actual classification of such Claims under the Plan for distribution purposes; (c) may not be relied upon by any Creditor as representing the actual classification of such Claims under the Plan for distribution purposes; and (d) shall not be binding on the Debtors or the Reorganized Debtors.
Settlement of Claims and Interests
4. In consideration of the Plan, certain U.S. Bank Claims, Lehman Claims, Intercompany Claims, 93/94 Note Claims, Exchange Note Claims, Original Note Claims, Lender Claims, and Claims asserted by or for the Releasees against the Debtors are hereby resolved as follows:
21

-------------------------------------------- ----------------- ----------------------- ---------------------------
                TYPE OF CLAIM                    CLAIM NO.       ALLEGED AMOUNT OF         ALLOWED AMOUNT OF
                                                                       CLAIM                     CLAIM
-------------------------------------------- ----------------- ----------------------- ---------------------------
-------------------------------------------- ----------------- ----------------------- ---------------------------
  U.S. BANK CLAIMS
  U S Bank National Association, as              49674-000137        $1,000,000,000              Disallowed
  Securitization Trustee

  U S Bank National Association, as              49672-006859        $1,000,000,000              Disallowed
  Securitization Trustee
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  LEHMAN CLAIMS                                  49672-005452          $6,000,000         Disallowed on Effective
                                                                                              Date of the Finance
                                                                                               Company Plans
                                                 49674-000059          $6,000,000         Disallowed on Effective
                                                                                            Date of the Finance
                                                                                               Company Plans
                                                 49674-000055         $125,000,000               Disallowed
                                                 49674-000056         $125,000,000               Disallowed
                                                 49674-000057         $125,000,000               Disallowed
                                                 49674-000058         $125,000,000               Disallowed
                                                 49674-000078          Contingent                Disallowed
                                                 49672-005451          Contingent                Disallowed
                                                 49672-006864          Contingent                Disallowed
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  INTERCOMPANY CLAIMS
  Conseco Finance Corp.                          49672-007941         $30,271,727                Disallowed
  Conseco Agency Inc.                            49672-007943           $394,208                 Disallowed
  Conseco Fin. Consumer Discount Co.             49672-007946           $186,944                 Disallowed
  Consumer Finance Corp. Alabama                 49672-007944           $239,776                 Disallowed
  Conseco Finance Credit Corp.                   49672-007945           $105,664                 Disallowed
  Conseco Finance Servicing Corp.                49672-007942         $14,878,304                Disallowed
  Conseco Agency Inc.                            49674-000256           $394,208                 Disallowed
  Conseco Annuity Assurance Company              49674-000234          Not Stated                Disallowed
  Conseco Fin. Consumer Discount Co.             49674-000259           $186,944                 Disallowed
  Conseco Finance Corp.                          49674-000254         $337,630,130         See Plan Article V.F.
  Conseco Finance Corp. Alabama                  49674-000257           $239,776                 Disallowed
  Conseco Finance Credit Corp.                   49674-000258           $105,664                 Disallowed
  Conseco Finance Servicing Corp.                49674-000255         $14,878,304                Disallowed
  Conseco Life Insurance Company                 49674-000232          Not Stated                Disallowed
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  93/94 NOTE CLAIMS                              49674-000197        $93,711,875.12              Disallowed
                                                 49672-006935        $93,711,875.12              Disallowed
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  EXCHANGE NOTE CLAIMS                           49674-006930       $382,472,524.69       Allowed in the aggregate
                                                 49674-006931       $988,502,907.35           in the amount of
                                                 49674-000079       $382,472,526.63        $1,370,975,431.97 and
                                                 49674-000080       $988,502,907.35        postpetition interest
                                                                                           will not be allowed to
                                                                                          calculate Total Exchange
                                                                                                 Note Claim
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  ORIGINAL NOTE CLAIMS                           49672-06393       $1,242,088,736.16      Allowed in the aggregate
                                                                                                in the amount of
                                                                                             $1,242,444,895.76
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------	

22

-------------------------------------------- ----------------- ----------------------- ---------------------------
                TYPE OF CLAIM                    CLAIM NO.       ALLEGED AMOUNT OF         ALLOWED AMOUNT OF
                                                                       CLAIM                     CLAIM
-------------------------------------------- ----------------- ----------------------- ---------------------------
-------------------------------------------- ----------------- ----------------------- ---------------------------
  LENDER CLAIMS                                  49672-003986       $145,535,970.27
                                                 49672-003982        $10,020,041.41
                                                 49672-003983       $133,649,282.13
                                                 49672-003984       $205,583,532.24       Allowed as set forth in
                                                 49672-003985      $1,537,426,989.45      Article III of the Plan
                                                 49674-000020      $1,537,426,989.45
                                                 49674-000021       $205,583,532.24
                                                 49674-000022       $145,535,970.27
                                                 49674-000023        $10,020,041.41
                                                 49674-000024       $133,649,282.13
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  -------------------------------------------- ----------------- ----------------------- ---------------------------
  RELEASEES

  Barea, Julio A                                 49674-000236           Unknown                  Disallowed
  Barea, Julio A                                 49672-007816           Unknown                  Disallowed
  Bellamy, Carol                                 49672-007817           Unknown                  Disallowed
  Bellamy, Carol                                 49674-000237           Unknown                  Disallowed
  Berube, Edward M                               49672-007834           Unknown                  Disallowed
  Berube, Edward M                               49674-000247           Unknown                  Disallowed
  Bublitz, Maxwell E.                            49672-007827           Unknown                  Disallowed
  Bublitz, Maxwell E                             49674-000248           Unknown                  Disallowed
  Bullis, Eugene M                               49674-000231           Unknown                  Disallowed
  Bullis, Eugene M                               49674-000225           Unknown                  Disallowed
  Bullis, Eugene M                               49672-007825           Unknown                  Disallowed
  Coss, Lawrence M                               49674-000238           Unknown                  Disallowed
  Coss, Lawrence M                               49672-007836           Unknown                  Disallowed
  Devanney, William T Jr.                        49674-000224           Unknown                  Disallowed
  Dykhouse, Richard R                            49672-007831           Unknown                  Disallowed
  Dykhouse, Richard R                            49674-000251           Unknown                  Disallowed
  Hagerty, Thomas M *                            49672-006453           $3,500 +                  $3,500
  Hagerty, Thomas M                              49672-007837           Unknown                  Disallowed
  Hagerty, Thomas M                              49674-000239           Unknown                  Disallowed
  Harkins, David V **                            49672-006508           $6,500 +                  $6,500
  Harkins, David V                               49674-000240           Unknown                  Disallowed
  Harkins, David V                               49672-007818           Unknown                  Disallowed
  Hathaway, M Phil                               49674-000241           Unknown                  Disallowed
  Hathaway, M Phil                               49672-007819           Unknown                  Disallowed
  Herzog, David K                                49672-007824           Unknown                  Disallowed
  Herzog, David K                                49674-000227           Unknown                  Disallowed
  Herzog, David K                                49674-000220           Unknown                  Disallowed
  Hill, Tammy M                                  49672-007828           Unknown                  Disallowed
  Hill, Tammy M                                  49674-000249           Unknown                  Disallowed
  Kiefer, Kathleen S                             49672-007832           Unknown                  Disallowed
  Kiefer, Kathleen S                             49674-000252           Unknown                  Disallowed
  Kindig, Karl W                                 49674-000230           Unknown                  Disallowed
  Kindig, Karl W                                 49674-000253           Unknown                  Disallowed
  Kindig, Karl W                                 49672-007833           Unknown                  Disallowed
  Kindig, Karl W                                 49674-000221           Unknown                  Disallowed
  -------------------------------------------- ----------------- ----------------------- ---------------------------
------------------

*    Claim No. 49672-006453 is allowed in the amount of $3,500 as compensation
     for director's fees but the remainder of the claim is disallowed for all
     purposes.

**   Claim No. 49672-006508 is allowed in the amount of $6,500 as compensation
     for director's fees but the remainder of the claim is disallowed for all
     purposes.	

23

-------------------------------------------- ----------------- ----------------------- ---------------------------
                TYPE OF CLAIM                    CLAIM NO.       ALLEGED AMOUNT OF         ALLOWED AMOUNT OF
                                                                       CLAIM                     CLAIM
-------------------------------------------- ----------------- ----------------------- ---------------------------
-------------------------------------------- ----------------- ----------------------- ---------------------------
  Kline, John R                                  49674-000250           Unknown                  Disallowed
  Kline, John R                                  49672-007829           Unknown                  Disallowed
  Lubbers, Mark R                                49672-007826           Unknown                  Disallowed
  Lubbers, Mark R                                49674-000246           Unknown                  Disallowed
  Murphy, Daniel J                               49674-000229           Unknown                  Disallowed
  Murphy, Daniel J                               49672-007830           Unknown                  Disallowed
  Murphy, Daniel J                               49674-000222           Unknown                  Disallowed
  Mutz, John M                                   49674-000242           Unknown                  Disallowed
  Mutz, John M                                   49672-007820           Unknown                  Disallowed
  Nickoloff, Robert S                            49672-007821           Unknown                  Disallowed
  Nickoloff, Robert S                            49674-000243           Unknown                  Disallowed
  Shea, William J                                49674-000223           Unknown                  Disallowed
  Shea, William J                                49672-007822           Unknown                  Disallowed
  Shea, William J.                               49674-000228           Unknown                  Disallowed
  Thompson, Samme                                49672-007835           Unknown                  Disallowed
  Thompson, Samme                                49674-000244           Unknown                  Disallowed
  -------------------------------------------- ----------------- ----------------------- ---------------------------	

Effects of Confirmation
Executory Contracts and Unexpired Leases
5. The executory contract and unexpired lease provisions of Article VI of the Plan shall be, and hereby are, approved. After today's date, the Debtors are authorized to amend the tax sharing agreement among the Debtors and their subsidiaries as requested by the regulatory authorities for the Debtors' subsidiaries. As of the Effective Date, all executory contracts or unexpired leases assumed by the Debtors shall be assigned and transferred to, and remain in full force and effect for the benefit of, the Reorganized Debtors notwithstanding any provision in such contract or lease (including those described in sections 365(b)(2) and (f) of the Bankruptcy Code) that prohibits such assignment or transfer or that enables or requires termination of such contract or lease. The Claims asserted on behalf of creditors whose executory contracts are Assumed Contracts are listed on Exhibit B and shall be disallowed as of today's date.
24

6. The Amended Employment Agreement, dated June 1, 2002, between CNC and William J. Shea, is rejected as of the Effective Date and all Claims and Causes of Action in respect thereof shall be deemed waived as of the Effective Date. The Senior Management Employment Agreements in the Plan Supplement and CNC's agreement with Charles H. Cremens regarding the sale of the GM Building shall bind New CNC as of the Effective Date.
Existing Injunction and Stays Remain in Effect until Effective Date
7. The stay imposed by section 362 of the Bankruptcy Code shall remain in full force and effect until the Effective Date. All injunctions or stays imposed during the Chapter 11 Cases or contained in the Plan or this Confirmation Order shall remain in full force and effect in accordance with their terms. Nothing herein shall bar the taking of such other actions as are necessary to effectuate the transactions specifically contemplated by the Plan or by this Confirmation Order.
Plan Confirmation Shall Not Affect the Nauert Adversary Proceeding
8. Nothing in the Plan, the Plan Supplement or this Order shall have any issue or claim preclusive effect on the rights, claims, counterclaims and interests asserted by Peter W. Nauert in the adversary proceeding captioned Peter W. Nauert v. CIHC, Inc. and U.S. Bank, N.A., Adv. No. 03 A 00452 (the "Nauert Adversary Proceeding"), including, without limitation, the issue of Plaintiff's Benefit Entitlement, as defined in the complaint filed in the Nauert Adversary Proceeding. Nothing in the Plan, or this Order shall be construed to enjoin the Nauert Adversary Proceeding. The Court shall retain jurisdiction over the Nauert Adversary Proceeding and his proofs of claim. The Stipulation and Agreed Order Regarding Peter W. Nauert's Motion for Preliminary Injunction Filed Against CIHC, Inc. and U.S. Bank, N.A., entered by the Court on March 31, 2003, regarding notice to Nauert and U.S. Bank of any withdrawal or transfer of monies held in an account at U.S. Bank (Account #08524041) shall
25

remain in effect until a final order is entered in the Nauert Adversary Proceeding, notwithstanding Confirmation of the Plan.
Exemption from Registration
9. Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance and distribution of the New Securities shall be exempt from, among other things, the registration requirements of Section 5 of the Securities Act and any State or local law requiring registration prior to the offering, issuance, distribution or sale of securities. In addition, under section 1145 of the Bankruptcy Code the New Securities (including, without limitation, the 462,444 shares of New CNC Common Stock distributed to Houlihan Lokey Howard & Zukin under its engagement letter) will be freely tradeable by the recipients thereof, subject to (i) the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in Section 2(a)(11) of the Securities Act, and compliance with any rules and regulations of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such securities or instruments; (ii) the restrictions, if any, on the transferability of such securities and instruments; and (iii) applicable regulatory approval.
Matters Relating to Implementation of the Plan
Immediate Effectiveness; Successors and Assigns
10. Notwithstanding Rules 3020(e), 6004(g) or 7062, or otherwise, immediately upon the entry of this Confirmation Order, the terms of the Plan, the Plan Supplement and this Order shall be, and hereby are, immediately effective and enforceable and deemed binding upon the Debtors, the Reorganized Debtors, any and all Holders of Claims or Equity Interests and the Trust Preferred Securities (irrespective of whether such Claims or Equity Interests are impaired under the Plan or whether the Holders of such Claims or Equity Interests accepted or are deemed to have accepted the Plan), all entities that are parties to or are subject to
26

the settlements, compromises, releases, discharges, and injunctions described in the Plan or herein, each Person acquiring property under the Plan, and any and all non-Debtor parties to executory contracts and unexpired leases with the Debtors and the respective heirs, executors, administrators, successors or assigns, affiliates, officers, directors, agents, representatives, attorneys, beneficiaries, or guardians, if any, of any of the foregoing.
Continued Corporate Existence; Vesting of Assets
11. On the Effective Date, subject to applicable state insurance regulatory approval: (a) Old CNC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Indiana and its Articles of Incorporation and By-laws, provided that the Articles of Incorporation shall be amended and restated to limit Old CNC's activity to the implementation of the Plan, the liquidation of its Residual Assets and the winding-up of its affairs; (b) each of the President, the Secretary and any other officer of Old CNC is authorized to file such Amended and Restated Articles of Incorporation with the Secretary of State of Indiana pursuant to 23-1-38-8 of the Indiana Business Corporation Law; (c) New CNC shall be incorporated and shall exist thereafter as a separate corporate entity, with all corporate powers in accordance with the laws of the State of Delaware, the New CNC Charter and the New CNC By-laws; and (d) (i) the Residual Trust shall be settled and exist as a grantor trust and/or liquidating trust under the laws of the State of Delaware and pursuant to the Declaration of Trust; (ii) Reorganized CIHC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Delaware and its existing charter and by-laws; (iii) Reorganized CTIHC shall continue to exist as a separate corporate entity, with corporate powers in accordance with the laws of the State of Delaware and its existing charter and by-laws; and (iv) Reorganized PHG shall continue to exist as a separate
27

corporate entity, with corporate powers in accordance with the laws of the State of Illinois and its existing charter and by-laws.
12. The Plan does not impair post-Effective Date (i) transfer and assumption of certain assets and liabilities of CIHC to and by CDOC, Inc., a non-debtor subsidiary of Conseco, Inc. and (ii) conversion of CIHC into a life insurance company and (iii) the merger of Conseco Life Insurance Company of Texas into CIHC, with CIHC being the surviving company, all subject to applicable state insurance regulatory approval.
13. Except as otherwise contemplated by the Plan and the Plan Supplement (including the New Credit Facility), on and after the Effective Date, all property of each Debtor's Estate, and any property retained or acquired by such Debtor, Reorganizing Debtor or Reorganized Debtor under the Plan, shall vest in the respective Debtor, Reorganizing Debtor or Reorganized Debtor free and clear of all Claims, liens, charges, or other encumbrances, and such transfer does not constitute an avoidable transfer under the Bankruptcy Code or under applicable non-Bankruptcy law, and does not and shall not subject the Debtors, Reorganizing Debtors, or Reorganized Debtors to any liability by reason of such transfer under the Bankruptcy Code or under applicable non-Bankruptcy law. As of the Effective Date, all property of the Reorganized Debtors shall be free and clear of all claims, encumbrances, Interests, charges, and liens except as specifically provided in the Plan or this Order.
14. On the Effective Date, all assets of Old CNC, other than the Residual Assets, shall be transferred by Old CNC to New CNC in exchange for the New CNC Common Stock, New CNC Preferred Stock, New CNC Warrants and the assumption of the New Tranche A Bank Debt and the New Tranche B Bank Debt.
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Cancellation of Old Notes, Old Preferred Stock, Old Common Stock and Stock Options
15. On the Effective Date, except to the extent otherwise expressly provided in the Plan, all notes, instruments, certificates, and other documents evidencing the (a) Senior Credit Facility and the Guarantees of D&O Credit Facilities; (b) Exchange Notes; (c) Original Notes; (d) Subordinated Debentures and the related guarantees and the Trust Preferred Securities; (e) 93/94 Notes;
(f) Old CNC Common Stock; (g) Old CNC Preferred Stock; (h) any and all other Claims and Equity Interests and (i) any rights, options, warrants, calls, commitments, contractual, or otherwise, obligating the Debtors to issue, transfer or sell any shares of Old CNC Common Stock or Old CNC Preferred Stock, shall be canceled and the obligations of the Reorganizing Debtors or Reorganized Debtors thereunder or in any way related thereto shall be discharged, provided, however, the Guarantees of D&O Credit Facilities are not cancelled or discharged solely to empower New CNC to collect amounts the Ineligible Persons (as defined in Plan Article V.K.5) owe under the D&O Credit Facilities and related documents.
Issuance of New Securities and Execution of Related Documents
16. On or as soon as practicable after the Effective Date, the Reorganized Debtors are hereby authorized, empowered, and directed, and shall distribute or issue all securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Plan, including, without limitation; (a) the New Credit Facility; (b) New CNC Common Stock; (c) New CNC Preferred Stock, and (d) New CNC Warrants, each of which shall be distributed as provided herein or in the Plan. The Reorganized Debtors and Old CNC shall execute and deliver such other agreements, documents and instruments as are required to be executed pursuant to the terms of the Plan. On the Effective Date, the New Credit Facility and
29

all documents, instruments, certificates and other agreements ancillary thereto to which any of the Lenders are a party, including the D&O Transfer Agreement, will bind all Lenders, regardless of whether all Lenders voted to accept the Plan or execute such documents.
17. Each distribution and issuance referred to in the prior paragraph shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Person receiving such distribution or issuance.
18. On the Effective Date, the Lenders under the D&O Credit Facilities shall be deemed to have transferred to New CNC, and New CNC shall be deemed to have succeeded to, all of the rights, title and interest of such Lenders in the Transferred Property (as defined in the D&O Transfer Agreement), all as more fully set forth in the D&O Transfer Agreement. The D&O Transfer Agreement is binding for all purposes.
19. On the Effective Date, Reorganized CIHC shall be authorized to require its direct and indirect subsidiaries to execute and deliver all such agreements, documents and instruments as are required to transfer the Residual Subsidiaries, as defined and described in the Residual Subsidiary Schedule in the Plan Supplement, to Old CNC. Thereafter, Old CNC shall issue the Residual Share to the Residual Trust.
20. The Debtors and New CNC (and each of their respective affiliates, agents, directors, officers, employees, advisors and attorneys), the Unofficial Noteholders' Committee, the Unofficial Lenders' Committee, and the Official Committees, and each of the former and current members and ex officio members of such committees (and each of their respective affiliates, agents, directors, officers, employees, advisors, and attorneys) have, and are deemed to
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have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the solicitation of acceptances or rejections of this Plan and the distributions under this Plan, and therefore are not, and on account of such distributions will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of this Plan or such distributions made pursuant to this Plan.
Corporate Governance, Directors and Officers and Corporate Action
Amended Certificate of Incorporation and By-laws
21. On or before the Effective Date, New CNC will file the New CNC Charter with the Secretary of State of Delaware in accordance with Section 103 of the Delaware General Corporation Law. The New CNC Charter and the New CNC By-laws will, among other things, authorize approximately 8,000,000,000 shares of New CNC Common Stock and approximately 265,000,000 shares of New CNC Preferred Stock. In addition, the New CNC Charter shall prohibit the issuance of non-voting equity securities to the extent required by the provisions of section 1123(a)(6) of the Bankruptcy Code. After the Effective Date, New CNC may amend and restate the New CNC Charter and other constituent documents as permitted by Delaware law.
Directors and Officers of the Reorganized Debtors
22. The officers of the Debtors immediately prior to the Effective Date will be the officers of the Reorganized Debtors unless otherwise provided by valid corporate action of any such Reorganized Debtor in accordance with applicable law and the applicable constituent documents for such Reorganized Debtor. The Senior Management Employment Agreements set forth at TAB J to the Plan Supplement will be effective as of the Effective Date.
23. Subject to applicable state insurance regulatory approval, the Boards of Directors of Old CNC, New CNC, Reorganized CIHC, Reorganized CTIHC and Reorganized
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PHG, on the Effective Date shall consist of the individuals specified in the Plan Supplement and the terms of the current Boards of Directors for each such entity shall expire and the members thereof shall be deemed to have resigned and shall cease to serve in such capacity.
24. Pursuant to section 1129(a)(5)(A)(ii) of the Bankruptcy Code, subject to applicable state insurance regulatory approval, the Court approves as consistent with the interests of Creditors and Interest holders and with public policy the selection, election, and/or continuance, as the case may be, of these individuals; provided, however, that nothing set forth herein shall prevent any of the foregoing individuals from resigning or from being removed or replaced as an officer or director without further order of the Court. On the Effective Dates, the operation of New CNC shall become the general responsibility of the Board of Directors of New CNC, subject to, and in accordance with, the New CNC Charter and New CNC By-laws.
Management Incentive Plan
25. On the Confirmation Date, New CNC will adopt the Management Incentive Plan substantially in the form set forth in the Plan Supplement. On or after the Effective Date, the compensation committee of the board of directors of New CNC will make initial awards under the Management Incentive Plan, other than those approved under the Senior Management Employment Agreements. Approval by the sole shareholder of New CNC on or before the Confirmation Date and receipt of sufficient votes to accept the Plan as reflected on the Voting Report shall be deemed to constitute shareholder approval of the Management Incentive Plan for all purposes.
Senior Management Employment Agreements
26. On the Effective Date, New CNC shall be bound by the Senior Management Employment Agreements substantially in the form set forth in the Plan
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Supplement, and the officers of New CNC shall be authorized and directed to execute such Senior Management Employment Agreements.
Resolution of the Directors & Officers Stock Purchase Program for Certain Participants
27. Amounts owed by the Participants under the D&O Credit Facilities shall be treated in accordance with Article V.K.5 of the Plan. "Executive officers" (as defined in the Sarbanes-Oxley Act) shall not be Participants as defined in Article V.K.5 of the Plan.
Sources of Cash for Plan Distribution
28. All Cash necessary for the Reorganizing Debtors and Reorganized Debtors to make payments pursuant hereto shall be obtained from existing Cash balances of the Debtors.
Dismissal of TOPrS' Appeals
29. Within one business day of today's date, counsel for the TOPrS Committee shall execute Exhibits F and G and deliver said executed documents to counsel for the Debtors. After the Effective Date (as confirmed by the filing with the Court of a Notice of Effective Date), counsel for the Debtors is authorized to file said executed documents with the appropriate court.
Distributions
30. The distribution provisions of Article VII of the Plan shall be, and hereby are, approved. The Reorganized Debtors shall make all distributions required under the Plan. The Distribution Record Date shall be the close of business on the date hereof for the following Classes: Class 5A-1, Class 5A-2, Class 4B-1 and Class 4B-2 (Lender Claims), Class 6A and Class 5B (Exchange Note Claims), Class 7A (Original Note Claims) and Class 10A (Trust
33

Related Claims). The Distribution Record Date shall remain May 30, 2003 for all other claims, as previously established by Order entered May 20, 2003 (Docket #3290).
31. If a claimant appeals disallowance of a claim pursuant to a lower court's order, but fails to obtain a stay of the lower court's order, then the Reorganized Debtors shall not consider such claim when calculating the New CNC Common Stock Holdback.
32. As of the close of business on today's date, the transfer registers for the Lender Claims, the Exchange Notes, the Original Notes and the Trust Preferred Securities shall be closed and there shall be no further changes in the record Holders of any Lender Claim, Exchange Note, Original Note or Trust Preferred Securities. Moreover, the Reorganized Debtors shall have no obligation to recognize the transfer of any Lender Claim, Exchange Note, Original Note or Trust Preferred Securities after today's date, and the Reorganized Debtors shall be entitled for all purposes to recognize and deal only with those Holders of record as of the close of business on today's date.
33. The Reorganized Debtors shall distribute the TOPrS Settlement to holders of Trust Preferred Securities who have not timely opted out of the TOPrS Settlement. Such distributions will be made to the Depository Trust Company, who shall (a) transfer such distributions to its nominee Cede & Co. and (b) take reasonable steps to ensure that such distributions are transferred to the participant accounts of the record holders of the Trust Preferred Securities who have not timely opted out of the TOPrS Settlement. Because the TOPrS Settlement D&O Litigation Recovery is not transferable, Depository Trust Company shall maintain the record holders of Trust Preferred Securities as of today's close of business to enable future distributions of the TOPrS Settlement D&O Litigation Recovery. The TOPrS
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Settlement Equity Recovery and the New CNC Warrants constitute New Securities and are transferable as otherwise specified in this Order.
34. Except as otherwise provided by the Plan or this Confirmation Order, distributions to be made on the Effective Date on account of Claims and Equity Interests that are Allowed as of the Effective Date and are entitled to receive distributions under the Plan shall be made on the Effective Date or as soon as practicable thereafter.
35. For purposes of determining the accrual of interest, dividends or rights in respect of any other payment from and after the Effective Date, the New Tranche A Bank Debt, the New Tranche B Bank Debt, New CNC Preferred Stock, New CNC Warrants and New CNC Common Stock shall be deemed issued as of the Effective Date regardless of the date on which they are actually dated, authenticated or distributed; provided that, the respective Reorganized Debtor shall withhold any actual payment until such distribution is made.
36. The Debtors or Reorganized Debtors, as the case may be, are authorized and empowered to retain, without further order of the Court, and shall have the authority, in their sole discretion, to enter into agreement with one or more Distribution Agents, to facilitate the solicitation of votes on the Reorganizing Subplans and the distributions required under the Reorganizing Subplans, as set forth in Section VII.B of the Plan.
Preservation of All Causes of Action Not Expressly Settled or Released
37. Unless a Claim or Cause of Action against a Creditor or other Person is expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order, the Debtors expressly reserve such Claim or Cause of Action for later adjudication by the Debtors, and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, Claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches shall apply to such Claims or Causes of Action upon or after the
35

Confirmation or Consummation of the Plan based on the Disclosure Statement, the Plan or the Confirmation Order, except where such Claims or Causes of Action have been waived, relinquished, released, compromised or settled in the Plan or a Final Order. In addition, the Debtors and the successor entities under the Plan expressly reserve the right to pursue or adopt any Claims not so waived, relinquished, released, compromised or settled that are alleged in any lawsuit in which the Debtors are a defendant or an interested party, against any person or entity, including, without limitation, the plaintiffs or co-defendants in such lawsuits.
Prosecution of Objections to Claims
38. After the Effective Date, the Reorganized Debtors (for Claims against the Reorganized Debtors) shall have the exclusive authority to file objections, settle, compromise, withdraw or litigate to judgment objections to Claims or Equity Interests.
39. The Conseco Creditors' Committee shall remain in existence after the Effective Date solely for the purpose of concluding their litigation with the Securities Plaintiffs (Anchorage Police & Fire Retirement System and the State of Louisiana Firefighters Retirement System, as lead plaintiffs and class representatives for the class of plaintiffs in In re Conseco, Inc. Securities Litigation, IP-0585-C Y/S (appointed on May 28, 2002)) including, but not limited to, the appeal of this Court's Order dated August 20, 2003, filed on August 29, 2003, and any post-appeal related proceedings.
Corporate Action
40. On the Effective Date (or on the Confirmation Date with respect to any actions taken prior to the Effective Date), the adoption and filing of the New CNC Charter and New CNC By-laws, the appointment of directors and officers for the Reorganized Debtors, the adoption of the Management Incentive Plan, the effectiveness of the Senior Management Employment Agreements (including the grant of equity awards thereunder) and all actions
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contemplated hereby shall be authorized and approved in all respects (subject to the provisions hereof) pursuant to the Plan, subject to applicable state insurance regulatory approval. All matters provided for herein involving the corporate structure of the Debtors, Reorganizing Debtors or Reorganized Debtors, and any corporate action required by the Debtors, Reorganizing Debtors or Reorganized Debtors in connection with the Plan, shall be deemed to have occurred and shall be in effect, without any requirement of further action by the security holders or directors of the Debtors, Reorganizing Debtors or Reorganized Debtors, subject to applicable state insurance regulatory approval. On or before the Effective Date, the appropriate officers of the Debtors, Reorganizing Debtors and Reorganized Debtors are authorized and directed to (a) issue, execute, deliver and implement the agreements, documents, securities and instruments contemplated by the Plan, including, but not limited to, the New Credit Facility and the New Securities, and (b) issue, execute, deliver, file, and record any documents, court papers, or pleadings, and take any and all actions as may be necessary or desirable to implement, effect, or consummate the transactions contemplated by the Plan, whether or not specifically referred to in the Plan or related documents and without further application to or order of the Court, in the name of and on behalf of the Debtors, Reorganizing Debtors and/or Reorganized Debtors, without the need for any shareholder's or director's approval, or any other authorizations or consents, except for express consents under the Plan, subject to applicable state insurance regulatory approval.
Release and Exculpation Provisions
41. The compromises and settlements contemplated by Art. X.A of the Plan are hereby approved.
42. The releases in Art. X.A of the Plan by all Persons and Entities of such contractual, legal and equitable subordination rights or Causes of Action, claims or
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counterclaims against such Holder satisfied, compromised and settled in this manner are approved.
43. The Release Provisions of Art. X.B and X.C of the Plan and the Exculpation Provision of Art. X.D of the Plan are hereby approved in their entirety. In particular, and without limitation, Article X.D. of the Plan applies to all parties involved in negotiating the TOPrS Settlement, including the option for holders of the Trust Preferred Securities to opt-out of the TOPrS Settlement if they choose to not accept it.
44. All Consenting Parties have consented to the releases set forth in Art. X.C of the Plan (Release by Holders of Claims) and therefore are bound by such releases.
Discharge and Injunction Provisions
45. Pursuant to Art. X.F of the Plan, and except as otherwise provided herein or in the Plan or in any other Order entered in these cases:
(i) the rights afforded in the Plan and the treatment of all Claims and Equity Interests in the Plan, shall be in exchange for and in complete satisfaction, discharge and release of Claims and Equity Interests of any nature whatsoever, including any interest accrued on Claims after the Petition Date to and including the Confirmation Date, against the Reorganizing or Reorganized Debtors or any of their assets or properties;
(ii) on the Effective Date, all such Claims against, and Equity Interests in, the Reorganizing or Reorganized Debtors shall be satisfied, discharged and released in full, and
(iii) all Persons shall be permanently enjoined from
(a) Asserting against the Reorganizing or Reorganized Debtors, their successors or their assets or properties such Claims or Equity Interests based upon any act or omission, transaction or other activity of any kind or nature that occurred on or prior to the Confirmation Date.
(b) Creating, perfecting, or enforcing any encumbrance of any kind premised on such Claim or Equity Interest
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against any Reorganizing Debtor or the property or estate of any Reorganizing Debtor or Reorganized Debtor;
(c) Asserting any right of setoff, subrogation or recoupment of any kind against any obligation due from any Reorganizing Debtor or Reorganized Debtor or against the property or estate of any Reorganizing Debtor or Reorganized Debtor with respect to any such Claim or Equity Interest.
Consummation
46. The substantial consummation of the Plan, within the meaning of section 1127 of the Bankruptcy Code, shall be, and hereby is, deemed to mean the occurrence of the Effective Date.
47. The consummation of the Plan shall not constitute a change of ownership or change in control, as such terms are used in any employment, severance or termination agreement in effect on the Effective Date and to which either of the Debtors is a party or under any applicable law of any applicable Governmental Unit.
Failure to Consummate the Plan
48. In accordance with Article IX.D of the Plan, if consummation of the Plan does not occur, then (a) the Plan shall be null and void in all respects;
(b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount any Claim or Interest or Class of Claims or Interests), assumption or rejection of executory contracts or leases effected by the Plan, and any document or agreement executed pursuant to the Plan shall be deemed null and void, and (c) nothing contained in the Plan, and no acts taken in preparation for consummation of the Plan, shall (i) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Interests in, the Debtors or any other Person; (ii) prejudice in any manner the rights of the Debtors or any Person in any further proceedings involving the Debtors; or (iii) constitute an admission of any sort by the Debtors or any other Person.
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Retention of Jurisdiction
49. Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, and sections 157 and 1334 of title 28 of the United States Code, notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such exclusive jurisdiction over all matters arising out of or related to the Chapter 11 Cases and the Plan after the Effective Date, as legally permissible, including jurisdiction to:
(ii) allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim or Equity Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the allowance or priority of Claims or Equity Interests;
(iii) grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on or before the Confirmation Date; provided, however, that final fee applications must be filed on or before 30 days after the date of this Order, and that such fee applications need only cover the period from the Petition Date to the Confirmation Date;
(iv) resolve any matters related to the assumption, assumption and assignment or rejection of any executory contract and unexpired lease to which a Debtor is party or with respect to which a Debtor may be liable and to hear, determine and, if necessary, liquidate, any Claims arising therefrom, including those matters related to the amendment after the Effective Date pursuant to Article V of the Plan to add any executory contracts or unexpired leases to the list of executory contracts and unexpired leases to be rejected;
(v) ensure that distributions to Holders of Allowed Claims and Allowed Equity Interests are accomplished pursuant to the provisions hereof;
(vi) decide or resolve any motions, adversary proceedings (including turnover actions and efforts to collect loans due the Reorganizing Debtors), contested or litigated matters and any other matters and grant or deny any applications involving a Debtor that may be pending on the Effective Date;
(vii) enter such orders as may be necessary or appropriate to implement or consummate the provisions hereof and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Plan or the Disclosure Statement;
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(viii) resolve any cases, controversies, suits or disputes that may arise in connection with the Consummation, interpretation or enforcement of the Plan or any Person's obligations incurred in connection with the Plan;
(ix) issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with Consummation or enforcement of the Plan, except as otherwise provided herein;
(x) resolve any cases, controversies, suits or disputes with respect to the releases, injunction and other provisions contained in Article X of the Plan and enter such orders as may be necessary or appropriate to implement such releases, injunction and other provisions;
(xi) enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated;
(xii) determine any other matters that may arise in connection with or relate to this Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement; and
(xiii) enter an order and/or final decree concluding the Chapter 11 Cases.
Notwithstanding any provision of this Order that may read to the contrary, nothing in this Order is intended to preempt or usurp the jurisdiction of state insurance regulators from the exercise of their applicable authority over the Reorganized Debtors.
Payment of Statutory Fees
50. All fees payable pursuant to 28 U.S.C. ss. 1930(a), as determined by the Bankruptcy Court at the hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid for each quarter (including any fraction thereof) for each Debtor until such Debtor's Chapter 11 Case is converted, dismissed or closed, whichever occurs first.
Exemption from Stamp Taxes
51. Pursuant to section 1146(c) of the Bankruptcy Code: (a) the issuance, distribution, transfer or exchange of any debt, equity security or other interest of the Debtors or Reorganized Debtors; (b) the creation, modification, consolidation or recording of any mortgage,
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deed of trust or other security interest, the securing of additional indebtedness by such or other means; (c) the making, assignment or recording of any lease or sublease, or (d) the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments or other instruments of transfer executed in connection with any transactions arising out of, contemplated by or in any way related to the Plan or this Confirmation Order, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, transfer tax, mortgage recording tax or other similar tax or governmental assessment, and the appropriate State or local government officials or agents shall be, and hereby are, directed to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. The Court specifically retains jurisdiction to enforce the foregoing direction, by contempt or otherwise. Exhibit C shall have the effect of an order of the Court, shall constitute sufficient notice of the entry of this Order to such filing and recording officers, and shall be a recordable instrument notwithstanding any contrary provision of applicable non-bankruptcy law.
References to Plan Provisions
52. The failure specifically to include or to refer to any particular provision of the Plan in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Plan be confirmed in its entirety.
Post-Confirmation Notices and Bar Dates
Notice of Entry of the Confirmation Order
53. In accordance with Fed. R. Bankr. P. 2002 and 3020(c), within five business days of the date of entry of this Confirmation Order, the Reorganized Debtors (or their
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agents) shall give notice of the entry of this Order, in substantially the form of Exhibit C annexed hereto (the "Notice of Confirmation") by United States mail, first class postage prepaid, by hand, or by overnight courier service to all parties having been served with the Confirmation Hearing Notice; provided, however, that no notice or service of any kind shall be required to be mailed or made upon any person to whom the Debtors mailed a Confirmation Hearing Notice, but received such notice returned marked "undeliverable as addressed," "moved, left no forwarding address" or "forwarding order expired," or similar reason, unless the Debtors have been informed in writing by such person, or are otherwise aware, of that person's new address. To supplement the notice described in the preceding sentence, within fifteen days of the date of this Order the Debtors shall publish Notice of Confirmation once each in The Wall Street Journal, USA Today, the Chicago Tribune and the Indianapolis Star.
54. Mailing and publication of the Notice of Confirmation in the time and manner set forth in the preceding paragraph are good and sufficient under the particular circumstances and in accordance with the requirements of Fed. R. Bankr. P. 2002 and 3020(c), and no further notice is necessary.
Bar Date for Requests for Administrative Claims
55. All requests for administrative expenses pursuant to section 503 of the Bankruptcy Code must be filed within thirty (30) days of the date of this Order with the Bankruptcy Management Corporation.
Final Fee Applications
56. Any professional seeking an allowance, pursuant to sections 327, 328, 330, 331, 503(b), 507(a)(1) and/or 1103 of the Bankruptcy Code, of (i) an Administrative Claim or (ii) final compensation or reimbursement of expenses incurred on or before the Confirmation Date for professional services rendered to the Reorganizing Debtors or in relation to these cases
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("Professional Fees and Expenses") shall file and serve an application for allowance of such Administrative Claim or Professional Fees and Expenses (each, an "Application"), on each of the following entities not later than thirty (30) days after the Confirmation Date:

------------------------------------------------------------ ---------------------------------------------------------
Counsel to the Debtors                                       The Office of the United States Trustee
Kirkland & Ellis LLP                                         227 West Monroe St.
200 East Randolph Drive                                      Suite 3350
Chicago, Illinois 60601                                      Chicago, IL 60606
Attn: Anne Marrs Huber, Esq.                                 Attn: Richard Friedman, Esq. and
and Roger Higgins, Esq.                                      Gretchen Silver, Esq.

------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Counsel to the Unsecured Creditors' Committee                Counsel for the Official Committee
Fried, Frank, Harris, Shriver & Jacobson                     of Trust Preferred Debt Holders
One New York Plaza                                           Jenner & Block, LLC
New York, NY 10004                                           One IBM Plaza
Attn: Brad Eric Scheler, Esq. And                            Chicago, Illinois 60611
Vivek Melwani, Esq.                                          Attn: Daniel R. Murray, Esq. And
                                                             Catherine Steege, Esq.

and                                                          and

Mayer Brown Rowe & Maw                                       Saul Ewing LLP
190 South La Salle Street                                    100 South Charles Street, 15th Floor
Chicago, Illinois 60603-3441                                 Baltimore, Maryland 21201
Attn: Thomas S. Kiriakos, Esq.                               Attn: Irving E. Walker, Esq.

------------------------------------------------------------ ---------------------------------------------------------	

57. Each Application shall comply with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Bankruptcy Rules, and shall set forth, among other things, in reasonable detail; (i) the name and address of the applicant; (ii) the nature of the Professional Fees and Expenses for which reimbursement is requested for all periods from the date the particular applicant was retained through the Confirmation Date; (iii) the amount of the Professional Fees and Expenses requested; (iv) the amounts of Professional Fees and Expenses previously allowed by the Court, if any; and (v) the amount or amounts of payments made to date, if any, by the Debtors to reduce such allowed amount.
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58. No applications need be filed for compensation and reimbursement by a professional person for services rendered or expenses incurred on or after the Confirmation Date, and such compensation and reimbursement may be paid by the Reorganized Debtors in accordance with ordinary business practices and without order of the Court.
Captions
59. On the Confirmation Date, the Reorganizing Debtors shall use the caption with respect to the Reorganizing Debtors' cases, in the form of Exhibit D annexed hereto. On the Confirmation Date, the Finance Company Debtors shall use the caption with respect to the Finance Company Debtors' cases in the form annexed hereto as Exhibit E.
Non-Material Changes
60. Without limiting the generality of the foregoing, and without the need for a further order or authorization of this Court, the Debtors, with the prior written consent of the Conseco Creditors Committee, shall be authorized and empowered to make non-material modifications to the exhibits comprising the Plan Supplement as in their reasonable business judgment may be necessary.
Authorization to Consummate
61. The Debtors are authorized to consummate the Plan at any time after the entry of this Order subject to satisfaction or waiver of the conditions precedent to Consummation set forth in Article IX.B of the Plan.
Final Order
62. This Order is a final order and the period in which an appeal must be filed shall commence upon the entry hereof.
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Miscellaneous
63. Paragraph 39 of this Order shall not limit the provisions of Plan Article XII.C.
64. Notwithstanding Article XII.C of the Plan, the Committee appointed on August 20, 2003 to represent a certain class asserting claims under Section 1114 "for the purpose of assisting class members in determining how and when cure amounts should be . . . resolved-as well as the specific cure amounts of the individual class members" (August 20, 2003 transcript at page 16) shall remain in existence after the Effective Date for the purposes specified by the Court.
IT IS SO ORDERED.
Chicago, Illinois

Dated: September 9, 2003                                /s/
                                            ------------------------------------
                                            Honorable Carol A. Doyle
                                            United States Bankruptcy Judge	

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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CONSECO, INC.
ARTICLE ONE
The name of the Corporation is Conseco, Inc.
ARTICLE TWO
The address of the Corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
Section 1. Authorized Shares. The total number of shares of capital stock which the Corporation has authority to issue is 8,265,000,000 shares, consisting of:
(a) 265,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred Stock"); and
(b) 8,000,000,000 shares of Common Stock, par value $.01 per share ("Common Stock").
The Preferred Stock and the Common Stock shall have the rights, preferences and limitations set forth below.
Section 2. Preferred Stock. The Preferred Stock may be issued from time to time and in one or more series. The Board of Directors of the Corporation is authorized to determine or alter the powers, preferences and rights, and the qualifications, limitations and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors

originally fixing the number of shares constituting any series of Preferred Stock, to increase or decrease (but not below the number of shares of any such series of Preferred Stock then outstanding) the number of shares of any such series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock. In the event that the number of shares of any series of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the status which such shares had prior to the adoption of the resolution originally fixing the number of shares of such series of Preferred Stock subject to the requirements of applicable law.
Section 3. Common Stock.
(a) Dividends. Except as otherwise provided by the Delaware General Corporation Law or this Amended and Restated Certificate of Incorporation (the "Certificate"), the holders of Common Stock, subject to the rights of holders of any series of Preferred Stock, shall share ratably in all dividends as may from time to time be declared by the Board of Directors in respect of the Common Stock out of funds legally available for the payment thereof and payable in cash, stock or otherwise and other distributions, whether in respect of liquidation or dissolution (voluntary or involuntary) or otherwise after payment of liabilities and liquidation preference on any outstanding Preferred Stock.
(b) Preemptive Rights. No holder of Common Stock shall have any preemptive rights with respect to the Common Stock or any other securities of the Corporation, or to any obligations convertible (directly or indirectly) into securities of the Corporation whether now or hereafter authorized.
(c) Voting Rights. Except as otherwise provided by the Delaware General Corporation Law or this Certificate and subject to the rights of holders of any series of Preferred Stock, all of the voting power of the stockholders of the Corporation shall be vested in the holders of the Common Stock, and each holder of Common Stock shall have one vote for each share held by such holder on all matters voted upon by the stockholders of the Corporation.
Section 4. Limitations on Voting Rights.
Notwithstanding the voting rights granted to holders of Common Stock and Preferred Stock (collectively, the "Stock") elsewhere in this Certificate or in any certificate of designations with respect to Preferred Stock, the voting rights of any Stock held by any holder as of the effective date of the Reorganizing Debtors' Joint Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code, dated March 18, 2003, as amended from time to time shall be automatically reduced, with respect to any particular stockholder vote or action by written consent, to the extent, if any, required to avoid a presumption of control arising from the beneficial ownership of voting securities under the insurance statutes or regulations applicable to any direct or indirect insurance company subsidiary of the Corporation, provided that no such reduction shall (without such holder's written consent) reduce such voting rights (i) by more than the minimum amount required to reduce such voting rights to less than 10% of the aggregate voting rights of all Stock entitled to vote or consent with respect to such vote or action, or (ii) to the extent that such holder's acquisition of control or deemed acquisition of control of the direct and indirect insurance company subsidiaries of the Corporation has been approved
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under, or is exempt from the approval requirements of, all insurance statutes and regulations applicable to the direct and indirect insurance company subsidiaries of the Corporation.
ARTICLE FIVE
The Corporation is to have perpetual existence.
ARTICLE SIX
Except as otherwise provided in this Certificate (including any duly authorized certificate of designation of any series of Preferred Stock), Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting of the stockholders at which Directors are elected and entitled to vote in the election of Directors or pursuant to a valid written consent in lieu of a meeting. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.
ARTICLE SEVEN
Subject to any rights of the holders of any series of Preferred Stock pursuant to a duly authorized certificate of designation to elect additional Directors under specified circumstances, the number of directors which shall constitute the Board of Directors shall initially be established at seven and, thereafter, shall be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total number of Directors then in office.
ARTICLE EIGHT
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation.
ARTICLE NINE
Section 1. Limitation of Liability.
(a) To the fullest extent permitted by the Delaware General Corporation Law as it now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), and except as otherwise provided in the Corporation's Bylaws, no Director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages arising from a breach of fiduciary duty owed to the Corporation or its stockholders.
(b) Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification.
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Section 2. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), by reason of the fact that he or she is or was a Director, officer or employee of the Corporation or a wholly owned subsidiary of the Corporation or, while a Director, officer or employee of the Corporation or a wholly owned subsidiary of the Corporation, is or was serving at the request of the Corporation or a wholly owned subsidiary of the Corporation as a Director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other entity or enterprise, including service with respect to an employee benefit plan (an "indemnitee") shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a Director, officer, employee, partner, member, trustee, fiduciary or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section 2 of this ARTICLE NINE shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an "advance of expenses"); provided, however, that, if and to the extent that the Delaware General Corporation Law requires, an advance of expenses incurred by an indemnitee in his or her capacity as a Director or officer shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise.
ARTICLE TEN
Section 1. Classification of Directors. At each annual meeting of stockholders, directors of the Corporation shall be elected to hold office until the expiration of the term for which they are elected, and until their successors have been duly elected and qualified; except that if any such election shall be not so held, such election shall take place at a stockholders' meeting called and held in accordance with the Delaware General Corporation Law. The directors of the Corporation shall initially be divided into two classes as nearly equal in size as is practicable, hereby designated Class I and Class II. The term of office of the initial Class I directors shall expire at the next succeeding annual meeting of stockholders and the term of office of the initial Class II directors shall expire at the second succeeding annual meeting of stockholders. Other than the term of office of the initial Class II directors, the term of office of each Class of directors shall expire at the next succeeding annual meeting of stockholders. For the purposes hereof, the initial Class I and Class II directors shall be those directors elected by
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the stockholders of the Corporation in connection with the adoption of this Certificate. At each annual meeting of stockholders, directors to replace those of a Class or Classes whose terms expire at such annual meeting shall be elected to hold office until the next succeeding annual meeting and until their respective successors shall have been duly elected and qualified. If the number of directors is hereafter changed, any newly created directorships or decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as practicable.
Section 2. Removal. Subject to the rights, if any, of the holders of any series of Preferred Stock to remove directors (with or without cause) and fill the vacancies thereby created (as specified in any duly authorized certificate of designation of any series of Preferred Stock), (i) prior to the second annual meeting of stockholders, no Director may be removed from office without cause and without the affirmative vote of the holders of a majority of the voting power of the then outstanding shares of capital stock entitled to vote generally in the election of Directors voting together as a single class and (ii) thereafter, a Director may be removed with or without cause with the affirmative vote of the holders of a majority of the voting power of the then outstanding shares of capital stock entitled to vote generally in the election of Directors voting together as a single class; provided, however, that if the holders of any class or series of capital stock are entitled by the provisions of any duly authorized certificate of designation to elect one or more Directors, such Director or Directors so elected may be removed with or without cause by the vote of the holders of a majority of the outstanding shares of that class or series entitled to vote.
Section 3. Vacancies. Subject to the rights of the holders of any series of Preferred Stock to remove Directors and fill the vacancies thereby created (as specified in any duly authorized certificate of designation of any series of Preferred Stock), vacancies occurring on the Board of Directors for any reason may be filled by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, at any meeting of the Board of Directors or by the stockholders. A person so elected by the Board of Directors to fill a vacancy shall hold office until the next succeeding annual meeting of stockholders of the Corporation and until his or her successor shall have been duly elected and qualified.
ARTICLE ELEVEN
Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.
ARTICLE TWELVE
The stockholders of the Corporation may take any action by written consent in lieu of a meeting. Subject to the rights of the holders of any series of Preferred Stock as specified in any duly authorized certificate of designation, special meetings of stockholders of the Corporation
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may be called only by the Board of Directors pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office, by the chairman of the Board of Directors or the chief executive officer of the Corporation, or by the secretary of the Corporation upon request in writing of the stockholder or stockholders holding of record at least 25% of the voting power of the issued and outstanding shares of stock of the Corporation entitled to vote at such meeting.
ARTICLE THIRTEEN
The Corporation expressly elects not to be governed by Section 203 of the Delaware General Corporation Law.
ARTICLE FOURTEEN
The Corporation shall not issue any class of non-voting equity securities unless and solely to the extent permitted by Section 1123(a)(6) of the United States Bankruptcy Code (the "Bankruptcy Code") as in effect on the date of filing this Certificate with the Secretary of State of the State of Delaware; provided, however, that this ARTICLE FOURTEEN: (a) will have no further force and effect beyond that required under Section 1123(a)(6) of the Bankruptcy Code;
(b) will have such force and effect, if any, only for so long as Section 1123(a)(6) of the Bankruptcy Code is in effect and applicable to the Corporation; and (c) in all events may be amended or eliminated in accordance with applicable law from time to time in effect.
* * * * * *
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Exhibit 3.2
AMENDED AND RESTATED
BY-LAWS
OF
CONSECO, INC.
A Delaware Corporation
 (Adopted as of September 10, 2003)
ARTICLE I

OFFICES
Section 1. Registered Office. The registered office of Conseco, Inc. (the "Corporation") in the State of Delaware shall be located at 1209 Orange Street, Wilmington, DE 19801. The name of the Corporation's registered agent at such address shall be CT Corporation. The registered office and/or registered agent of the Corporation may be changed from time to time by action of the Board of Directors.
Section 2. Other Offices. The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II

MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders shall be held each year within 180 days after the close of the immediately preceding fiscal year of the Corporation or at such other time specified by the Board of Directors for the purpose of electing Directors and conducting such other proper business as may come before the annual meeting; provided, however, that the first and the second annual meeting after the date of the adoption of these By-laws shall not be held earlier than on the 11th month and the 23rd month anniversary of such date, respectively. At the annual meeting, stockholders shall elect Directors and transact such other business as properly may be brought before the annual meeting pursuant to Section 11 of ARTICLE II hereof.
Section 2. Special Meetings. Special meetings of the stockholders may only be called in the manner provided in the Corporation's certificate of incorporation, as amended from time to time (the "Cerificate of Incorporation").
Section 3. Place of Meetings. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting. If no designation is made, or if a special meeting be otherwise called, the

place of meeting shall be the principal executive office of the Corporation. If for any reason any annual meeting shall not be held during any year, the business thereof may be transacted at any special meeting of the stockholders.
Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the Board of Directors, the chairman of the board, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.
Section 5. Stockholders List. The officer having charge of the stock ledger of the Corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting, (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list shall be provided with the notice of the meeting or
(ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of capital stock entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by the General Corporation Law of the State of Delaware or by the Certificate of Incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a specified item of business requires a vote by a class or series (if the Corporation shall then have outstanding shares of more than one class or series) voting as a class or series, the holders of a majority of the shares of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business.
Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed
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for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless (i) by express provisions of an applicable law or of the Certificate of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (ii) the subject matter is the election of Directors, in which case Section 2 of ARTICLE III hereof shall govern and control the approval of such subject matter.
Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these By-laws, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of capital stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.
Section 11. Business Brought Before an Annual Meeting. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) brought before the meeting by or at the direction of the Board of Directors or
(iii) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public announcement of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the date on which such notice of the date of the annual meeting was mailed or such public announcement was made. A stockholder's
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notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder and (iv) any material interest of the stockholder in such business. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this section. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this section; if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. For purposes of this section, "public announcement" shall mean disclosure in a press release reported by Dow Jones News Service, Associated Press or a comparable national news service. Nothing in this section shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
ARTICLE III

Directors
Section 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to such powers as are herein and in the Certificate of Incorporation expressly conferred upon it, the Board of Directors shall have and may exercise all the powers of the Corporation, subject to the provisions of the laws of Delaware, the Certificate of Incorporation and these By-laws.
Section 2. Number, Election and Term of Office. The number of directors which constitute the entire Board of Directors of the Corporation shall be such number as is specified in, and the Directors shall be elected and shall hold office only in the manner provided in, the Certificate of Incorporation and any duly authorized certificate of designation.
Section 3. Resignation. Any Director may resign at any time upon written notice to the Corporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting from any increase in the total number of Directors may be filled only in the manner provided in the Certificate of Incorporation.
Section 5. Nominations.
(a) Subject to any duly authorized certificate of designation, only persons who are nominated in accordance with the procedures set forth in these By-laws shall be eligible to serve as Directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who was a stockholder of record at the
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time of giving of notice provided for in this By-law, who is entitled to vote generally in the election of Directors at the meeting and who shall have complied with the notice procedures set forth below in Section 5(b).
(b) In order for a stockholder to nominate a person for election to the Board of Directors of the Corporation at a meeting of stockholders, such stockholder shall have delivered timely notice of such stockholder's intent to make such nomination in writing to the secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation (i) in the case of an annual meeting, not less than 60 nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date or in the event of the first annual meeting, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made, and
(ii) in the case of a special meeting at which Directors are to be elected, not later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made. Such stockholder's notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election as a Director at such meeting all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (ii) as to the stockholder giving the notice (A) the name and address, as they appear on the Corporation's books, of such stockholder and (B) the class and number of shares of the Corporation which are beneficially owned by such stockholder and also which are owned of record by such stockholder; and (iii) as to the beneficial owner, if any, on whose behalf the nomination is made, (A) the name and address of such person and (B) the class and number of shares of the Corporation which are beneficially owned by such person. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee.
(c) Subject to any duly authorized certificate of designation, no person shall be eligible to serve as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section 5 or
Section 4 above. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this section, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. A stockholder seeking to nominate a person to serve as a Director must also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this section.
Section 6. Annual Meetings. The annual meeting of the Board of Directors shall be held without other notice than this By-law immediately after, and at the same place as, the annual meeting of stockholders.
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Section 7. Other Meetings and Notice. Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board of Directors. Special meetings of the Board of Directors may be called by the chairman of the board, the president (if the president is a Director) or, upon the written request of at least a majority of the Directors then in office, the secretary of the Corporation on at least 24 hours notice to each Director, either personally, by telephone, by mail or by telecopy (notice by mail shall be deemed delivered 3 days after deposit in the U.S. mail).
Section 8. Chairman of the Board, Quorum, Required Vote and Adjournment. The Board of Directors shall elect, by the affirmative vote of a majority of the total number of Directors then in office, a chairman of the board, who shall preside at all meetings of the stockholders and Board of Directors at which he or she is present and shall have such powers and perform such duties as the Board of Directors may from time to time prescribe. If the chairman of the board is not present at a meeting of the stockholders or the Board of Directors, the president (if the president is a Director and is not also the chairman of the board) shall preside at such meeting, and, if the president is not present at such meeting, a majority of the Directors present at such meeting shall elect one of their members to so preside. A majority of the total number of Directors then in office shall constitute a quorum for the transaction of business. Unless by express provision of an applicable law, the Certificate of Incorporation or these By-laws a different vote is required, the vote of a majority of Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Committees. The Board of Directors may, by resolution passed by a majority of the total number of Directors then in office, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation, which to the extent provided in such resolution or these By-laws shall have, and may exercise, the powers of the Board of Directors in the management and affairs of the Corporation, except as otherwise limited by law. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request.
Section 10. Committee Rules. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. Unless otherwise provided in such a resolution, in the event that a member and that member's alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or
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not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Section 11. Communications Equipment. Members of the Board of Directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear and speak with each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting.
Section 12. Waiver of Notice and Presumption of Assent. Any member of the Board of Directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.
Section 13. Action by Written Consent. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of such board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.
ARTICLE IV

OFFICERS
Section 1. Number. The officers of the Corporation shall be elected by the Board of Directors and shall consist of a chairman of the board, a chief executive officer, a president, one or more vice-presidents, a secretary, a chief financial officer and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors. Any number of offices may be held by the same person, except that neither the chief executive officer nor the president shall also hold the office of secretary. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible.
Section 2. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.
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Section 3. Removal. Any officer or agent elected by the Board of Directors may be removed by the Board of Directors at its discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors.
Section 5. Compensation. Compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a Director of the Corporation; provided however, that compensation of all executive officers may be determined by a committee established for that purpose if so authorized by the unanimous vote of the Board of Directors.
Section 6. Chairman of the Board. The chairman of the board shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and perform such other duties as may be prescribed to him or her by the Board of Directors or provided in these By-laws.
Section 7. Chief Executive Officer. The chief executive officer shall have the powers and perform the duties incident to that position. Subject to the powers of the Board of Directors and the chairman of the board, the chief executive officer shall be in the general and active charge of the entire business and affairs of the Corporation, and shall be its chief policy making officer. The chief executive officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or provided in these By-laws. The chief executive officer is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chief executive officer shall perform all the duties and responsibilities and exercise all the powers of the president.
Section 8. The President. The president of the Corporation shall, subject to the powers of the Board of Directors, the chairman of the board and the chief executive officer, have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees. The president shall see that all orders and resolutions of the Board of Directors are carried into effect. The president is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer, the Board of Directors or as may be provided in these By-laws.
Section 9. Vice Presidents. The vice president, or if there shall be more than one, the vice presidents in the order determined by the Board of Directors or the chairman of the board,
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shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice presidents shall also perform such other duties and have such other powers as the Board of Directors, the chairman of the board, the chief executive officer, the president or these By-laws may, from time to time, prescribe. The vice presidents may also be designated as executive vice presidents or senior vice presidents, as the Board of Directors may from time to time prescribe.
Section 10. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the Board of Directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the chairman of the board's supervision, the secretary shall give, or cause to be given, all notices required to be given by these By-laws or by law; shall have such powers and perform such duties as the Board of Directors, the chairman of the board, the chief executive officer, the president or these By-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the Corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, any of the assistant secretaries, shall in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors, the chairman of the board, the chief executive officer, the president, or the secretary may, from time to time, prescribe.
Section 11. The Chief Financial Officer. The chief financial officer shall have the custody of the corporate funds and securities; shall keep full and accurate all books and accounts of the Corporation as shall be necessary or desirable in accordance with applicable law or generally accepted accounting principles; shall deposit all monies and other valuable effects in the name and to the credit of the Corporation as may be ordered by the chairman of the board or the Board of Directors; shall cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the Board of Directors, at its regular meeting or when the Board of Directors so requires, an account of the Corporation; shall have such powers and perform such duties as the Board of Directors, the chairman of the board, the chief executive officer, the president or these By-laws may, from time to time, prescribe. If required by the Board of Directors, the chief financial officer shall give the Corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of chief financial officer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the chief financial officer belonging to the Corporation.
Section 12. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these By-laws, shall have
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such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.
Section 13. Absence or Disability of Officers. In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any Director, or to any other person selected by it.
ARTICLE V

INDEMNIFICATION
Section 1. Procedure for Indemnification. Any indemnification of a Director or officer of the Corporation or advance of expenses under Section 2 of ARTICLE NINE of the Certificate of Incorporation shall be made promptly, and in any event within forty-five days (or, in the case of an advance of expenses, twenty days), upon the written request of the Director or officer. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to ARTICLE NINE of the Certificate of Incorporation is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved the request. If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within forty-five days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by ARTICLE NINE of the Certificate of Incorporation shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation. The procedure for indemnification of other employees and agents for whom indemnification is provided pursuant to Section 2 of ARTICLE NINE of the Certificate of Incorporation shall be the same procedure set forth in this
Section 1 for Directors or officers, unless otherwise set forth in the action of the Board of Directors providing indemnification for such employee or agent.
Section 2. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a Director, officer, employee, partner, member, manager, trustee, fiduciary or agent of the Corporation or a wholly owned subsidiary of the Corporation or was serving at the request of the Corporation or a wholly owned subsidiary of the Corporation as a Director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation, partnership, joint venture, limited liability company, trust or other entity or enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the Delaware General Corporation Law.
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Section 3. Reliance. Persons who after the date of the adoption of this provision become or remain Directors or officers of the Corporation or who, while a Director or officer of the Corporation, become or remain a Director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in ARTICLE NINE of the Certificate of Incorporation in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in ARTICLE NINE of the Certificate of Incorporation shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.
Section 4. Non-Exclusivity of Rights. The rights to indemnification and to the advance of expenses conferred in ARTICLE NINE of the Certificate of Incorporation shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate or under any statute, by-law, agreement, vote of stockholders or disinterested Directors or otherwise.
ARTICLE VI

CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by the chairman of the board, the chief executive officer or the president and the secretary or an assistant secretary of the Corporation, certifying the number of shares owned by such holder in the Corporation. If such a certificate is countersigned (i) by a transfer agent or an assistant transfer agent other than the Corporation or its employee or (ii) by a registrar, other than the Corporation or its employee, the signature of any such chairman of the board, chief executive officer, president, secretary or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the Corporation. Shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates and record the transaction on its books. Each such new certificate will be registered in such name as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate. The Board of Directors may appoint
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a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the Corporation.
Section 2. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is first given. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 4. Fixing a Record Date for Other Purposes. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days nor less than 10 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 5. Registered Stockholders. Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.
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Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the Board of Directors. Any call made by the Board of Directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due the Corporation.
ARTICLE VII

GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, in accordance with applicable law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or any other purpose and the Directors may modify or abolish any such reserve in the manner in which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts or other orders for the payment of money by or to the Corporation and all notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall be determined by resolution of the Board of Directors or a duly authorized committee thereof.
Section 3. Contracts. In addition to the powers otherwise granted to officers pursuant to ARTICLE IV hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, of the Corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 5. Corporate Seal. The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 6. Voting Securities Owned By Corporation. Voting securities in any other Corporation held by the Corporation shall be voted by the chief executive officer, the president or a vice president, unless the Board of Directors specifically confers authority to vote with respect
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thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.
Section 7. Inspection of Books and Records. The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation.
Section 8. Section Headings. Section headings in these By-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 9. Inconsistent Provisions. In the event that any provision of these By-laws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these By-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
Section 10. Notices. All notices referred to herein shall be in writing, shall be delivered personally or by first class mail, postage prepaid, and shall be deemed to have been given when so delivered or mailed to the Corporation at its principal executive offices and to any stockholder at such holder's address as it appears in the stock records of the Corporation (unless otherwise specified in a written notice to the Corporation by such holder).
ARTICLE VIII

AMENDMENTS
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to make, alter, amend, change, add to or repeal these By-laws by the affirmative vote of a majority of the total number of Directors then in office. Any alteration or repeal of these By-laws by the stockholders of the Corporation shall require the affirmative vote of a majority of the outstanding shares of the Corporation entitled to vote on such alteration or repeal.
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Exhibit 4.1
CERTIFICATE OF DESIGNATIONS OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS
OF CLASS A SENIOR CUMULATIVE
CONVERTIBLE EXCHANGEABLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

Conseco, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to authority conferred upon the board of directors of the Corporation (the "Board of Directors") by its Amended and Restated Certificate of Incorporation (hereinafter referred to as the "Certificate of Incorporation"), and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, said Board of Directors, by unanimous written consent dated as of September 9, 2003, duly approved and adopted the following resolution (the "Certificate of Designations"):
RESOLVED, that, pursuant to the authority vested in the Board of Directors by its Certificate of Incorporation, the Board of Directors does hereby create, authorize and provide for the issuance of Class A Senior Cumulative Convertible Exchangeable Preferred Stock, par value $0.01 per share, with a stated value of $25 per share, consisting of 164,537,777 shares, having the designations, preferences, relative, participating, optional and other special rights and the qualifications, limitations and restrictions that are set forth in the Certificate of Incorporation and in this Certificate of Designations as follows:
(a) Designation. There is hereby created out of the authorized and unissued shares of Preferred Stock of the Corporation a class of Preferred Stock designated as the "Class A Senior Cumulative Convertible Exchangeable Preferred Stock." The number of shares constituting such class shall be 164,537,777 and are referred to as the "Convertible Exchangeable Preferred Stock," of which 34,386,740 shares of Convertible Exchangeable Preferred Stock shall be initially issued, with an additional 130,151,037 shares reserved for issuance in accordance with
1

paragraph (c)(i) hereof and with the remaining shares issuable as otherwise permitted hereunder or under applicable law. The liquidation preference of the Convertible Exchangeable Preferred Stock shall be $25 per share.
(b) Rank. The Convertible Exchangeable Preferred Stock shall, with respect to dividend distributions and distributions upon the liquidation, winding-up or dissolution of the Corporation, rank (i) senior to all classes of Common Stock of the Corporation and to each other class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation hereafter established, the terms of which do not expressly provide that it ranks senior to, or on a parity with, the Convertible Exchangeable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up or dissolution of the Corporation (collectively referred to, together with all classes of Common Stock of the Corporation, as "Junior Securities"); (ii) on a parity with any class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation hereafter established, the terms of which expressly provide that such class or series will rank on a parity with the Convertible Exchangeable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up or dissolution of the Corporation (collectively referred to as "Parity Securities"); and junior to each other class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation hereafter established, the terms of which expressly provide that such class or series will rank senior to the Convertible Exchangeable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up or dissolution of the Corporation (collectively referred to as "Senior Securities"). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any rights, options, warrants or calls exercisable for or convertible into any of the Junior Securities, Parity Securities and Senior Securities, as the case may be.
(c) Dividends.
(i) Beginning on the Issue Date, the Holders of the outstanding shares of Convertible Exchangeable Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, distributions in the form of dividends on each share of Convertible Exchangeable Preferred Stock, at a rate per annum equal to 10.5% of the liquidation preference per share of the Convertible Exchangeable Preferred Stock, payable semi-annually, which rate per annum will increase to 11% of the liquidation preference per
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share of Convertible Exchangeable Preferred Stock beginning on the day after the second anniversary of the Issue Date. All dividends shall accrue, whether or not declared, on a daily basis from the date of issuance of the Convertible Exchangeable Preferred Stock and shall be payable, when, as and if declared, semi-annually in arrears on each Dividend Payment Date, commencing March 1, 2004. Until the later of
(i) the second anniversary of the Issue Date and (ii) the first day of the first Fiscal Quarter after the first date on which each of the Active Material Insurance Subsidiaries has a financial strength rating of at least "A-" by A.M. Best, dividends declared shall be paid on any Dividend Payment Date by the issuance of additional shares of Convertible Exchangeable Preferred Stock (and, at the Corporation's option, payment of a whole share (after rounding up) or payment of cash in lieu of a fractional share or issuance of whole shares representing the fractional shares that would be issuable to all Holders to an agent who will have the right to either sell all such shares and remit the proceeds to the Holders or buy or sell fractional shares on behalf of the Holders (as directed by the Holders)) having an aggregate liquidation preference equal to the amount of such dividends. Commencing with the day after the later of (i) the second anniversary of the Issue Date and (ii) the first day of the first Fiscal Quarter after the first date on which each of the Active Material Insurance Subsidiaries has a financial strength rating of at least "A-" by A.M. Best, dividends declared may be paid, at the Corporation's option, either in cash, out of funds legally available therefor, or by the issuance of additional shares of Convertible Exchangeable Preferred Stock (and, at the Corporation's option, payment of a whole share (after rounding up) or payment of cash in lieu of a fractional share or issuance of whole shares representing the fractional shares that would be issuable to all Holders to an agent who will have the right to either sell all such shares and remit the proceeds to the Holders or buy or sell fractional shares on behalf of the Holders (as directed by the Holders)) having an aggregate liquidation preference equal to the amount of such dividends. In the event that dividends are declared and paid through the issuance of additional shares of Convertible Exchangeable Preferred Stock as provided in this paragraph, such dividends shall be deemed paid in full and shall not accumulate. If dividends are not paid in full in either cash or additional shares of Convertible Exchangeable Preferred Stock on any Dividend Payment Date as provided in this paragraph, dividends will accumulate as if dividends had been paid in additional shares of Convertible Exchangeable Preferred Stock
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and such additional shares were outstanding for succeeding Dividend Periods. Each dividend shall be payable to the Holders of record as they appear on the stock books of the Corporation on the Dividend Record Date immediately preceding the related Dividend Payment Date. Dividends shall cease to accumulate in respect of the Convertible Exchangeable Preferred Stock held by any Holder on the earliest to occur of the Conversion Date, the Exchange Date or the Redemption Date applicable to the Convertible Exchangeable Preferred Stock held by such Holder, unless, in the case of the Redemption Date, the Corporation shall have failed to pay the relevant Optional Redemption Price (or deposit funds in trust pursuant to paragraph (e)(ii)(C)) on the Redemption Date.
(ii) All dividends paid with respect to shares of the Convertible Exchangeable Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata to the Holders entitled thereto.
(iii) In the event of any optional redemption pursuant to paragraph (e)(i), dividends may be declared and paid at such time, without reference to any regular Dividend Payment Date, to Holders of record on such date, not more than forty-five (45) days prior to the payment thereof, as may be fixed by the Board of Directors.
(iv) Dividends payable on the Convertible Exchangeable Preferred Stock for any period less than a year shall be computed on the basis of a 360-day year of twelve 30 day months.
(v) The Corporation shall not declare, pay or set apart for payment any dividends or other distributions on Parity Securities or Junior Securities or make any payment on account of, or set apart for payment money for a sinking or other similar fund for, the purchase, redemption or other retirement of any Parity Securities or Junior Securities, and shall not permit any corporation or other entity directly or indirectly controlled by the Corporation to purchase or redeem any Parity Securities or Junior Securities, unless full cumulative dividends have been paid on the Convertible Exchangeable Preferred Stock.
(d) Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, the Holders of shares of Convertible Exchangeable Preferred
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Stock then outstanding shall be entitled, after payment shall be made or provision for payment of the debts and other liabilities of the Corporation and the payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for payment to holders of Senior Securities, to be paid out of the assets of the Corporation available for distribution to its stockholders, an amount in cash equal to the Total Liquidation Preference for each share as of the date fixed for liquidation, dissolution or winding-up, before any distribution shall be made or any assets distributed to the holders of any Junior Securities including, without limitation, Common Stock of the Corporation. Except as provided in the preceding sentence, Holders of Convertible Exchangeable Preferred Stock shall not be entitled to any distribution in the event of any liquidation, dissolution or winding-up of the affairs of the Corporation. If upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, the amounts payable with respect to the Convertible Exchangeable Preferred Stock and all other Parity Securities are not sufficient to pay in full the liquidation payments payable to the Holders of outstanding shares of the Convertible Exchangeable Preferred Stock and all Parity Securities, then the holders of all such shares shall share equally and ratably in such distribution of assets first in proportion to the full liquidation preference to which each is entitled until such preferences are paid in full, and then in proportion to their respective amounts of accumulated but unpaid dividends, plus dividends accrued for the period from the most recent Dividend Payment Date to the date fixed for liquidation, dissolution or winding-up.
(e) Redemption.
(i) Optional Redemption.
(A) The Corporation may, at the option of the Board of Directors, redeem, to the extent of funds legally available therefor, in whole or in part, in the manner provided for in paragraph (e)(ii) hereof, any or all of the shares of the Convertible Exchangeable Preferred Stock, at a redemption price in cash equal to the Total Liquidation Preference for each share as of the Redemption Date (the "Optional Redemption Price").
(B) In the event of a redemption pursuant to paragraph
(e)(i)(A) hereof of only a portion of the then outstanding shares of the Convertible Exchangeable Preferred Stock, the Corporation shall effect such redemption on a pro rata basis according to the number of
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shares held by each Holder of the Convertible Exchangeable Preferred Stock, provided that the Corporation may redeem any or all such shares held by any Holder of fewer than 100 shares (or shares held by any Holder who would hold less than 100 shares as a result of such redemption), as may be determined by the Corporation.
(ii) Procedures for Redemption.
(A) At least thirty (30) days and not more than sixty (60)
days prior to the date fixed for any redemption of the Convertible Exchangeable Preferred Stock, written notice (the "Redemption Notice") shall be given by first class mail, postage prepaid, to each Holder of record on the record date fixed for such redemption of the Convertible Exchangeable Preferred Stock at such Holder's address as it appears on the stock books of the Corporation; provided that no failure to give such notice nor any deficiency therein shall affect the validity of the procedure for the redemption of any shares of Convertible Exchangeable Preferred Stock to be redeemed except as to the Holder or Holders to whom the Corporation has failed to give said notice or to whom such notice was defective. The Redemption Notice shall state:
(1) that the redemption is pursuant to paragraph
(e)(i)(A) hereof;
(2) the Optional Redemption Price;
(3) whether all or less than all the outstanding shares of the Convertible Exchangeable Preferred Stock are to be redeemed and the total number of shares of the Convertible Exchangeable Preferred Stock being redeemed, and in the event that less than all the outstanding shares of Convertible Exchangeable Preferred Stock are to be redeemed, the number of shares to be redeemed from such Holder;
(4) the date fixed for redemption;
(5) that the Holder is to surrender to the Corporation, in the manner, at the place or
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places and at the price designated, the certificate or certificates representing the shares of Convertible Exchangeable Preferred Stock to be redeemed; and
(6) that dividends on the shares of the Convertible Exchangeable Preferred Stock to be redeemed shall cease to accumulate on such Redemption Date unless the Corporation defaults in the payment in full of the Optional Redemption Price on such date.
(B) Each Holder of Convertible Exchangeable Preferred Stock shall surrender the certificate or certificates representing such shares of Convertible Exchangeable Preferred Stock to the Corporation, duly endorsed (or otherwise in proper form for transfer, as determined by the Corporation), in the manner and at the place designated in the Redemption Notice, and on the Redemption Date the full Optional Redemption Price for such shares shall be payable in cash to the Person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be canceled and retired and the shares represented thereby shall no longer be deemed to be outstanding. In the event that less than all of the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares.
(C) On and after the Redemption Date, unless the Corporation defaults in the payment in full of the Optional Redemption Price, dividends on the Convertible Exchangeable Preferred Stock called for redemption shall cease to accumulate on the Redemption Date, and all rights of the Holders of redeemed shares shall terminate with respect thereto on the Redemption Date, other than the right to receive the Optional Redemption Price without interest; provided, however, that if a notice of redemption shall have been given as provided in paragraph (ii)(A) above and the funds necessary for redemption (including an amount in respect of all dividends that will accrue to the Redemption Date) shall have been deposited in trust for the equal and ratable benefit of the Holders of the shares to be redeemed (with
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such funds not being revocable until two years after the proposed Redemption Date), then, at the close of business on the day on which such funds are segregated and set aside, the Holders of the shares to be redeemed shall cease to be stockholders of the Corporation and shall be entitled only to receive the Optional Redemption Price, without interest.
(f) Voting Rights.
(i) After the occurrence of a Trigger Event, the Holders of each share of Convertible Exchangeable Preferred Stock shall be entitled to vote together with the holders of Common Stock as a single class on all matters on which the holders of the Common Stock of the Corporation shall be entitled to vote; provided, however, if such Trigger Event occurs prior to the first anniversary of the Issue Date and is not an Immediate Trigger Event, then the Holders of the Convertible Exchange Preferred Stock shall only be entitled to exercise the voting rights described in this paragraph (f)(i) as a result of such Trigger Event if such Trigger Event is continuing on or occurs after the first anniversary of the Issue Date. Each share of Convertible Exchangeable Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Convertible Exchangeable Preferred Stock could be converted pursuant to paragraph (h) hereof (assuming such share was immediately convertible into shares of Common Stock pursuant to paragraph (h)) at the record date for determination of the stockholders entitled to vote on such matters, or if no record date is established, at the date such vote is taken or any written consent of stockholders is solicited, such votes to be counted together with all other shares of stock of the Corporation having general voting power and not counted separately as a class. After the occurrence of a Trigger Event, Holders of Convertible Exchangeable Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws. At any time (and from time to time) after the voting rights of the Convertible Exchangeable Preferred Stock described in this paragraph (f)(i) become exercisable, directors of the Corporation may be removed with or without cause and a proper officer of the Corporation may, and upon the written request of the Holders of record of at least forty percent (40%) of the outstanding shares of Convertible Exchangeable Preferred Stock addressed to the secretary of the Corporation shall, call a special meeting of the
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shareholders for the purpose of (i) voting on the removal (with or without cause) of one or more of the directors of the Corporation and the filling of any vacancies thereby created, (ii) having the holders of Common Stock approve the selection of a Non-Voting Observer, who shall have the right to attend all scheduled meetings of the Board of Directors of the Corporation as an observer and to whom the Corporation shall afford the opportunity to participate in the deliberations of the board of directors of the Corporation at such scheduled meetings, including through receipt, at the same time as the board of directors of the Corporation receives the same, of all written information and material as is distributed to the board of directors of the Corporation. The Non-Voting Observer shall agree to keep confidential any such information and materials received and shall not disclose or make use of any such information for any purpose other than for the participation in the scheduled meetings of the board of directors as an observer. The Non-Voting Observer shall be elected for, and only for, a single term to coincide with the initial term for which the directors are being nominated pursuant to this paragraph, and (iii) for any other matter on which holders of Common Stock are entitled to vote. If such meeting shall not be called by a proper officer of the Corporation within thirty (30) days after personal service of said written request upon the secretary of the Corporation, or within thirty-five (35) days after mailing the same within the United Sates by certified mail, addressed to the secretary of the Corporation at its principal executive offices, then the Holders of record of at least forty percent (40%) of the outstanding shares of Convertible Exchangeable Preferred Stock may designate one of their number to call such meeting at the expense of the Corporation. Any Holder of Convertible Exchangeable Preferred Stock so designated shall have, and the Corporation shall provide, access to the lists of stockholders to be called pursuant to the provisions hereof. The Person so designated may designate any place, either within or without the State of Delaware, as the place of meeting for such meeting. If no designation is made, the place of meeting shall be the principal executive office of the Corporation. Written or printed notice stating the place, date, time and the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his,
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her or its address as the same appears on the records of the Corporation.
Nominations of persons for election to the Board of Directors of the Corporation may be made at any special meeting called pursuant to the provisions of this paragraph by any person who was a Holder of record of Common Stock or Convertible Exchangeable Preferred Stock at the time of giving of notice provided for in this paragraph, and who shall have delivered timely notice of such Holder's intent to make such nomination in writing to the secretary of the Corporation. To be timely, a Holder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made. Such Holder's notice shall set forth (i) as to each person whom the Holder proposes to nominate for election as a Director at such meeting all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (ii) as to the Holder giving the notice (A) the name and address, as they appear on the Corporation's books, of such Holder and (B) the class and number of shares of Common Stock or Convertible Exchangeable Preferred Stock of the Corporation which are beneficially owned by such Holder and also which are owned of record by such Holder; and (iii) as to the beneficial owner, if any, on whose behalf the nomination is made, (A) the name and address of such person and (B) the class and number of shares of Common Stock or Convertible Exchangeable Preferred Stock of the Corporation which are beneficially owned by such person.
(ii) So long as any shares of the Convertible Exchangeable Preferred Stock are outstanding, without the affirmative vote or consent of Holders of at least a majority of the issued and outstanding shares of Convertible Exchangeable Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by resolution adopted at an annual or special meeting (unless all shares of the Convertible Exchangeable Preferred Stock will be redeemed in full in accordance with paragraph
(e) hereof upon the
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occurrence or consummation of any of the following), the Corporation shall not:
(A) effect or permit any amendment, alteration or repeal (by merger, consolidation, combination, reclassification or otherwise) of any provision of the Certificate of Incorporation or by-laws which would adversely alter, circumvent or otherwise adversely affect the preferences, rights or powers of the Holders of Convertible Exchangeable Preferred Stock (including without limitation the granting of any voting rights to any other holder of Capital Stock of the Corporation (other than (v) voting rights to holders of Common Stock no superior than the voting rights to which holders of Common Stock are entitled on the Issue Date and
(w) voting rights to holders of Preferred Stock of this Corporation of the type customarily provided to holders of publicly traded Preferred Stock (whether or not such class of the Corporation's Preferred Stock being issued is publicly traded), it being understood that certain of the voting rights granted to the Convertible Exchangeable Preferred Stock are not customary for publicly traded Preferred Stock, and in no event shall such voting rights include voting rights superior to the voting rights of the Convertible Exchangeable Preferred Stock) or holder of obligations of the Corporation) and, prior to the second annual meeting of the Corporation held after the date hereof, Section 1 of Article 10 of the Certificate of Incorporation and Section 1 of Article II of the by-laws, or any provisions of any thereof; provided that any such amendment that changes (i) the dividend payable on or the Total Liquidation Preference of the Convertible Exchangeable Preferred Stock, (ii) the Conversion Price Per Common Share or (iii) the Exchange Rate shall require the affirmative vote of the Holder of each share of Convertible Exchangeable Preferred Stock;
(B) authorize the issuance of or issue (or, in the case of clause (iii) below, permit any Subsidiary to authorize or issue)
(i) shares of any class of Senior Securities, (ii) any shares of Capital Stock of the Corporation or series of Preferred Stock of the Corporation entitled to any mandatory cash redemption obligation or mandatory cash dividend payments at any
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time when any shares of Convertible Exchangeable Preferred Stock are outstanding or (iii) any Indebtedness of the Corporation or any Subsidiary (such shares of Capital Stock and Preferred Stock and such Indebtedness, together with Senior Securities, "Senior Debt and Equity Securities") or any securities exchangeable for, convertible into, or evidencing the right to purchase Senior Debt and Equity Securities (or amend the provisions of any existing class of Capital Stock of the Corporation to make such class of Capital Stock into Senior Debt and Equity Securities), other than Indebtedness set forth in Schedule D hereto, except to the extent that 100% of the Net Proceeds thereof are applied to permanently repay or prepay loans under the Credit Agreement, provided that the aggregate liquidation preference and aggregate principal amount, as applicable, of the Senior Debt and Equity Securities so issued is not greater than the sum of (x) the aggregate principal amount of the loans under the Credit Agreement so repaid or prepaid and (y) the reasonable costs and expenses incurred by the Corporation in connection with the issuance of such Senior Debt and Equity Securities;
(C) authorize the issuance of or issue additional shares of any class of Parity Securities and any securities exchangeable for, convertible into, or evidencing the right to purchase Parity Securities (or amend the provisions of any existing class of Capital Stock of the Corporation to make such class of Capital Stock into Parity Securities) except to the extent that 100% of the Net Proceeds thereof are applied (x) to redeem shares of Convertible Exchangeable Preferred Stock pursuant to paragraph
(e)(i) hereof, (y) to otherwise repurchase shares of Convertible Exchangeable Preferred Stock or (z) to permanently repay or prepay loans under the Credit Agreement; provided that, in each case, the aggregate liquidation preference of the Parity Securities so issued is not greater than the sum of (x) the aggregate Total Liquidation Preference of the Convertible Exchangeable Preferred Stock so redeemed as of the date of redemption or otherwise repurchased by the Corporation, (y) the aggregate principal amount of loans under the Credit Agreement so repaid or prepaid and (z) the reasonable costs and expenses incurred by the
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Corporation in connection with the issuance of such Parity Securities;
(D) authorize or permit the issuance of any Preferred Stock by any subsidiary of the Corporation other than to the Corporation or any of its direct or indirect wholly owned subsidiaries;
(E) consent to any liquidation, dissolution or winding up of the Corporation;
(F) sell all or substantially all of the Corporation's assets; provided however, that the right to vote or consent pursuant to this paragraph (f)(ii)(F) shall terminate on September 30, 2005;
(G) effect a merger or consolidation or any other transaction resulting in the acquisition of the Corporation by another corporation or entity; provided however, that the right to vote or consent pursuant to this paragraph (f)(ii)(G) shall terminate on September 30, 2005;
(H) redeem or otherwise acquire any shares of Junior Securities except pursuant to any bona fide plan for the benefit of directors, officers or employees of the Corporation now or hereafter in effect;
(I) redeem or otherwise acquire any shares of Parity Securities unless shares of Convertible Exchangeable Preferred Stock are redeemed, on a pro rata basis pursuant to paragraph
(e)(i)(B);
(J) pay or set apart for payment any cash dividends or distributions on Junior Securities; or
(K) pay or set apart for payment any cash dividends or distributions on Parity Securities, unless cash dividends are paid concurrently on the Convertible Exchangeable Preferred Stock on a pro rata basis.
(iii) The consent or votes required in paragraph (f)(i) and (ii) shall be in addition to any approval of stockholders of the Corporation which may be required by law or pursuant to any provision of the Corporation's Certificate of Incorporation or by-
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laws. In any case in which the Holders of Convertible Exchangeable Preferred Stock shall be entitled to vote as one class on any matter (other than when voting as a single class together with the holders of the Common Stock pursuant to paragraph (f)(i) hereof), and as one class together with any other series of Preferred Stock on any matter, each Holder of Convertible Exchangeable Preferred Stock, and each holder of any such other series, entitled to vote with respect to such matter shall be entitled to one vote for each $25 in liquidation preference plus the amount of any accumulated and unpaid dividends. In any case in which the Holders of Convertible Exchangeable Preferred Stock shall be entitled to vote on any matter, whether as one class or together with any other series or class of capital stock of the Corporation, such Holders may act by written consent in lieu of a meeting of the stockholders.
(iv) If at any time dividends on the Convertible Exchangeable Preferred Stock shall be in arrears for dividend periods (whether or not consecutive) containing in the aggregate a number of days equivalent to six calendar quarters, then the Holders of the Convertible Exchangeable Preferred Stock will be entitled to vote for the election of two additional directors on the terms set forth below and until all past dividends accumulated on the Convertible Exchangeable Preferred Stock have been paid in full. In such case, the Board of Directors will be increased by two directors, and the Holders of the Convertible Exchangeable Preferred Stock will have the exclusive right to elect two directors at the next annual meeting of stockholders of the Corporation or at a special meeting held in place thereof, or at a special meeting of the Holders of the Convertible Exchangeable Preferred Stock called as hereinafter provided. When all arrears in dividends on the Convertible Exchangeable Preferred Stock then outstanding have been paid, then the right of the Holders of the Convertible Exchangeable Preferred Stock to elect such additional two directors shall cease (but subject always to the same provisions for the vesting of such voting rights in the case of any similar future arrearages for dividend periods (whether or not consecutive) containing in the aggregate a number of days equivalent to six calendar quarters), and the terms of office of all Persons elected as directors by the Holders of the Convertible Exchangeable Preferred Stock shall immediately terminate and the number of directors serving on the Board of Directors shall be reduced accordingly. At any time after such voting power has been so vested in the Holders of Convertible Exchangeable Preferred
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Stock, the secretary of the Corporation may, and upon the written request of any Holder of Convertible Exchangeable Preferred Stock (addressed to the secretary at the principal office of the Corporation) shall, call a special meeting of the Holders of the Convertible Exchangeable Preferred Stock for the election of the two directors to be elected by them as herein provided, such call to be made by notice similar to that provided in the by-laws of the Corporation for a special meeting of the stockholders or as required by law. If the secretary does not call a meeting as above provided within 20 days after receipt of any such request, then any Holder of Convertible Exchangeable Preferred Stock may call such meeting, upon the notice above provided, and for that purpose shall have access to the stock books of the Corporation. The directors elected by the Holders of Convertible Exchangeable Preferred Stock at any such meeting shall hold office until the next annual meeting of the stockholders or special meeting held in lieu thereof if such office shall not have terminated as above provided. If any vacancy shall occur among the directors elected by the Holders of the Convertible Exchangeable Preferred Stock, a successor shall be elected by the Board of Directors, upon the nomination of the then-remaining director elected by the Holders of the Convertible Exchangeable Preferred Stock or the successor of such remaining director, to serve until the next annual meeting of the stockholders or special meeting held in place thereof if such office shall not have terminated as provided above. At any meeting held for the purpose of electing directors pursuant to this paragraph (f)(iv), the presence in person or by proxy of the Holders of at least ten percent (10%) of the outstanding shares of Convertible Exchangeable Preferred Stock shall be required to constitute a quorum of such Convertible Exchangeable Preferred Stock.
(g) Exchange.
(i) Requirements.
The outstanding shares of Convertible Exchangeable Preferred Stock are exchangeable, at the option of the Holder, at any time (and from time to time) on or after the tenth anniversary of the Issue Date, for the Corporation's Common Stock (the "Exchange Common Stock"). The "Exchange Rate" shall be equal to the Total Liquidation Preference of the Convertible Exchangeable Preferred Stock to be exchanged as of the Exchange Date divided by the Current Market Price Per Common Share; provided that the maximum number of shares of the Corporation's
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Common Stock issued pursuant to this paragraph (g) upon the exchange of all the Convertible Exchangeable Preferred Stock shall not exceed the greater of (x) 7,840,000,000 shares of the Corporation's Common Stock, which number of shares shall be reduced proportionately to the extent that any shares of Convertible Exchangeable Preferred Stock have previously been converted or exchanged pursuant to the terms hereof(1) and (y) such number of shares of the Corporation's Common Stock as shall be authorized but unissued pursuant to paragraph (g)(iii)(B) hereof; and provided further that the Corporation shall have the right, at its option, to pay cash in an amount equal to the Total Liquidation Preference of such Convertible Exchangeable Preferred Stock as of the Exchange Date instead of delivering Exchange Common Stock.
(ii) Procedure for Exchange.
(A) In order to exercise its exchange right hereunder, a Holder must execute and deliver to the Corporation not less than 10 days nor more than 60 days prior to the Exchange Date a written notice of election to exchange, with respect to the shares of Convertible Exchangeable Preferred Stock to be exchanged. On or prior to the Exchange Date, such Holder shall surrender the certificate or certificates representing such shares of Convertible Exchangeable Preferred Stock, at the office of the transfer agent for the Corporation's securities, or, if none, the primary business office of the Corporation. Unless the shares of Common Stock issuable upon exchange are to be issued in the same name as the name in which such shares of Convertible Exchangeable Preferred Stock are registered, each share of Convertible Exchangeable Preferred Stock surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the Holder or the Holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax to the

1 By way of illustration, if there are 40,000,000 shares of Convertible Exchangeable Preferred Stock outstanding on a given date and 10,000,000 shares of Convertible Exchangeable Preferred Stock are converted or exchanged on such date, then the maximum number of shares of Common Stock issuable upon exchange of all remaining outstanding shares of Convertible Exchangeable Preferred Stock outstanding at any time thereafter would be 5,880,000,000 and the maximum number of shares of Common Stock issuable upon exchange of 50% of the shares of Convertible Exchangeable Preferred Stock outstanding at any time thereafter would be 2,940,000,000.

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extent required below in this paragraph. Upon delivery of the duly executed notice of election to exchange and certificate or certificates representing such shares of Convertible Exchangeable Preferred Stock (the "Exchange Date"), unless the Corporation has elected to pay cash in an amount equal to the Total Liquidation Preference of the Convertible Exchangeable Preferred Stock, as of the Exchange Date, the Holder shall be deemed to be the holder of record of the whole number of shares of Exchange Common Stock subject to such exercise, notwithstanding that the stock transfer books of the Corporation shall then be closed or that certificates representing such shares of Exchange Common Stock shall not then be actually delivered to the Holder. The Corporation shall pay any and all issuance, delivery and transfer taxes in respect of the issuance or delivery of shares of Exchange Common Stock. The Corporation shall not, however, be required to pay any tax in respect of any transfer involved in the issuance or delivery of shares of Exchange Common Stock in a name other than that of the Holder of the Convertible Exchangeable Preferred Stock so exchanged, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Corporation the amount of any such tax or has established to the Corporation's satisfaction that such tax has been paid. All shares of Exchange Common Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. Upon the surrender of certificates representing shares of Convertible Exchangeable Preferred Stock, such shares shall no longer be deemed to be outstanding and all rights of a Holder with respect to such shares surrendered for exchange shall immediately terminate except the right to receive Exchange Common Stock and any cash amounts payable pursuant to this paragraph (g).
(B) From the date of delivery by a Holder of Convertible Exchangeable Preferred Stock of such notice of election to exchange, in lieu of dividends on such Convertible Exchangeable Preferred Stock pursuant to paragraph (c), such Convertible Exchangeable Preferred Stock shall participate equally and ratably with the
17

holders of Common Stock in all dividends paid on Common Stock as if such shares of Convertible Exchangeable Preferred Stock had been exchanged for shares of Common Stock at the time of such delivery.
(C) Upon delivery to the Corporation by a Holder of Convertible Exchangeable Preferred Stock of a notice of election to exchange, the right of the Corporation to redeem such shares of Convertible Exchangeable Preferred Stock shall terminate, regardless of whether a notice of redemption has been mailed.
(iii) (A) The Corporation shall, subject to paragraph (g)(i), at all times reserve and keep available, free from preemptive rights, such number of its authorized but unissued shares of Common Stock as may be required to effect exchanges of the Convertible Exchangeable Preferred Stock.
(B) The Corporation shall use its best efforts to reserve and keep available, free from preemptive rights, not less than 98% of its authorized shares of Common Stock as unissued for purposes of effecting exchanges of the Convertible Exchangeable Preferred Stock; provided that any shares of Common Stock issued upon the conversion or exchange of Convertible Exchangeable Preferred Stock pursuant to the terms hereof shall be deemed to be unissued for purposes of this paragraph (g)(iii)(B).
(C) Prior to the delivery of any securities that the Corporation is obligated to deliver upon exchange of the Convertible Exchangeable Preferred Stock, the Corporation shall comply with all applicable federal and state laws and regulations which require action by the Corporation.
(iv) In connection with the exchange of any shares of Convertible Exchangeable Preferred Stock, no fractions of shares of Common Stock shall be issued. In lieu thereof the Corporation shall, at its option, issue a whole share in respect of any fraction of a share or pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Current Market Price Per Common Share on the Exchange Date.
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(h) Conversion
(i) Subject to the provisions of this paragraph (h), each Holder of Convertible Exchangeable Preferred Stock has the right, at any time (and from time to time) on or after September 30, 2005, at such Holder's option, to convert any or all outstanding shares of Convertible Exchangeable Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock. The number of shares of Common Stock deliverable upon conversion of a share of Convertible Exchangeable Preferred Stock, adjusted as provided herein, is the "Conversion Ratio." The Conversion Ratio shall be a number equal to the Total Liquidation Preference as of the Conversion Date divided by the then applicable Conversion Price Per Common Share. The "Conversion Price Per Common Share" will initially be equal to the greater of (x) the Daily Price Per Common Share for each of the Trading Days in the 60 calendar day period immediately preceding January 8, 2004 and (y) $0.15 per share of Common Stock, and will be subject to adjustment from time to time pursuant to paragraph
(h)(vii). The Corporation will promptly notify the Holders of the Convertible Exchangeable Preferred Stock of the initial Conversion Price Per Common Share following its determination. In the event of any call for redemption pursuant to paragraph (e), the right to convert shares so called for redemption shall terminate at the close of business on the date immediately prior to the Redemption Date unless the Corporation defaults in paying the amount payable upon such redemption.
(ii) (A) In order to exercise the conversion right, the Holder of the shares of Convertible Exchangeable Preferred Stock to be converted shall surrender the certificate representing such shares at the office of the transfer agent for the Corporation's securities or, if none, the primary business office of the Corporation, with a written notice of election (which notice shall be delivered not less than 10 days nor more than 60 days prior to the proposed Conversion Date) to convert completed and signed by such Holder of such Holder's duly authorized attorney, specifying the number of shares of Convertible Exchangeable Preferred Stock to be converted and the proposed Conversion Date. Unless the shares of Common Stock issuable on conversion are to be issued in the same name as the name in which such shares of Convertible Exchangeable Preferred Stock are registered, each share surrendered for conversion shall be
19

accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the Holder or the Holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax to the extent required by paragraph (h)(v) hereof.
(B) As promptly as practicable after the surrender by the Holder of the certificates for shares of Convertible Exchangeable Preferred Stock for conversion pursuant to this paragraph (h), the Corporation shall issue and deliver to such Holder or, on the Holder's written order, to the Holder's transferee a certificate or certificates for the whole number of shares of Common Stock issuable upon conversion.
(C) Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Convertible Exchangeable Preferred Stock were surrendered and notice of conversion was received by the Corporation (the "Conversion Date"). The Person in whose name or names any certificate or certificates for shares of Common Stock are issuable upon such conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby at such time on such date, and such conversion shall be into a number of shares of Common Stock equal to the product of the number of shares of Convertible Exchangeable Preferred Stock surrendered multiplied by the Conversion Ratio in effect at such time on such date. All shares of Common Stock delivered upon conversion of the Convertible Exchangeable Preferred Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. Upon the surrender of certificates representing shares of Convertible Exchangeable Preferred Stock, such shares shall no longer be deemed to be outstanding and all rights of a Holder with respect to such shares surrendered for conversion shall immediately terminate except the right to receive Common Stock and other amounts payable pursuant to this paragraph (h).
(iii) (A) Upon delivery to the Corporation by a Holder of Convertible Exchangeable Preferred Stock of a notice of
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election to convert, the right of the Corporation to redeem such shares of Convertible Exchangeable Preferred Stock shall terminate, regardless of whether a notice of redemption has been mailed.
(B) From the date of delivery by a Holder of Convertible Exchangeable Preferred Stock of such notice of election to convert, in lieu of dividends on such Convertible Exchangeable Preferred Stock pursuant to paragraph (c), such Convertible Exchangeable Preferred Stock shall participate equally and ratably with the holders of Common Stock in all dividends paid on Common Stock as if such shares of Convertible Exchangeable Preferred Stock had been converted to shares of Common Stock at the time of such delivery.
(C) If a Holder of Convertible Exchangeable Preferred Stock delivers to the Corporation a notice of election to convert prior to or after receipt by such Holder of a notice of redemption, such shares of Convertible Exchangeable Preferred Stock shall cease to accumulate dividends pursuant to paragraph (c) but shall continue to be entitled to receive all accumulated and unpaid dividends that such Holder is entitled to receive pursuant to paragraph (c) through the date of delivery of such notice of election to convert together with pro rata accrued but unpaid dividends such Holder is entitled to receive for the period from the last Dividend Payment Date to the date of delivery of the notice of election to convert in preference to and in priority over any dividends on Common Stock. Such accumulated and unpaid dividends shall be payable to such Holder when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, as provided in paragraph (c).
(D) Except as provided above and in paragraph (h)(vii), the Corporation shall make no payment or adjustment for accumulated and unpaid dividends on shares of Convertible Exchangeable Preferred Stock, whether or not in arrears, on conversion of such shares or for dividends in cash on the shares of Common Stock issued upon such conversion.
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(iv) (A) The Corporation shall at all times reserve and keep available, free from preemptive rights, such number of its authorized but unissued shares of Common Stock as may be required to effect conversions of the Convertible Exchangeable Preferred Stock.
(B) Prior to the delivery of any securities that the Corporation is obligated to deliver upon conversion of the Convertible Exchangeable Preferred Stock, the Corporation shall comply with all applicable federal and state laws and regulations which require action by the Corporation.
(v) The Corporation shall pay any and all issuance, delivery and transfer taxes in respect of the issuance or delivery of shares of Common Stock on conversion of the Convertible Exchangeable Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax in respect of any transfer involved in the issuance or delivery of shares of Common Stock in a name other than that of the Holder of the Convertible Exchangeable Preferred Stock so converted, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Corporation the amount of any such tax or has established to the Corporation's satisfaction that such tax has been paid.
(vi) In connection with the conversion of any shares of Convertible Exchangeable Preferred Stock, no fractions of shares of Common Stock shall be issued. In lieu thereof the Corporation shall, at its option, issue a whole share in respect of any fraction of a share or pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Conversion Price Per Common Share on the Conversion Date.
(vii) If the Corporation at any time after the date of issue of the Convertible Exchangeable Preferred Stock (1) declares a dividend or makes a distribution on Common Stock payable in Common Stock (or securities convertible into Common Stock), (2) subdivides or splits the outstanding Common Stock, (3) combines or reclassifies the outstanding Common Stock into a smaller number of shares, (4) issues any shares of its Capital Stock in a reclassification of Common Stock (including any such reclassification in connection with a consolidation or merger in
22

which the Corporation is the continuing corporation), or (5) consolidates with, merges with or into or is converted into any other Person, the Conversion Price Per Common Share in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, split, combination, consolidation, conversion, merger or reclassification shall be adjusted so that the conversion of the Convertible Exchangeable Preferred Stock after such time shall entitle the Holder to receive the aggregate number of shares of Common Stock or other securities of the Corporation (or shares of any security into which such shares of Common Stock have been combined, consolidated, converted, merged or reclassified pursuant to paragraphs (h)(vii)(A)(3), (4) or (5)) which, if the Convertible Exchangeable Preferred Stock had been converted immediately prior to such time, such Holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, distribution, subdivision, split, combination, consolidation, conversion, merger or reclassification, assuming such holder of Common Stock (x) is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such recapitalization, sale or transfer was made, as the case may be ("constituent Person"), or an affiliate of a constituent Person and (y) failed to exercise any rights of election as to the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, conversion, merger, recapitalization, sale or transfer (provided, that if the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, conversion, merger, recapitalization, sale or transfer is not the same for each share of Common Stock held immediately prior to such reclassification, change, consolidation, conversion, merger, recapitalization, sale or transfer by other than a constituent Person or an affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this paragraph
(h)(vii) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, conversion, merger, recapitalization, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). In any such event referred to in paragraph (h)(vii)(A)(5), effective provisions shall be made in the certificate or articles of incorporation of the resulting or surviving corporation, in any contract, sale, conveyance, lease or transfer or otherwise so that the provisions
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set forth herein for the protection of the conversion rights of the Convertible Exchangeable Preferred Stock shall thereafter continue to be applicable. Any such resulting or surviving corporation shall expressly assume the obligation to deliver, upon conversion, such shares of stock, of securities, cash or property. Such adjustment shall be made successively whenever any event listed above shall occur.
(B) Prior to September 30, 2005, if the Corporation issues or sells any Common Stock (other than Common Stock issued upon conversion of the Convertible Exchangeable Preferred Stock, upon exercise or conversion of any security the issuance of which caused an adjustment under paragraphs (h)(vii)(C) (D) or (E)),
(3) pursuant to any bona fide plan for the benefit of employees or directors of the Corporation now or hereafter in effect, in an amount not to exceed 10,000,000 shares of Common Stock, (4) upon conversion of shares of Convertible Exchangeable Preferred Stock issued as payment of dividends pursuant to paragraph (c)(ii), or
(5) upon exercise of warrants issued pursuant to the Warrant Agreement), for a consideration per share (the "Issue Price Per Common Share") less than the then Conversion Price Per Common Share, the Conversion Price Per Common Share to be in effect after such issuance or sale shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price Per Common Share in effect immediately prior to such issuance or sale by a fraction the numerator of which shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares so offered would purchase at the Conversion Price Per Common Share in effect immediately prior to such issuance or sale and the denominator shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of additional shares of Common Stock which are to be issued or sold.
On or after September 30, 2005, if the Corporation issues or sells any Common Stock (other than (x) Common
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Stock issued as described in paragraph (h)(vii)(B)(1), (2), (3),
(4) or (5) above or (y) in a bona fide public offering pursuant to a firm commitment underwriting at a price per share to the public of not less than 95% of the Closing Price Per Common Share calculated as of the date the underwriting agreement for such offering is entered into) for a consideration per share less than the then Current Market Price Per Common Share, the Conversion Price Per Common Share to be in effect after such issuance or sale shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price Per Common Share in effect immediately prior to such issuance or sale by a fraction the numerator of which shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares so offered would purchase at the Current Market Price Per Common Share and the denominator shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of additional shares of Common Stock which are to be issued or sold.
If any portion of the Issue Price Per Common Share is in a form other than cash, the fair market value of such noncash consideration shall be utilized in the foregoing computation. Such fair market value shall be determined by the Board of Directors of the Corporation. The Holders shall be notified promptly of any consideration other than cash to be received by the Corporation and furnished with a description of the consideration and the fair market value thereof, as determined by the Board of Directors.
(C) Prior to September 30, 2005, if the Corporation fixes a record date for the issuance of, or issues or sells, rights, options or warrants entitling the Holders thereof to subscribe for or purchase shares of Common Stock (or securities convertible into shares of Common Stock) or convertible securities (other than (1) pursuant to any bona fide plan for the benefit of employees or directors of the Corporation now or
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hereafter in effect, in an amount not to exceed 10,000,000 shares of Common Stock, (2) shares of Convertible Exchangeable Preferred Stock issued as payment of dividends pursuant to paragraph
(c)(ii) or (3) warrants issued pursuant to the Warrant Agreement), at a price per share of Common Stock (including, in the case of rights, options or warrants, the price at which they may be exercised, or in the case of convertible securities, the conversion price per share of Common Stock) (such price per share being the "New Option Price Per Common Share") less than the then Conversion Price Per Common Share on such record date or date of issuance or sale, the Conversion Price Per Common Share shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price Per Common Share in effect immediately prior to such issuance or sale by a fraction the numerator of which shall be the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares so offered (including the aggregate exercise price of any rights, options or warrants) would purchase at the Conversion Price Per Common Share in effect immediately prior to such issuance or sale (determined by multiplying such total number of shares by the exercise price of such rights, warrants or options and dividing the product so obtained by the Conversion Price Per Common Share in effect immediately prior to such issuance or sale) and the denominator shall be the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of additional shares of Common Stock which are to be issued or sold.
(D) On or after September 30, 2005, if the Corporation fixes a record date for the issuance of, or issues or sells, rights, options or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock (or securities convertible into shares of Common Stock) or convertible securities (other than (1) pursuant to any bona fide plan for the benefit of employees or directors of the Corporation now or hereafter in effect, in an amount not to exceed 10,000,000
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shares of Common Stock, (2) shares of Convertible Exchangeable Preferred Stock issued as payment of dividends pursuant to paragraph (c)(ii), or (3) warrants issued pursuant to the Warrant Agreement), at a New Option Price Per Common Share less than the then Current Market Price Per Common Share, the Conversion Price Per Common Share to be in effect after such issuance or sale shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price Per Common Share in effect immediately prior to such issuance or sale by a fraction the numerator of which shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of shares of Common Stock which the aggregate offering price (including the aggregate exercise price of any rights options or warrants) of the total number of shares so offered would purchase at the Current Market Price Per Common Share and the denominator shall equal the number of shares of Common Stock outstanding on the date of such issuance or sale, immediately prior to such issuance or sale, plus the number of additional shares of Common Stock which are to be issued or sold.
If any portion of the New Option Price Per Common Share is in a form other than cash, the fair market value of such noncash consideration shall be determined as set forth in paragraph
(h)(vii)(B). Such adjustment shall be made successively whenever such record date is fixed or whenever such rights, options, warrants or convertible securities are issued or sold; and if such rights, options, warrants or convertible securities are not so issued or expire unexercised, or if there is a change in the number of shares of Common Stock to which the Holders of such rights, options, warrants or convertible securities are entitled (other than pursuant to adjustment provisions therein comparable to those contained in this paragraph (h)(vii)), the Conversion Price Per Common Share shall again be adjusted to be the Conversion Price Per Common Share which would then be in effect if such record date had not been fixed or such rights, options, warrants or convertible securities not so issued, in the former event, or the Conversion Price Per Common Share which would then be in effect if such Holder had initially been entitled
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to such changed number of shares of Common Stock, in the latter event. No adjustment of the Conversion Price Per Common Share shall be made pursuant to this paragraph (h)(vii)(C) upon the issuance or sale of any rights, options, warrants or convertible securities to the extent that the Conversion Price Per Common Share has already been adjusted upon the setting of any record date relating to such rights, options, warrants or convertible securities and such adjustment fully reflects the number of shares of Common Stock to which the holders of such rights, options, warrants or convertible securities are entitled and the price payable therefor.
(E) If the Corporation fixes a record date for a distribution to holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Corporation is the continuing corporation) of evidences of indebtedness, assets or other property (other than dividends payable in Common Stock or rights, options or warrants referred to in, and for which an adjustment is made pursuant to, paragraph
(h)(vii)(C)), the Conversion Price Per Common Share to be in effect after such record date shall be reduced by the fair market value (determined as set forth in paragraph (h)(vii)(B)) of the portion of the assets, other property or evidence of indebtedness so to be distributed which is applicable to one share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and if such distribution is not so made, the Conversion Price Per Common Share shall again be adjusted to be the Conversion Price Per Common Share which would then be in effect if such record date had not been fixed.
(F) No adjustment to the Conversion Price Per Common Share pursuant to any of paragraphs (h)(vii)(B), (C), (D) or (E) shall be required unless such adjustment would require an adjustment of at least 1% in the Conversion Price Per Common Share; provided that any adjustments which by reason of this paragraph
(h)(vii)(F) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this paragraph (h)(vii) shall be made to the nearest four decimal points.
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(G) If, at any time as a result of the provisions of this paragraph (h)(vii), Holders of Convertible Exchangeable Preferred Stock upon subsequent conversion shall become entitled to receive any shares of capital stock of the Corporation other than Common Stock, the number of such other shares so receivable upon conversion of the Convertible Exchangeable Preferred Stock shall thereafter be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained herein.
All adjustments pursuant to this paragraph (h) shall be notified to the Holders of Convertible Exchangeable Preferred Stock, and such notice shall be accompanied by a schedule of computations of the adjustments.
(i) Reissuance of Convertible Exchangeable Preferred Stock. Shares of Convertible Exchangeable Preferred Stock that have been issued and reacquired in any manner, including shares purchased or redeemed or exchanged, shall (upon compliance with any applicable provisions of the laws of Delaware) have the status of authorized and unissued shares of Preferred Stock undesignated as to series and may be redesignated and reissued as part of any series of Preferred Stock, provided that any issuance of such shares as Convertible Exchangeable Preferred Stock must be in compliance with the terms hereof.
(j) Business Day. If any payment, redemption or exchange shall be required by the terms hereof to be made on a day that is not a Business Day, such payment, redemption or exchange shall be made on the immediately succeeding Business Day.
(k) Definitions. As used in this Certificate of Designations, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires:
"Active Material Insurance Subsidiary" means Bankers Life and Casualty Company, Conseco Life Insurance Company, Conseco Annuity Assurance Company, Conseco Health Insurance Company and any other Insurance Subsidiary which, on a stand-alone basis (excluding any equity ownership in its Subsidiaries), has in excess of 5% of New Annualized Premiums of the Conseco Insurance Group.
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"Aggregate RBC Ratio" means the Risk-Based Capital Ratio for all Insurance Subsidiaries taken as a whole.
"A.M. Best" means A.M. Best Company, 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 insurance companies.
"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.
"Bankers Life Group" means Bankers Life and Casualty Company, Bankers Life Insurance Company of Illinois and Colonial Penn Life Insurance Company.
"Board of Directors" shall have the meaning set forth in the introductory paragraph of this Certificate of Designations.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The Borough of Manhattan, The City of New York, New York are authorized or obligated by law or executive order to close.
"Calculation Period" means, with respect to any ratio or calculation, the period for which such ratio or calculation is being calculated.
"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of any association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and (iii) in the case of a partnership, partnership interests (whether general or limited).
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"Capitalized Lease Liabilities" means, with respect to any Person, all monetary obligations of such Person under any leasing or similar arrangement which, in accordance with GAAP, would be classified as a capitalized lease, and, for purposes of this Certificate of Designations, 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.
"Certificate of Incorporation" shall have the meaning set forth in the introductory paragraph of this Certificate of Designations.
"Closing Price Per Common Share" means (A) if the shares of such class of Common Stock are listed and traded on the NYSE, the closing price per share of Common Stock on such day as reported on the NYSE Consolidated Tape; (B) if the shares of such class of Common Stock are not listed and traded on the NYSE, the closing price per share of Common Stock on such day as reported by the principal national securities exchange on which the shares are listed and traded; (C) if the shares of such class of Common Stock are not listed and traded on any such securities exchange and are reported on Nasdaq, the closing price per share of Common Stock on such day on Nasdaq; or (D) if the shares of such class of Common Stock are not traded on Nasdaq, the average of the last reported bid and last reported asked price not identified as having been reported late, on such day as reported by Nasdaq. If on any determination date the shares of such class of Common Stock are not quoted by any such organization, the Closing Price Per Common Share shall be the fair market value of such shares on such determination date as determined by the Board of Directors.
"Combined Statutory Statement" means a statement combining the Quarterly Statements or Annual Statements, as applicable, of all the Insurance Subsidiaries.
"Common Stock" of any Person means Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other class of such Person.
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Unless otherwise specified, "Common Stock" means Common Stock of the Corporation.
"Conseco EBITDA" means, for any Calculation Period, the consolidated Net Income of the Corporation for such period plus, without duplication and to the extent reflected as a charge in the statement of such consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, including, to the extent included as interest expense in accordance with GAAP, amortization or write off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness, (c) depreciation and amortization expense of tangible and intangible assets, (d) any losses on sales of assets outside of the ordinary course of business, (e) any realized or unrealized losses on Investments of Insurance Subsidiaries, (f) solely for any Calculation Period ending on or prior to March 31, 2005, cash charges not exceeding $20,000,000 in the aggregate and other non-cash charges, in each case related to the Reorganization Transactions and incurred on or prior to June 30, 2004, (g) any other non-recurring cash charges (not to exceed $25,000,000 in the aggregate for all Calculation Periods) and non-recurring non-cash charges (not to exceed $50,000,000 in the aggregate for all Calculation Periods) taken by any Insurance Subsidiary arising out of the restructuring, consolidation, severance or discontinuance of any portion of the operations, employees and/or management of such Insurance Subsidiary or any businesses thereof, (h) non-cash charges reflecting the cumulative effect of changes in GAAP to the extent such charges relate to any prior Calculation Period and
(i) non-cash charges taken to write off any goodwill included in the Corporation's balance sheet on the Issue Date to the extent such charges are required by FAS 142, and minus, without duplication and to the extent reflected as a gain in the statement of such consolidated Net Income for such period, the sum of (a) any gains on sales of assets outside of the ordinary course of business and (b) realized or unrealized gains on Investments of Insurance Subsidiaries, all as determined on a consolidated basis for such Calculation Period.
"Conseco Insurance Group" means all Insurance Subsidiaries of the Corporation 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
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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 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.
"Conversion Date" has the meaning set forth in paragraph
(h)(ii)(C) hereof.
"Conversion Price Per Common Share" has the meaning set forth in paragraph (h)(i) hereof.
"Conversion Ratio" has the meaning set forth in paragraph (h)(i) hereof.
"Convertible Exchangeable Preferred Stock" shall have the meaning set forth in paragraph (a) hereof.
"Corporation" has the meaning set forth in the introductory paragraph of this Certificate of Designations.
"Credit Agreement" means the Credit Agreement dated on or about the Issue Date among the Corporation, the lenders party thereto, and Bank of America, N.A. as agent, as amended, restated or refinanced and in effect from time to time.
"Current Market Price Per Common Share" means the volume weighted arithmetic mean of the Daily Price Per Common Share for the ten consecutive Trading Days ending on the date of the event giving rise to such calculation.
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"Daily Price Per Common Share" means (A) if the shares of such class of Common Stock are listed and traded on the NYSE, the volume weighted average price per share of Common Stock on such day as reported on the NYSE Consolidated Tape; (B) if the shares of such class of Common Stock are not listed and traded on the NYSE, the volume weighted average price per share of Common Stock on such day as reported by the principal national securities exchange on which the shares are listed and traded; (C) if the shares of such class of Common Stock are not listed and traded on any such securities exchange and are reported on the Nasdaq, the volume weighted average price per share of Common Stock on such day on Nasdaq; or (D) if the shares of such class of Common Stock are not traded on Nasdaq, the average of the highest reported bid and lowest reported asked price not identified as having been reported late, on such day as reported by Nasdaq. If on any determination date the shares of such class of Common Stock are not quoted by any such organization, the Daily Price Per Common Share shall be the fair market value of such shares on such determination date as determined by the Board of Directors.
"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.
"Dividend Payment Date" means March 1 and September 1 of each year.
"Dividend Period" means the Initial Dividend Period and, thereafter, each semi-annual period commencing on a Dividend Payment Date and ending one day before the next Dividend Payment Date.
"Dividend Record Date" means February 15 and August 15 of each year.
"Exchange Common Stock" has the meaning set forth in paragraph (g)(i).
"Exchange Date" has the meaning set forth in paragraph
(g)(ii)(A).
"Exchange Rate" has the meaning set forth in paragraph (g)(i).
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"Fiscal Quarter" means a fiscal quarterly period of the Corporation.
"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), which 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, regulatory or administrative 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.
"Holder" means a holder of shares of Convertible Exchangeable Preferred Stock as reflected in the stock books of the Corporation.
"Immaterial Subsidiary" means any Non-Insurance Subsidiary that
(a) has assets with an aggregate fair market value less than $1,000,000, (b) has aggregate revenues less than $1,000,000 for the period of four consecutive Fiscal Quarters most recently ended, (c) has no Indebtedness (other than intercompany Indebtedness permitted under clause (ix) of Schedule D hereto 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 Corporation or its Subsidiaries (other than Immaterial Subsidiaries), (e) has no Subsidiaries (other than Immaterial Subsidiaries) and (f) is not a guarantor of the obligations of the Corporation under the Credit Agreement; provided that each of CNC Entertainment Nevada, Inc. and Conseco Risk Management, Inc. shall be deemed to be an Immaterial Subsidiary for so long as such Person meets all the requirements set forth above other than, prior to the end of the
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fourth full Fiscal Quarter after the Issue Date, the requirements of clause (b) above.
"Immediate Trigger Event" means any of the events described in clauses (i) through (iv) under the definition of Trigger Event hereof.
"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) all obligations of such Person in respect of Swap Contracts; (f) all obligations of such Person to pay the deferred purchase price of property or services which 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 (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) below in which such Person is a general partner; and (h) all Contingent Obligations of such Person in connection with Indebtedness or obligations of others of the kinds referred to in clauses (a) through (g) above.
"Initial Dividend Period" means the dividend period commencing on the Issue Date and ending on March 1, 2004.
"Insurance Subsidiary" means any Subsidiary which is required to be licensed as an insurer or reinsurer.
"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.
"Issue Date" means September 10, 2003.
"Junior Securities" shall have the meaning set forth in paragraph
(b)(i) hereof.
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"License" means any license, certificate of authority, permit or other authorization which 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.
"Material Adverse Regulatory Effect" means a material adverse change in, or a material adverse effect upon, the business, properties, condition (financial or otherwise) or prospects of the Corporation or the Corporation and its Subsidiaries taken as a whole.
"Material Adverse Regulatory Event" means the occurrence of any of the following events: (a) the applicable Department of any Material Insurance Subsidiary or a court of competent jurisdiction finds that any Material Insurance Subsidiary (x) is in hazardous financial condition, if such finding, together with all other such findings, could reasonably be expected to have a Material Adverse Regulatory Effect or (y) is insolvent, (b) any Material Insurance Subsidiary is required to comply with any letter, bulletin or order of a state insurance regulator materially restricting its operations or business, or enters into an agreement (whether oral or written) with any state insurance regulator for substantially the same purpose, and such event, together with all other such events, could reasonably be expected to have a Material Adverse Regulatory Effect; (c) any Material Insurance Subsidiary becomes subject to orders of supervision, conservation, rehabilitation or liquidation, by agreement or otherwise, or has a receiver or supervisor appointed or (d) any material License of any Material Insurance Subsidiary is suspended or revoked and such suspension or revocation continues for 30 days, or any renewal application by any Material Insurance Subsidiary for any material License is disapproved or ultimately fails to be approved, and such event, together with all other such events, could reasonably be
37

expected to have a material adverse effect upon the business, properties, condition (financial or otherwise) or prospects of such Material Insurance Subsidiary.
"Material Insurance Subsidiary" means (i) any Active Material Insurance Subsidiary and (ii) any other Insurance Subsidiary having assets as determined pursuant to SAP greater than or equal to 10% of the aggregate assets as determined pursuant to SAP of all Insurance Subsidiaries as determined as of the date of the most recently prepared Combined Statutory Statement.
"Nasdaq" means the National Association of Securities Dealers, Inc. Automated Quotation Market System.
"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, with respect to any issuance of Capital Stock of, or capital contribution to, the Corporation or any Subsidiary, or any incurrence of Indebtedness by the Corporation 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 60 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 Corporation 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.
"New Annualized Premiums" means, with respect to any Insurance Subsidiary, the aggregate annualized first year insurance premiums of such Insurance Subsidiary; provided that (x) if such Insurance Subsidiary is part of the Conseco Insurance Group, New Annualized Premiums on any single premium annuity issued by such Insurance Subsidiary shall be calculated as 1/15th of such premium and (y) if such Insurance Subsidiary is part of the Bankers Life Group, New Annualized Premiums on any single premium annuity issued by such Insurance Subsidiary shall be calculated as 6% of such premium.
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"Non-Insurance Subsidiary" means any Subsidiary which is not an Insurance Subsidiary.
"Non-Voting Observer" means a person selected by the holders of the shares of Common Stock on the same basis as if such selection was for the election of a director pursuant to Delaware law, which Non-Voting Observer may be a director, officer or employee of any such holder.
"NYSE" means the New York Stock Exchange, Inc.
"Optional Redemption Price" shall have the meaning set forth in paragraph (e)(i)(A) hereof.
"Parity Securities" shall have the meaning set forth in paragraph
(b)(ii) hereof.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock corporation, trust, estate, unincorporated organization or government or any agency or political subdivision thereof.
"Plan of Reorganization" means the Corporation's Joint Plan of Reorganization dated as of March 12, 2003, as amended through the Issue Date.
"Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding-up of such Person, to shares of Capital Stock of any other class of such Person.
"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.
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"Redemption Date," with respect to any shares of Convertible Exchangeable Preferred Stock, means the date on which such shares of Convertible Exchangeable Preferred Stock are redeemed by the Corporation.
"Redemption Notice" shall have the meaning set forth in paragraph
(e)(ii)(A) hereof.
"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 which is treated as such by the applicable Department.
"Reorganization Transactions" means the transactions contemplated by the Plan of Reorganization to occur upon the effective date thereof.
"Risk-Based Capital Ratio" means, with respect to any Insurance Subsidiary or 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 the relevant Insurance Subsidiary's Department) for such Insurance Subsidiary or Insurance Subsidiaries to (b) the aggregate Authorized Control Level Risk-Based Capital (as defined by the relevant Insurance Subsidiary's Department) for such Insurance Subsidiary or Insurance Subsidiaries.
"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, which are applicable to the circumstances as of the date of filing of such statement or report.
"Senior Debt and Equity Securities" shall have the meaning set forth in paragraph (b)(iii) hereof.
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"Senior Securities" shall have the meaning set forth in paragraph
(b)(iii) hereof.
"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 ("Paladin"), 767 LLC or Resortport Investment Partnership shall be considered a Subsidiary for any purpose of this Certificate of Designations for so long as (w) such Person has no Indebtedness other than intercompany Indebtedness and non-recourse Indebtedness, (x) the aggregate principal amount of Indebtedness of such Person (other than intercompany Indebtedness) does not exceed 85% of the fair market value of the assets of such Person, (y) such Person is not integral to the business or operations of the Corporation or any Subsidiary and (z) in the case of Paladin, the accounts thereof are not consolidated or are not required pursuant to GAAP to be consolidated with those of the Corporation in the Corporation's consolidated financial statements. Unless otherwise specified, "Subsidiary" means a Subsidiary of the Corporation.
"Swap Contract" means any agreement, whether or not in writing, 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, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.
41

"Total Liquidation Preference" means, with respect to any share of Convertible Exchangeable Preferred Stock and as of any date, the liquidation preference for such share plus, without duplication, an amount equal to accumulated and unpaid dividends thereon (whether or not declared) to such date, plus an amount equal to a prorated dividend for the period from the last Dividend Payment Date to such date.
"Trading Day" means a day on which the specified securities exchange or quotation system is open for trading or quotation; provided, however, if no closing price, sale price or bid or asked price, as the case may be, is reported by such securities exchange or quotation system in respect of the Common Stock for such Trading Day, such day or days will be disregarded in any relevant calculation and will be deemed not to have existed when ascertaining any period of consecutive Trading Days.
"Trigger Event" means any of (i) a reduction in the claims pay rating assigned to any Active Material Insurance Subsidiary by A.M. Best to a level (counting any "+" or "-" modifier as a separate level) below the level prevailing on September 10, 2003 or by two or more levels (counting any "+" or "-" modifier as a separate level) in any six-month period, (ii) the occurrence of an Event of Default (as defined in the Credit Agreement) with respect to any payment of principal or interest under the Credit Agreement which Event of Default is continuing, (iii) the occurrence of any Material Adverse Regulatory Event with respect to any Material Insurance Subsidiary,
(iv) the Convertible Exchangeable Preferred Stock becoming convertible in accordance with the provisions of paragraph (h) hereof, (v) Conseco EBITDA as of the end of any Fiscal Quarter set forth in Schedule A hereto for the four Fiscal Quarters then ended (or, if less, the number of full fiscal Quarters commencing after the Issue Date) being less than the amount set forth in such Schedule for such Fiscal Quarter, (vi) the Risk-Based Capital Ratio for any Active Material Insurance Subsidiary set forth in Schedule B hereto as at the end of any fiscal year of the Corporation ending after the Issue Date being less than the ratio set forth in such Schedule for such Active Material Insurance Subsidiary as at the end of such fiscal year and
(vii) the Aggregate RBC Ratio as at the end of any Fiscal Quarter set forth in Schedule C hereto being less than the ratio set forth in such Schedule for such Fiscal Quarter.
42

"Warrant Agreement" means the warrant agreement dated the Issue Date between the Corporation and the Warrant Agent named therein.
43

                                                             SCHEDULE A

                        CONSECO EBITDA

---------------------------------------------- ------------------------
---------------------------------------------  ------------------------
            Fiscal Quarter Ending                    Amount
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                       $632,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                  $877,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                   $878,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                      $878,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                       $879,000,000
---------------------------------------------- ------------------------	

44

SCHEDULE B

                                 MINIMUM RISK-BASED CAPITAL RATIO

------------- --------------- --------------- ---------------- --------------- ---------------
                                                                                 Each other
                                                  Conseco         Conseco          Active
               Bankers Life    Conseco Life       Annuity          Health         Material
               and Casualty     Insurance        Assurance       Insurance       Insurance
Fiscal Year      Company         Company          Company         Company        Subsidiary
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------

    2003           125%            125%            125%            165%*            175%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2004           145%            150%            152%             152%            175%
------------- --------------- --------------- ---------------- --------------- ---------------	

* If the proposed merger of Conseco Life Insurance Company with and into Conseco Health Insurance Company shall have been consummated on or prior to December 31, 2003, the relevant ratio for 2003 shall instead be 145%.
45

SCHEDULE C
AGGREGATE RISK-BASED CAPITAL RATIO

---------------------------------------------- ------------------------
            Fiscal Quarter Ending                       Ratio
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2004                                          157%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                           165%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                      174%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                       182%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                          185%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                           188%
---------------------------------------------- ------------------------

                              46	

                                                             SCHEDULE D	

PERMITTED INDEBTEDNESS
The Corporation and its Subsidiaries shall be permitted to incur the following Indebtedness:
(i) Indebtedness under the Credit Agreement in an aggregate principal amount not to exceed $1,400,000,000 at any time outstanding;
(ii) any Surplus Debentures issued by any Insurance Subsidiary to the Corporation or any of its Subsidiaries that remain outstanding on the Issue Date, and extensions, renewals or replacements thereof;
(iii) Permitted Transactions entered into by Insurance Subsidiaries;
(iv) Permitted Swap Obligations;
(v) Indebtedness existing on the Issue Date, 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 Schedule, or result in an earlier maturity date or decreased average weighted life;
(vi) 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;
(vii) Capitalized Lease Liabilities and Purchase Money Debt in an aggregate principal amount not to exceed $50,000,000 at any time outstanding;
(viii) intercompany Indebtedness (including Surplus Debentures) among the Corporation and its Subsidiaries (other than Excluded Subsidiaries) and among the Subsidiaries (other than Excluded Subsidiaries);
(ix) intercompany Indebtedness of Excluded Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any time outstanding;
47

(x) Indebtedness in respect of letters of credit issued in connection with reinsurance transactions entered into in the ordinary course of business;
(xi) Indebtedness in respect of surety and other similar bonds in the ordinary course of business and consistent with past practice;
(xii) other secured Indebtedness in an aggregate principal amount not to exceed the greater of (A) $10,000,000 and (B) the lesser of (x) 2% of Modified Total Adjusted Capital and (y) $50,000,000 at any time outstanding;
(xiii) other unsecured Indebtedness in an aggregate principal amount not to exceed the greater of (A) $50,000,000 and (B) the lesser of (x) 10% of Modified Total Adjusted Capital and (y) $250,000,000 at any time outstanding; and
(xiv) Contingent Obligations in respect of Indebtedness permitted under (vii), (xii) or (xiii).
"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, or an amount determined in a consistent manner for any date other than one as of which an Annual Statement is prepared.
"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.
"CMOs" means notes or other instruments secured by collateral consisting primarily of mortgages, mortgage-backed securities and/or other types of mortgage-related obligations.
"Excluded Subsidiary" means any Subsidiary that is a Foreign Subsidiary, non-Wholly-Owned Subsidiary or Immaterial Subsidiary.
"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 otherwise) treated as a partnership in which any Subsidiary is a partner or as a branch of any Subsidiary for United States income tax purposes.
48

"Modified Total Adjusted Capital" means, at any date, the aggregate Total Adjusted Capital (as defined by each relevant Insurance Subsidiary's Department) of the Insurance Subsidiaries taken as a whole, as determined as of such date; provided that not more than $150,000,000 of anticipated future benefit of tax loss carry-forwards may be included for purposes of determining Modified Total Adjusted Capital at any date.
"Permitted Swap Obligations" means all obligations (contingent or otherwise) of the Corporation 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 under the Credit Agreement, 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 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, which 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.
"Purchase Money Debt" means Indebtedness incurred by a Person in connection with the purchase of fixed or capital assets by such Person, in which such assets the seller or financier thereof has taken or retained a Lien therein; 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
49

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.
"Surplus Debentures" means, as to any Insurance Subsidiary, debt securities of such Insurance Subsidiary issued to the Corporation 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.
"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 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 Corporation, or by one or more of the other Wholly-Owned Subsidiaries, or both.
50

IN WITNESS WHEREOF, the undersigned has signed this Certificate this th day of September, 2003.

CONSECO, INC
 By:

Name:

Title:
Attested By:

Name:
Title:

51

Exhibit 4.2

CONSECO, INC.
AND
WACHOVIA BANK, N.A.,
as Warrant Agent

Series A Warrant Agreement
Dated as of September 10, 2003
Warrants to Purchase
Shares of Common Stock

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS.............................................................................................1

   Section 1.01         Definitions...............................................................................1
   Section 1.02         Rules of Construction.....................................................................4

ARTICLE 2 APPOINTMENT OF WARRANT AGENT............................................................................4

   Section 2.01         Appointment of Warrant Agent..............................................................4

ARTICLE 3 THE WARRANTS............................................................................................4

   Section 3.01         Form and Dating; Legends..................................................................4
   Section 3.02         Execution and Countersignature............................................................5
   Section 3.03         Warrant Registrar and Countersignature Agent..............................................5
   Section 3.04         Replacement Warrants......................................................................5
   Section 3.05         Outstanding Warrants......................................................................5
   Section 3.06         Temporary Warrants........................................................................6
   Section 3.07         Cancellation..............................................................................6
   Section 3.08         CUSIP and CINS Numbers....................................................................6
   Section 3.09         Registration, Transfer and Exchange.......................................................7

ARTICLE 4 TERMS OF WARRANTS; EXERCISE OF WARRANTS.................................................................9

   Section 4.01         Terms of Warrants; Exercise of Warrants...................................................9

ARTICLE 5 COVENANTS OF THE COMPANY...............................................................................11

   Section 5.01         Maintenance of Office or Agency..........................................................11
   Section 5.02         Payment of Taxes.........................................................................11
   Section 5.03         Reports..................................................................................11
   Section 5.04         Reservation of Warrant Shares............................................................12
   Section 5.05         Obtaining Stock Exchange Listings........................................................12

ARTICLE 6 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE.....................................13

   Section 6.01         Adjustment of Exercise Price and Number of Warrant Shares Issuable.......................13
   Section 6.02         Fractional Interests.....................................................................16
   Section 6.03         Notices to Warrant Holders...............................................................17
   Section 6.04         No Rights as Stockholders................................................................18

ARTICLE 7 WARRANT AGENT..........................................................................................18

   Section 7.01         Warrant Agent............................................................................18
   Section 7.02         Compensation; Indemnity..................................................................19
   Section 7.03         Individual Rights of Warrant Agent.......................................................20
   Section 7.04         Replacement of Warrant Agent.............................................................20
   Section 7.05         Successor Warrant Agent by Merger........................................................21
   Section 7.06         Eligibility..............................................................................21
   Section 7.07         Holder Lists.............................................................................21	

i

ARTICLE 8 MISCELLANEOUS..........................................................................................21

   Section 8.01         Warrantholder Actions....................................................................21
   Section 8.02         Notices..................................................................................22
   Section 8.03         Supplements and Amendments...............................................................23
   Section 8.04         Governing Law............................................................................24
   Section 8.05         No Adverse Interpretation of Other Agreements............................................24
   Section 8.06         Successors...............................................................................24
   Section 8.07         Duplicate Originals......................................................................24
   Section 8.08         Separability.............................................................................25
   Section 8.09         Table of Contents and Headings...........................................................25
   Section 8.10         Benefits of this Agreement...............................................................25	

EXHIBITS

Exhibit A         Face of Series A Warrant Subscription Certificate
Exhibit B         Reverse of Series A Warrant Subscription Certificate
Exhibit C         DTC Legend	

ii

THIS SERIES A WARRANT AGREEMENT is dated as of September 10, 2003 between Conseco, Inc., a Delaware Corporation (the "Company"), and Wachovia Bank, N.A., as warrant agent (the "Warrant Agent").
WHEREAS, concurrently with the execution hereof, the Company is emerging from the protection of Chapter 11 of Title 11 of the United States Code pursuant to that certain plan of reorganization dated March 18, 2003, as the same may be amended, restated, supplemented or otherwise modified (the "Plan").
WHEREAS, pursuant to the terms of, and subject to the conditions contained in, the Plan, the Company has agreed to issue 6,000,000 Series A Warrants (each, a "Warrant" and collectively the "Warrants") entitling the holders thereof to purchase shares of the common stock, par value $0.01 per share (the "Common Stock"), of the Company (the Common Stock issuable on exercise of the Warrants being referred to herein as the "Warrant Shares") at a price of $27.60 per share of Common Stock (as adjusted from time to time hereunder, the "Exercise Price").
WHEREAS, the Company wishes the Warrant Agent to act on its behalf, and the Warrant Agent is willing to act on behalf of the Company, in connection with the issuance, exchange, transfer, substitution and exercise of the Warrants.
WHEREAS, the Company desires to enter into this Agreement to set forth the terms and conditions of the Warrants and the rights and obligations of the Company, the Warrant Agent and the registered holders of the Certificates evidencing Warrants (the "Holders").
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein and in the Plan, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Warrant Agent, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the following terms shall have the following respective meanings:
"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with") with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar or Countersignature Agent.
"Agent Member" means a member of, or a participant in, the Depositary.
1

"Agreement" means this Warrant Agreement, as amended or supplemented from time to time.
"Board of Directors" means the board of directors or comparable governing body of the Company, or any committee thereof duly authorized to act on its behalf.
"Board Resolution" means a resolution duly adopted by the Board of Directors which is certified by the Secretary or an Assistant Secretary of the Company and remains in full force and effect as of the date of its certification.
"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City or in the city where the Corporate Trust Office of the Warrant Agent is located are authorized or required by law to close.
"Capital Stock" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred.
"Certificated Warrant" means a Warrant in registered individual form.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such in the preamble of this Agreement, or any successor obligor under this Agreement.
"Corporate Trust Office" means the office of the Warrant Agent at which the corporate trust business of the Warrant Agent is principally administered, which at the Issue Date is located at 1525 West W. T. Harris Blvd., Charlotte, North Carolina 28288-1153.
"Countersignature Agent" refers to a Person engaged to countersign the Warrants in the stead of the Warrant Agent.
"Daily Price" means (A) if the shares of Common Stock then are listed and traded on the New York Stock Exchange ("NYSE"), the closing price on such day as reported on the NYSE Composite Transactions Tape; (B) if the shares of Common Stock then are not listed and traded on the NYSE, the closing price on such day as reported by the principal national securities exchange on which the shares are listed and traded; (C) if the shares of Common Stock then are not listed and traded on any such securities exchange, the last reported sale price on such day on the National Market of the National Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"); or (D) if the shares of Common Stock then are not traded on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked price on such day as reported by Nasdaq. If on any determination date the shares of such class of Common Stock are not quoted by any such organization, the Daily Price shall be the fair market value of such shares on such determination date as reasonably determined in good faith by the Board of Directors.
"Depositary" means the depositary of each Global Warrant, which will initially be DTC.
2

"DTC" means The Depository Trust Company, a New York corporation, and its successors.
"DTC Legend" means the legend set forth in Exhibit C.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" has the meaning assigned to such term in the preamble of this Agreement.
"Expiration Date" has the meaning assigned to such term in Section 4.01.
"Fundamental Change" means any merger, consolidation, amalgamation, sale or other conveyance of all or substantially all of the assets of the Company with or to any entity, any reclassification, recapitalization, reorganization, compulsory share exchange, tender offer or exchange offer, stock split or reverse stock split affecting the Capital Stock of the Company for which the Warrants are exercisable.
"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time.
"Global Warrant" means a Warrant in registered global form.
"Holder" or "Warrantholder" means the record owner of any Warrant.
"Issue Date" means the date on which the Warrants are originally issued under the Agreement.
"Liquidation Event" means a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.
"Officer" means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company.
"Officers' Certificate" means a certificate signed in the name of the Company (i) by the chairman of the Board of Directors, the president or chief executive officer or any vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary of the Company.
"Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, reasonably satisfactory to the Warrant Agent.
"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof.
"Register" has the meaning assigned to such term in Section 3.09.
3

"Registrar" means a Person engaged to maintain the Register.
"Warrant Agent" means the party named as such in the preamble of this Agreement or any successor warrant agent under the Agreement pursuant to Article 7.
"Warrant Shares" has the meaning assigned to such term in the preamble of this Agreement.
"Warrants" has the meaning assigned to such term in the Recitals to this Agreement.
Section 1.02 Rules of Construction. Unless the context otherwise requires or except as otherwise expressly provided,
(i) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(ii) "herein," "hereof" and other words of similar import refer to the Agreement as a whole and not to any particular Section, Article or other subdivision;
(iii) all references to Sections, subsections or Articles or Exhibits refer to Sections, subsections or Articles or Exhibits of or to the Agreement unless otherwise indicated; and
(iv) references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations).
ARTICLE 2
APPOINTMENT OF WARRANT AGENT
Section 2.01 Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth in this Agreement and the Warrant Agent hereby accepts such appointment.
ARTICLE 3
THE WARRANTS
Section 3.01 Form and Dating; Legends. The face of the Warrants will be substantially in the form attached hereto as Exhibit A and the reverse of the Warrants will be substantially in the form attached hereto as Exhibit B. The terms and provisions contained in the form of the Warrants annexed as Exhibit A and B constitute, and are hereby expressly made, a part of this Agreement. The Warrants may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or usage. Each Warrant will be dated the date of its countersignature. The Company and the Warrant Agent, by their execution and delivery of this Agreement, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Warrant Certificate conflicts with the express provisions of this Agreement, the provisions of this Agreement shall govern and be controlling.
4

Section 3.02 Execution and Countersignature. (a) An Officer shall execute the Warrants for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Warrant no longer holds that office at the time the Warrant is countersigned, the Warrant will still be valid.
(b) A Warrant will not be valid until the Warrant Agent manually countersigns the Warrant, with the signature conclusive evidence that the Warrant has been countersigned under this Agreement. At any time and from time to time after the execution and delivery of this Agreement, the Company may deliver Warrants executed by the Company to the Warrant Agent for countersignature. The Warrant Agent will countersign and deliver a number of Warrants for original issue in an aggregate amount not to exceed the amount stated in the preamble hereof after receipt by the Warrant Agent of an Officers' Certificate specifying:
(i) the amount of Warrants to be countersigned and the date on which the Warrants are to be countersigned, (ii) whether the Warrants are to be issued as one or more Global Warrants or Certificated Warrants, and
(ii) other information the Company may determine to include or the Warrant Agent may reasonably request.
Section 3.03 Warrant Registrar and Countersignature Agent. The Company may appoint one or more Registrars, and the Warrant Agent may appoint a Countersignature Agent, in which case each reference in the Agreement to the Warrant Agent in respect of the obligations of the Warrant Agent to be performed by the Countersignature Agent will be deemed to be references to the Countersignature Agent. The Company may act as Registrar. In each case the Company and the Warrant Agent will enter into an appropriate agreement with the applicable Agent implementing the provisions of the Agreement relating to the obligations of the Warrant Agent or Registrar to be performed by the applicable Agent and the related rights. The Company initially appoints the Warrant Agent as Registrar.
Section 3.04 Replacement Warrants. If a mutilated Warrant is surrendered to the Warrant Agent or if a Holder delivers to the Company a sworn affidavit that its Warrant has been lost, destroyed or wrongfully taken, the Company will issue and the Warrant Agent will countersign a replacement Warrant. Every replacement Warrant is an additional obligation of the Company and entitled to the benefits of this Agreement. If required by the Warrant Agent or the Company, an indemnity must be furnished that is sufficient in the judgment of both the Warrant Agent and the Company to protect the Company and the Warrant Agent from any loss they may suffer if a Warrant is replaced. The Company may charge the Holder for the expenses of the Company and the Warrant Agent in replacing a Warrant.
Section 3.05 Outstanding Warrants. (a)Warrants outstanding at any time are all Warrants that have been countersigned by the Warrant Agent except for:
(i) Warrants cancelled by the Warrant Agent or delivered to it for cancellation;
(ii) Warrants exercised by the Holder thereof; and
5

(iii) any Warrant which has been replaced pursuant to Section 3.04.
(b) A Warrant shall not cease to be outstanding because the Company or one of its Affiliates holds the Warrant, provided that in determining whether the Holders of the requisite number of the outstanding Warrants have given or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder, Warrants owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding (it being understood that in determining whether the Warrant Agent is protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Warrants which the Warrant Agent knows to be so owned will be so disregarded). Warrants so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Warrant Agent the pledgee's right so to act with respect to such Warrants and that the pledgee is not the Company or any Affiliate of the Company.
Section 3.06 Temporary Warrants. Until definitive Warrants are ready for delivery, the Company may prepare and the Warrant Agent or the Countersignature Agent, as applicable, will countersign temporary Warrants. Temporary Warrants will be substantially in the form of definitive Warrants but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Warrants, as evidenced by the execution of the temporary Warrants. If temporary Warrants are issued, the Company will cause definitive Warrants to be prepared without unreasonable delay. After the preparation of definitive Warrants, the temporary Warrants will be exchangeable for definitive Warrants upon surrender of the temporary Warrants without charge to the Holder. Upon surrender for cancellation of any temporary Warrants, the Company will execute and the Warrant Agent or the Countersignature Agent, as applicable, will countersign and deliver in exchange therefor a like amount of definitive Warrants. Until so exchanged, the temporary Warrants will be entitled to the same benefits as definitive Warrants.
Section 3.07 Cancellation. The Company at any time may deliver to the Warrant Agent for cancellation any Warrants previously countersigned and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Warrant Agent for cancellation any Warrants previously countersigned hereunder which the Company has not issued and sold. Any Registrar will forward to the Warrant Agent any Warrants surrendered to it for transfer, exchange or exercise. The Warrant Agent (and no one else) will cancel all Warrants surrendered for transfer, exchange, exercise or cancellation and dispose of them in accordance with its normal procedures or the written instructions of the Company. The Company may not issue new Warrants to replace Warrants that have been exercised or delivered to the Warrant Agent for cancellation. The Registrar shall provide the Company with a list of all Warrants that have been cancelled.
Section 3.08 CUSIP and CINS Numbers. The Company in issuing the Warrants may use "CUSIP" and "CINS" numbers, and the Warrant Agent will use CUSIP numbers or CINS numbers in notices as a convenience to Holders, the notice to state that no representation is made as to the correctness of such numbers either as printed on the Warrants or as contained in any notice to any Holder. The Company will promptly notify the Warrant Agent of any change in the CUSIP or CINS numbers.
6

Section 3.09 Registration, Transfer and Exchange. (a) The Warrants will be issued in registered form only, and the Company shall cause the Warrant Agent to maintain a register (the "Register") of the Warrants, for registering the record ownership of the Warrants by the Holders and transfers and exchanges of the Warrants.
(b) (i) Each Global Warrant will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.
(ii) Each Global Warrant will be delivered to the Warrant Agent as custodian for the Depositary. Transfers of a Global Warrant (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (1) as set forth in Section 3.09(b)(iv) and (2) transfers of portions thereof in the form of Certificated Warrants may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Warrant Agent by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section.
(iii) Agent Members will have no rights under the Agreement with respect to any Global Warrant held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Warrant Agent and any agent of the Company or the Warrant Agent as the absolute owner and Holder of such Global Warrant for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Warrant through an Agent Member) to take any action which a Holder is entitled to take under the Warrant or the Warrants, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.
(iv) If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Warrant and a successor depositary is not appointed by the Company within 90 days of the notice or
(y) the Warrant Agent has received a request from the Depositary, the Warrant Agent will promptly exchange all beneficial interest in the Global Warrant for one or more Certificated Warrants having an equal number registered in the name of the owner of each beneficial interest, as identified to the Warrant Agent by the Depositary, and thereupon the Global Warrant will be deemed canceled.
(c) Each Certificated Warrant will be registered in the name of the holder thereof or its nominee.
(d) A Holder may transfer a Warrant (or a beneficial interest therein) to another Person or exchange a Warrant (or a beneficial interest therein) for another Warrant by presenting to the Warrant Agent a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any document required by the Agreement. The Warrant Agent will promptly register any transfer or exchange that meets the requirements of
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this Section by noting the same in the register maintained by the Warrant Agent for the purpose; provided that no transfer or exchange will be effective until it is registered in such register. Prior to the registration of any transfer, the Company, the Warrant Agent and their agents will treat the Person in whose name the Warrant is registered as the owner and Holder thereof for all purposes, and will not be affected by notice to the contrary.
From time to time the Company will execute and the Warrant Agent or the Countersignature Agent, as applicable, will countersign additional Warrants as necessary in order to permit the registration of a transfer or exchange in accordance with this Section. All Warrants issued upon transfer or exchange shall be the duly authorized, executed and delivered Warrants of the Company entitled to the benefits of the Agreement.
No service charge will be imposed in connection with any transfer or exchange of any Warrant, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to Section 3.09(b)(iv)).
(e) (i) Global Warrant to Global Warrant. If a beneficial interest in a Global Warrant is transferred or exchanged for a beneficial interest in another Global Warrant, the Warrant Agent will (x) record a decrease in the amount of the Global Warrant being transferred or exchanged equal to the amount of such transfer or exchange and (y) record a like increase in the amount of the other Global Warrant. Any beneficial interest in one Global Warrant that is transferred to a Person who takes delivery in the form of an interest in another Global Warrant, or exchanged for an interest in another Global Warrant, will, upon transfer or exchange, cease to be an interest in such Global Warrant and become an interest in the other Global Warrant and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Warrant for as long as it remains such an interest.
(ii) Global Warrant to Certificated Warrant. If a beneficial interest in a Global Warrant is transferred or exchanged for a Certificated Warrant, the Warrant Agent will (x) record a decrease in the number of such Global Warrant equal to the number of such transfer or exchange and (y) deliver a new Certificated Warrant to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable.
(iii) Certificated Warrant to Global Warrant. If a Certificated Warrant is transferred or exchanged for a beneficial interest in a Global Warrant, the Warrant Agent will (x) cancel such Certificated Warrant, (y) record an increase in such Global Warrant equal to the number of Warrants being transferred or exchanged and (z) in the event that such transfer or exchange involves less than the entire amount of the canceled Certificated Warrant, deliver to the Holder thereof one or more new Certificated Warrants having an aggregate number of Warrants equal to the untransferred or unexchanged portion of the canceled Certificated Warrant, registered in the name of the Holder thereof.
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(f) Certificated Warrant to Certificated Warrant. If a Certificated Warrant is transferred or exchanged for another Certificated Warrant, the Warrant Agent will (x) cancel the Certificated Warrant being transferred or exchanged, (y) deliver one or more new Certificated Warrants having a number equal to the amount of Warrants being transferred or exchanged to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Warrant (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire amount of the canceled Certificated Warrant, deliver to the Holder thereof one or more Certificated Warrants having an aggregate amount of Warrants equal to the untransferred or unexchanged portion of the canceled Certificated Warrant, registered in the name of the Holder thereof.
ARTICLE 4
TERMS OF WARRANTS; EXERCISE OF WARRANTS
Section 4.01 Terms of Warrants; Exercise of Warrants.
(a) Each Warrant not exercised prior to 5:00 p.m., New York City time, on September 10, 2008 (the "Expiration Date") shall become void and all rights thereunder and all rights in respect thereof under this agreement shall cease as of such time.
(b) Subject to the terms of this Agreement, the Warrants shall be exercisable, at the election of the Holders thereof, either in full or from time to time in part during the period commencing at the opening of business on the Issue Date and until 5:00 p.m., New York City time on the Expiration Date, and shall entitle any Holder thereof to receive from the Company the number of fully paid and nonassessable Warrant Shares which the Holder may at the time be entitled to receive on exercise of such Warrants and payment of the Exercise Price in cash, by wire transfer or by certified or official check payable to the order of the Company, in each case, equal to the Exercise Price for such Warrant Shares or by cashless exercise as set forth in subsection (c) below. No adjustments as to dividends will be made upon exercise of the Warrants.
(c) Subject to the terms of this Agreement, and in the sole discretion of the Company, a Holder may elect to convert Warrants into shares of Common Stock, in which event the Company will issue to the Holder the number of shares of Common Stock equal to the result obtained by (i) subtracting B from A, (ii) dividing the result by A as set forth in the following equation, and (iii) multiplying the result by C:
X = (A-B) x C where:

A
X = the number of shares of Common Stock issuable upon exercise pursuant to this subsection (c).
A = the Daily Price on the day immediately preceding the date on which the Holder delivers written notice to the Company pursuant to subsection
(d)below.
B = the Exercise Price.
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C = the number of shares of Common Stock as to which the Warrants are then being exercised.
If the foregoing calculation results in a negative number, then no shares of Common Stock shall be issued upon exercise pursuant to this subsection (c).
(d) In order to exercise all or any of the Warrants, the Holder thereof must deliver to the Warrant Agent at its Corporate Trust Office (i) such Warrants, (ii) the form of election to purchase on the reverse thereof duly filled in and signed, which signature shall be medallion guaranteed by an institution which is a member of a Securities Transfer Association recognized signature guarantee program, and (iii) payment to the Warrant Agent for the account of the Company of the then-current Exercise Price (in the manner set forth in subsections (b) or (c) above) for the number of Warrant Shares in respect of which the Warrants are being exercised.
(e) Subject to the provisions of Section 6.01 hereof and upon the Holder's compliance with the provisions set forth in subsection (d) above, the Company shall cause the Warrant Agent to credit such aggregate number of whole Warrant Shares to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC; provided, however, if the Common Stock is not DTC eligible, the Company shall deliver or cause to be delivered with all reasonable dispatch, to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate or certificates for the number of whole Warrant Shares issuable upon the exercise of such Warrants or other securities or property to which such Holder is entitled.
(f) No fractional Warrant Shares are to be issued upon any exercise of a Warrant, but rather cash in lieu of fractional shares shall be delivered to the Holder as provided in Section 6.02 hereof.
(g) Upon the Holder's compliance with the provisions set forth in subsection (d) above, such Holder shall be deemed for all corporate purposes to have become the holder of the Warrant Shares with respect to which the Warrant has been exercised.
(h) If less than all the Warrants represented by a Warrant Certificate are exercised, such Warrant Certificate shall be surrendered and a new Warrant Certificate of the same tenor and for the number of Warrants which were not exercised shall be executed by the Company and delivered to the Warrant Agent and the Warrant Agent or the Countersignature Agent, as applicable, shall countersign the new Warrant Certificate, registered in such name or names as may be directed in writing by the Holder, and shall deliver the new Warrant Certificate to the Person or Persons entitled to receive the same.
(i) All Warrant Certificates surrendered upon exercise of Warrants shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner satisfactory to the Company. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants.
(j) The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Holders during normal business hours at its
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office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may reasonably request.
ARTICLE 5
COVENANTS OF THE COMPANY
Section 5.01 Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, the City of New York, an office or agency where Warrants may be surrendered for registration of transfer or exchange or for presentation for exercise. The Company hereby initially designates the Corporate Trust Office of the Warrant Agent as such office of the Company. The Company will give prompt written notice to the Warrant Agent of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Warrant Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Warrant Agent.
The Company may also from time to time designate one or more other offices or agencies where the Warrants may be surrendered or presented for any of such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Warrant Agent of any such designation or rescission and of any change in the location of any such other office or agency.
Section 5.02 Payment of Taxes. The Company will pay all documentary, stamp or similar issue or transfer taxes and other governmental charges, if any, in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants; provided that the Company shall not be required to pay any tax, taxes or charges which may be payable in respect of any transfer involved in the issue of any Warrants or any Warrant Shares in a name other than that of the registered holder of a Warrant surrendered upon exercise, and the Company shall not be required to issue or deliver such Warrant Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such taxes or charges or shall have established to the satisfaction of the Company that such taxes or charges have been paid.
Section 5.03 Reports. (a) Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company must provide the Warrant Agent within the time periods specified in those sections for filers that are not "accelerated filers" and the regulations thereunder with:
(i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to annual information only, a report thereon by the Company's certified independent accountants, and
(ii) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports.
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In addition, whether or not required by the Commission, the Company will, after the effectiveness of a shelf registration statement if the Commission will accept the filing, file a copy of all of the information and reports referred to in clauses (i) and (ii) with the Commission for public availability within the time periods for filers that are not "accelerated filers" specified in the Commission's rules and regulations.
Section 5.04 Reservation of Warrant Shares.
(a) The Company will at all times reserve and keep available for issuance and delivery, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights, such number of shares of its authorized but unissued Common Stock or other securities of the Company from time to time issuable upon exercise of the Warrants as will be sufficient to permit the exercise in full of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the Common Stock (the "Transfer Agent") and every subsequent transfer agent for any securities of the Company issuable upon the exercise of any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times to reserve such number of authorized securities as shall be required for such purpose. The Company will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent transfer agent for any of the Company's securities issuable upon the exercise of the rights of purchase represented by the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from such Transfer Agent the certificates for securities of the Company required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement. The Company will supply such Transfer Agent with duly executed certificates for such purposes and will provide or otherwise make available any cash which may be payable as provided in
Section 6.02 hereof. The Company will furnish such Transfer Agent a copy of all notices of adjustments, and certificates related thereto, transmitted to each holder pursuant to Section 6.03 hereof.
(c) Before taking any action which would cause an adjustment pursuant to
Section 6.01 hereof to reduce the Exercise Price below the then par value (if any) of the Warrant Shares, the Company will take any corporate action which may, in the opinion of its counsel (which may be counsel employed by the Company), be necessary in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares at the Exercise Price as so adjusted.
(d) The Company covenants that all Warrant Shares which may be issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issuance thereof.
Section 5.05 Obtaining Stock Exchange Listings. To the extent not already listed, upon the written request of Holders holding Warrants for the purchase of at least ten percent (10%) of the initial Warrant Shares issuable hereunder, the Company will from time to time use reasonable best efforts to take all actions which may be necessary so that the Warrants will be listed on the principal securities exchanges, automated quotation systems or other markets within the United States of America, if any, on which shares of Common Stock are then listed; provided, however, that the Company shall not be required to seek to list the Warrants if the
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Warrants do not then satisfy the listing requirements for such principal securities exchanges, automated quotation systems or other markets. The Company will from time to time use reasonable best efforts to take all action which may be necessary so that the Warrant Shares, immediately upon their issuance upon the exercise of Warrants, will be listed on the principal securities exchanges, automated quotation systems or other markets within the United States of America, if any, on which other shares of Common Stock are then listed.
ARTICLE 6
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE
Section 6.01 Adjustment of Exercise Price and Number of Warrant Shares Issuable. The Exercise Price and the number of Warrant Shares issuable upon the exercise of each Warrant are subject to adjustment from time to time upon the occurrence of the events enumerated in this Article 6. For purposes of this Article 6, "Common Stock" means shares now or hereafter authorized of any class of common stock of the Company and any other stock of the Company, however designated, that has the right (subject to any prior rights of any class or series of preferred stock) to participate in any distribution of the assets or earnings of the Company without limit as to per share amount (it being understood that Common Stock shall not include the Class A Senior Cumulative Convertible Exchangeable Preferred Stock of the Company but shall include stock appreciation rights and phantom stock rights).
(a) Adjustment for Change in Capital Stock.
If the Company (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock, (ii) subdivides its outstanding shares of Common Stock into a greater number of shares, (iii) combines its outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of its Common Stock any shares of its Capital Stock, then the Exercise Price in effect immediately prior to such action shall be proportionately adjusted so that the holder of any Warrant thereafter exercised may receive upon exercise of such Warrant the aggregate number and kind of shares of Capital Stock of the Company which he would have owned immediately following such action if such Warrant had been exercised immediately prior to such action.
The adjustment under this Section 6.01(a) shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If, after an adjustment, a holder of a Warrant upon exercise of it may receive shares of two or more classes of Capital Stock of the Company, the Company shall determine, in good faith, the allocation of the adjusted Exercise Price between the classes of Capital Stock. After such allocation, the exercise privilege and the Exercise Price of each class of Capital Stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 6. Such adjustment shall be made successively whenever any event listed above shall occur.
(b) Adjustment for Certain Derivative Securities.
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If the Company distributes any rights, options, warrants or other securities exercisable for or convertible into shares of its Common Stock (collectively, "Derivative Securities") to all holders of its Common Stock entitling them to purchase shares of Common Stock at a price per share less than the Daily Price per share on the record date applicable to such distribution, the Exercise Price shall be adjusted in accordance with the formula:
O + NxP

E' = E x M O + N
where:

E' =      the adjusted Exercise Price.

E  =      the then current Exercise Price.

O  =      the number of shares of Common Stock outstanding on the record
          date.

N  =      the number of additional shares of Common Stock issued or
          issuable pursuant to such Derivative Securities.

P  =      the price per unit, if any, for the Derivative Securities plus
          the price per share required to be paid for the additional shares
          upon exercise or conversion of any Derivative Securities.

M  =      the Daily Price per share of Common Stock on the record date.	

The adjustment shall be made successively whenever any such Derivative Securities are issued and shall become effective immediately after the record date for the determination of stockholders entitled to receive such Derivative Securities. If at the end of the period during which such Derivative Securities are exercisable or convertible, not all such Derivative Securities shall have been exercised or converted, the Exercise Price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued.
(c) When De Minimis Adjustment may be Deferred.
No adjustment in the Exercise Price need be made unless the adjustment would require an increase or decrease of at least 1% in the Exercise Price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6.01 shall be made to the nearest cent or to the nearest 1/10,000th of a share, as the case may be, it being understood that no such rounding shall be made under subsection (i).
(d) When no Adjustment Required.
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No adjustment need be made for a transaction referred to in Section 6.01(a) or (b) hereof if Warrantholders are to participate (without being required to exercise their Warrants) in the transaction on a basis and with notice that the Board of Directors reasonably and in good faith determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction. No adjustment need be made for (i) rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest, or (ii) a change in the par value or no par value of the Common Stock. To the extent the Warrants become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash.
(e) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall provide the notices required by Section 8.02 hereof.
(f) Notice of Certain Transactions.
If (i) the Company takes any action that would require an adjustment in the Exercise Price pursuant to Section 6.01(a) or (b) hereof and if the Company does not arrange for Warrantholders to participate pursuant to Section 6.01(d) hereof, (ii) the Company takes any action that would require a supplemental Warrant Agreement pursuant to Section 6.01(g) hereof or (iii) there is a Liquidation Event, then the Company shall mail to Warrantholders a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, transfer, lease, liquidation, dissolution or wind-up. The Company shall mail the notice at least 15 days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction.
(g) Reorganization of the Company.
After the date hereof, if the Company consolidates or merges with or into, or transfers or leases all or substantially all its assets to, any Person, upon consummation of such transaction the Warrants shall automatically become exercisable for the kind and amount of securities, cash or other assets which the Holder would have owned immediately after the consolidation, merger, transfer or lease if the Holder had exercised the Warrant immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the corporation formed by or surviving any such consolidation or merger if other than the Company, or the Person to which such sale or conveyance shall have been made, shall enter into a supplemental Warrant Agreement so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section
6.01(g). The successor company shall mail to Holders a notice describing the supplemental Warrant Agreement. If the issuer of securities deliverable upon exercise of Warrants under the supplemental Warrant Agreement is an affiliate of the formed, surviving, transferee or lessee corporation, that issuer shall join in the supplemental Warrant Agreement. If this Section 6.01(g) applies, Section 6.01(a) or (b) hereof shall not apply.
(h) When Issuance or Payment may be Deferred.
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In any case in which this Section 6.01 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event (i) issuing to the holder of any Warrant exercised after such record date the Warrant Shares and other Capital Stock of the Company, if any, issuable upon such exercise over and above the Warrant Shares and other Capital Stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price and (ii) paying to such holder any amount in cash in lieu of a fractional share pursuant to
Section 6.02 hereof; provided that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional Warrant Shares, other Capital Stock and cash upon the occurrence of the event requiring such adjustment.
(i) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this Section 6.01, each Warrant outstanding prior to the making of the adjustment in the Exercise Price shall thereafter evidence the right to receive upon payment of the adjusted Exercise Price that number of shares of Common Stock (calculated to the nearest hundredth) obtained from the following formula:
N x E N' = ----------- E'

where:

     N' =      the adjusted number of Warrant Shares issuable upon exercise of a
               Warrant by payment of the adjusted Exercise Price.

     N  =      the number or Warrant Shares previously issuable upon exercise of
               a Warrant by payment of the Exercise Price prior to adjustment.

     E' =      the adjusted Exercise Price.

     E  =      the Exercise Price prior to adjustment.	

(j) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number or kind of shares purchasable upon the exercise of the Warrants, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the Warrants initially issuable pursuant to this Agreement.
Section 6.02 Fractional Interests. The Company shall not be required to issue fractional Warrant Shares or scrip representing fractional shares on the exercise of Warrants. If more than one Warrant shall be presented for exercise in full at the same time by the same holder, the number of full Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrants so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 6.02, be issuable on the exercise of any Warrants (or specified portion thereof), the
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Company shall pay an amount in cash equal to the Daily Price per Warrant Share, as determined on the day immediately preceding the date the Warrant is presented for exercise, multiplied by such fraction, computed to the nearest whole U.S. cent.
Section 6.03 Notices to Warrant Holders. (a) Upon any adjustment of the Exercise Price pursuant to Section 6.01 hereof, the Company shall promptly thereafter (i) cause to be filed with the Warrant Agent an Officer's Certificate setting forth the Exercise Price after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based and setting forth the number of Warrant Shares (or portion thereof) issuable after such adjustment in the Exercise Price, upon exercise of a Warrant and payment of the adjusted Exercise Price, which certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (ii) cause to be given to each of the Holders, at the address of such Holder appearing in the Registrar, written notice of such adjustments by first-class mail, postage prepaid. Where appropriate, such notice may be given in advance and included as a part of the notice required to be mailed under the other provisions of this Section 6.03.
(b) In case:
(i) the Company shall authorize the issuance to all holders of shares of Common Stock of rights, options or warrants to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants;
(ii) the Company shall authorize the distribution to all holders of shares of Common Stock of evidences of its indebtedness or assets;
(iii) of any Fundamental Change (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination);
(iv) of any Liquidation Event; or
(v) the Company proposes to take any action which would require an adjustment of the Exercise Price pursuant to Section 6.01 hereof;
then the Company shall cause to be filed with the Warrant Agent and shall cause to be given to each of the Holders, at least 20 days (or 10 days in any case specified in clauses (i) or (ii) above) prior to the applicable record date hereinafter specified, or promptly in the case of events for which there is no record date, by first-class mail, postage prepaid, a written notice stating (x) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, options, warrants or distribution are to be determined, (y) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (z) the date on which any such Fundamental Change or Liquidation Event is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such Fundamental Change or Liquidation Event. The failure to give the notice required by this Section 6.03 or any defect therein shall not affect the legality
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or validity of any distribution, right, option, warrant, Fundamental Change, Liquidation Event, or the vote upon any action.
Section 6.04 No Rights as Stockholders. Nothing contained in this Agreement or the Warrants shall be construed as conferring upon the holders of Warrants the right to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter, or any rights whatsoever, including the right to receive dividends, as stockholders of the Company.
ARTICLE 7
WARRANT AGENT
Section 7.01 Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Warrants, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrants shall be taken as statements of the Company and the Warrant Agent assumes no responsibility for the correctness of any of the same except such as describe the Warrant Agent or action taken or to be taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Warrants except as herein otherwise provided.
(b) The Warrant Agent has no duty to determine when an adjustment under Article 6 should be made, how it should be made or what it should be. The Warrant Agent has no duty to determine whether any provisions of a supplemental Warrant Agreement under Section 8.03 hereof are correct. The Warrant Agent makes no representation as to the validity or value of any securities or assets issued upon exercise of Warrants.
(c) The Warrant Agent shall not be accountable with respect to the validity or value or the kind or amount of any Warrant Shares or of any securities or property which may at any time be issued or delivered upon the exercise of any Warrant or with respect to whether any such Warrant Shares or other securities will, when issued, be validly issued and fully paid and nonassessable, and makes no representation with respect thereto.
(d) The Warrant Agent shall not be responsible for any failure of the Company to comply with any of the covenants contained in this Agreement or in the Warrants.
(e) In the absence of bad faith on its part, the Warrant Agent may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Warrant Agent need not investigate any fact or matter stated in the document, but, in the case of any document which is specifically required to be furnished to the Warrant Agent pursuant to any provision hereof, the Warrant Agent shall examine the document to determine whether it conforms to the requirements of the Agreement (but need not confirm or investigate the accuracy of mathematical calculations or other facts
18

stated therein). The Warrant Agent, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit.
(f) The Warrant Agent may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
(g) The Warrant Agent will be under no obligation to exercise any of the rights or powers vested in it by the Agreement at the request or direction of any of the Holders, unless such Holders have offered to the Warrant Agent reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. All rights of action under this Agreement or under any of the Warrants may be enforced by the Warrant Agent without the possession of any of the Warrants or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent and any recovery of judgment shall be for the ratable benefit of the Holders of the Warrants, as their respective rights or interests may appear.
(h) The Warrant Agent may consult with counsel, and the written advice of such counsel or any Opinion of Counsel will 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.
(i) No provision of the Agreement will require the Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense.
(j) The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the provisions hereof. No provision of the Agreement shall be construed to relieve the Warrant Agent from liability for its own negligent action, its own negligent failure to act or its own willful misconduct.
Section 7.02 Compensation; Indemnity. (a) The Company will pay the Warrant Agent compensation as agreed upon in writing for its services. The Company will reimburse the Warrant Agent upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Warrant Agent, including the reasonable compensation and expenses of the Warrant Agent's agents and counsel.
(b) The Company will indemnify the Warrant Agent for, and hold it harmless against, any loss or liability or expense incurred by it without negligence, willful misconduct or bad faith on its part arising out of or in connection with the acceptance or administration of the Agreement and its duties under the Agreement and the Warrants, including the costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under the Agreement and the Warrants, except to the extent any such loss, liability or expense may be attributable to its negligence, bad faith or wilfull misconduct. The Warrant Agent shall notify the Company promptly of any claim for which it may seek indemnity. Failure
19

by the Warrant Agent to so notify the Company shall not relieve the Company of its obligations hereunder. At the Warrant Agent's sole discretion, the Company shall defend the claim and the Warrant Agent shall cooperate in the defense at the Company's expense. The Warrant Agent may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
Section 7.03 Individual Rights of Warrant Agent. The Warrant Agent, and any stockholder, director, officer or employee of it, may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. An Agent may do the same with like rights.
Section 7.04 Replacement of Warrant Agent. (a) The Warrant Agent
(i) may resign at any time by written notice to the Company,
(ii) may be removed at any time by the Holders of a majority of the outstanding Warrants by written notice to the Warrant Agent,
(iii) shall, if no longer eligible under Section 7.06, be subject to removal upon the request of any Holder to the Company
(iv) shall be removed by the Company if: (A) the Warrant Agent is no longer eligible under Section 7.06; (B) the Warrant Agent is adjudged a bankrupt or an insolvent; (C) a receiver or other public officer takes charge of the Warrant Agent or its property; or (D) the Warrant Agent becomes incapable of acting.
A resignation or removal of the Warrant Agent and appointment of a successor Warrant Agent will become effective only upon the successor Warrant Agent's acceptance of appointment as provided in this Section.
(b) If the Warrant Agent has been removed by the Holders, Holders of a majority of the Warrants may appoint a successor Warrant Agent with the consent of the Company. Otherwise, if the Warrant Agent resigns or is removed, or if a vacancy exists in the office of Warrant Agent for any reason, the Company will promptly appoint a successor Warrant Agent. If the successor Warrant Agent does not deliver its written acceptance within 30 days after the retiring Warrant Agent resigns or is removed, the retiring Warrant Agent, the Company or the Holders of a majority of the outstanding Warrants may petition any court of competent jurisdiction for the appointment of a successor Warrant Agent.
(c) Upon delivery by the successor Warrant Agent of a written acceptance of its appointment to the retiring Warrant Agent and to the Company, (i) the retiring Warrant Agent will transfer all property held by it as Warrant Agent to the successor Warrant Agent, (ii) the resignation or removal of the retiring Warrant Agent will become effective, and (iii) the
20

successor Warrant Agent will have all the rights, powers and duties of the Warrant Agent under the Warrant Agent. Upon request of any successor Warrant Agent, the Company will execute any and all instruments for fully and vesting in and confirming to the successor Warrant Agent all such rights, powers and trusts. The Company will give notice of any resignation and any removal of the Warrant Agent and each appointment of a successor Warrant Agent to all Holders, and include in the notice the name of the successor Warrant Agent and the address of its Corporate Trust Office.
(d) Notwithstanding replacement of the Warrant Agent pursuant to this Section, the Company's obligations under Section 7.02 will continue for the benefit of the retiring Warrant Agent.
Section 7.05 Successor Warrant Agent by Merger. (a) If the Warrant Agent consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Warrant Agent with the same effect as if the successor Warrant Agent had been named as the Warrant Agent in the Agreement.
(b) If, at the time such successor to the Warrant Agent shall succeed to the agency created by this Agreement, any of the Warrants have been countersigned but not delivered, the successor Warrant Agent may adopt the countersignature of the original Warrant Agent; and if any of the Warrants shall not have been countersigned, the successor Warrant Agent may countersign such Warrants, and in all such cases such Warrants shall have the full force and effect provided in the Warrants and in this Agreement.
Section 7.06 Eligibility. The Agreement must always have a Warrant Agent that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and satisfies the eligibility requirements set forth in Section 310(a) of the Trust Indenture Act of 1939.
Section 7.07 Holder Lists. The Warrant Agent shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the Company shall promptly furnish to the Warrant Agent at such times as the Warrant Agent may request in writing, a list in such form and as of such date as the Warrant Agent may reasonably require of the names and addresses of the Holders.
ARTICLE 8
MISCELLANEOUS
Section 8.01 Warrantholder Actions. (a) Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by this Agreement to be given or taken by a Holder (an "act") may be evidenced by an instrument signed by the Holder delivered to the Warrant Agent. The fact and date of the execution of the instrument, or the authority of the Person executing it, may be proved in any manner that the Warrant Agent deems sufficient.
21

(b) The Warrant Agent may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders.
(c) Any act by the Holder of any Warrant binds that Holder and every subsequent Holder of a Warrant certificate that evidences the same Warrant of the acting Holder, even if no notation thereof appears on the Warrant certificate. Subject to subsection (d) below, a Holder may revoke an act as to its Warrants, but only if the Warrant Agent receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.
(d) The Company may, but is not obligated to, fix a record date for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act will be valid or effective for more than 90 days after the record date.
Section 8.02 Notices. (a) Any notice or communication to the Company will be deemed given if in writing (i) when delivered in person or (ii) five days after mailing when mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Any notice to the Warrant Agent will be effective only upon receipt. In each case the notice or communication should be addressed as follows:
if to the Company:
CONSECO, INC.
 11825 North Pennsylvania St.
Carmel, IN 46032
ATTN: General Counsel
FAX: (317) 817-6327
if to the Warrant Agent:
WACHOVIA BANK, N.A.
Equity Services Group
1525 West W.T. Harris Blvd.
Charlotte, NC 28288-1153
ATTN: Myron Gray
FAX: (704) 590-7598
The Company or the Warrant Agent by notice to the other may designate additional or different addresses for subsequent notices or communications.
(b) Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its address as it appears on the Register by first class mail or, as to any Global Warrant registered in the name of DTC or its nominee, as agreed by the Company, the Warrant Agent and DTC.
22

Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Warrant Agent at the same time. Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders.
(c) Where the Agreement provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Warrant Agent, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers.
Section 8.03 Supplements and Amendments. (a) The Company and the Warrant Agent may amend or supplement the Agreement or the Warrants without notice to or the consent of any Holder
(i) to cure any ambiguity, defect or inconsistency in the Agreement or the Warrants;
(ii) to comply with Section 6.01(f);
(iii) to evidence and provide for the acceptance of an appointment hereunder by a successor Warrant Agent; or
(iv) to make any other change that does not adversely affect the rights of any Holder.
(b) Except as otherwise provided in subsections (a) above or (c) below, the Company and the Warrant Agent may amend the Agreement and the Warrants with the written consent of the Holders of a majority of the outstanding Warrants, and the Holders of a majority of the outstanding Warrants by written notice to the Warrant Agent may waive future compliance by the Company with any provision of the Agreement or the Warrants.
(c) Notwithstanding the provisions of subsection (b) above, without the consent of each Holder affected, an amendment or waiver may not
(i) increase the Exercise Price;
(ii) decrease the number of Warrant Shares or other securities or property issuable upon exercise of the Warrants except, in each case, for adjustments provided for in the Agreement; or
(iii) designate an earlier Expiration Date.
(d) It is not necessary for Holders to approve the particular form of any proposed amendment, supplement or waiver, but is sufficient if their consent approves the substance thereof.
23

(e) An amendment, supplement or waiver under this Section will become effective on receipt by the Warrant Agent of written consents from the Holders of the requisite percentage of the outstanding Warrants. After an amendment, supplement or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.
(f) After an amendment, supplement or waiver becomes effective, it will bind every Holder unless it is of the type requiring the consent of each Holder affected. If the amendment, supplement or waiver is of the type requiring the consent of each Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it and every subsequent Holder of a Warrant with respect to which consent was granted.
(g) If an amendment, supplement or waiver changes the terms of a Warrant, the Warrant Agent may require the Holder to deliver it to the Warrant Agent so that the Warrant Agent may place an appropriate notation of the changed terms on the Warrant and return it to the Holder, or exchange it for a new Warrant that reflects the changed terms. The Warrant Agent may also place an appropriate notation on any Warrant thereafter countersigned. However, the effectiveness of the amendment, supplement or waiver is not affected by any failure to annotate or exchange Warrants in this fashion.
(h) The Warrant Agent is entitled to receive, and will be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this section is authorized or permitted by the Agreement. If the Warrant Agent has received such an Opinion of Counsel, it shall sign the amendment, supplement or waiver so long as the same does not adversely affect the rights of the Warrant Agent. The Warrant Agent may, but is not obligated to, execute any amendment, supplement or waiver that affects the Warrant Agent's own rights, duties or immunities under the Agreement.
Section 8.04 Governing Law. The Agreement and the Warrants shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 8.05 No Adverse Interpretation of Other Agreements. The Agreement may not be used to interpret another agreement of the Company, and no such agreement may be used to interpret the Agreement.
Section 8.06 Successors. All agreements of the Company in the Agreement and the Warrants will bind its successors. All agreements of the Warrant Agent in the Agreement will bind its successors.
Section 8.07 Duplicate Originals. The parties may sign any number of copies of the Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.
24

Section 8.08 Separability. In case any provision in the Agreement or in the Warrants is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Section 8.09 Table of Contents and Headings. The Table of Contents and headings of the Articles, Sections and subsections of this Agreement have been inserted for convenience of reference only, are not to be considered a part of the Agreement and in no way modify or restrict any of the terms and provisions of the Agreement.
Section 8.10 Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person or corporation other than the Company, the Warrant Agent and the registered holders of Warrants any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the registered holders of Warrants.
25

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.
CONSECO, INC.

By:/s/Daniel J. Murphy
   ----------------------------------
   Name:  Daniel J. Murpny
   Title: Senior Vice President and
          Treasurer	

WACHOVIA BANK, N.A., as Warrant Agent

By:/s/Myron O. Gray
   ---------------------------------
   Name:  Myron O. Gray
   Title: Vice President	

[SIGNATURE PAGE TO WARRANT AGREEMENT]

EXHIBIT A
[Face of Series A Warrant Subscription Certificate]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT 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 INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL WARRANT ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL WARRANT ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE WARRANT AGREEMENT.

No.                                                   Warrants to Subscribe for
   ----------                                   ------
                                                      shares of Common Stock
                                                ------
                                                      CUSIP No.
                                                               ---------	

Series A Warrant Subscription Certificate
This Warrant Subscription Certificate certifies that Cede & Co., or its registered assigns, is the registered holder of Series A Warrants (the "Warrants") to purchase Common Stock, par value $0.01 per share (the "Common Stock"), of Conseco, Inc., a Delaware corporation. Each Warrant entitles the registered holder upon exercise at any time from 9:00 a.m. on the Issue Date until 5:00 p.m. New York City Time on September 10, 2008 (the "Expiration Date"), to receive from the Company fully paid and nonassessable shares of Common Stock (the "Warrant Shares") at an initial exercise price (the "Exercise Price") of $27.60 per share payable upon surrender of this Warrant Certificate at the office or agency of the Warrant Agent, subject to the conditions set forth herein and in the Warrant Agreement referred to on the reverse hereof. The Exercise Price and number of Warrant Shares issuable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further 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 Warrant Certificate to be signed below manually or by facsimile by its duly authorized officer.

Dated: September   , 2003
                ---

                                         CONSECO, INC.

                                         By:
                                            ----------------------------------
                                            Name:  William J. Shea
                                            Title:  President
Countersigned:

WACHOVIA BANK, N.A.,
as Warrant Agent

By:
   --------------------------------	

Authorized Signatory

EXHIBIT B
CONSECO, INC.
[Reverse of Series A Warrant Subscription Certificate
1. Warrant Agreement.
The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued or to be issued pursuant to a Warrant Agreement dated as of September 10, 2003 (the "Warrant Agreement"), between the Company and Wachovia Bank, N.A., as warrant agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words "holders" or "holder" meaning the registered holders or registered holder) of the Warrants. To the extent permitted by law, in the event of an inconsistency or conflict between the terms of this Warrant and the Warrant Agreement, the terms of the Warrant Agreement will prevail.
2. Exercise.
Warrants may be exercised at any time on or after 9:00 a.m on the Issue Date and on or before 5:00 p.m. New York City time on the Expiration Date. In order to exercise all or any of the Warrants represented by this Warrant Certificate, the holder must deliver to the Warrant Agent at its Corporate Trust Office set forth in the Warrant Agreement this Warrant Certificate and the form of election to purchase on the reverse hereof duly completed, which signature shall be medallion guaranteed by an institution which is a member of a Securities Transfer Association recognized signature guarantee program, and upon payment to the Warrant Agent for the account of the Company of the Exercise Price in the manner set forth in the Warrant Agreement for the number of Warrant Shares in respect of which such Warrants are then exercised.
No Warrant may be exercised after 5:00 p.m., New York City time on the Expiration Date, and to the extent not exercised by such time the Warrants shall become void.
3. Adjustments.
The Warrant Agreement provides that, upon the occurrence of certain events, the Exercise Price set forth on the face hereof may, subject to certain conditions, be adjusted. The Warrant Agreement also provides that the number of shares of Common Stock issuable upon the exercise of each Warrant shall be adjusted in certain events.
4. No Fractional Shares.
No fractions of a share of Common Stock will be issued upon the exercise of any Warrant, but the Company will pay the cash value thereof determined as provided in the Warrant Agreement.

5. Registered Form; Transfer and Exchange.
The Warrants are in registered form. Warrant Certificates, when surrendered at the office of the Warrant Agent by the registered holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge (except as specified in the Warrant Agreement), for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered holder(s) thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
6. Countersignature. This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent or the Countersignature Agent, as applicable, as such term is used in the Warrant Agreement.
7. Governing Law.
This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York
8. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).
A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company.

[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
(1) The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive _____________ shares of Common Stock and herewith tenders payment for such shares to the order of CONSECO, INC., in the amount of $__________ in accordance with the terms hereof.
OR
The undersigned hereby irrevocably elects to convert this Warrant into ___________ shares of Common Stock (before giving effect to the cashless exercise provisions) and herewith agrees to make payment therefor pursuant to the cashless exercise provisions of the Warrant Agreement, all on the terms and the conditions specified in the Warrant Certificate and the Warrant Agreement.
(2) The undersigned requests that the Company deliver ______________________ shares of Common Stock in accordance with the terms of the Warrant Agreement.

Signature Date:

Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Warrant Agent, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Warrant Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS
The following exchanges of a part of this Global Warrant have been made:

                                                                         Number of Warrants
                          Amount of decrease     Amount of increase in   in this Global         Signature of
                          in number of           number of Warrants in   Warrant following      authorized officer
Date of Exchange          Warrants in this       this Global Warrant     such decrease or       of Warrant Agent
                          Global Warrant                                 increase
------------------------- ---------------------- ----------------------- ---------------------- ----------------------	

[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto _____________________________ (the "Assignee")
(Please type or print block letters)
__________________________________________________________________ (Please print or typewrite name and address including zip code of assignee) the within Warrant and all rights thereunder, hereby irrevocably constituting and appointing __________________________________________________________________ attorney to transfer said Warrant on the books of the Company with full power of substitution in the premises.
Date:

Seller
By:
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.
Signature Guarantee:(1)

1 Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

EXHIBIT C
DTC LEGEND
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT 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 INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL WARRANT ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL WARRANT ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE WARRANT AGREEMENT.

Exhibit 10.1

CREDIT AGREEMENT
Dated as of September 10, 2003
among
CONSECO, INC.,
BANK OF AMERICA, N.A.,
as 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

Section 1.01.  Certain Defined Terms..............................................................................1
Section 1.02.  Other Interpretive Provisions.....................................................................39
Section 1.03.  Classification of Loans and Borrowings............................................................40
Section 1.04.  Accounting Principles.............................................................................40

                                    ARTICLE 2
                                   THE CREDITS

Section 2.01.  Commitments.......................................................................................41
Section 2.02.  Loans.............................................................................................42
Section 2.03.  Notes; Loan Accounts..............................................................................42
Section 2.04.  Interest Elections................................................................................42
Section 2.05.  Termination of Commitments........................................................................43
Section 2.06.  Payment at Maturity...............................................................................43
Section 2.07.  Scheduled Amortization............................................................................44
Section 2.08.  Optional and Mandatory Prepayments................................................................45
Section 2.09.  Interest..........................................................................................48
Section 2.10.  Fees..............................................................................................49
Section 2.11.  Computation of Fees and Interest..................................................................50
Section 2.12.  Payments by the Company...........................................................................50
Section 2.13.  Sharing of Payments, Etc..........................................................................51

                                    ARTICLE 3
                     TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.01.  Taxes.............................................................................................51
Section 3.02.  Illegality........................................................................................53
Section 3.03.  Increased Costs and Reduction of Return...........................................................54
Section 3.04.  Funding Losses....................................................................................55
Section 3.05.  Inability to Determine Rates......................................................................55
Section 3.06.  Certificates of Banks.............................................................................56
Section 3.07.  Substitution of Banks.............................................................................56
Section 3.08.  Survival..........................................................................................56

                                    ARTICLE 4
                              CONDITIONS PRECEDENT

Section 4.01.  Effective Date....................................................................................56	

i

                                    ARTICLE 5
                         REPRESENTATIONS AND WARRANTIES

Section 5.01.  Corporate Existence and Power.....................................................................60
Section 5.02.  Corporate Authorization; No Contravention.........................................................60
Section 5.03.  Governmental Authorization........................................................................61
Section 5.04.  Binding Effect....................................................................................61
Section 5.05.  Litigation........................................................................................61
Section 5.06.  No Default........................................................................................62
Section 5.07.  ERISA Compliance..................................................................................62
Section 5.08.  Margin Regulations................................................................................63
Section 5.09.  Title to Properties...............................................................................63
Section 5.10.  Taxes.............................................................................................63
Section 5.11.  Financial Condition...............................................................................64
Section 5.12.  Environmental Matters.............................................................................65
Section 5.13.  Regulated Entities................................................................................66
Section 5.14.  Subsidiaries......................................................................................66
Section 5.15.  Insurance Licenses................................................................................66
Section 5.16.  Full Disclosure...................................................................................67
Section 5.17.  Solvency..........................................................................................67
Section 5.18.  Security Interests................................................................................67
Section 5.19.  Insurance.........................................................................................68
Section 5.20.  Reinsurance Agreements............................................................................68

                                    ARTICLE 6
                              AFFIRMATIVE COVENANTS

Section 6.01.  Financial Statements..............................................................................68
Section 6.02.  Certificates; Other Information...................................................................70
Section 6.03.  Notices...........................................................................................74
Section 6.04.  Preservation of Corporate Existence, Etc..........................................................76
Section 6.05.  Insurance.........................................................................................76
Section 6.06.  Payment of Obligations............................................................................76
Section 6.07.  Compliance With Laws..............................................................................77
Section 6.08.  Compliance With ERISA.............................................................................77
Section 6.09.  Inspection of Property and Books and Records; Expense Reimbursement; Appraisal Reports............77
Section 6.10.  A.M. Best Rating Reduction Remedy.................................................................78
Section 6.11.  Financial Advisor.................................................................................79
Section 6.12.  Information Regarding Collateral..................................................................79
Section 6.13.  Casualty and Condemnation.........................................................................80
Section 6.14.  Additional Subsidiaries; Immaterial Subsidiaries..................................................80
Section 6.15.  Further Assurances................................................................................81
Section 6.16.  D&O Loans.........................................................................................82	

ii

                                    ARTICLE 7
                               NEGATIVE COVENANTS

Section 7.01.  Limitation on Indebtedness; Certain Capital Stock.................................................83
Section 7.02.  Liens.............................................................................................84
Section 7.03.  Disposition of Assets.............................................................................86
Section 7.04.  Other Agreements..................................................................................88
Section 7.05.  Transactions With Affiliates......................................................................88
Section 7.06.  Change in Business................................................................................88
Section 7.07.  Fundamental Changes...............................................................................88
Section 7.08.  Restricted Payments...............................................................................89
Section 7.09.  Investments and Acquisitions......................................................................90
Section 7.10.  Prepayments of Indebtedness; Modifications of Certain Agreements; Synthetic Purchase Agreements...91
Section 7.11.  Debt to Total Capitalization Ratio................................................................93
Section 7.12.  Interest Coverage Ratio...........................................................................93
Section 7.13.  Conseco EBITDA....................................................................................93
Section 7.14.  Aggregate RBC Ratio...............................................................................93
Section 7.15.  Individual Risk-Based Capital Ratio...............................................................93
Section 7.16.  Combined Statutory Capital and Surplus Level......................................................94
Section 7.17.  Investment Portfolio Requirement..................................................................94
Section 7.18.  Restrictive Agreements............................................................................94
Section 7.19.  Holding Company Activities........................................................................95
Section 7.20.  Changes In Fiscal Year............................................................................96

                                    ARTICLE 8
                                EVENTS OF DEFAULT

Section 8.01.  Events of Default.................................................................................96
Section 8.02.  Remedies.........................................................................................100
Section 8.03.  Rights Not Exclusive.............................................................................101

                                    ARTICLE 9
                                    THE AGENT

Section 9.01.  Appointment and Authorization; "Agent"...........................................................101
Section 9.02.  Delegation of Duties.............................................................................102
Section 9.03.  Liability of Agent...............................................................................102
Section 9.04.  Reliance by Agent................................................................................102
Section 9.05.  Notice of Default................................................................................103
Section 9.06.  Credit Decision..................................................................................103
Section 9.07.  Indemnification of Agent.........................................................................104
Section 9.08.  Agent in Individual Capacity.....................................................................104
Section 9.09.  Successor Agent..................................................................................105
Section 9.10.  Agent May File Proofs Of Claim...................................................................105
Section 9.11.  Collateral And Guaranty Matters..................................................................106
Section 9.12.  Withholding Tax..................................................................................106	

iii

                                   ARTICLE 10
                                  MISCELLANEOUS

Section 10.01.  Amendments and Waivers..........................................................................108
Section 10.02.  Notices.........................................................................................110
Section 10.03.  No Waiver; Cumulative Remedies..................................................................111
Section 10.04.  Costs and Expenses..............................................................................111
Section 10.05.  Company Indemnification; Damage Waiver..........................................................112
Section 10.06.  Payments Set Aside..............................................................................113
Section 10.07.  Assignments, Participations, etc................................................................113
Section 10.08.  Confidentiality.................................................................................116
Section 10.09.  Set-off.........................................................................................117
Section 10.10.  Notification of Addresses, Lending Offices, Etc.................................................118
Section 10.11.  Counterparts....................................................................................118
Section 10.12.  Survival of Representations and Warranties......................................................118
Section 10.13.  Severability....................................................................................118
Section 10.14.  Governing Law; Jurisdiction; Consent to Service of Process......................................119
Section 10.15.  Waiver of Jury Trial............................................................................119
Section 10.16.  Entire Agreement................................................................................120	

                                    SCHEDULES
Schedule 2.01                    Commitments
Schedule 5.03                    Governmental Authorizations
Schedule 5.05                    Litigation
Schedule 5.07                    ERISA
Schedule 5.13                    Investment Companies
Schedule 5.14                    Subsidiaries
Schedule 5.20                    Non-Ordinary Course Reinsurance Agreements
Schedule 7.01                    Existing Indebtedness
Schedule 7.02                    Existing Liens
Schedule 7.06                    Business Activities
Schedule 7.09                    Committed Investments
Schedule 7.10                    Amendment of Debt Agreements
Schedule 7.11                    Debt to Total Capitalization Ratio
Schedule 7.12                    Interest Coverage Ratio
Schedule 7.13                    Conseco EBITDA
Schedule 7.14                    Aggregate Risk-Based Capital Ratio
Schedule 7.15                    Minimum Risk-Based Capital Ratio
Schedule 7.18                    Restrictive Agreements
Schedule 10.02                   Addresses for Notices	

iv

                                    EXHIBITS
Exhibit A                        Form of Compliance Certificate
Exhibit B                        Form of Note
Exhibit C                        Form of Notice of Continuation
Exhibit D                        Form of Assignment and Assumption
Exhibit E                        Offshore Rate Funding Loss Determination Methodology
Exhibit F                        Form of Security Agreement
Exhibit G                        Subordination Provisions
Exhibit H-1                      Form of Opinion of Kirkland & Ellis
Exhibit H-2                      Form of Opinion of Baker & Daniels
Exhibit H-3                      Form of Opinion of Baker & Daniels (as to insurance matters)
Exhibit I                        Terms of Replacement Preferred Stock	

v

CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of September 10, 2003, 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 "Banks"; individually, a "Bank") and Bank of America, N.A., as agent for the Banks.
WHEREAS, on December 17, 2002, Conseco, Inc., an Indiana corporation ("Old Conseco"), and certain of its Subsidiaries (such term and other capitalized terms used in these recitals without definition having the meanings set forth in
Section 1.01 of this Agreement) filed voluntary petitions for relief under the Bankruptcy Code with the Bankruptcy Court, such petitions being jointly administered;
WHEREAS, Old Conseco and such Subsidiaries have proposed a Plan of Reorganization that provides inter alia (x) for Old Conseco to transfer substantially all of its assets to the Company pursuant to a reorganization under Section 368(a)(1)(G) of the Code and (y) as a condition to consummation thereof that the Company enter into this Agreement in order to provide for the partial satisfaction of certain pre-petition claims of the Banks against Old Conseco and CIHC;
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 guarantee the foregoing obligations of the Company and to secure its guarantee thereof by granting Liens on substantially all of its assets 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:

"Acquisition" means (i) any Investment by the Company or any of its Subsidiaries in a Person 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 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.
"Active Material Insurance Subsidiary" means Bankers Life and Casualty Company, Conseco Life Insurance Company, Conseco Annuity Assurance Company, Conseco Health Insurance Company and any other Insurance Subsidiary which, on a stand-alone basis (excluding any equity ownership in its Subsidiaries), has in excess of 5% of New Annualized Premiums of the Conseco Insurance Group.
"Adjustment Agreement" means, with respect to any obligor under any D&O Credit Facility, any Adjustment Agreement substantially in the form attached to the Disclosure Statement (as defined in the Plan of Reorganization) entered into among such obligor, the Company, CIHC and Conseco Services, LLC as contemplated by the Plan of Reorganization.
"Affiliate" means, as to any Person, any other Person which, 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.
"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 appointed under Section 9.09, 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 the Risk-Based Capital Ratio for all Insurance Subsidiaries taken as a whole.
2

"Agreement" means this Credit Agreement.
"Allowed Class 10A Claims" has the meaning specified in the Plan of Reorganization.
"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, with respect to any Offshore Rate Tranche A Term Loan, Base Rate Tranche A Term Loan, Offshore Rate Tranche B Term Loan or Base Rate Tranche B Term Loan, the respective percentage per annum set forth below under the applicable column in the row corresponding to the Status that exists on such day:

-------------------- ----------------- ---------------- ----------------- ------------------
      Status          Offshore Rate       Base Rate      Offshore Rate        Base Rate
                      Tranche A Term   Tranche A Term    Tranche B Term    Tranche B Term
                          Loans             Loans            Loans              Loans
-------------------- ----------------- ---------------- ----------------- ------------------
-------------------- ----------------- ---------------- ----------------- ------------------

Level I                   5.25%             3.25%            7.25%              5.25%
-------------------- ----------------- ---------------- ----------------- ------------------
-------------------- ----------------- ---------------- ----------------- ------------------
Level II                  4.75%             2.75%            6.75%              4.75%
-------------------- ----------------- ---------------- ----------------- ------------------
-------------------- ----------------- ---------------- ----------------- ------------------
Level III                 4.25%             2.25%            6.25%              4.25%
-------------------- ----------------- ---------------- ----------------- ------------------
-------------------- ----------------- ---------------- ----------------- ------------------
Level IV                  3.75%             1.75%            5.75%              3.75%
-------------------- ----------------- ---------------- ----------------- ------------------	

For purposes of this definition, subject to the following paragraphs of this definition, the following terms have the following meanings:
"Level I Status" exists at any date if, at such date, (i) the Company is rated "CCC+" or below by S&P or "Caa1" or below by Moody's or (ii) no other Status exists.
"Level II Status" exists at any date if, at such date, the Company is rated "B-", "B" or "B+" by S&P or "B3", "B2" or "B1" by Moody's.
3

"Level III Status" exists at any date if, at such date, the Company is rated "BB-", "BB" or "BB+" by S&P or "Ba3", "Ba2" or "Ba1" by Moody's.
"Level IV Status" exists at any date if, at such date, the Company is rated "BBB-" or higher by S&P or "Baa3" or higher by Moody's.
"Status" refers to the determination of which of Level I Status, Level II Status, Level III Status or Level IV Status exists at any date.
The S&P and Moody's credit ratings to be utilized for purposes of this definition are those assigned to the senior secured long-term debt securities of the Company (including the Loans) without third-party credit enhancement ("Long-Term Debt"), and any rating assigned to any other debt security of the Company shall be disregarded. The ratings in effect for any day are those in effect on the close of business on such day. If either S&P or Moody's shall not have in effect on any date a Long-Term Debt rating, such agency shall be deemed to have a Long-Term Debt rating referred to in the definition of "Level I Status" on such date; provided that if such event is as a result of such rating agency ceasing to be in the business of rating debt securities, then so long as the other rating agency has in effect on such date a Long-Term Debt rating, the Long-Term Debt rating of such other rating agency in effect on such date shall be used to determine the applicable Status until such time as the Company and the Agent (with the consent of the Required Banks) shall have agreed upon an alternate rating agency that has a Long-Term Debt rating and shall have made all necessary changes to this Agreement (including this definition) to give effect to such agreement. In the case of split ratings from S&P and Moody's, the rating to be used to determine the applicable Status is the lower of the two; provided that if the split is more than one full rating category, the rating to be used to determine the applicable Status is any rating in the rating category which is one rating category higher than the lower of the two rating categories. Notwithstanding anything to the contrary herein, if the Status as determined pursuant to this definition on any date is either Level III Status or Level IV Status and, on such date, any Active Material Insurance Subsidiary has a financial strength rating less than "A-" by A.M. Best, then Level II Status shall be deemed to exist on such date. A rating category means (i) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories) and (ii) the equivalent of any such category of S&P used by Moody's.
Initially, unless Level I Status exists at any date during the period commencing on the Effective Date through the end of the second full Fiscal Quarter after the Effective Date, Level II Status shall be deemed to exist for each day during such period. Commencing on the first day of the third full Fiscal Quarter following the Effective Date, the Applicable Margin shall be determined based on the ratings in effect on such date. Thereafter, each change in the
4

Applicable Margin resulting from a publicly announced change in a rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.
"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),
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), Section 7.03(i) and Section 7.03(j).
"Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit D.
"Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external legal counsel and, without duplication, the reasonable allocated cost of internal legal services and all reasonable expenses and disbursements of internal counsel.
"Bankers Life Group" means Bankers Life and Casualty Company, Bankers Life Insurance Company of Illinois and Colonial Penn Life Insurance Company.
"Bankruptcy Code" means Title 11 of the United States Code and applicable provisions of Titles 18 and 28 of the United States Code.
"Bankruptcy Court" means the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division.
"Banks" 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.
"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.
5

"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 Class and Interest Type deemed made, converted or continued on the same day and, in the case of Offshore 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 Offshore 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, 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.
"Capitalized Lease Liabilities" means, with respect to any Person, all monetary obligations of such Person under any leasing or similar arrangement
6

which, 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 nine 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 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 Bank 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 six months or less from the date of acquisition backed by standby letters of credit issued by any Bank or any commercial bank satisfying the requirements of clause (b) of this definition; or (g) shares of money market mutual or similar funds which 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
7

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.
"CCM" means Conseco Capital Management, Inc. (to be renamed 40/86 Advisors, Inc.), a Delaware corporation.
"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 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; provided that such cessation shall not constitute a "Change of Control" if (x) such cessation is as a result of the holders of the New CNC Preferred Stock exercising their voting rights following the occurrence of a Trigger Event (as defined in the certificate of designations setting forth the terms of the New CNC Preferred Stock (as in effect on the date hereof)) and (y) the holders of a majority of the shares of New CNC Preferred Stock at the time of such cessation are also Banks then holding at least a majority of the aggregate unpaid principal amount of the Loans or (c) the occurrence of a "change of control" (howsoever defined) in the indenture or any other instrument evidencing Permitted Refinancing Indebtedness or in any instrument evidencing the Existing CIHC Preferred Stock or the Replacement Preferred Stock.
8

"CIHC" means CIHC, Incorporated, a Delaware corporation, and a direct Wholly-Owned Subsidiary of the Company on the Effective Date.
"Class" (a) when used with respect to Banks, refers to whether such banks are Tranche A Banks or Tranche B Banks, (b) when used with respect to Commitments, refers to whether such Commitments are Tranche A Commitments or Tranche B Commitments and (c) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Tranche A Term Loans or Tranche B Term Loans.
"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 Account" has the meaning specified in the Security Agreement.
"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 not be required to pledge more than 65% of the outstanding voting Capital Stock in any Foreign Subsidiary that is not an Obligor) 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
9

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 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 Tranche A Commitment or Tranche B Commitment, or any combination thereof (as the context requires).
"Company" has the meaning specified in the introduction to this Agreement.
"Compliance Certificate" means a certificate substantially in the form of Exhibit A.
"Confirmation Date" means the date upon which the Confirmation Order is entered by the Bankruptcy Court in its docket, within the meaning of bankruptcy rules 5003 and 9021.
"Confirmation Order" means the order of the Bankruptcy Court confirming the Plan of Reorganization.
"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
10

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 minus
(k) solely for any Calculation Period ending on or prior to March 31, 2005, the cash portion of any charges referred to in clause (f) of the definition of "Conseco EBITDA" and incurred on or prior to June 30, 2004 (other than any such charges to the extent that payment thereof was reserved by the Company prior to such Calculation Period and such reserve is reflected in the business plan prepared by the Company in connection with the Reorganization Transactions, a copy of which plan has been provided to the Banks prior to the Effective Date) 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(e)) shall, to the extent otherwise included in Conseco Available Cash Flow for any Calculation Period, be excluded from this calculation for such Calculation Period.
"Conseco EBITDA" means, for any Calculation Period, the consolidated Net Income of the Company for such period plus, without duplication and to the extent reflected as a charge in the statement of such consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, including, to the extent included as interest expense in accordance with GAAP, amortization or write off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness,
(c) depreciation and amortization expense of tangible and intangible assets, (d) any losses on sales of assets outside of the ordinary course of business, (e) any realized or unrealized losses on Investments of Insurance Subsidiaries, (f) solely for any Calculation Period ending on or prior to March 31, 2005, cash charges not exceeding $20,000,000 in the aggregate and other non-cash charges, in each case related to the Reorganization Transactions and incurred on or prior to June 30, 2004, (g) any other non-recurring cash charges (not to exceed $25,000,000 in the aggregate for all Calculation Periods) and non-recurring non-cash charges (not to exceed $50,000,000 in the aggregate for all Calculation Periods) taken by any Insurance Subsidiary arising out of the restructuring, consolidation, severance or discontinuance of any portion of the operations, employees and/or management of such Insurance Subsidiary or any businesses thereof, (h) non-cash charges reflecting the cumulative effect of changes in GAAP to the extent such charges relate to any prior Calculation Period and (i) non-cash charges taken to write off any goodwill included in the Company's balance sheet on the Effective Date to
11

the extent such charges are required by FAS 142, and minus, without duplication and to the extent reflected as a gain in the statement of such consolidated Net Income for such period, the sum of (a) any gains on sales of assets outside of the ordinary course of business and (b) realized or unrealized gains on Investments of Insurance Subsidiaries, all as determined on a consolidated basis for such Calculation Period.
"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 and (c) permanent repayments of Indebtedness by the Company during such Excess Cash Calculation Period to the extent permitted under Section 7.10(a), other than repayments already reflected in the calculation of Conseco Available Cash Flow for such Excess Cash Calculation Period.
"CFC" means Conseco Finance Corp., a Delaware corporation.
"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 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.
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"Continuation Date" means any date on which, under Section 2.04, the Company continues as Loans of the same Interest Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.
"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.
"D&O Credit Facility" means each of (and "D&O Credit Facilities" means the collective reference to the following):
(i) the Credit Agreement dated as of May 13, 1996 among certain officers, directors and employees of Old Conseco and its subsidiaries, BofA, as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time prior to the Effective Date, including pursuant to the Amended and Restated Credit Agreement dated as of August 26, 1997, Agreement dated as of September 22, 2000 and Credit Agreement dated as of November 22, 2000;
(ii) the Credit Agreement dated as of August 21, 1998 among certain officers, directors and employees of Old Conseco and its subsidiaries, BofA, as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time prior to the Effective Date, including pursuant to the Agreement dated as of September 22, 2000 and Credit Agreement dated as of November 22, 2000;
(iii) the Credit Agreement dated as of August 21, 1998 among certain officers, directors and employees of Old Conseco and its subsidiaries, BofA, as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees, entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time prior the Effective Date, including pursuant to the Agreement dated as of September 22, 2000; and
(iv) the Credit Agreement dated as of September 15, 1999 among certain officers, directors and employees of Old Conseco and its subsidiaries, JPMorgan Chase Bank, as Administrative Agent, and the financial institutions signatory thereto, and all other agreements and instruments, including guarantees,
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entered into in connection therewith, in each case as amended, restated, refinanced, supplemented, waived, extended, renewed, replaced or otherwise modified from time to time prior to the Effective Date, including pursuant to the Termination and Replacement Agreement dated as of May 30, 2000, Agreement dated as of September 22, 2000 and Credit Agreement dated as of November 22, 2000.
"D&O Loans" means loans made pursuant to the D&O Credit Facilities.
"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 which constitutes an Event of Default or which, 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.
"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 (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(e), waived by the Person entitled to receive any payment required thereunder).
"Eligible Assignee" has the meaning specified in Section 10.07.
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"Environmental Claims" means all claims, complaints, notices or inquiries, however asserted or made, 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, 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 relating to environmental, health, safety and land use matters, as now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, and 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 which 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.
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"Eurodollar Base Rate" has the meaning specified in the definition of "Offshore Rate".
"Eurodollar Reserve Percentage" has the meaning specified in the definition of "Offshore 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 CIHC Preferred Stock" means preferred stock of CIHC that is reinstated pursuant to the Plan of Reorganization and that is held by one or more of the Insurance Subsidiaries.
"Existing Reinsurance Transactions" means the reinsurance transactions consummated in 2002 by Bankers Life and Casualty Company and Colonial Penn Life Insurance Company.
"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 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.
"Final Order" means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the subject matter, which has not been reversed, stayed, modified or amended.
"Financing Transactions" means the execution, delivery and performance by each Obligor of the Loan Documents to which it is to be a party and the deemed borrowing of the Loans hereunder.
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"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 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.
"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), which 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, regulatory or administrative 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.
"Greenhill" means Greenhill & Co., LLC, a New York limited liability company.
"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
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within the meaning of any other 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 $1,000,000, (b) has aggregate revenues less than $1,000,000 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 each of CNC Entertainment Nevada, Inc. and Conseco Risk Management, Inc. shall be deemed to be an Immaterial Subsidiary for so long as such Person meets all the requirements set forth above other than, prior to the end of the fourth full Fiscal Quarter after the Effective Date, the requirements of clause (b) above.
"Income Taxes" means any Taxes based upon net income.
"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) all obligations of such Person in respect of Swap Contracts; (f) all obligations of such Person to pay the deferred purchase price of property or services which 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 (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 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.
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"Independent Auditor" has the meaning specified in Section 6.01(a).
"Initial A.M. Best Rating" of any Active Material Insurance Subsidiary means the financial strength rating of such Active Material Insurance Subsidiary by A.M. Best in effect at the close of business on the 60th day after the Effective Date.
"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 the Bankruptcy Code.
"Insurance Subsidiary" means any Subsidiary which 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 month and (b) with respect to any Offshore Rate Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part; provided, however, that if any Interest Period for an Offshore Rate Loan exceeds one month, the date that falls one month 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 Offshore 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;
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(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 Tranche A Term Loan shall extend beyond the Tranche A Maturity Date and no Interest Period for any Tranche B Term Loan shall extend beyond the Tranche B Maturity Date.
For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is deemed made and thereafter shall be deemed to 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 Offshore 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.
"IRS" means the Internal Revenue Service or any Governmental Authority succeeding to any of its principal functions under the Code.
"Lender Claims" has the meaning specified in the Plan of Reorganization.
"Lending Office" means, as to any Bank, the office or offices of such Bank specified as its "Lending Office" or "Domestic Lending Office" or "Offshore 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 Bank may from time to time notify the Company and the Agent.
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"License" means any license, certificate of authority, permit or other authorization which 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.
"Loan Documents" means this Agreement, all Notes, the Security Documents and any fee letter agreement entered into pursuant to Section 2.10.
"Loans" means loans deemed made by the Banks to the Company pursuant to this Agreement.
"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 $50,000,000, other than any such acquisition by any Insurance Subsidiary in the ordinary course of business in compliance with
Section 7.17 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 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 Adverse Regulatory Effect" means (a) a material adverse change in, or a material adverse effect upon, the business, properties, condition (financial or otherwise) or prospects of the Company or the 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.
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"Material Adverse Regulatory Event" means the occurrence of any of the following events: (a) the applicable Department of any Material Insurance Subsidiary or a court of competent jurisdiction finds that any Material Insurance Subsidiary (x) is in hazardous financial condition, if such finding, together with all other such findings, could reasonably be expected to have a Material Adverse Regulatory Effect or (y) is insolvent, (b) any Material Insurance Subsidiary is required to comply with any letter, bulletin or order of a state insurance regulator materially restricting its operations or business, or enters into an agreement (whether oral or written) with any state insurance regulator for substantially the same purpose, and such event, together with all other such events, could reasonably be expected to have a Material Adverse Regulatory Effect; (c) any Material Insurance Subsidiary becomes subject to orders of supervision, conservation, rehabilitation or liquidation, by agreement or otherwise, or has a receiver or supervisor appointed or (d) any material License of any Material Insurance Subsidiary is suspended or revoked and such suspension or revocation continues for 30 days, or any renewal application by any Material Insurance Subsidiary for any material License is disapproved or ultimately fails to be approved, and such event, together with all other such events, could reasonably be expected to have a material adverse effect upon the business, properties, condition (financial or otherwise) or prospects of such Material Insurance Subsidiary.
"Material Disposition" means any disposition of assets by the Company or its Subsidiaries in a transaction or series of related transactions for consideration exceeding $50,000,000, 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.
"Material Insurance Subsidiary" means (i) any Active Material Insurance Subsidiary and (ii) any other Insurance Subsidiary having assets as determined pursuant to SAP greater than or equal to 10% of the aggregate assets as determined pursuant to SAP of all Insurance Subsidiaries as determined as of the date of the most recently prepared Combined Statutory Statement.
"Minimum Statutory Capital and Surplus" means, as of the last day of any Fiscal Quarter, the sum of (a) 85% of the Combined Statutory Capital and Surplus of the Insurance Subsidiaries as of the last day of the Fiscal Quarter most recently ended prior to the Effective Date plus (b) an amount equal to 50% of Statutory Net Income (if positive) of the Insurance Subsidiaries for each Fiscal Quarter after the Effective Date and ending on or prior to the last day of such Fiscal Quarter plus (c) the aggregate principal amount of Surplus Debentures issued by the Insurance Subsidiaries during the period from the Effective Date to the last day of such Fiscal Quarter less (d) the lesser of (x) the aggregate amount of dividends paid and principal amount of Surplus Debentures paid or prepaid directly or indirectly in cash to the Company by the Insurance Subsidiaries and
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(y) the aggregate amount of cash applied to the prepayment, repayment, repurchase or redemption of the Loans or the New CNC Preferred Stock, in each case during the period from the Effective Date to the last day of such Fiscal Quarter. For purposes of calculating Minimum Statutory Capital and Surplus, Statutory Net Income shall be calculated excluding any portion thereof attributable to the Existing Reinsurance Transactions and separately deducted from Combined Statutory Capital and Surplus.
"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
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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 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 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 which 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 60 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 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.
"New Annualized Premiums" means, with respect to any Insurance Subsidiary, the aggregate annualized first year insurance premiums of such Insurance Subsidiary; provided that (x) if such Insurance Subsidiary is part of the Conseco Insurance Group, New Annualized Premiums on any single premium annuity issued by such Insurance Subsidiary shall be calculated as 1/15th of such premium and (y) if such Insurance Subsidiary is part of the Bankers Life Group,
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New Annualized Premiums on any single premium annuity issued by such Insurance Subsidiary shall be calculated as 6% of such premium.
"New CNC Preferred Stock" means the Class A Preferred Stock of the Company to be issued to the Banks on the Effective Date pursuant to the Plan of Reorganization. Such term shall include any pay-in-kind dividends issued in respect of or accrued on the New CNC Preferred Stock from time to time in accordance with the terms thereof.
"New CNC Warrant Agreement" means the Series A Warrant Agreement dated as of the Effective Date between the Company and Wachovia, Bank, N.A., as warrant agent (as in effect on the Effective Date).
"New HoldCo" means CDOC, Inc., a Delaware corporation, or any other Domestic Subsidiary that is a corporation and is a direct Wholly-Owned Subsidiary of the Company on the Effective Date designated in a notice delivered by the Company to the Agent prior to the commencement of the Proposed CIHC Transactions and that is reasonably acceptable to the Agent.
"1999 D&O Facility" means the Credit Agreement referred to in clause (iv) of the definition of "D&O Credit Facility".
"1999 Facility Collateral" has the meaning specified in the Security Agreement.
"Non-Insurance Subsidiary" means any Subsidiary which is not an Insurance Subsidiary.
"Notes" has the meaning specified in Section 2.03(b).
"Notice of Continuation" means a notice in substantially the form of Exhibit C.
"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 Banks 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.
"Offshore Rate" means for any Interest Period with respect to any Offshore Rate Loan, the greater of (a) (x) on or prior to September 30, 2004, in the case of any Tranche A Term Loan, 2.00% per annum, and in the case of any Tranche B Term Loan, 2.25% per annum and (y) thereafter, in the case of any Tranche A Term Loan, 2.50% per annum, and in the case of any Tranche B Term
25

Loan, 2.75% per annum and (b) a rate per annum determined by the Agent pursuant to the following formula:
Offshore Rate = Eurodollar Base Rate
 1.00-Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
(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
(b) 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
(c) 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 Offshore Rate Loan deemed 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 their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period.
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"Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage
(expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means any Loan that bears interest based on the Offshore Rate.
"Old Conseco" has the meaning set forth in the recitals hereto.
"Organization Documents" means (i) with respect to any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination 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 which 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.
"Participant" has the meaning specified in subsection 10.07(d).
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"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 which the Company or any ERISA Affiliate sponsors, 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 Preferred Stock" means 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 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).
"Permitted Refinancing Indebtedness" means Indebtedness of the Company that
(i) does not require mandatory principal payments prior to the first anniversary of the Tranche B 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 satisfactory to the Required Banks; provided that
(x) no Event of Default shall have occurred and be continuing at the time or immediately after such Indebtedness is incurred, (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 and (z) the Company shall have delivered a certificate of a Responsible Officer to the Agent stating that
A.M. Best has confirmed that none of the Active Material Insurance Subsidiaries will have their financial strength rating placed on credit watch with negative outlook or downgraded following the incurrence of such Indebtedness (and, if such confirmation was provided in writing, attaching a copy of such confirmation).
"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
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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 Tranche B 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 Tranche B 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 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, which 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) which the Company sponsors or maintains or to which the Company makes, is making, or is obligated to make contributions and includes any Pension Plan.
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"Plan of Reorganization" means the Company's Joint Plan of Reorganization dated as of March 12, 2003, as amended through the Effective Date.
"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 of 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 and (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.
"Pro Rata Share" means, as to any Bank (a) at any time at which the Commitments remain outstanding, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Bank's Commitment divided by the combined Commitments of all Banks, and (b) after the termination of the Commitments, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of the principal amount of such Bank's outstanding Loans divided by the aggregate principal amount of the outstanding Loans of all the Banks.
"Proposed CIHC Transactions" means a multi-step transaction in which the following steps occur substantially simultaneously: (i) the Company and Conseco Annuity Assurance Company each contributes all common stock that it owns in CIHC to New HoldCo, (ii) CIHC distributes or otherwise transfers all Capital Stock that it owns in any Non-Insurance Subsidiary (other than CFC) and
30

in Conseco Life Insurance (Bermuda) Limited, and all other assets not constituting Capital Stock, to New HoldCo, (iii) New HoldCo satisfies the Collateral and Guarantee Requirement with respect to all property distributed or otherwise transfered to it pursuant to clause (ii), (iv) each Insurance Subsidiary that holds Existing CIHC Preferred Stock transfers such Existing CIHC Preferred Stock to New HoldCo in exchange for Replacement Preferred Stock, (v) New HoldCo forms a new Wholly-Owned Subsidiary that is a Texas general business corporation ("CIHC-TX"), (vi) CIHC merges with CIHC-TX (with CIHC-TX surviving),
(vii) CIHC-TX applies to become a life insurance company, (viii) CIHC-TX merges with Conseco Life Insurance Company of Texas (with CIHC-TX surviving) and (ix) immediately following the merger referred to in clause (viii), CIHC-TX is a life insurance company.
"Purchase Money Debt" means Indebtedness incurred by a Person in connection with the purchase of fixed or capital assets by such Person, in which such assets the seller or financier thereof has taken or retained a Lien therein; 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 the New CNC Preferred Stock or 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.
"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,
31

certificate or other arrangement which is treated as such by the applicable Department.
"Reorganization Transactions" means the transactions contemplated by the Plan of Reorganization to occur upon the effective date thereof.
"Replacement Preferred Stock" means preferred stock to be issued to certain Insurance Subsidiaries by New HoldCo having terms at least as favorable to New HoldCo as those in the Existing CIHC Preferred Stock (it being understood that the terms set forth in Exhibit I shall be deemed to be at least as favorable to New HoldCo as those in the Existing CIHC Preferred Stock) in exchange for the Existing CIHC Preferred Stock in connection with the Proposed CIHC Transactions.
"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 Banks" means (a) Banks then holding at least 50.1% of the aggregate amount of the Commitments or (b) if the Commitments have terminated or expired, Banks then holding at least 50.1% of the aggregate unpaid principal amount of the Loans.
"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 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.
"Risk-Based Capital Ratio" means, with respect to any Insurance Subsidiary or 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 the relevant Insurance Subsidiary's Department) for such Insurance Subsidiary or Insurance Subsidiaries
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to (b) the aggregate Authorized Control Level Risk-Based Capital (as defined by the relevant Insurance Subsidiary's Department) for such Insurance Subsidiary or Insurance Subsidiaries.
"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, which 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.
"Security Agreement" means the Guarantee and Security Agreement among the Obligors and the Agent, substantially in the form of Exhibit F.
"Security Documents" means the Security Agreement and each other security agreement, instrument or document executed and delivered pursuant thereto or pursuant to Section 6.14 or Section 6.15 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.
"Sub-Class" (a) when used with respect to Banks, refers to whether such Banks are Tranche A-1 Banks, Tranche A-2 Banks, Tranche A-3 Banks, Tranche
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B-1 Banks, Tranche B-2 Banks or Tranche B-3 Banks and (b) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche A-3 Term Loans, Tranche B-1 Term Loans, Tranche B-2 Term Loans or Tranche B-3 Term Loans.
"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 ("Paladin"), 767 LLC or Resortport Investment Partnership shall be considered a Subsidiary for any purpose of this Agreement for so long as (w) such Person has no Indebtedness other than intercompany Indebtedness and non-recourse Indebtedness, (x) the aggregate principal amount of Indebtedness of such Person (other than intercompany Indebtedness) does not exceed 85% of the fair market value of the assets of such Person, (y) such Person is not integral to the business or operations of the Company or any Subsidiary and (z) in the case of Paladin, the accounts thereof are not consolidated or are not required pursuant to GAAP to be consolidated with those of the Company in the Company's consolidated financial statements; and provided further that CFC shall not be considered a Subsidiary for any purpose of this Agreement so long as CFC is liquidated pursuant to and in accordance with the Finance Company Plan (as defined in the Plan of Reorganization) prior to the 180th day after the Effective Date. 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 hereof, become a Subsidiary Guarantor pursuant to Section 28 of the Security Agreement.
"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, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction,
34

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, unless the context otherwise clearly requires, 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 Bank).
"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 be deemed to be a Synthetic Purchase Agreement.
"Tax Sharing Agreement" means the tax sharing agreement dated January 1, 2002 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 Bank and the Agent, respectively, taxes imposed as a result of a connection between such Bank or the Agent and the jurisdiction imposing such tax (other than any connection arising solely from such Bank 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
35

the laws of which such Bank or the Agent, as the case may be, is organized or maintains its Lending Office.
"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 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) of securities as determined in accordance with FAS 115 and (ii) any charges taken to write off any goodwill included on the Company's balance sheet on the Effective Date to the extent such charges are required by FAS 142).
"Tranche A Bank" means a Tranche A-1 Bank, Tranche A-2 Bank or Tranche A-3 Bank, or any combination thereof (as the context requires).
"Tranche A Commitment" means a Tranche A-1 Commitment, Tranche A-2 Commitment or Tranche A-3 Commitment, or any combination thereof (as the context requires).
"Tranche A Maturity Date" means the sixth anniversary of the Effective Date, or if such day is not a Business Day, the next succeeding Business Day.
"Tranche A Term Loan" means a Tranche A-1 Term Loan, Tranche A-2 Term Loan or Tranche A-3 Term Loan, or any combination thereof (as the context requires).
"Tranche A-1 Bank" means a Bank with a Tranche A-1 Commitment or an outstanding Tranche A-1 Term Loan.
"Tranche A-1 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche A-1 Term Loan on the Effective Date, expressed as an amount representing the maximum principal amount of such Tranche A-1 Term Loan. The initial amount of each Bank's Tranche A-1 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche A-1 Commitments is $754,345,049.96.
"Tranche A-1 Term Loan" means a Loan deemed made pursuant to Section 2.01(a).
"Tranche A-2 Bank" means a Bank with a Tranche A-2 Commitment or an outstanding Tranche A-2 Term Loan.
"Tranche A-2 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche A-2 Term Loan on the
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Effective Date, expressed as an amount representing the maximum principal amount of such Tranche A-2 Term Loan. The initial amount of each Bank's Tranche A-2 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche A-2 Commitments is $72,348,180.07.
"Tranche A-2 Term Loan" means a Loan deemed made pursuant to Section 2.01(b).
"Tranche A-3 Bank" means a Bank with a Tranche A-3 Commitment or an outstanding Tranche A-3 Term Loan.
"Tranche A-3 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche A-3 Term Loan on the Effective Date, expressed as an amount representing the maximum principal amount of such Tranche A-3 Term Loan. The initial amount of each Bank's Tranche A-3 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche A-3 Commitments is $173,306,769.97.
"Tranche A-3 Term Loan" means a Loan deemed made pursuant to Section 2.01(c).
"Tranche B Bank" means a Tranche B-1 Bank, Tranche B-2 Bank or Tranche B-3 Bank, or any combination thereof (as the context requires).
"Tranche B Commitment" means a Tranche B-1 Commitment, Tranche B-2 Commitment or Tranche B-3 Commitment, or any combination thereof (as the context requires).
"Tranche B Maturity Date" means the seventh anniversary of the Effective Date, or if such day is not a Business Day, the next succeeding Business Day.
"Tranche B Term Loan" means a Tranche B-1 Term Loan, Tranche B-2 Term Loan or Tranche B-3 Term Loan, or any combination thereof (as the context requires).
"Tranche B-1 Bank" means a Bank with a Tranche B-1 Commitment or an outstanding Tranche B-1 Term Loan.
"Tranche B-1 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche B-1 Term Loan on the Effective Date, expressed as an amount representing the maximum principal amount of such Tranche B-1 Term Loan. The initial amount of each Bank's Tranche B-1 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche B-1 Commitments is $226,303,514.99.
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"Tranche B-1 Term Loan" means a Loan deemed made pursuant to Section 2.01(d).
"Tranche B-2 Bank" means a Bank with a Tranche B-2 Commitment or an outstanding Tranche B-2 Term Loan.
"Tranche B-2 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche B-2 Term Loan on the Effective Date, expressed as an amount representing the maximum principal amount of such Tranche B-2 Term Loan. The initial amount of each Bank's Tranche B-2 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche B-2 Commitments is $21,704,454.02.
"Tranche B-2 Term Loan" means a Loan deemed made pursuant to Section 2.01(e).
"Tranche B-3 Bank" means a Bank with a Tranche B-3 Commitment or an outstanding Tranche B-3 Term Loan.
"Tranche B-3 Commitment" means, with respect to each Bank, the commitment, if any, of such Bank to make a Tranche B-3 Term Loan on the Effective Date, expressed as an amount representing the maximum principal amount of such Tranche B-3 Term Loan. The initial amount of each Bank's Tranche B-3 Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Tranche B-3 Commitments is $51,992,030.99.
"Tranche B-3 Term Loan" means a Loan deemed made pursuant to Section 2.01(f).
"Transaction Liens" means the Liens granted by the Obligors under the Security Documents.
"Transactions" means the Financing Transactions and the Reorganization Transactions.
"Transfer Agreement" means, with respect to any D&O Credit Facility, any D&O Loan Transfer Agreement entered into in connection with such D&O Credit Facility among the Company and the agent and lenders under such D&O Credit Facility with respect to the transfer of ownership of and subsequent collection of D&O Loans made under such D&O Credit Facility.
"Trigger Date" means (i) in the case of the sale of Sufficient Assets (as defined in Section 6.10), the Reduction Date (as defined in Section 6.10) and
(ii) in the case of any other Approved Strategic Alternative (as defined in
Section 6.10), the date such Approved Strategic Alternative is approved by the Required Banks.
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"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 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
39

to a Person shall be construed to include such Person's permitted successors and assigns and (iv) the word "property" shall be 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 Banks 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 Banks or the Agent merely because of the Agent's or Banks' 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 Class (e.g., a "Tranche A Term Loan") or by Interest Type (e.g., an "Offshore Rate Loan") or by Class and Interest Type (e.g., an "Offshore Rate Tranche A Term Loan"). Borrowings also may be classified and referred to by Class (e.g., a "Tranche A Term Borrowing") or by Interest Type (e.g., an "Offshore Rate Borrowing") or by Class and Interest Type (e.g., an "Offshore Rate Tranche A Term 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 2002 Annual Statement or the March 31, 2003
40

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.
Article 2
THE CREDITS
Section 2.01. Commitments. Subject to the terms and conditions set forth herein:
(a) each Tranche A-1 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche A-1 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche A-1 Commitment;
(b) each Tranche A-2 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche A-2 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche A-2 Commitment;
(c) each Tranche A-3 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche A-3 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche A-3 Commitment;
(d) each Tranche B-1 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche B-1 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche B-1 Commitment;
(e) each Tranche B-2 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche B-2 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche B-2 Commitment; and
(f) each Tranche B-3 Bank agrees that in partial satisfaction of its Lender Claims it shall be deemed to have made a Tranche B-3 Term Loan to the Company on the Effective Date in a principal amount equal to its Tranche B-3 Commitment.
Amounts repaid in respect of the Loans may not be reborrowed.
41

Section 2.02. Loans. Each Loan shall be deemed made as part of a Borrowing consisting of Loans of the same Class and Interest Type deemed made by the Banks ratably in accordance with their respective Commitments of the applicable Class, provided that all the Borrowings deemed made on the Effective Date must be Offshore Rate Borrowings with an initial Interest Period of three months. Each Bank at its option may be deemed to have made any Offshore Rate Loan by designating (by notice to the Agent) any domestic or foreign branch or Affiliate of such Bank as deemed to have made such Loan. Any exercise of such option shall not affect the Company's obligation to repay such Loan as provided herein.
Section 2.03. Notes; Loan Accounts. (a) Each Tranche A Term Loan and Tranche B Term Loan deemed made by each Bank shall be evidenced by one or more loan accounts or records maintained by such Bank in the ordinary course of business. The loan accounts or records maintained by the Agent and each Bank shall be presumptive evidence of the amount of the Loans deemed made by the Banks 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.
(b) Upon the request of any Bank made through the Agent, instead of or in addition to loan accounts, the Loans deemed made by each Bank may be evidenced by one or more notes in substantially the form of Exhibit B hereto (each such note, a "Note", and collectively, the "Notes"). Each Bank shall endorse on the schedules annexed to its Note(s) 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 Bank is irrevocably authorized by the Company to endorse its Note(s) and each Bank's record shall be conclusive absent demonstrable error; provided, however, that the failure of a Bank 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 Bank.
Section 2.04. Interest Elections. (a) Each Borrowing deemed made on the Effective Date shall have an initial Interest Period of three months. Thereafter, the Company shall, upon irrevocable (subject to Section 3.05) written notice to the Agent in accordance with subsection 2.04(b) elect, as of the last day of the applicable Interest Period, to continue any Borrowings having Interest Periods expiring on such day (or any part thereof in an amount not less than $5,000,000, or that is in an integral multiple of $1,000,000 in excess thereof) for one or more Interest Periods, all as provided in this Section.
(b) The Company shall deliver a written Notice of Continuation (which notice must be received by the Agent not later than 12:00 noon (Central time)
42

three Business Days in advance of the Continuation Date signed by a Responsible Officer and specifying:
(A) the proposed Continuation Date;
(B) the aggregate amount of Borrowings to be continued; and
(C) the duration of the requested Interest Period (each such Interest Period shall comply with the provisions of the definition of "Interest Period").
(c) Subject to Section 2.04(e), if the Company fails to deliver a timely Notice of Continuation to the Agent in accordance with the provisions of Section 2.04(b) or if any Notice of Continuation does not specify an Interest Period, the Company shall be deemed to have elected an Interest Period of one month.
(d) The Agent will promptly notify each Bank of its receipt of a Notice of Continuation, or, if no timely notice is provided by the Company, the Agent will promptly notify each Bank of the details of any deemed election of an Interest Period. All continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given by each Bank.
(e) Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing, unless the Required Banks otherwise consent, each Borrowing will be converted into a Base Rate Borrowing at the end of the Interest Period applicable thereto.
(f) After giving effect to any continuation of Loans, unless the Agent shall otherwise consent, there may not be more than six different Interest Periods in effect in respect of all Loans then outstanding.
Section 2.05. Termination of Commitments. Unless previously terminated, the Commitments will terminate on the Effective Date immediately after the closing hereunder.
Section 2.06. Payment at Maturity. The Company shall repay to the Agent
(i) on the Tranche A Maturity Date, for the account of each Tranche A Bank, the then unpaid principal amount of such Bank's Tranche A Term Loans and (ii) on the Tranche B Maturity Date, for the account of each Tranche B Bank, the then unpaid principal amount of such Bank's Tranche B Term Loans, together in each case with accrued and unpaid interest thereon to but excluding the date of such payment.
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Section 2.07. Scheduled Amortization. (a) Subject to adjustment pursuant to Section 2.07(c), the Company shall repay Tranche A Term Loans on each date set forth below in the aggregate principal amount set forth opposite such date:

------------------------------- ---------------------------------------------------------------------------
             Date                                                 Amount
------------------------------- ---------------------------------------------------------------------------
------------------------------- ------------------- ------------------ ------------------ -----------------
                                 Tranche A-1 Term   Tranche A-2 Term   Tranche A-3 Term        Total
                                      Loans               Loans              Loans
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
June 30, 2004                       $37,717,252.50      $3,617,409.00      $8,665,338.50       $50,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
June 30, 2005                       $37,717,252.50      $3,617,409.00      $8,665,338.50       $50,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
June 30, 2006                       $37,717,252.50      $3,617,409.00      $8,665,338.50       $50,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
December 31, 2006                   $37,717,252.50      $3,617,409.00      $8,665,338.50       $50,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
June 30, 2007                       $56,575,878.75      $5,426,113.50     $12,998,007.75       $75,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
December 31, 2007                   $56,575,878.75      $5,426,113.50     $12,998,007.75       $75,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
June 30, 2008                       $56,575,878.75      $5,426,113.50     $12,998,007.75       $75,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
December 31, 2008                   $56,575,878.75      $5,426,113.50     $12,998,007.75       $75,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------
------------------------------- ------------------- ------------------ ------------------ -----------------
Tranche A Maturity Date            $377,172,524.96     $36,174,090.07     $86,653,384.97      $500,000,000
------------------------------- ------------------- ------------------ ------------------ -----------------	

(b) Subject to adjustment pursuant to Section 2.07(c), the Company shall repay Tranche B Term Loans on each date set forth below in the aggregate principal amount set forth opposite such date:

------------------------------ --------------------------------------------------------------------------
              Date                                                Amount
------------------------------ --------------------------------------------------------------------------
------------------------------ -------------------- ------------------ ----------------- ----------------
                                 Tranche B-1 Term    Tranche B-2 Term     Tranche B-3          Total
                                       Loans               Loans           Term Loans
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2004                         $2,263,035.15        $217,044.54       $519,920.31       $3,000,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2005                         $2,263,035.15        $217,044.54       $519,920.31       $3,000,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2006                         $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
December 31, 2006                     $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2007                         $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
December 31, 2007                     $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2008                         $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
December 31, 2008                     $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
June 30, 2009                         $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
December 31, 2009                     $1,131,517.57        $108,522.28       $259,960.15       $1,500,000
------------------------------- -------------------- ------------------ ----------------- ----------------
------------------------------- -------------------- ------------------ ----------------- ----------------
Tranche B Maturity Date             $212,725,304.13     $20,402,186.70    $48,872,509.17     $282,000,000
------------------------------- -------------------- ------------------ ----------------- ----------------	

(c) Any prepayment of Loans of either Class (or any Sub-Class(es) thereof) will be applied to reduce the subsequent scheduled repayments of the Loans of such Class (or such Sub-Class(es) thereof) to be made pursuant to this Section ratably; provided that any prepayments made pursuant to Section 2.08(e) will be applied to reduce such subsequent scheduled repayments in direct order of maturity.
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(d) Before repaying any Loans of either Class pursuant to this Section, the Company shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall (i) in the case of an Offshore Rate Borrowing, notify the Agent in writing of such selection not later than 11:00 a.m. (Central time) three Business Days before the scheduled date of such repayment and (ii) in the case of a Base Rate Borrowing, notify the Agent in writing of such selection not later than 11:00 a.m. (Central time) on the prepayment date. Each such repayment of a Borrowing shall be applied ratably to the applicable Loans (and Sub-Classes thereof) included in such Borrowing and shall be accompanied by accrued interest on the amount repaid.
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) 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 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; provided that so long as no Event of Default is continuing or shall result from the repurchase or redemption thereof, the Net Proceeds of the incurrence of any Permitted Refinancing Indebtedness shall not be required to be applied to the prepayment of the Borrowings to the extent that such Net Proceeds are applied to repurchase or redeem the New CNC Preferred Stock.
(c) 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), the Company shall prepay Borrowings in an aggregate amount equal to (i) in the case of an issuance of Permitted Refinancing Preferred Stock, 100% of such Net Proceeds, (ii) in the case of an issuance or contribution other than an issuance of Permitted Refinancing Preferred Stock, to the extent that the Company contributes up to 50% of the Net Proceeds of such issuance or contribution to one or more Insurance Subsidiaries and such Net Proceeds are retained as capital and surplus of such Insurance Subsidiaries, the remaining
45

portion of such Net Proceeds and (iii) in all other cases, 75% of such Net Proceeds; provided that so long as no Event of Default is continuing or shall result from the repurchase or redemption thereof, the Net Proceeds of any such event shall not be required to be applied to the prepayment of the Borrowings to the extent that such Net Proceeds are applied to repurchase or redeem the New CNC Preferred Stock.
(d) Asset Sales and Casualty Events. 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 or Casualty Event, the Company shall
(i) first, until such time as the Company shall have prepaid Tranche A-2 Term Borrowings and Tranche B-2 Term Borrowings in an aggregate principal amount equal to $32,500,000 pursuant to this paragraph, prepay Tranche A-2 Term Borrowings and Tranche B-2 Term Borrowings in an aggregate amount equal to the lesser of (x) such Net Proceeds and (y) $32,500,000, until such Borrowings are repaid in full and (ii) then, prepay other Borrowings (and Tranche A-2 Term Borrowings and Tranche B-2 Term Borrowings if then outstanding) with any remaining amount of 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 and Casualty Events in any Fiscal Year exceeds $2,500,000; provided further that any prepayment in respect of any Asset Sale or Casualty Event involving 1999 Facility Collateral shall be governed by Section 2.08(g).
(e) Conseco Excess Cash Flow and Excess Aggregate RBC Ratio. Commencing with the Excess Cash Calculation Period ending December 31, 2003, the Company shall prepay Borrowings in an aggregate amount equal to the lesser of (i) the sum of (A) Conseco Excess Cash Flow for each Excess Cash Calculation Period plus (B) to the extent that the Aggregate RBC Ratio exceeds 300% as at the end of any Excess Cash Calculation Period, 100% of the amount in excess of the amount required to maintain an Aggregate RBC Ratio of 300% and (ii) the amount by which the aggregate amount of cash on hand and Cash Equivalents of the Company and its Subsidiaries (other than the Insurance Subsidiaries) exceeds $50,000,000 at the time of prepayment; provided that (x) the amount, if any, required to be applied towards prepayment of Borrowings pursuant to clause (i)(A) above shall be reduced by 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 clause (i)(A) above and (y) the amount, if any, required to be applied towards prepayment of Borrowings pursuant to clause (i)(B) above shall be reduced by any amount that any Department shall prohibit any Insurance Subsidiary from distributing to the Company to the extent that such prohibited amount is included in the calculation of the amount determined pursuant to clause (i)(B) above, 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
46

prepayment is required with respect to any Excess Cash Calculation Period, within 120 days after the end of such Excess Cash Calculation Period); provided further that up to 50% of the amount, if any, required to be applied to prepay the Borrowings pursuant to this paragraph may instead be applied to the redemption or repurchase of the New CNC Preferred Stock so long as both before and after giving pro forma effect to such redemption or repurchase (w) no Event of Default shall have occurred and be continuing or shall occur, (x) the A.M. Best financial strength rating of each Active Material Insurance Subsidiary is at least A-, (y) the Company's implied senior unsecured long-term debt rating from S&P is at least BBB+ and (z) the Aggregate RBC Ratio as of the end of such Excess Cash Calculation Period is, and, if applicable, as at the end of the second and third Fiscal Quarters of such Excess Cash Calculation Period has been, at least 250%. 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).
(f) Loan Recoveries. Within five Business Days after any amounts are received or recovered by or on behalf of the Company in respect of the D&O Loans, the Company shall first, prepay Borrowings (other than Tranche A-1 Term Borrowings and Tranche B-1 Term Borrowings) in an aggregate amount equal to the amounts so received or recovered less any fees, costs and expenses reasonably incurred by or on behalf of the Company in connection therewith (the "D&O Prepayment Amount"), until such Borrowings are repaid in full and then, prepay other Borrowings with any remaining amount of such D&O Prepayment Amount; provided that a prepayment of the Borrowings with respect to amounts received under or in respect of any Adjustment Agreement shall be required pursuant to this paragraph only to the extent that the aggregate amount of D&O Prepayment Amounts received under or in respect of all Adjustment Agreements in any Fiscal Year exceeds $2,500,000 (and then only in an aggregate amount equal to such excess); and provided further that until such time as the Company shall have applied or contributed $30,000,000 in the aggregate pursuant to this proviso, up to 45% of the amount of any D&O Prepayment Amount shall not be required to be applied to the prepayment of the Borrowings to the extent otherwise applied to pay Allowed Class 10A Claims in cash or contributed by the Company to one or more Insurance Subsidiaries and retained as capital and surplus of such Insurance Subsidiaries.
(g) 1999 Facility Collateral Recoveries. Within five Business Days after any Net Proceeds are received by or on behalf of the Company or any Subsidiary under or in respect of any 1999 Facility Collateral, including pursuant to any Asset Sale, the Company shall first, prepay Tranche A-2 Term Borrowings and Tranche B-2 Term Borrowings in an aggregate amount equal to such Net Proceeds, until such Borrowings are repaid in full and then, prepay other Borrowings with any remaining amount of such Net Proceeds.
47

(h) Allocation of Prepayments. Before any optional or mandatory prepayment of Borrowings hereunder (or of any Sub-Class(es) thereof as specified above), the Company shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to Section
2.08(k). If any such optional or mandatory prepayment of Loans is made at a time when Borrowings of both Classes remain outstanding, the Company shall select Borrowings to be prepaid so that the aggregate amount of such prepayment is allocated between the Tranche A Term Loans (or relevant Sub-Class(es) thereof) and Tranche B Term Loans (or relevant Sub-Class(es) thereof) pro rata based on the aggregate outstanding principal amount of the Loans of each such Class (or relevant Sub-Class(es) thereof).
(i) Partial Prepayments. Each partial prepayment of a Borrowing (or Sub-Class thereof) shall be applied ratably to the Loans included in such Borrowing (or Sub-Class thereof).
(j) Accrued Interest. Each prepayment of a Borrowing shall be accompanied by accrued interest on the amount prepaid.
(k) Notice of Prepayments. The Company shall notify the Agent in writing of any prepayment of any Borrowing hereunder (i) in the case of an Offshore Rate Borrowing, not later than 11:00 a.m. (Central time) three Business Days before the date of prepayment and (ii) in the case of a Base Rate Borrowing, not later than 11:00 a.m. (Central 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 Banks of the contents thereof.
Section 2.09. Interest. Each Base Rate Loan of any Class 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 for such Class.
(b) Each Offshore Rate Loan of any Class shall bear interest on the outstanding principal amount for each Interest Period applicable thereto at a rate per annum equal to the Offshore Rate for such Interest Period plus the Applicable Margin for such Class.
(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(c) (with respect to the Company's failure to comply with any covenant or agreement set forth in
Section 7.11 through Section 7.17 (inclusive and without giving effect to any cure period
48

provided for thereunder)), Section 8.01(f) or Section 8.01(g), and upon notice from the Agent (upon the instruction of the Required Banks) 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 5.25% plus the Base Rate.
(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 Banks), (ii) upon any repayment of any Loan, interest accrued on the principal amount repaid shall be payable on the date of such repayment and (iii) upon any conversion of an Offshore 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 Bank 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 Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Bank, and in such event the Company shall pay such Bank 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. Fees paid shall not be refundable under any circumstances.
(b) The Company shall by no later than June 30, 2004 pay to the Agent, for the account of the Banks ratably in proportion to the principal amount of their outstanding Loans, fees in an aggregate amount equal to $6,500,000; provided that such fees shall not be payable if the Company shall have prior to June 30, 2004 repaid or prepaid all principal of and interest on each Loan, all fees and all other amounts payable hereunder (other than contingent indemnification obligations not yet due and payable) for which invoices have been submitted to the Company prior to June 30, 2004.
49

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 Banks in the absence of demonstrable error. The Agent will, at the request of the Company or any Bank, deliver to the Company or the Bank, 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 by the Company. (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 the account of the Banks at the Agent's Office, and shall be made in dollars and in immediately available funds, no later than 2:00 p.m. (Central time) on the date specified in such Loan Document. The Agent will promptly distribute to each Bank 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 2:00 p.m. (Central 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 has notified the Agent, prior to the date any payment is required to be made by it to the Agent hereunder, that the Company will not make such payment, the Agent may assume that the Company 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 each Bank shall forthwith on demand repay to the Agent the portion of such assumed payment that was made available to such Bank in immediately available funds, together with interest thereon in respect of each day
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from and including the date such amount was made available by the Agent to such Bank 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. A notice of the Agent to any Bank with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error.
Section 2.13. Sharing of Payments, Etc. If, other than as expressly provided elsewhere in any Loan Document, any Bank shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, counterclaim or otherwise) in excess of its ratable share (or other share contemplated in such Loan Document), such Bank shall immediately (a) notify the Agent of such fact, and (b) purchase from the other Banks such participations in the Loans made by them as shall be necessary to cause such purchasing Bank to share the excess payment pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Bank, such purchase shall to that extent be rescinded and each other Bank shall repay to the purchasing Bank the purchase price paid therefor, together with an amount equal to such paying Bank's ratable share (according to the proportion of (i) the amount of such paying Bank's required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Company agrees that any Bank so purchasing a participation from another Bank may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off and counterclaim, but subject to Section 10.09) with respect to such participation as fully as if such Bank were the direct creditor of the Company in the amount of such participation. The Agent will keep records (which shall be conclusive and binding in the absence of demonstrable error) of participations purchased under this Section 2.13 and will in each case notify the Banks following any such purchases or repayments.
Article 3
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 . Taxes. (a) Any and all payments by the Company to any Bank 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 Bank 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:
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(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 Bank 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;
(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 Bank or the Agent, at the time interest is paid, Further Taxes in the amount that the respective Bank or the Agent specifies as necessary to preserve the after-tax yield the Bank 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 Bank 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 Bank or the Agent specifies as necessary to preserve the after-tax yield the Bank 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 Bank or the Agent makes written demand therefor. If any Bank 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 Bank or the Agent, as the case may be; provided, that the Company, upon the request of such Bank 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 Bank or the Agent in the event such Bank 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 Bank to disclose its tax
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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 Bank, the Company shall furnish to each affected Bank 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 Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank pursuant to subsection (b) or (c) of this Section 3.01, then such Bank 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 such change, in the sole judgment of such Bank, is not otherwise disadvantageous to such Bank.
Section 3.02. Illegality. (a) If any Bank 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 Bank or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by the Bank to the Company through the Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies the Agent and the Company that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any Offshore Rate Loan, the Company shall, upon its receipt of written notice of such fact and demand from such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans of that Bank 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 Bank may lawfully continue to maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Offshore Rate Loan. If the Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, the Company shall borrow from the affected Bank, in the amount of such prepayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, the Company may elect, by giving notice to the Bank through the Agent, that all Loans which would otherwise be
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made or maintained by the Bank as Offshore Rate Loans shall instead be Base Rate Loans.
(d) Before giving any notice to the Agent under this Section 3.02, the affected Bank shall designate a different Lending Office with respect to its Offshore 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 Bank, be illegal or otherwise disadvantageous to the Bank.
Section 3.03. Increased Costs and Reduction of Return. (a) If any Bank 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 Bank 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 Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans, then the Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank 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) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank'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 Bank to the Company through the Agent, the Company shall pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase; provided, however, that if any such Bank fails to deliver such demand within 120 days after the date on which an officer of such Bank has actual knowledge of its right to compensation under this Section 3.03(b), then such Bank shall only be entitled to additional compensation for any such increases in capital required from and after the date that is 120 days prior to the date such Bank 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.
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Section 3.04. Funding Losses. The Company shall reimburse each Bank and hold each Bank harmless from any loss or expense which the Bank 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 Offshore 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 an Offshore 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 Offshore 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 Bank for the calculation of such loss. For purposes of calculating amounts payable by the Company to the Banks under this Section 3.04 and under subsection 3.03(a), each Offshore Rate Loan made by a Bank (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the Eurodollar Base Rate used in determining the Offshore Rate for such Offshore 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 Offshore Rate Loan is in fact so funded.
Section 3.05. Inability to Determine Rates. If the Required Banks determine that for any reason adequate and reasonable means do not exist for determining the Offshore Rate for any requested Interest Period with respect to a proposed Offshore Rate Loan, or that the Offshore Rate for any requested Interest Period with respect to a proposed Offshore Rate Loan does not adequately and fairly reflect the cost to such Banks of funding such Loan, the Agent will promptly so notify the Company and each Bank. Thereafter, the obligation of the Banks to make or maintain Offshore Rate Loans shall be suspended until the Agent (upon the instruction of the Required Banks) 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 Banks 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 Offshore Rate Loans.
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Notwithstanding the foregoing, the Agent and each Bank 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 Bank, be materially disadvantageous to the Agent, such Bank or the Company, as compared to the steps described in this Section 3.05.
Section 3.06. Certificates of Banks. Any Bank 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 Bank 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 Offshore Rate Loans under Section 3.04 and in a form reasonably determined by the applicable Bank with respect to Base Rate Loans) the methodology used in determining the amount payable to the Bank.
Section 3.07. Substitution of Banks. If the Company receives notice from any Bank of a claim for compensation under Section 3.01, 3.02 or 3.03, the Company may, upon notice to such Bank and the Agent, replace such Bank by causing such Bank 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 Banks or Eligible Assignees procured by the Company; provided, however, that (x) the Company shall be obligated to replace all Banks that have made similar requests for compensation and (y) each such Bank 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 Bank from its obligations under the Loan Documents. Any Bank being replaced shall execute and deliver an Assignment and Assumption with respect to such Bank'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. Effective Date. The obligations of the Banks to have deemed to have made Loans hereunder shall not become effective until the date
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on which each of the following conditions is satisfied (or waived in accordance with Section 10.01):
(a) If any Bank shall have requested any Note(s) pursuant to Section 2.03(b), the Company shall have distributed, or made arrangements to distribute promptly after the Effective Date, to such Bank such Note(s) duly executed by a Responsible Officer of the Company.
(b) The Agent shall have received:
(i) copies of the resolutions of the board of directors 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.
(c) 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;
(iii) a certificate of existence 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 from the Department of its jurisdiction of domicile as of a recent date.
(d) The Agent shall have received a favorable written opinion (addressed to the Agent and the Banks and dated the Effective Date) of each of (i) Kirkland & Ellis, counsel for the Obligors, substantially in the form of Exhibit H-1 and
(ii) Baker & Daniels, Indiana and insurance regulatory counsel for the Obligors, substantially in the form of Exhibits H-2 and H-3. The Agent shall have also received such other legal opinions, in form and substance satisfactory to the Agent, covering such matters relating to the Loan Documents and the
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Transactions as the Agent may reasonably require. The Company requests such counsel to deliver such opinions.
(e) The Agent and each Bank 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 Bank on or before the Effective Date, including Attorney Costs of the Agent or such Bank 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 costs, fees and expenses arising under or referenced in Section 2.10 and 10.04. Without limiting the foregoing, each of the Lenders' Agents and each of the Lenders (each as defined in the Plan of Reorganization) shall have received all amounts distributable to them pursuant to Article
III.C.4 of the Plan of Reorganization, including all fees and expenses payable thereunder.
(f) 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(g), Section 4.01(h) and the second sentence of Section 4.01(m) 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.
(g) The fact that the representations and warranties of each Obligor contained in the Loan Documents shall be true and correct on and as of the Effective Date, as though made on and as of such date.
(h) The fact that, immediately after giving effect to the Transactions, no Default shall have occurred and be continuing.
(i) The Collateral and Guarantee Requirement shall have been satisfied and the Agent shall have received (i) a completed Perfection Certificate with respect to each Obligor dated the Effective Date and signed by a Responsible Officer or other executive officer of such Obligor, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to such Obligor in the jurisdictions contemplated by such Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Agent that the Liens indicated by such financing statements (or similar documents) are permitted by
Section 7.02 or have been released, (ii) evidence that any lockbox and concentration account arrangements contemplated by the Security Agreement have been established and (iii) evidence that all insurance required by Section 6.05 is in effect.
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(j) Upon completion of the solicitation of votes on the Plan of Reorganization, the Holders (such term and other capitalized terms used in this paragraph and not defined herein having the meanings set forth in the Plan of Reorganization) of at least two-thirds in amount and one-half in number of the Allowed Claims in each of Classes 5A-1, 5A-2, 4B-1 and 4B-2 actually voting in such Classes shall have voted to accept the Plan of Reorganization (the Plan of Reorganization as so accepted, the "Accepted Plan"). Any material amendments or modifications to the Accepted Plan or any related document (including the Plan Supplement (as defined in the Plan of Reorganization)) shall be satisfactory to the Required Banks.
(k) The Effective Date (as defined in the Plan of Reorganization) of the Plan of Reorganization shall have occurred (or shall occur simultaneously with the closing hereunder), all conditions precedent enumerated therein shall have been satisfied (or waived by the parties entitled to do so) as set forth in the Plan of Reorganization and the Reorganization Transactions (including the issuance of the New CNC Preferred Stock) shall have been consummated.
(l) The Confirmation Order pursuant to which the Plan of Reorganization is consummated shall have become a Final Order; the Confirmation Order shall be in form and substance satisfactory to the Required Banks and shall not provide that the Bankruptcy Court's retention of jurisdiction thereunder governs the enforcement of the Loan Documents or any of the rights or remedies of the Banks or the Agent related thereto.
(m) The Banks shall have received the pro forma financial statements described in Section 5.11(b); and such pro forma financial statements shall be reasonably satisfactory to the Banks. Immediately after giving effect to the Transactions, no Obligor shall have outstanding any shares of preferred stock or any Indebtedness, except (i) Indebtedness permitted under Section 7.01 (other than Section 7.01(a)(iii), Section 7.01(a)(xiii), Section 7.01(a)(xiv) and
Section 7.01(a)(xv)) and (ii) the Existing CIHC Preferred Stock and the New CNC Preferred Stock.
(n) There shall not exist any (i) pending or threatened action, suit, investigation, proceeding or other litigation in which the Required Banks determine there is a reasonable likelihood of a decision which could reasonably be expected to have a Material Adverse Effect or a material adverse effect on the rights of the Banks under the Loan Documents or that seeks to enjoin the Transactions or the Loan Documents or the transactions contemplated thereby or
(ii) order or injunction restraining the Transactions or the Loan Documents or the transaction contemplated thereby.
(o) All agreements, orders and other restrictions binding on the Company or any of its Subsidiaries on the Effective Date, and the corporate and
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capital structure of the Obligors and all organizational documents thereof, shall be reasonably satisfactory to the Required Banks.
(p) 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.
Promptly after the Effective Date occurs, the Agent shall notify the Company and the Banks thereof, and such notice shall be conclusive and binding.
Article 5
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank 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 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) (with respect to Subsidiaries other than Obligors and Material Insurance Subsidiaries), (b)(i) (with respect to Subsidiaries other than Material Insurance Subsidiaries), (c) or (d), to the extent that the failure to do so, 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)
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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 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 listed on Schedule 5.03 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 which: (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) that 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
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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 which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect, or that would, if such default had occurred after the Effective Date, create an Event of Default under
Section 8.01(e).
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 which 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 which 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 which 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 the Confirmation Date, no ERISA
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Event has occurred or is reasonably expected to occur; (ii) except as set forth on Schedule 5.07, since the Confirmation Date, 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 which, 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 record and marketable title in fee simple to, 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 which are being contested in 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 and which would, if made, individually or in the aggregate, have a Material Adverse Effect and for which adequate reserves in accordance with GAAP are not being maintained by the Company or such Subsidiary.
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Section 5.11. Financial Condition. (a) Each of (i) the audited consolidated financial statements of the Company and its Subsidiaries dated December 31, 2002, 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 March 31, 2003, and the related consolidated statements of income, shareholders' equity and cash flows for the period ended on that date,
(iii) the December 31, 2002 Annual Statement of each Insurance Subsidiary and
(iv) the March 31, 2003 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 Company has heretofore furnished to the Banks its pro forma consolidated balance sheet and income statement as of the last day of the Fiscal Quarter most recently ended prior to the Effective Date for which financial statements have been prepared (the "Preparation Date"), prepared giving effect to the Transactions as if the Transactions had occurred on such date. Such pro forma consolidated balance sheet and income statement (i) have been prepared in good faith based on the same assumptions used to prepare the pro forma financial statements included in the Disclosure Statement (as defined in the Plan of Reorganization) (which assumptions are believed by the Company to be reasonable) and using the principles of fresh start accounting as required by AICPA Statement of Position 90-7, (ii) are based on the best information available to the Company after due inquiry, (iii) accurately reflect all material adjustments necessary to give effect to the Transactions, (iv) present fairly, in all material respects, the pro forma financial position of the Company and its consolidated Subsidiaries as of the Preparation Date as if the Transactions had occurred on such date and (v) demonstrate that the covenants set forth in Section
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7.11 through Section 7.16 are satisfied as at the Preparation Date after giving effect to the Transactions.
(c) Since the Confirmation Date, 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;
(b) there have been no past, and there are no pending or threatened, Environmental Claims, 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 or desirable for their businesses except where failure to comply 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
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to any location which 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 which is the subject of federal, Governmental Authority or local enforcement actions or other investigations which 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 which, 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.
Section 5.13. 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, an Insurance Subsidiary, an Active Material Insurance Subsidiary and/or a Material 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
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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 Banks 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 neither the Disclosure Statement prepared in connection with the confirmation of the Plan of Reorganization nor any of the exhibits, reports, statements or certificates furnished by or on behalf of the Company or any Subsidiary pursuant to the Loan Documents, in either case, 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.
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(e), Section 7.02(f), Section 7.02(g), Section 7.02(i) and Section 7.02(j)) on the Collateral until the applicable Security Interest are released in accordance with the Loan Documents.
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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.
Section 5.20. Reinsurance Agreements. Each Reinsurance Agreement entered into on or after December 31, 2000 (other than any Reinsurance Agreement entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice) to which any Insurance Subsidiary is a party as of the Effective Date is listed on Schedule 5.20. The information set forth on Schedule 5.20 with respect to each such agreement, including the identity of each Person party thereto, each Person's rating from A.M. Best (or another rating agency, if rated) and the subject matter thereof, is accurate and complete in all material respects. The copies of each such Reinsurance Agreement delivered to the Agent prior to the Effective Date is true and complete in all material respects. Each of the reinsurers identified on Schedule 5.20 either (i) is duly licensed to transact an insurance business, (ii) is duly authorized to transact a reinsurance business or (iii) has pledged collateral to secure its obligations under the applicable Reinsurance Agreement such that each of the Insurance Subsidiaries is entitled to take full statutory credit for all reinsurance ceded under such Reinsurance Agreement.
Section 5.21. Tax Shelter Regulations. The Company does not intend to treat the Loans and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In the event the Company determines to take any action inconsistent with such intention, it will promptly notify the Agent thereof. If the Company so notifies the Agent, the Company acknowledges that one or more of the Banks may treat its Loans as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Bank or Banks, as applicable, will maintain the lists and other records required by such Treasury Regulation.
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 Banks that:
Section 6.01. Financial Statements. The Company shall deliver to the Agent and each Bank:
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(a) promptly upon filing thereof with the SEC (including as part of a Form 10-K) but not later than 120 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 60 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 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 ordinary, good faith year-end and 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);
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(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 Active Material Insurance Subsidiary (including any summary report from the NAIC with respect to the performance of such Active Material 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); and
(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 which is provided to the applicable Department (or equivalent information should such Department no longer require such a statement) as to the adequacy of loss 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 Bank (other than in the case of
Section 6.02(r)):
(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
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to their attention which 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 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) through Section 2.08(d), Section 2.08(f) or Section 2.08(g), (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) or, in the case of Section 2.08(f), other net amounts received in respect thereof;
(g) at least 5 days before the beginning of each Fiscal Year, a detailed consolidated budget for the next six Fiscal Quarters (prepared on a quarterly basis and 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) as soon as available, but not later than 60 days after the end of each Fiscal Quarter, a variance analysis, in form and scope reasonably acceptable to the Agent, comparing actual results of operations and cash flows for such Fiscal Quarter against projected results of operations and cash flows for such Fiscal Quarter, together with a statement of a Responsible Officer setting forth the reasons, in reasonable detail, for such variance;
(i) as soon as available but not later than 60 days after the end of each Fiscal Quarter, a list of the investments of the Company and its Subsidiaries (and valuations thereof) appearing on the then current "watchlist" maintained by CCM
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(or any other Person that shall then be performing the functions performed by CCM on the Effective Date), such "watchlist" to be prepared in a manner consistent with past practice;
(j) as soon as available but not later than 10 Business Days after the end of each calendar month, monthly production reports in form and scope reasonably acceptable to the Agent of new business activity of the Conseco Insurance Group and the Bankers Life Group;
(k) as soon as available but not later than 60 days after the end of each Fiscal Quarter, a quarterly report in form and scope reasonably acceptable to the Agent on the status of the D&O Loan collection program, including the status of the Company's progress in pursuing collection of payment obligations owed in respect of the D&O Loans, including through enforcement proceedings and the aggregate amount of such collections that shall have been applied to pay Allowed Class 10A Claims or contributed to the Insurance Subsidiaries to the extent permitted by the second proviso to Section 2.08(f); provided that after the end of the fourth full Fiscal Quarter after the Effective Date, such report shall be required to be delivered on a semi-annual basis only by no later than 60 days after the end of each of the second and fourth Fiscal Quarters of each Fiscal Year, commencing with the Fiscal Quarter ended December 31, 2004;
(l) promptly upon filing thereof, copies of all annual Form B amendments and all other material amendments to the registration statement of any Insurance Subsidiary that the Company or such Insurance Subsidiary may file with the applicable Department;
(m) 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 Material Insurance Subsidiary, as applicable, a copy of any written communication setting forth or relating to any matter that may reasonably be expected to be materially adverse to the interests of the Company, such Material Insurance Subsidiary or the Banks delivered to or received from any applicable Department or any other applicable insurance regulatory authority;
(n) 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 of any written communication setting forth or relating to any matter that may reasonably be expected to be materially adverse to the interests of the Company, such Subsidiary or the Banks delivered to or received from S&P, Moody's or A.M. Best or any other rating agency;
(o) 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
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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 Bank, attaching thereto, a true and complete copy of such agreement;
(p) 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;
(q) promptly after the Company has notified the Agent of any intention by the Company to treat the Loans and related transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any successor form; and
(r) 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 Bank, 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(l) (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 Bank 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 Bank 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 Bank and (ii) the Company shall notify (which may be by facsimile or electronic mail) the Agent and each Bank of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Company shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(a) to the Agent. Except for such Compliance Certificates, the Agent shall have no obligation to request the delivery or to maintain copies of the documents referred
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to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Bank shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
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 (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 which 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), which 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 Bank 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;
(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
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contributions or Unfunded Pension Liability; provided, however, 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 which is required to conduct insurance business in compliance with all applicable laws and regulations; provided that if such Insurance Subsidiary is not an Active Material Insurance Subsidiary, 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 if such Insurance Subsidiary is not an Active Material Insurance Subsidiary, 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;
(h) of any judicial or administrative order limiting or controlling the insurance business of any Insurance Subsidiary (and not the insurance industry generally) which has been issued or adopted; provided that if such Insurance Subsidiary is not an Active Material Insurance Subsidiary, 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; or
(i) of any actual or proposed changes in any applicable insurance code which 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
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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):
(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. (a) The Company shall, and shall cause each Subsidiary to, maintain with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss 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.
(b) The Company shall maintain (on behalf of itself and its Subsidiaries) with financially sound and reputable independent insurers, director and officer liability insurance on terms and in amounts (i) at least as favorable to the directors and officers thereof as is in effect or in place on the Effective Date or (ii) as is customary for other Persons engaged in the same or similar business.
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:
(a) all material Tax liabilities imposed upon it or its material properties or assets, unless the same (i) are not overdue for a period of more than 60 days or (ii) 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; and
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(b) all material Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.
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 and all applicable Environmental Laws), except (i) for such noncompliance which 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 which 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; Appraisal Reports. (a) 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. The Company shall permit, and shall cause each Subsidiary to permit, representatives and independent contractors of the Agent or any Bank 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, however, when an Event of Default exists the Agent or any Bank may do any of the foregoing at any time during normal business hours and without advance notice.
(b) Until each Active Material Insurance Subsidiary has a financial strength rating of at least B++ by A.M. Best, the Company shall, if requested by the Agent or the Required Banks, cause each Active Material Insurance Subsidiary to permit any actuarial firm designated by the Agent (in consultation
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with the Company) to conduct an analysis of the statutory reserves of such Active Material Insurance Subsidiary; provided that each such analysis shall be carried out at reasonable times and no more than one such analysis with respect to any Active Material Insurance Subsidiary shall be conducted in any Fiscal Year. The Company shall pay the fees and expenses of any actuarial firm retained by the Agent to conduct any such analysis.
Section 6.10. A.M. Best Rating Reduction Remedy. If on any date on or after the 60th date after the Effective Date (the "Reduction Date"), the financial strength rating of any Active Material Insurance Subsidiary by A.M. Best is reduced to less than the Initial A.M. Best Rating of such Active Material Insurance Subsidiary, the Company shall be obligated to retain an investment banker of national recognition (the "Investment Banker") reasonably satisfactory to the Agent to explore strategic alternatives ("Strategic Alternatives") to repaying in full in cash all Obligations (other than contingent indemnification obligations then not due and payable) under the Loan Documents and, if the Required Banks request, all obligations in respect of the New CNC Preferred Stock, which Strategic Alternatives shall include either (x) the sale of one or more of its Subsidiaries ("Sufficient Assets") the value of which will be sufficient to repay in full in cash all such obligations, (y) such other Strategic Alternative(s) approved by the Required Banks or (z) both the sale of Sufficient Assets and one or more other Strategic Alternatives approved by the Required Banks (clauses (x), (y) or (z), individually, an "Approved Strategic Alternative"). At any time, the Required Banks may amend, supplement or otherwise modify the requirements of this Section 6.10, including amending the terms and/or conditions of an Approved Strategic Alternative, releasing the Company from its obligations to proceed with the sale of Sufficient Assets or otherwise. The Company shall, and shall cause each Subsidiary to, diligently pursue and take material steps toward achieving each Approved Strategic Alternative, including, to the extent applicable, the preparation and distribution of offering materials with respect to each Approved Strategic Alternative, facilitating advisors of the Company in making contact with potential purchasers or other relevant parties in their due diligence processes, using reasonable best efforts to prepare, negotiate and execute transaction documents with respect thereto and consummate such transactions. The Company shall provide the Agent with bi-weekly written reports (in form and scope acceptable to the Agent), describing the status of its progress in pursuing, and actions it has taken and is planning on taking toward achieving, each Approved Strategic Alternative. Without limiting the generality of the Company's obligations set forth above, the Company shall have:
(a) Engaged the Investment Banker to explore Strategic Alternatives no later than 30 days after the Reduction Date;
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(b) Distributed offering materials, and provided copies thereof to the Agent, with respect to any Approved Strategic Alternative, no later than 90 days after the Trigger Date;
(c) Used reasonable best efforts to receive written expressions of interest, and provided copies thereof to the Agent, with respect to each Approved Strategic Alternative, no later than 120 days after the Trigger Date;
(d) Used reasonable best efforts to sign the appropriate transaction documents with respect to any Approved Strategic Alternative no later than 180 days after the Trigger Date, unless the Required Banks have agreed to extend such date; and
(e) Used reasonable best efforts to consummate any Approved Strategic Alternative no later than 270 days after the Trigger Date, unless the Required Banks have agreed to extend such date.
Section 6.11. Financial Advisor. Until each Active Material Insurance Subsidiary has a financial strength rating of at least A- by A.M. Best, the Company shall continue the retention of Greenhill or another financial advisor reasonably satisfactory to the Required Banks to review the financial condition and performance of the Company and its Subsidiaries on behalf of the Banks (and the Company agrees to use reasonable best efforts to facilitate such review) and the Company shall pay the reasonable fees, costs and expenses incurred from time to time in connection with such review promptly upon receipt of an invoice for such services.
Section 6.12. Information Regarding Collateral. (a) The Company will furnish to the Agent prompt written notice of any change in (i) any Obligor's name or any trade name used to identify it in the conduct of its business 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 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.
(b) Each year, at the time annual financial statements with respect to the preceding Fiscal Year are delivered pursuant to Section 6.01(a), the Company will deliver to the Agent a certificate of a Responsible Officer (i) setting forth the information required pursuant to Sections A and B of the Perfection Certificate or confirming that there has been no change in such information since the date of any Perfection Certificate delivered on the Effective Date or the date of the most
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recent certificates delivered pursuant to this subsection and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the Transaction Liens for a period of at least 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).
Section 6.13. Casualty and Condemnation. The Company (a) will furnish to the Agent and the Banks 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 Section 2.08.
Section 6.14. 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 Banks 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.
(b) If at any time (i) the aggregate fair market value of the assets of all Immaterial Subsidiaries exceeds $20,000,000 or (ii) the aggregate revenues of all Immaterial Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended exceeds $20,000,000, the Company shall promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to one or more
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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 $20,000,000 and (y) the aggregate revenues of all Immaterial Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended shall not exceed $20,000,000, whereupon each such Subsidiary will become an "Obligor", a "Subsidiary Guarantor" and "Lien Grantor" for purposes of the Loan Documents.
Section 6.15. 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, or that the Agent or the Required Banks may reasonably request, 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) 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 Banks thereof, and, if requested by the Agent or the Required Banks, 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 shall be necessary or reasonably requested by the Agent to grant and perfect or record such Transaction Lien, including actions described in Section 6.15(a), all at the Company's expense.
(c) The Company shall cause all cash and Cash Equivalents of each Obligor to be maintained in one or more Collateral Accounts pending application towards any purpose not prohibited by this Agreement; provided that this paragraph (c) shall not apply to (u) cash and Cash Equivalents maintained in the Professional Escrow Account (as defined in the Plan of Reorganization) so long as (A) such account is funded and maintained solely for the purpose of paying all fees and expenses of Professionals (as defined in the Plan of Reorganization) as contemplated by the Plan of Reorganization, (B) to the extent any such fees or expenses are disallowed pursuant to an order of the Bankruptcy Court, an amount equal to the amount of such disallowed fees or expenses shall be promptly transferred to a Collateral Account and (C) such account is funded on the Effective Date in an amount not exceeding the aggregate amount in respect of such fees and expenses for which the Company has received invoices from the
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Professionals on or prior to the Effective Date, and no amounts are deposited in such account thereafter, (v) cash and Cash Equivalents maintained in any account of CCM so long as (A) such account is funded to satisfy CCM's obligations under expense reimbursement agreements to which CCM is a party and such account is funded in a manner consistent with past practice and (B) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $2,000,000 at any time, (w) cash and Cash Equivalents maintained in any trust account so long as (A) such account is maintained as a trust account solely for the purpose for which it was established and is funded in a manner consistent with past practice and (B) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $2,000,000 at any time, (x) cash and Cash Equivalents maintained in any account of any Obligor which is an investment adviser registered under the Investment Advisers Act of 1940 (including CCM) so long as (A) such account is maintained to satisfy qualified professional asset manager requirements under ERISA and (B) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $2,000,000 at any time, (y) cash and Cash Equivalents maintained in any account of any Obligor which is a broker-dealer registered under the Exchange Act and a member of the NASD (including Conseco Equity Sales, Inc.) so long as (A) such account is maintained to satisfy minimum net regulatory capital requirements imposed by NASD regulations pursuant to the Exchange Act and (B) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $10,000,000 at any time and (z) other accounts that in the aggregate hold less than $1,000,000 of cash and Cash Equivalents at any time.
(d) The Company shall, by no later than the day that is 30 days after the Effective Date, contribute or otherwise invest as capital in one or more of the Insurance Subsidiaries cash in an amount equal to the amount by which the aggregate amount of cash on hand and Cash Equivalents of the Company exceeds $112,000,000 as of the Effective Date. Promptly upon making such contribution or investment, the Company shall provide evidence of the same to the Agent, such evidence to be in form and substance satisfactory to the Agent.
Section 6.16. D&O Loans. On and after the Effective Date, the Company hereby agrees to be obligated to, and the Company shall, use its commercially reasonable efforts to collect, or cause to be collected, in accordance with the applicable Transfer Agreement the D&O Loans other than the D&O Loans whose obligors are eligible to participate and in fact have satisfied all of the requirements (including executing and delivering an Adjustment Agreement) for participation in the D&O Loan repricing plan described in Article V.K.5. of the Plan of Reorganization. The Company will ensure that any amounts so collected by or on behalf of the Company are applied in accordance with Section 2.08.
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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 Banks 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) Capitalized Lease Liabilities and Purchase Money Debt in an aggregate principal amount not to exceed $25,000,000 at any time outstanding;
(ix) intercompany Indebtedness (including Surplus Debentures) among the Company and its Subsidiaries (other than Excluded Subsidiaries) and among the Subsidiaries (other than Excluded Subsidiaries);
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(x) intercompany Indebtedness of Excluded Subsidiaries in an aggregate principal amount not to exceed $5,000,000 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;
(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 $10,000,000 at any time outstanding;
(xiv) other unsecured Indebtedness in an aggregate principal amount not to exceed $50,000,000 at any time outstanding; and
(xv) Contingent Obligations in respect of Indebtedness permitted under
Section 7.01(a)(viii), Section 7.01(a)(xiii) or Section 7.01(a)(xiv).
(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 the New CNC Preferred Stock, 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 Existing CIHC Preferred Stock or any Replacement 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) Liens for Taxes which are not overdue for more than 60 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;
(d) 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
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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);
(e) 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;
(f) 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 which are not overdue for more than 60 days or which are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;
(g) 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;
(h) 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;
(i) 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;
(j) Liens on property of the Company and its Subsidiaries in favor of landlords securing licenses, subleases or leases of property not otherwise prohibited hereunder;
(k) 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;
(l) attachment or judgment Liens not constituting an Event of Default under
Section 8.01(i);
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(m) 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;
(n) customary set-off rights in favor of depositary banks; and
(o) other Liens securing Indebtedness or other obligations in an aggregate amount not exceeding $10,000,000 at any time outstanding.
None of the Liens permitted by this Section (other than Transaction Liens and Liens of the applicable depositary bank to the extent permitted under Section 7.02(n)) shall be permitted on any Collateral Account.
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 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 $5,000,000;
(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
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resulting from all Dispositions described in this clause (ii) consummated after the Effective Date do not exceed $250,000,000 in the aggregate during the term of this Agreement or $100,000,000 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);
(j) the Proposed CIHC Transactions;
(k) 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 $50,000,000) and at least 85% 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.
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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 which (a) would be violated or breached 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 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.
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 which, in the case of any transaction with any Excluded Subsidiary (other than transactions pursuant to and in accordance with
Section 7.01(a)(x), Section 7.03(d)(ii), Section 7.07 or Section 7.09(h)), shall also be in the ordinary course, (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) the Proposed CIHC Transactions and (e) any Restricted Payment permitted by Section 7.08.
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 as described in Schedule 7.06; provided that any Subsidiary that is not an Active Material Insurance 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 (other than
Section 7.03(i)) and (b) if at the time thereof and immediately after giving effect thereto no Event
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of Default shall have occurred and be continuing, (i) any Subsidiary Guarantor (other than New HoldCo, or prior to the consummation of the Proposed CIHC Transactions, CIHC) 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 New HoldCo, or prior to the consummation of the Proposed CIHC Transactions, CIHC, is a party to such transaction, New HoldCo or CIHC, as the case may be, is the surviving entity) and the Company determines in good faith that such action is in the best interests of the Company and is not materially disadvantageous to the Banks, (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; provided further that, notwithstanding the immediately preceding proviso, Bankers National Life Insurance Company may merge with and into any direct or indirect Insurance Subsidiary of Conseco Life Insurance Company of Texas, (iv) the Proposed CIHC Transactions shall be permitted and (v) any Immaterial Subsidiary may liquidate, wind up or dissolve itself if the Company determines in good faith that such liquidation, winding up or dissolution is in the best interests of the Company and is not materially disadvantageous to the Banks.
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), 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) on or after February 5, 2008, CIHC, and following the consummation of the Proposed CIHC Transactions, New HoldCo may redeem the then outstanding shares of the Existing CIHC Preferred Stock or the Replacement Preferred Stock, as the case may be, with the designation "$2.32 Redeemable Cumulative Preferred Stock" for an aggregate redemption price not exceeding $6,500,000, plus accrued and unpaid dividends thereon to the date of redemption;
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(b) the Company may pay dividends solely in the form of shares of common stock or additional shares of New CNC Preferred Stock to the holders of the New CNC Preferred Stock;
(c) so long as no Event of Default is continuing (both before and immediately after giving effect to the payment thereto or the redemption or repurchase thereof), the Company may redeem or repurchase the New CNC Preferred Stock to the extent expressly permitted by Section 2.08(b), Section 2.08(c) and
Section 2.08(e) so long as any amounts that are required to be applied to prepay the Borrowings pursuant to such provisions are so applied;
(d) 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;
(e) 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;
(f) 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; and
(g) the Company may, upon the exercise of a warrant under the New CNC Warrant Agreement, pay cash in lieu of delivering fractional shares of common stock to the holder thereof to the extent the Company is permitted to do so pursuant to the terms of the New CNC Warrant Agreement.
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;
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(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 7.17 and 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 and intercompany Investments necessary to consummate the Proposed CIHC Transactions;
(h) intercompany Investments in Excluded Subsidiaries in the ordinary course of business in an aggregate amount expended not to exceed $5,000,000;
(i) security deposits held in the ordinary course of business;
(j) loans and advances in the ordinary course of business to employees for moving, relocation or travel purposes;
(k) Permitted Swap Obligations;
(l) Acquisitions (other than Acquisitions that constitute Investments permitted by Section 7.09(f) above or Section 7.09(m) below) in an aggregate amount expended not to exceed $250,000,000 during the term of this Agreement or $75,000,000 in any Fiscal Year and/or financed with Capital Stock of the Company
(other than Capital Stock prohibited under Section 7.01(b)); provided that (x) 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 (y) at the time of such Acquisition each Active Material Insurance Subsidiary has, and for the twelve consecutive month period ending on the date of such Acquisition each Active Material Insurance Subsidiary had, a financial strength rating by A.M. Best of at least A-; and
(m) Investments not otherwise permitted hereby in an aggregate amount expended not to exceed $25,000,000 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 prepayment (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 Indebtedness, or any prepayment (whether in cash, securities or other property), including any sinking fund or similar deposit, on
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account of the purchase, redemption, defeasance or termination of any Indebtedness, other than:
(i) prepayments of Indebtedness under the Loan Documents;
(ii) prepayments in respect of Indebtedness of a Subsidiary of the Company owed to the Company or another Subsidiary of the Company or of the Company owed to a Subsidiary of the Company, in each case to the extent prepaid in the ordinary course of business, which Indebtedness is not a prepayment of loans referred to in clause (f) of the definition of "Conseco Available Cash Flow" unless, in the case of this clause (ii), at the time of, and after giving effect on a Pro Forma Basis to, such prepayment, the Company is in compliance with Section 7.12;
(iii) prepayments of Capitalized Lease Liabilities or Purchase Money Debt that become due as a result of the voluntary sale or transfer of the related asset; and
(iv) other prepayments in an aggregate amount expended not to exceed $20,000,000.
(b) Notwithstanding anything herein to the contrary, 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.
(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 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).
(d) 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
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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 New CNC Preferred Stock, the Permitted Preferred Stock and the Permitted Refinancing Preferred Stock) or any related trust in a manner which adversely affects the interests of the Banks, 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.
(e) 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 which do not, individually or in the aggregate, adversely affect the interests of the Banks.
(f) 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 not permit the Debt to Total Capitalization Ratio as of the end of any Fiscal Quarter set forth in Schedule 7.11 to be greater than the ratio set forth in Schedule 7.11 for such Fiscal Quarter.
Section 7.12. Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the end of any Fiscal Quarter set forth in Schedule 7.12 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 in Schedule 7.12 for such Fiscal Quarter.
Section 7.13. Conseco EBITDA. The Company shall not permit the Conseco EBITDA as of the end of any Fiscal Quarter set forth in Schedule 7.13 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 amount set forth in Schedule 7.13 for such Fiscal Quarter.
Section 7.14. Aggregate RBC Ratio. The Company shall not permit the Aggregate RBC Ratio as of the end of any Fiscal Quarter set forth in Schedule 7.14 to be less than the ratio set forth in Schedule 7.14 for such Fiscal Quarter.
Section 7.15. Individual Risk-Based Capital Ratio. The Company shall not permit the Risk-Based Capital Ratio for any Insurance Subsidiary listed in Schedule 7.15 as of the end of any Fiscal Year to be less than the ratio set forth in Schedule 7.15 for such Insurance Subsidiary for such Fiscal Year.
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Section 7.16. 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 ending on or after September 30, 2003 to be less than the Minimum Statutory Capital and Surplus for such Fiscal Quarter.
Section 7.17. 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 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 will not exceed 6% of the aggregate fair market value of all Investments held by the Insurance Subsidiaries; and
(c) any Investment involving Capital Stock, unless, after giving effect thereto, the aggregate fair market value of all Investments of the Insurance Subsidiaries that consist of Capital Stock 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 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) and (y) one or more of the Insurance Subsidiaries shall be permitted to directly or indirectly acquire the remaining interest in 767 LLC (it being understood that (A) on or prior to June 30, 2004, any Investment held directly or indirectly by any Insurance Subsidiary in the building located at 767 5th Avenue, New York, NY 10153 shall not be taken into account for purposes of determining whether any additional Investments may be purchased, made or otherwise acquired hereunder and (B) after such date, any such Investment shall be taken into account for such purpose). If one or more of the percentage thresholds referred in clauses
(a), (b) or (c) 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 7.18. Restrictive Agreements. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to
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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 law (including pursuant to regulatory restrictions), by Official Orders No. 02-1126 and 02-1127 dated October 30, 2002 of the Commissioner of Insurance of the State of Texas (and any replacement orders that are no more restrictive to the Company or its Subsidiaries (it being understood that any term in any such replacement order that provides that the relevant Insurance Subsidiary may not request any dividends or other distributions prior to January 1, 2004 shall be deemed not to be more restrictive to the Company or its Subsidiaries)) or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof and identified on Schedule 7.18 (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 which 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.
Section 7.19. Holding Company Activities. The Company shall not, and shall not permit New HoldCo, or prior to the consummation of the Proposed CIHC Transactions, CIHC, 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 New HoldCo, or prior to the consummation of the Proposed CIHC Transactions, CIHC, 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
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existence on the Effective Date and other liabilities incidental to its existence and permitted business and activities).
Section 7.20. Changes In Fiscal Year. The Company shall not, and shall not permit any of its Subsidiaries to, 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), Section 6.10(a), Section 6.10(b), Section 6.10(e), Section 6.11 or Article 7 (other than Section 7.15 or
Section 7.17) or (ii) Section 7.15 or Section 7.17 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 7.15 or Section 7.17, 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
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any other Loan Document, 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 Bank; 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 (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $20,000,000, 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 $20,000,000; 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
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(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, 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 which 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 $25,000,000 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
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(j) Material Regulatory Matters. (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),
(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 or (iv) any other Material Adverse Regulatory Event occurs, 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 Regulatory 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 the Agent at the direction of the Required Banks) 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), 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 $10,000,000.
(n) Subordination Provisions. Any subordination provisions applicable to the 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 the Permitted Refinancing Indebtedness.
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(o) A.M. Best Rating. (i) The financial strength rating of any Active Material Insurance Subsidiary by A.M. Best shall be less than (A) B at the close of business on the 60th day after the Effective Date, (B) the Initial A.M. Best Rating of such Active Material Insurance Subsidiary at any time during the period commencing on the 60th day after the Effective Date and ending on the A- Effective Date or (C) A- thereafter. For purposes of this paragraph, "A- Effective Date" means August 15, 2005; provided, however, that A- Effective Date shall mean December 31, 2005 if (x) the Debt to Total Capitalization Ratio as of the end of the Fiscal Quarter ended June 30, 2005 is less than 0.270:1.0 and (y) the Aggregate RBC Ratio as of the end of the Fiscal Quarter ended June 30, 2005 is greater than 250%.
(ii) The financial strength rating by A.M. Best of any Active Material Insurance Subsidiary (A) that has a financial strength rating above A- by A.M. Best immediately prior to the Rating Test Date shall be downgraded to below A- by A.M. Best at any time on or after the Rating Test Date or (B) that has a financial strength rating of A- or below by A.M. Best immediately prior to the Rating Test Date shall be downgraded by one or more levels by A.M. Best at any time on or after the Rating Test Date; provided that notwithstanding that a Rating Test Date has occurred, no Event of Default under this clause shall occur until the first date on which the Company would not have been in compliance with
(x) the covenant in Section 7.11 assuming that the non-qualifying portion of preferred stock referred to in clause (i) of the definition of "Rating Test Date" had been treated as Indebtedness and not equity of the Company for the purposes of such covenant or (y) the covenant in Section 7.13 if the Company had not been permitted to add back the charges referred to in clause (ii) of the definition of "Rating Test Date". For purposes of this paragraph, "Rating Test Date" shall mean the earlier of (i) if there is a change in GAAP after the Effective Date as a result of which all or any portion of any preferred stock issued by the Company no longer qualifies as permanent equity of the Company, the date on which such disqualification takes effect and (ii) if the Company takes any charges after the Effective Date to write off any goodwill included on the Company's balance sheet on the Effective Date, the date on which the first such charge was taken.
Section 8.02. Remedies. If any Event of Default occurs, the Agent shall, at the request of, or may, with the consent of, the Required Banks,
(a) declare the Commitment of each Bank to have deemed to have made Loans to be terminated, whereupon such Commitments shall 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
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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 Banks all rights and remedies available to it and the Banks under the Loan Documents or applicable law;
provided, however, 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 Bank to have deemed to have made 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.
Article 9
THE AGENT
Section 9.01. Appointment and Authorization; "Agent". Each Bank hereby irrevocably appoints, designates and authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Bank or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
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Section 9.02. Delegation of Duties. The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. The exculpatory provisions of this Article shall apply to any such agent, employee or attorney-in-fact.
Section 9.03. Liability of Agent. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Bank or participant for any recital, statement, representation or warranty made by the Company or any Subsidiary or Affiliate thereof, or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Company or any Subsidiary or Affiliate thereof or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Bank or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Company or any Subsidiary or Affiliate thereof.
Section 9.04. Reliance by Agent. (a) The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Company or any Subsidiary), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required
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Banks (or such other number of Banks as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Bank that has signed this Agreement 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 a Bank unless the Agent shall have received notice from such Bank prior to the proposed Effective Date specifying its objection thereto.
Section 9.05. Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Banks, unless the Agent shall have received written notice from a Bank or the Company referring to this Agreement, describing such Default and stating that such notice is a "notice of default." The Agent will notify the Banks of its receipt of any such notice. The Agent shall take such action with respect to such Default as may be directed by the Required Banks in accordance with Article 8; provided, however, that unless and until the Agent has received any such direction, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the best interest of the Banks.
Section 9.06. Credit Decision. Each Bank acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of the Company, any Subsidiary or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Bank as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Bank represents to the Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries, and all applicable bank or other regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Company hereunder. Each Bank also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the
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business, prospects, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Agent herein, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Company or any of its Subsidiaries or any of their respective Affiliates which may come into the possession of any Agent-Related Person.
Section 9.07. Indemnification of Agent. Whether or not the transactions contemplated hereby are consummated, the Banks 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, however, that no Bank 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; provided, however, that no action taken in accordance with the directions of the Required Banks shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Bank 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 9.08. Agent in Individual Capacity. BofA and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Company or any of its Subsidiaries and their respective Affiliates as though BofA were not the Agent hereunder and without notice to or consent of the Banks. The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates may receive information regarding the Company or its Subsidiaries or Affiliates (including information that may be subject to confidentiality obligations in favor of the Company, such Subsidiary or such Affiliate) and acknowledge that the Agent shall be under no obligation to provide such information to them. With respect to its Loans, BofA shall have the same rights and powers under this Agreement as any other Bank and may exercise such rights and powers as though it were not
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the Agent, and the terms "Bank" and "Banks" include BofA in its individual capacity.
Section 9.09. Successor Agent. The Agent may resign as Agent upon 30 days' notice to the Banks. If the Agent resigns under this Agreement, the Required Banks shall appoint from among the Banks a successor administrative agent for the Banks, which successor administrative agent shall be consented to by the Company at all times other than during the existence of an Event of Default (which consent of the Company shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Banks and the Company, a successor administrative agent from among the Banks. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor administrative agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article 9 and Sections 10.04 and 10.05 shall inure to its benefit and to the benefit of the Agent-Related Persons as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor administrative agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Banks shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Banks appoint a successor agent as provided for above.
Section 9.10. 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 the Company or any other 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 Banks and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Banks and the Agent and their respective agents and counsel and all other amounts due the Banks and the Agent under Section 2.10 and Section 10.04) allowed in such judicial proceeding; and
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(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 Bank 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 Banks, 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 Section 2.10 and Section 10.04.
Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Bank or to authorize the Agent to vote in respect of the claim of any Bank in any such proceeding.
Section 9.11. Collateral And Guaranty Matters. The Banks 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 or other disposition 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 Banks;
(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(h); and
(c) to release any Subsidiary Guarantor from its obligations under its 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 Banks 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 its Secured Guarantee pursuant to this Section.
Section 9.12. Withholding Tax. (a) If any Bank (including a Bank 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 Bank claims exemption
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from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of the Agent and the Company, to deliver to the Agent and the Company:
(i) if such Bank 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 Bank 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 Bank, 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 Bank and in each third succeeding taxable year of such Bank 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 Bank 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 Bank 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 Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Bank, such Bank 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 Bank. To the extent of such percentage amount, the Agent and the Company will treat such Bank's IRS Form W-8BEN, W-8ECI or other required form as no longer valid.
(c) If any Bank 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 Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax, the Company may withhold from any interest payment to such Bank (or the
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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 Bank is not entitled to submit such forms or other documentation, then the Company may withhold from any interest payment to such Bank (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 Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank 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 Bank 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 Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Agent.
(f) Any amounts withheld from a Bank as a result of the failure of such Bank 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 Banks 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, however, that no such amendment, waiver or consent shall:
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(a) extend or increase the Commitment of any Bank (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Bank;
(b) postpone or delay the maturity of any Loan, or any scheduled date of payment of the principal amount of any Loan under Section 2.07, or any date for the payment of any interest or fees due to the Banks (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 Bank affected thereby; provided that this clause shall not apply to any amendment, waiver or consent that is entered into as contemplated by the definition of "Applicable Margin" for purposes of giving effect to the replacement of S&P or Moody's if such agency ceases to be in the business of rating debt securities;
(c) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which is required for the Banks (or Banks of any Class) or any of them to take any action hereunder, without the written consent of each Bank, or each Bank of such Class, as the case may be;
(d) 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 Bank;
(e) change any provision of any Loan Document in a manner that by its terms adversely affects the rights in respect of payments due to Banks holding Loans of any Class or Sub-Class differently than those holding Loans of any other Class or Sub-Class, without the written consent of Banks holding a majority in interest of the outstanding Loans of each adversely affected Class or Sub-Class, as applicable;
(f) change clause (i) of Section 2.08(d), the second proviso to Section 2.08(d) or Section 2.08(g), without the written consent of Banks holding a majority in interest of the outstanding Tranche A-2 Term Loans and Tranche B-2 Term Loans;
(g) change Section 2.08(f), without the written consent of Banks holding a majority in interest of the outstanding Tranche A-2 Term Loans, Tranche A-3 Term Loans, Tranche B-2 Term Loans and Tranche B-3 Term Loans; or
(h) amend this Section 10.01 or Section 2.13, without the written consent of each Bank;
and, provided further, that (i) no such agreement shall, unless in writing and signed by the Agent in addition to the Required Banks or all the Banks, as the
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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), (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 and
(iii) any amendment, waiver or consent that by its terms affects the rights or duties under this Agreement of one Class or Sub-Class of Banks (but not of any other Class or Sub-Class of Banks) may be effected by an agreement or agreements in writing entered into by the Company and the requisite percentage in interest of the affected Class or Sub-Class of Banks that would be required to consent thereto under this Section if such Class or Sub-Class of Banks were the only Class or Sub-Class of Banks hereunder at the time.
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 Bank, 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, however, that notices and other communications to the Agent pursuant to Article 2 shall not be effective until actually received by such
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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. 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 Banks. The Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, 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 Banks 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 confirmation thereof. The Company shall indemnify each Agent-Related Person and each Bank from all losses, costs, 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 Bank, 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 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
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thereby, including all Attorney Costs, and (b) to pay or reimburse the Agent and each Bank 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 Bank. All amounts due under this Section shall be payable within five 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 Bank and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (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) which 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, 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,
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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 Bank 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 Banks, or the Agent or the Banks 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 Bank 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 Bank 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 Bank and no Bank may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an 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
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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 Bank 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 Bank's Loans at the time owing to it or in the case of an assignment to a Bank or an Affiliate of a Bank or an Approved Fund (as defined in subsection (g) of this Section) with respect to a Bank, 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 $3,000,000 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 Bank's rights and obligations under this Agreement with respect to the Loans assigned; and (iii) the parties to each assignment shall execute and deliver to the Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500. Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this Section, 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 Bank under this Agreement, and the assigning Bank 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 Bank's rights and obligations under this Agreement, such Bank 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 Bank. Any assignment or transfer by a Bank 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 Bank of a participation in such rights and obligations in accordance with subsection (d) of this Section.
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(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 Banks, and the principal amounts of the Loans owing to each Bank 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 Banks may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Bank, at any reasonable time and from time to time upon reasonable prior notice.
(d) Any Bank 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 Bank's rights and/or obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (i) such Bank's obligations under this Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Company, the Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Bank sells such a participation shall provide that such Bank 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 Bank 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 Bank 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 Bank, provided such Participant agrees to be subject to Section 2.13 as though it were a Bank.
(e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or Section 3.03 than the applicable Bank 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 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 Bank.
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(f) Any Bank 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 Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Bank from any of its obligations hereunder or substitute any such pledgee or assignee for such Bank as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Bank; (b) an Affiliate of a Bank; (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 Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity that administers or manages a Bank.
(h) Notwithstanding anything to the contrary contained herein, any Bank 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 Bank in compliance with the other provisions of this Section, (i) no such pledge shall release the pledging Bank 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 Bank 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 Bank 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
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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 the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by the Bank, 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 Bank; provided, however, that any Bank may disclose such information (a) at the request or pursuant to any requirement of any Governmental Authority to which the Bank is subject or in connection with an examination of such Bank 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 Bank 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 Bank'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 Banks hereunder; (h) as to any Bank 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 Bank or such Affiliate; (i) to its Affiliates, provided that such Affiliates are not insurance companies; and (j) to any other party to this Agreement. Notwithstanding anything herein to the contrary, "information" shall not include, and the Agent and each Bank and their respective Affiliates may disclose without limitation of any kind, any information with respect to the "tax treatment" and "tax structure" (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Agent or such Bank or Affiliate relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loans and transactions contemplated hereby.
Section 10.09. Set-off. In addition to any rights and remedies of the Banks provided by law, if an Event of Default shall have occurred and be continuing, each Bank 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
117

Bank or Affiliate to or for the credit or the account of the Company against any and all Obligations owing to such Bank, now or hereafter existing, irrespective of whether or not the Agent or such Bank shall have made demand under this Agreement or any Loan Document and although such Obligations may be contingent or unmatured; provided that neither any Bank nor any of its Affiliates shall be entitled to exercise any such set off with respect to any account that is certified by a Responsible Officer pursuant to a certificate delivered to such Bank (with a copy to the Agent) as being a trust account of the type described in Section 6.15(c)(w); and provided further that until such time as all outstanding Loans have become due and payable (whether pursuant to Article 8 or otherwise), neither any Bank nor any of its Affiliates shall be entitled to exercise any such set off with respect to any account that is certified by a Responsible Officer pursuant to a certificate (which certificate may be included in any account control agreement required by the Security Agreement and applicable to such account) delivered to such Bank (with a copy to the Agent) as being a payroll account if the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $15,000,000. Each Bank agrees promptly to notify the Company and the Agent after any such set-off and application made by such Bank; provided, however, 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 Bank shall notify the Agent in writing of any changes in the address to which notices to the Bank 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.
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 Bank, regardless of any investigation made by the Agent or any Bank 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
118

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 Banks 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. 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 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 Bank 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 10.15. 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
119

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 10.16. 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 Banks and the Agent, and 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]
120

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/William J. Shea
   --------------------------------------------
   Name:  William J. Shea
   Title: President and Chief
          Executive Officer	

BANK OF AMERICA, N.A., as Agent

By:/s/Molly J. Oxford
   --------------------------------------------
   Name:  Molly J. Oxford
   Title: Vice President	

BANK OF AMERICA, N.A., as a Bank

By:/s/Bridget A. Garavalia
   --------------------------------------------
   Name:  Bridget A. Garavalia
   Title: Managing Director	

121

[OTHER SIGNATURE BLOCKS]
122

SCHEDULE 7.11
DEBT TO TOTAL CAPITALIZATION RATIO

---------------------------------------------- ------------------------
            Fiscal Quarter Ending                       Ratio
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2003                                    0.358:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2003                                     0.356:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2004                                        0.351:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                         0.339:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                    0.335:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                     0.333:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                        0.328:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                         0.317:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2005                                    0.313:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2005                                     0.305:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2006                                        0.295:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2006                                         0.284:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2006                                    0.280:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2006                                     0.267:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2007                                        0.261:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2007                                         0.243:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2007                                    0.237:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2007                                     0.216:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2008                                        0.210:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
each Fiscal Quarter thereafter                        0.200:1.0
---------------------------------------------- ------------------------	

SCHEDULE 7.12
INTEREST COVERAGE RATIO

---------------------------------------------- ------------------------
            Fiscal Quarter Ending                       Ratio
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2003                                     1.00:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2004                                        1.00:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                         1.00:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                    1.00:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                     1.05:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                        1.10:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                         1.10:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2005                                    1.36:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2005                                     1.37:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2006                                        1.50:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2006                                         1.50:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2006                                    1.63:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2006                                     1.94:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2007                                        1.99:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2007                                         2.15:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2007                                    2.25:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2007                                     2.25:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2008                                        2.26:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2008                                         2.47:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2008                                    2.62:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2008                                     2.78:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2009                                        2.96:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2009                                         3.17:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2009                                    3.72:1.0
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
each Fiscal Quarter thereafter                        4.50:1.0
---------------------------------------------- ------------------------	

SCHEDULE 7.13
CONSECO EBITDA

---------------------------------------------- ------------------------
            Fiscal Quarter Ending                      Amount
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2004                                      $490,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                       $767,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                 $1,065,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                  $1,066,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                     $1,067,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                      $1,067,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2005                                 $1,068,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2005                                  $1,073,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2006                                     $1,078,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2006                                      $1,083,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2006                                 $1,089,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2006                                  $1,098,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2007                                     $1,108,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2007                                      $1,118,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2007                                 $1,129,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2007                                  $1,141,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2008                                     $1,155,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2008                                      $1,169,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2008                                 $1,185,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2008                                  $1,200,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2009                                     $1,216,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2009                                      $1,233,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2009                                 $1,252,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2009                                  $1,273,000,000
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
each Fiscal Quarter thereafter                     $1,296,000,000
---------------------------------------------- ------------------------	

SCHEDULE 7.14
AGGREGATE RISK-BASED CAPITAL RATIO

---------------------------------------------- ------------------------
            Fiscal Quarter Ending                       Ratio
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2003                                      158%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2003                                       158%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2004                                          167%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2004                                           176%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2004                                      185%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2004                                       195%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
March 31, 2005                                          197%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
June 30, 2005                                           210%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
September 30, 2005                                      215%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
December 31, 2005                                       220%
---------------------------------------------- ------------------------
---------------------------------------------- ------------------------
each Fiscal Quarter thereafter                          225%
---------------------------------------------- ------------------------	

SCHEDULE 7.15
MINIMUM RISK-BASED CAPITAL RATIO

------------- --------------- --------------- ---------------- --------------- ---------------
                                                                                 Each other
                                                                                   Active
                                                  Conseco         Conseco         Material
               Bankers Life    Conseco Life       Annuity          Health        Insurance
               and Casualty     Insurance        Assurance       Insurance       Subsidiary
Fiscal Year      Company         Company          Company         Company
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2003           125%            139%            125%            200%*            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2004           176%            183%            179%             184%            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2005           190%            179%            191%             184%            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2006           191%            178%            191%             191%            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2007           191%            178%            191%             192%            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2008           191%            178%            191%             191%            200%
------------- --------------- --------------- ---------------- --------------- ---------------
------------- --------------- --------------- ---------------- --------------- ---------------
    2009           191%            178%            191%             191%            200%
------------- --------------- --------------- ---------------- --------------- ---------------	

* If the proposed merger of Conseco Life Insurance Company with and into Conseco Health Insurance Company shall have been consummated on or prior to December 31, 2003, the relevant ratio for 2003 shall instead be 183%.

Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of September 10, 2003 by and between CONSECO, INC., a Delaware corporation (the "Issuer"), and the holders of common stock of the Issuer named on the signature pages hereto; which holders shall be limited to (i) holders of 5% or more of such class of the Issuer's securities as of the Effective Date, (ii) other holders who have notified the Issuer in writing that they are members of a "group" (as such term is defined for purposes of the Exchange Act) of holders owning 5% or more of such class of the Issuer's securities as of the Effective Date and (iii) other holders who have notified the Issuer in writing that they are "underwriters" (as such term is defined in Section 1145 of the Bankruptcy Code (as defined below)) (the "Initial Holders").
WHEREAS, concurrently herewith the Issuer is consummating the issuance of Conseco, Inc. common stock, par value $.01 per share (the "Common Stock"), pursuant to a reorganization plan (the "Plan") under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code");
WHEREAS, the Initial Holders will be holders of Common Stock of the Issuer following the confirmation of the Plan;
WHEREAS, the parties hereto wish to enter into this Agreement in order to provide for certain arrangements concerning their relationship following the issuance of the Common Stock;
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. As used herein the following terms shall have the following meanings:
"Affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, "control" when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" has the meaning set forth in the Preamble hereto.
"Appaloosa" means Appaloosa Management, L.P. and its Affiliates.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the Preamble hereto.

"Demand Registration" means a Demand Registration as defined in Section 2.2.
"Effective Date" means the date the Plan becomes effective under the Bankruptcy Code.
"Exchange Act" means the United States Securities Exchange Act of 1934, as amended.
"Holder" shall mean any Initial Holder who holds Registrable Securities or any assignee or transferee of a Registrable Security unless such Registrable Security is acquired in a public distribution pursuant to a registration statement under the Securities Act or pursuant to a transaction exempt from registration under the Securities Act where securities sold in such transaction may be resold without subsequent registration under the Securities Act.
"Issuer" has the meaning set forth in the Preamble hereto.
"Person" means any individual, corporation, partnership, trust, limited liability company, government or governmental agency.
"Piggy-Back Registration" means a Piggy-Back Registration as defined in
Section 2.3.
"Preferred Registration Rights Agreement" means that certain Registration Rights Agreement dated as of even date herewith by and between the Issuer and certain holders of Preferred Stock.
"Preferred Stock" means the Preferred Stock, par value $.01, of the Issuer.
The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.
"Registrable Securities" means (i) the Common Stock, (ii) any shares of Common Stock issued upon conversion or exchange of any securities held by the Initial Holders convertible or exchangeable into Common Stock and (iii) any other securities that may be issued or distributed in respect of such Common Stock by way of any stock split, stock dividend, exchange or other distribution, recapitalization, reclassification, merger, consolidation or similar event. For the purposes of this Agreement, Registrable Securities of any Holder will cease to be Registrable Securities when (a) a registration statement covering such Registrable Securities has been declared effective and such Registrable Securities have been sold pursuant to such effective registration statement or
(b) in the opinion of counsel for the Issuer the sale of such Holder's Registrable Securities are not required to be registered under the Securities Act.
"Securities" means the Common Stock.
"Securities Act" means the United States Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable Securities pursuant to a registration statement under the Securities Act.
2

"Shelf Registration Statement" means a Shelf Registration Statement as defined in Section 2.1.
"Underwriter" means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 Shelf Registration.
(a) As expeditiously as practicable (but in no event after the later of (i) 15 days after the date the Issuer is required to file its first annual report on Form 10-K or quarterly report on Form 10-Q in each case including fresh start financial statements, whichever comes first and (ii) 90 days after the Effective Date), the Issuer shall file with the Commission a registration statement (the "Shelf Registration Statement") relating to the offer and sale of Registrable Securities by the Holders to the public, from time to time, on a delayed or continuous basis (but not involving any underwriting). The Issuer shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission as soon as practicable thereafter.
(b) The Issuer agrees to use its reasonable best efforts to keep the Shelf Registration Statement continuously effective and not to suspend use of the prospectus included therein in order to permit the prospectus included therein to be usable by the Holders until the earlier of: (1) the date all Holders could sell shares free of any volume limitations imposed by Rule 144 of the Securities Act; (2) the date all Holders have disposed of all Registrable Securities; or
(3) three years from the date on which such Shelf Registration Statement was declared effective; provided, that the Issuer shall be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it determines, in its reasonable judgment and upon the advice of counsel, as authorized by a resolution of its Board of Directors, that the filing of such Shelf Registration Statement or the maintenance of effectiveness of such Shelf Registration Statement or prospectus included therein would materially interfere with any material financing, corporate reorganization or other material transaction involving the Issuer or any subsidiary, or would require premature disclosure thereof, and the Issuer promptly gives the Holders written notice of such determination, containing a general statement of the reasons for such postponement or suspension and an approximation of the anticipated delay; provided, however, that the failure to keep the Shelf Registration Statement effective and usable for offers and sales of Registrable Securities for such reasons shall last no longer than 120 days in the aggregate in any 12-month period.
SECTION 2.2 Demand Registration.
(a) Commencing 30 days following the Effective Date, any Holder of Registrable Securities may make a written request substantially in the form of Annex A hereto for registration under the Securities Act of all or part of its or their Registrable Securities (a "Demand Registration"); provided that the Issuer shall not be obligated to effect (i) any
3

Demand Registration, except for the first Demand Registration hereunder, unless the aggregate market value of the Registrable Securities covered by such written requests (calculated as of a recent date as determined by the Issuer) is at least $50,000,000, (ii) more than one Demand Registration in any 6-month period,
(iii) more than three Demand Registrations requested by Appaloosa and more than two Demand Registrations requested by Holders other than Appaloosa, (iv) any Demand Registration within 3 months of a previous registration in which the holders of Registrable Securities were given piggyback rights pursuant to
Section 2.3 and in which there was no reduction in the number of Registrable Securities requested to be included or (v) any Demand Registration at a time when doing so would be in violation of Section 5.3(b) of the Preferred Registration Rights Agreement. Each such request will specify the number of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof and may specify the book-running managing Underwriter and any additional investment bankers and managers to be used in connection with an underwritten offering. Promptly after receipt of requests for the registration of Registrable Securities with an aggregate market value of at least $50,000,000 (determined as aforesaid) or, in the case of the first Demand Registration hereunder, promptly after the receipt of a request for the registration of Registrable Securities, the Issuer will give written notice of such registration request to all other Holders of the Registrable Securities and include in such registration all such Registrable Securities with respect to which the Issuer has received a written request for inclusion therein within 30 calendar days after written notice has been mailed. Each such request will also specify the number of Registrable Securities to be registered and the intended method of disposition thereof. The registration statement to be filed pursuant to a Demand Registration shall not include securities being sold for the account of other persons and entities (other than securities being sold for the account of other persons and entities pursuant to the piggy-back registration rights provisions of the Preferred Registration Rights Agreement) or for the account of the Issuer, unless the Holders of a majority of the Registrable Securities to be included in such Demand Registration consent in writing thereto.
(b) A registration will not count as a Demand Registration until it has become effective and remains effective for not less than 90 days or such shorter period as is required for all of the Registrable Securities so registered to be sold unless such Demand Registration has not become effective due solely to the fault of, or is terminated at the request of, the requesting Holders.
(c) If the Holders of a majority of the Registrable Securities to be registered in a Demand Registration so elect, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. Unless otherwise specified by the Holders of a majority of the Registrable Securities to be included in such Demand Registration, and subject to the approval of such Holders, which shall not be unreasonably withheld, the Issuer shall select the book-running managing Underwriter in connection with such offering and any additional investment bankers and managers to be used in connection with the offering. Any book-running managing Underwriter or additional investment bankers and managers specified by the Holders shall be subject to the approval of the Issuer, which shall not be unreasonably withheld. To the extent 25% or more of the Registrable Securities so requested to be registered are excluded from the offering in accordance with
Section 2.4, the registration of such offering will not count as a Demand Registration.
4

SECTION 2.3 Piggy-Back Registration. If the Issuer proposes to file a registration statement under the Securities Act with respect to an equity offering by the Issuer for its own account or for the account of any of its respective securityholders of any class of equity security (other than a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the Commission) or a registration statement to be filed in connection with an exchange offer or offering of securities solely to the Issuer's existing securityholders), then the Issuer shall give written notice of such proposed filing to the Holders of Registrable Securities as soon as practicable (but in no event less than 30 calendar days before the anticipated filing date), and such notice shall offer such Holders the opportunity to register such number of shares of Registrable Securities as each such Holder may request (a "Piggy-Back Registration"). The Issuer shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Issuer included therein.
SECTION 2.4 Reduction of Offering. Notwithstanding anything to the contrary contained herein, if the managing Underwriter or Underwriters of an offering described in Section 2.2 or 2.3 shall advise the Issuer that, in its judgment, either (a) the size of the offering that the Holders, the Issuer and such other persons intend to make exceeds the size that can be sold in an orderly manner in such offering within a price range acceptable to the Holders, the Issuer or such other persons participating in the offering, or (b) in the case of a Piggy-Back Registration, the type of securities proposed to be offered in such registration statement by the Holders or such other persons would materially adversely affect such offering, then in the case of (a) above, the amount of securities to be offered for the accounts of Holders shall be reduced pro rata (according to the Registrable Securities proposed for registration), to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing Underwriter or Underwriters; provided that, in the case of a Piggy-Back Registration initiated for the account of the Issuer, the amount of Registrable Securities being offered by Holders shall be reduced before the amount of securities being offered by the Issuer is reduced but, subject to (b) above, the proportion by which the amount of Registrable Securities being offered by Holders is reduced shall not exceed the proportion by which the amount of such securities intended to be offered by such other persons or entities is reduced; provided further that, in the case of a Piggy-Back Registration initiated for the account of other persons or entities, then the amount of Registrable Securities being offered by Holders shall be reduced before the amount of securities being offered by such other persons or entities or the Issuer is reduced; and provided further that, in the case of a Demand Registration, if securities are being offered for the account of other persons or entities or for the account of the Issuer, then the amount of such securities being offered by such other persons or entities or by the Issuer shall be reduced before the amount of any Registrable Securities intended to be offered by Holders is reduced; and in the case of (b) above, the type of securities proposed to be offered in such registration statement by Holders or such other persons shall not be included in such registration statement.
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ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1 Filings; Information. Whenever Holders validly request that any Registrable Securities be registered pursuant to Section 2.2 hereof, the Issuer will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and in connection with any such request:
(a) The Issuer will as expeditiously as practicable prepare and file with the Commission a registration statement on any form for which the Issuer then qualifies or which counsel for the Issuer shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed registration statement to become and remain effective for a period of not less than 90 days; provided that if the Issuer shall furnish to the Holders making a request pursuant to Section 2.2 a resolution of its Board of Directors stating that in their good faith judgment it would be disadvantageous to the Issuer or its shareholders for such a registration statement to be filed as expeditiously as practicable or that such registration and offering would materially interfere with any material financing, corporate reorganization or other material transaction involving the Issuer or any of its subsidiaries, or would require premature disclosure thereof, and promptly gives the Holders making such request written notice that such determination has been made (a "Valid Business Reason"), the Issuer shall have a period of not more than 180 days within which to file such registration statement measured from the date the notice is sent to the Holders in accordance with Section 2.2 or, in the case of a registration statement that has been filed in connection with a Demand Registration, the Issuer may cause such registration statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such registration statement until such Valid Business Reason no longer exists.
(b) The Issuer will prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the registration form utilized by the Issuer or by the instructions applicable to such registration form or by the Securities Act or the rules and regulations promulgated thereunder, until the earlier of (i) such time as all of such Registrable Securities and other securities have been disposed of in accordance with the intended methods of disposition or otherwise by the Selling Holders set forth in such registration statement and (ii) 90 days, in either case, after the initial effective date of such registration statement.
(c) The Issuer will, prior to filing a registration statement or prospectus or any amendment or supplement thereto, furnish copies of all such documents to each Selling Holder and each Underwriter, if any, and their respective counsel, which documents shall be subject to the review and comment of such Selling Holder, Underwriter and counsel, and thereafter furnish, without charge, to such Selling Holder and Underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in
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such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder or Underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder. The information contained in such documents are confidential shall not be disclosed by such Selling Holder unless (i) the disclosure of such information is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Selling Holder of such Registrable Securities agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such information is made generally available to the public. Each Selling Holder of such Registrable Securities further agrees that it will, upon learning that disclosure of such information is sought in a court of competent jurisdiction, give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the information deemed confidential.
(d) After the filing of the registration statement, the Issuer will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
(e) The Issuer will use its reasonable best efforts to (i) register or qualify the Registrable Securities under such other securities or blue sky laws of such jurisdictions in the United States as any Selling Holder reasonably (in the light of such Selling Holder's intended plan of distribution) requests and
(ii) cause such Registrable Securities to be registered with or approved by such other federal and state governmental agencies or authorities as may be necessary to enable the Selling Holders to consummate the disposition of such Registrable Securities and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that the Issuer will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.
(f) The Issuer will promptly notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the discovery of any condition or the occurrence of any event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly make available to each Selling Holder any such supplement or amendment.
(g) The Issuer will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities.
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(h) The Issuer will make available for inspection by any Selling Holder, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any such Selling Holder or Underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Issuer (collectively, the "Records") as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Issuer's officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement. Records which the Issuer determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Selling Holder of such Registrable Securities agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such information is made generally available to the public. Each Selling Holder of such Registrable Securities further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
(i) The Issuer will use reasonable best efforts to cause to be furnished to each Selling Holder and to each Underwriter, if any, a signed counterpart, addressed to such Selling Holder or Underwriter, of (i) an opinion or opinions of counsel to the Issuer and (ii) a comfort letter or comfort letters from the Issuer's independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions of counsel or comfort letters, as the case may be, as the managing Underwriter for the offering reasonably requests.
(j) The Issuer will otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering the first fiscal year of the Issuer commencing after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.
(k) The Issuer will use its reasonable best efforts to cause all such Registrable Securities to be listed or quoted on each securities exchange or inter-dealer automated quotation system on which similar securities issued by the Issuer are then listed or quoted.
The Issuer may require each Selling Holder of Registrable Securities to promptly furnish in writing to the Issuer such information regarding such Selling Holder and the distribution of the Registrable Securities as the Issuer may from time to time reasonably request and such other information as may be legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from the Issuer of the discovery of any condition or the happening of any event, in each case of the kind described in Section 3.1(f) hereof, such Selling Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Selling Holder's receipt of the copies of the supplemented or amended prospectus contemplated
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by Section 3.1(f) hereof, and, if so directed by the Issuer, such Selling Holder will deliver to the Issuer (at the Issuer's expense) all copies, other than permanent file copies then in such Selling Holder's possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. In the event the Issuer shall give such notice, the Issuer shall extend the period during which such registration statement shall be maintained effective (including the periods referred to in Sections 3.1(a) and 3.1(b) hereof) by the number of days during the period from and including the date of the giving of notice pursuant to Section 3.1(f) hereof to the date when the Issuer shall make available to the Selling Holders of Registrable Securities covered by such registration statement a prospectus supplemented or amended to conform with the requirements of Section 3.1(f) hereof.
SECTION 3.2 Registration Expenses. In connection with any registration statement required to be filed hereunder, the Issuer shall pay the following expenses incurred in connection with the registration hereunder (the "Registration Expenses"): (i) all registration and filing fees, (ii) fees and expenses of compliance with State securities or "blue sky" laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing, messenger and customary delivery expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with any listing or quotation of the Registrable Securities on any securities exchange or inter-dealer automated quotation system, (vi) reasonable fees and disbursements of counsel for the Issuer and customary fees and expenses for independent certified public accountants retained by the Issuer (including the costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 3.1(i) hereof), (vii) the reasonable fees and expenses of any special experts retained by the Issuer in connection with such registration, and (viii) reasonable fees and expenses of one counsel (who shall be reasonably acceptable to the Issuer) for the Holders.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification by the Issuer. The Issuer agrees to indemnify and hold harmless each Selling Holder of Registrable Securities, its officers, directors, partners, employees, advisors and agents, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, expenses (including without limitation reasonable costs of investigation and fees, disbursements and other charges of counsel) and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any document incorporated by reference in any of the foregoing, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, expenses or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Issuer by such Selling Holder or on
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such Selling Holder's behalf expressly for use therein. The Issuer also agrees to indemnify any Underwriters of the Registrable Securities, their officers and directors and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 4.1.
SECTION 4.2 Indemnification by Holders of Registrable Securities. Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless the Issuer, its officers, directors and agents and each Person, if any, who controls the Issuer within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuer to such Selling Holder, but only with reference to information related to such Selling Holder furnished in writing by such Selling Holder or on such Selling Holder's behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus; provided that the liability of any Selling Holder under this Section 4.2 shall be limited to the net proceeds received by such Selling Holder in the offering giving rise to such liability. In case any action or proceeding shall be brought against the Issuer or its officers, directors or agents or any such controlling person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder shall have the rights and duties given to the Issuer, and the Issuer or its officers, directors or agents or such controlling person shall have the rights and duties given to such Selling Holder, by the preceding paragraph. Each Selling Holder also agrees to indemnify and hold harmless Underwriters of the Registrable Securities, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Issuer provided in this Section 4.2.
SECTION 4.3 Conduct of Indemnification Proceedings. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (an "Indemnified Party") shall promptly notify the person against whom such indemnity may be sought (an "Indemnifying Party") in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without such consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent
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of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability arising out of such proceeding.
SECTION 4.4 Contribution. If the indemnification provided for in this Article 4 is unavailable to the Indemnified Parties in respect of any losses, claims, damages, expenses or liabilities referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, expenses or liabilities (i) as between the Issuer and the Selling Holders on the one hand and the Underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Selling Holders on the one hand and the Underwriters on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Issuer and the Selling Holders on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations, and (ii) as between the Issuer on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Issuer and of each Selling Holder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Selling Holders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Issuer and the Selling Holders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Issuer and the Selling Holders on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer and the Selling Holders or by the Underwriters. The relative fault of the Issuer on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Issuer and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which did not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Securities of such Selling Holder were offered to the public exceeds the
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amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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 Selling Holders' obligations to contribute pursuant to this Section 4.4 are several in proportion to the proceeds of the offering received by each such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Participation in Underwritten Registrations. No Person may participate in any underwritten registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and hereunder.
SECTION 5.2 Rule 144 and Rule 145. The Issuer covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act and that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 and Rule 145 under the Securities Act, as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Issuer will deliver to such Holder a written statement as to whether it has complied with such requirements.
SECTION 5.3 Holdback Agreements. (a) Restrictions on Public Sale by Holder of Registrable Securities. To the extent not inconsistent with applicable law, each Holder whose securities are included in a registration statement agrees not to effect any public sale or distribution of securities of the same class as the securities being registered or a similar security of the Issuer, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or Rule 145 under the Securities Act, during the 14 days prior to, and during the up to 180-day period beginning on, the effective date of such registration statement (except as part of such registration), if and to the extent requested by the Issuer in the case of a non-underwritten public offering or if and to the extent requested by the managing Underwriter or Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Issuer and Others. The Issuer agrees not to effect any public sale or distribution of any securities of the same class as those being registered in accordance with Section 2.2 or Section 2.3 hereof, or any securities convertible into or exchangeable or exercisable for such securities, during the 14 days prior to, and during the
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period beginning on, the effective date requested by the managing Underwriter or Underwriters (which period shall not exceed 90 days) of any registration statement with respect to an underwritten public offering (except as part of such registration statement as provided herein); provided that the provisions of this paragraph (b) shall not prevent the conversion or exchange of any securities pursuant to their terms into or for other securities.
SECTION 5.4 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the implementation of this Agreement.
SECTION 5.5 Governing Law. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of New York.
SECTION 5.6 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.
SECTION 5.7 Entire Agreement; Amendment; Waiver. This Agreement constitutes the full and entire understanding and agreement between the parties hereto with respect to the subject hereof. Neither this Agreement nor any terms hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the holders of at least a majority of the Registrable Securities outstanding as of such time and the Issuer and any such amendment, waiver, discharge or termination shall be binding on all the Holders, but in no event shall the obligation of any Holder hereunder be materially increased, except upon the written consent of such Holder.
SECTION 5.8 Notices, etc. All notices and other communications required or permitted hereunder to the Issuer shall be in writing and shall be mailed by first-class mail, postage prepaid, or delivered by hand, facsimile transmission or by messenger, addressed to it at 11825 North Pennsylvania Street, Carmel, IN 46032, Attn.: General Counsel, or to such other address as the Issuer may specify by notice to the Holders.
SECTION 5.9 Separability. In case any provision of this Agreement 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 5.10 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
SECTION 5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.
* * * * *
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[SIGNATURE PAGE TO COMMON STOCK REGISTRATION RIGHTS AGREEMENT] IN WITNESS
WHEREOF, the parties hereto have set their hands as of the date first above written.
CONSECO, INC.

By:/s/Daniel J. Murphy
   -----------------------------------
   Name:  Daniel J. Murphy
   Title: Senior Vice President and
          Treasurer	

ANGELO GORDON & CO., L.P.,
 on behalf of itself and its affiliates
By: AG Partners, L.P.,
Its General Partner

By:/s/Jeffrey H. Aronson
   -----------------------------------
   Name:  Jeffrey H. Aronson
   Title: Authorized Signatory	

APPALOOSA MANAGEMENT, L.P.,
 on behalf of certain funds for which
it acts as investment advisor

By:/s/Ronald Goldstein
   -----------------------------------
   Name:  Ronald Goldstein
   Title: Authorized Signatory	

[SIGNATURE PAGE TO COMMON STOCK REGISTRATION RIGHTS AGREEMENT]

CONSECO FINANCE CORP.

By:/s/Charles H. Cremens
   -----------------------------------
   Name:  Charles H. Cremens
   Title: President and Chief
          Executive Officer	

[SIGNATURE PAGE TO COMMON STOCK REGISTRATION RIGHTS AGREEMENT]

ANNEX A
FORM OF NOTICE TO BE DELIVERED
IN CONNECTION WITH A REQUEST FOR
DEMAND REGISTRATION
, 200
CONSECO, INC.
 11825 N. Pennsylvania Street
Carmel, IN 46032
Dear Sirs:
Pursuant to Section 2.2 of the Registration Rights Agreement dated September 10, 2003, the undersigned hereby requests Conseco, Inc. (the "Company") to register __________ shares of the Company's Common Stock, of which the undersigned is the registered holder.
[We request that such securities be sold in an underwritten offering
[to be lead-managed by _________________]].
[Name of Transferor]
By:

Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of September 10, 2003 by and between CONSECO, INC., a Delaware corporation (the "Issuer"), and the holders of convertible exchangeable preferred stock of the Issuer named on the signature pages hereto; which holders shall be limited to
(i) holders of 5% or more of such class of the Issuer's securities as of the Effective Date, (ii) other holders who have notified the Issuer in writing that they are members of a "group" (as such term is defined for purposes of the Exchange Act) of holders owning 5% or more of such class of the Issuer's securities as of the Effective Date and (iii) other holders who have notified the Issuer in writing that they are "underwriters" (as such term is defined in
Section 1145 of the Bankruptcy Code (as defined below)) (the "Initial Holders").
WHEREAS, concurrently herewith the Issuer is consummating the issuance of Conseco, Inc. Class A Convertible Exchangeable Preferred Stock (the "Preferred Stock"), pursuant to a reorganization plan (the "Plan") under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code");
WHEREAS, the Initial Holders will be holders of Preferred Stock of the Issuer following the confirmation of the Plan;
WHEREAS, the parties hereto wish to enter into this Agreement in order to provide for certain arrangements concerning their relationship following the issuance of the Preferred Stock;
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. As used herein the following terms shall have the following meanings:
"Affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, "control" when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" has the meaning set forth in the Preamble hereto.
"Angelo Gordon" means Angelo Gordon & Co., L.P. and its Affiliates.
"Bank of America" means Bank of America, N.A. and its Affiliates.

"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $0.01, of the Issuer.
"Common Registration Rights Agreement" means that certain Registration Rights Agreement dated of even date herewith by and between the Issuer and certain holders of Common Stock.
"Demand Registration" means a Demand Registration as defined in Section 2.2.
"Effective Date" means the date the Plan becomes effective under the Bankruptcy Code.
"Exchange Act" means the United States Securities Exchange Act of 1934, as amended.
"Holder" shall mean any Initial Holder who holds Registrable Securities or any assignee or transferee of a Registrable Security unless such Registrable Security is acquired in a public distribution pursuant to a registration statement under the Securities Act or pursuant to a transaction exempt from registration under the Securities Act where securities sold in such transaction may be resold without subsequent registration under the Securities Act.
"Issuer" has the meaning set forth in the Preamble hereto.
"Naugatuck" means Naugatuck Holding Corp. and its Affiliates.
"Person" means any individual, corporation, partnership, trust, limited liability company, government or governmental agency.
"Piggy-Back Registration" means a Piggy-Back Registration as defined in
Section 2.3.
"Preferred Stock" has the meaning set forth in the preamble hereto.
The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.
"Registrable Securities" means (i) the Preferred Stock, (ii) any other securities that may be issued or distributed in respect of such Preferred Stock by way of any stock split, stock dividend, exchange or other distribution, recapitalization, reclassification, merger, consolidation or similar event and
(iii) the shares of Common Stock issuable upon conversion or exchange of the Preferred Stock. For the purposes of this Agreement, Registrable Securities of any Holder will cease to be Registrable Securities when (a) a registration statement covering such Registrable Securities has been declared effective and such Registrable Securities have been sold pursuant to such effective registration statement or (b) in the opinion of counsel for the Issuer the sale of such Holder's Registrable Securities are not required to be registered under the Securities Act.
"Securities" means the Preferred Stock.
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"Securities Act" means the United States Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable Securities pursuant to a registration statement under the Securities Act.
"Shelf Registration Statement" means a Shelf Registration Statement as defined in Section 2.1.
"Underwriter" means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 Shelf Registration.
(a) As expeditiously as practicable (but in no event after the later of (i) 15 days after the date the Issuer is required to file its first annual report on Form 10-K or quarterly report on Form 10-Q in each case including fresh start financial statements, whichever comes first and (ii) 90 days after the Effective Date), the Issuer shall file with the Commission a registration statement (the "Shelf Registration Statement") relating to the offer and sale of Registrable Securities by the Holders to the public, from time to time, on a delayed or continuous basis (but not involving any underwriting). The Issuer shall use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission as soon as practicable thereafter.
(b) The Issuer agrees to use its reasonable best efforts to keep the Shelf Registration Statement continuously effective and not to suspend use of the prospectus included therein in order to permit the prospectus included therein to be usable by the Holders until the earlier of: (1) the date all Holders could sell shares free of any volume limitations imposed by Rule 144 of the Securities Act; (2) the date all Holders have disposed of all Registrable Securities; or
(3) three years from the date on which such Shelf Registration Statement was declared effective; provided, that the Issuer shall be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it determines, in its reasonable judgment and upon the advice of counsel, as authorized by a resolution of its Board of Directors, that the filing of such Shelf Registration Statement or the maintenance of effectiveness of such Shelf Registration Statement or prospectus included therein would materially interfere with any material financing, corporate reorganization or other material transaction involving the Issuer or any subsidiary, or would require premature disclosure thereof, and the Issuer promptly gives the Holders written notice of such determination, containing a general statement of the reasons for such postponement or suspension and an approximation of the anticipated delay; provided, however, that the failure to keep the Shelf Registration Statement effective and usable for offers and sales of Registrable Securities for such reasons shall last no longer than 120 days in the aggregate in any 12-month period.
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SECTION 2.2 Demand Registration.
(a) Commencing 30 days following the Effective Date, any Holder of Registrable Securities may make a written request substantially in the form of Annex A hereto for registration under the Securities Act of all or part of its or their Registrable Securities (a "Demand Registration"); provided that the Issuer shall not be obligated to effect (i) any Demand Registration, except for the first Demand Registration hereunder, unless the aggregate market value of the Registrable Securities covered by such written requests (calculated as of a recent date as determined by the Issuer) is at least $50,000,000; provided that in the case of a Demand Registration which may only be requested by Angelo Gordon, Bank of America or Naugatuck (as provided in clause (iii) below) the aggregate market value of the Registrable Securities covered by such written requests (calculated as of a recent date as determined by the Issuer) is at least $25,000,000, (ii) more than one Demand Registration in any 6-month period,
(iii) more than five Demand Registrations in total (of which, one such Demand Registration may only be requested by Angelo Gordon, one such Demand Registration may only be requested by Bank of America and one such Demand Registration may only be requested by Naugatuck), (iv) any Demand Registration within 3 months of a previous registration in which the holders of Registrable Securities were given piggyback rights pursuant to Section 2.3 and in which there was no reduction in the number of Registrable Securities requested to be included or (v) any Demand Registration at a time when doing so would be in violation of Section 5.3(b) of the Common Registration Rights Agreement. Each such request will specify the number of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof and may specify the book-running managing Underwriter and any additional investment bankers and managers to be used in connection with an underwritten offering. Promptly after receipt of requests for the registration of Registrable Securities with an aggregate market value of at least $50,000,000 (or $25,000,000 for a Demand Registration which may only be requested by Angelo Gordon, Bank of America or Naugatuck, as provided in clause (iii) above), in each case, determined as aforesaid or, in the case of the first Demand Registration hereunder, promptly after the receipt of a request for the registration of Registrable Securities, the Issuer will give written notice of such registration request to all other Holders of the Registrable Securities and include in such registration all such Registrable Securities with respect to which the Issuer has received a written request for inclusion therein within 30 calendar days after written notice has been mailed. Each such request will also specify the number of Registrable Securities to be registered and the intended method of disposition thereof. The registration statement to be filed pursuant to a Demand Registration shall not include securities being sold for the account of other persons and entities (other than securities being sold for the account of other persons and entities pursuant to the piggy-back registration rights provisions of the Common Registration Rights Agreement) or for the account of the Issuer, unless the Holders of a majority of the Registrable Securities to be included in such Demand Registration consent in writing thereto.
(b) A registration will not count as a Demand Registration until it has become effective and remains effective for not less than 90 days or such shorter period as is required for all of the Registrable Securities so registered to be sold unless such Demand Registration has not become effective due solely to the fault of, or is terminated at the request of, the requesting Holders.
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(c) If the Holders of a majority of the Registrable Securities to be registered in a Demand Registration so elect, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. Unless otherwise specified by the Holders of a majority of the Registrable Securities to be included in such Demand Registration, and subject to the approval of such Holders, which shall not be unreasonably withheld, the Issuer shall select the book-running managing Underwriter in connection with such offering and any additional investment bankers and managers to be used in connection with the offering. Any book-running managing Underwriter or additional investment bankers and managers specified by the Holders shall be subject to the approval of the Issuer, which shall not be unreasonably withheld. To the extent 25% or more of the Registrable Securities so requested to be registered are excluded from the offering in accordance with
Section 2.4, the registration of such offering will not count as a Demand Registration.
SECTION 2.3 Piggy-Back Registration. If the Issuer proposes to file a registration statement under the Securities Act with respect to an equity offering by the Issuer for its own account or for the account of any of its respective securityholders of any class of equity security (other than a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the Commission) or a registration statement to be filed in connection with an exchange offer or offering of securities solely to the Issuer's existing securityholders), then the Issuer shall give written notice of such proposed filing to the Holders of Registrable Securities as soon as practicable (but in no event less than 30 calendar days before the anticipated filing date), and such notice shall offer such Holders the opportunity to register such number of shares of Registrable Securities as each such Holder may request (a "Piggy-Back Registration"). The Issuer shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Issuer included therein.
SECTION 2.4 Reduction of Offering. Notwithstanding anything to the contrary contained herein, if the managing Underwriter or Underwriters of an offering described in Section 2.2 or 2.3 shall advise the Issuer that, in its judgment, either (a) the size of the offering that the Holders, the Issuer and such other persons intend to make exceeds the size that can be sold in an orderly manner in such offering within a price range acceptable to the Holders, the Issuer or such other persons participating in the offering, or (b) in the case of a Piggy-Back Registration, the type of securities proposed to be offered in such registration statement by the Holders or such other persons would materially adversely affect such offering, then in the case of (a) above, the amount of securities to be offered for the accounts of Holders shall be reduced pro rata (according to the Registrable Securities proposed for registration), to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing Underwriter or Underwriters; provided that, in the case of a Piggy-Back Registration initiated for the account of the Issuer, the amount of Registrable Securities being offered by Holders shall be reduced before the amount of securities being offered by the Issuer is reduced but, subject to (b) above, the proportion by which the amount of Registrable Securities being offered by Holders is reduced shall not exceed the proportion by which the amount of such securities intended to be offered by such other persons or entities is reduced; provided further that, in the case of a Piggy-Back Registration initiated for the account of other persons or entities, then the amount of Registrable Securities being offered by Holders shall be reduced
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before the amount of securities being offered by such other persons or entities or the Issuer is reduced; and provided further that, in the case of a Demand Registration, if securities are being offered for the account of other persons or entities or for the account of the Issuer, then the amount of such securities being offered by such other persons or entities or by the Issuer shall be reduced before the amount of any Registrable Securities intended to be offered by Holders is reduced; and in the case of (b) above, the type of securities proposed to be offered in such registration statement by Holders or such other persons shall not be included in such registration statement.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1 Filings; Information. Whenever Holders validly request that any Registrable Securities be registered pursuant to Section 2.2 hereof, the Issuer will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and in connection with any such request:
(a) The Issuer will as expeditiously as practicable prepare and file with the Commission a registration statement on any form for which the Issuer then qualifies or which counsel for the Issuer shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed registration statement to become and remain effective for a period of not less than 90 days; provided that if the Issuer shall furnish to the Holders making a request pursuant to Section 2.2 a resolution of its Board of Directors stating that in their good faith judgment it would be disadvantageous to the Issuer or its shareholders for such a registration statement to be filed as expeditiously as practicable or that such registration and offering would materially interfere with any material financing, corporate reorganization or other material transaction involving the Issuer or any of its subsidiaries, or would require premature disclosure thereof, and promptly gives the Holders making such request written notice that such determination has been made (a "Valid Business Reason"), the Issuer shall have a period of not more than 180 days within which to file such registration statement measured from the date the notice is sent to the Holders in accordance with Section 2.2 or, in the case of a registration statement that has been filed in connection with a Demand Registration, the Issuer may cause such registration statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such registration statement until such Valid Business Reason no longer exists.
(b) The Issuer will prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the registration form utilized by the Issuer or by the instructions applicable to such registration form or by the Securities Act or the rules and regulations promulgated thereunder, until the earlier of (i) such time as all of such Registrable Securities and other securities have been disposed of in accordance with the intended methods of disposition or otherwise by the Selling Holders set
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forth in such registration statement and (ii) 90 days, in either case, after the initial effective date of such registration statement.
(c) The Issuer will, prior to filing a registration statement or prospectus or any amendment or supplement thereto, furnish copies of all such documents to each Selling Holder and each Underwriter, if any, and their respective counsel, which documents shall be subject to the review and comment of such Selling Holder, Underwriter and counsel, and thereafter furnish, without charge, to such Selling Holder and Underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder or Underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder. The information contained in such documents are confidential shall not be disclosed by such Selling Holder unless (i) the disclosure of such information is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Selling Holder of such Registrable Securities agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such information is made generally available to the public. Each Selling Holder of such Registrable Securities further agrees that it will, upon learning that disclosure of such information is sought in a court of competent jurisdiction, give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the information deemed confidential.
(d) After the filing of the registration statement, the Issuer will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
(e) The Issuer will use its reasonable best efforts to (i) register or qualify the Registrable Securities under such other securities or blue sky laws of such jurisdictions in the United States as any Selling Holder reasonably (in the light of such Selling Holder's intended plan of distribution) requests and
(ii) cause such Registrable Securities to be registered with or approved by such other federal and state governmental agencies or authorities as may be necessary to enable the Selling Holders to consummate the disposition of such Registrable Securities and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that the Issuer will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.
(f) The Issuer will promptly notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the discovery of any condition or the occurrence of any event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to
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the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly make available to each Selling Holder any such supplement or amendment.
(g) The Issuer will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities.
(h) The Issuer will make available for inspection by any Selling Holder, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any such Selling Holder or Underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Issuer (collectively, the "Records") as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Issuer's officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement. Records which the Issuer determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Selling Holder of such Registrable Securities agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such information is made generally available to the public. Each Selling Holder of such Registrable Securities further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
(i) The Issuer will use reasonable best efforts to cause to be furnished to each Selling Holder and to each Underwriter, if any, a signed counterpart, addressed to such Selling Holder or Underwriter, of (i) an opinion or opinions of counsel to the Issuer and (ii) a comfort letter or comfort letters from the Issuer's independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions of counsel or comfort letters, as the case may be, as the managing Underwriter for the offering reasonably requests.
(j) The Issuer will otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering the first fiscal year of the Issuer commencing after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.
(k) The Issuer will use its reasonable best efforts to cause all such Registrable Securities to be listed or quoted on each securities exchange or inter-dealer automated quotation system on which similar securities issued by the Issuer are then listed or quoted.
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The Issuer may require each Selling Holder of Registrable Securities to promptly furnish in writing to the Issuer such information regarding such Selling Holder and the distribution of the Registrable Securities as the Issuer may from time to time reasonably request and such other information as may be legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from the Issuer of the discovery of any condition or the happening of any event, in each case of the kind described in Section 3.1(f) hereof, such Selling Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Selling Holder's receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3.1(f) hereof, and, if so directed by the Issuer, such Selling Holder will deliver to the Issuer (at the Issuer's expense) all copies, other than permanent file copies then in such Selling Holder's possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. In the event the Issuer shall give such notice, the Issuer shall extend the period during which such registration statement shall be maintained effective (including the periods referred to in Sections 3.1(a) and 3.1(b) hereof) by the number of days during the period from and including the date of the giving of notice pursuant to Section 3.1(f) hereof to the date when the Issuer shall make available to the Selling Holders of Registrable Securities covered by such registration statement a prospectus supplemented or amended to conform with the requirements of Section 3.1(f) hereof.
SECTION 3.2 Registration Expenses. In connection with any registration statement required to be filed hereunder, the Issuer shall pay the following expenses incurred in connection with the registration hereunder (the "Registration Expenses"): (i) all registration and filing fees, (ii) fees and expenses of compliance with State securities or "blue sky" laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing, messenger and customary delivery expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with any listing or quotation of the Registrable Securities on any securities exchange or inter-dealer automated quotation system, (vi) reasonable fees and disbursements of counsel for the Issuer and customary fees and expenses for independent certified public accountants retained by the Issuer (including the costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 3.1(i) hereof), (vii) the reasonable fees and expenses of any special experts retained by the Issuer in connection with such registration, and (viii) reasonable fees and expenses of one counsel (who shall be reasonably acceptable to the Issuer) for the Holders.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification by the Issuer. The Issuer agrees to indemnify and hold harmless each Selling Holder of Registrable Securities, its officers, directors, partners, employees, advisors and agents, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, expenses (including without limitation
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reasonable costs of investigation and fees, disbursements and other charges of counsel) and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any document incorporated by reference in any of the foregoing, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, expenses or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Issuer by such Selling Holder or on such Selling Holder's behalf expressly for use therein. The Issuer also agrees to indemnify any Underwriters of the Registrable Securities, their officers and directors and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 4.1.
SECTION 4.2 Indemnification by Holders of Registrable Securities. Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless the Issuer, its officers, directors and agents and each Person, if any, who controls the Issuer within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuer to such Selling Holder, but only with reference to information related to such Selling Holder furnished in writing by such Selling Holder or on such Selling Holder's behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus; provided that the liability of any Selling Holder under this Section 4.2 shall be limited to the net proceeds received by such Selling Holder in the offering giving rise to such liability. In case any action or proceeding shall be brought against the Issuer or its officers, directors or agents or any such controlling person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder shall have the rights and duties given to the Issuer, and the Issuer or its officers, directors or agents or such controlling person shall have the rights and duties given to such Selling Holder, by the preceding paragraph. Each Selling Holder also agrees to indemnify and hold harmless Underwriters of the Registrable Securities, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Issuer provided in this Section 4.2.
SECTION 4.3 Conduct of Indemnification Proceedings. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (an "Indemnified Party") shall promptly notify the person against whom such indemnity may be sought (an "Indemnifying Party") in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that
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the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without such consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability arising out of such proceeding.
SECTION 4.4 Contribution. If the indemnification provided for in this Article 4 is unavailable to the Indemnified Parties in respect of any losses, claims, damages, expenses or liabilities referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, expenses or liabilities (i) as between the Issuer and the Selling Holders on the one hand and the Underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Selling Holders on the one hand and the Underwriters on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Issuer and the Selling Holders on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations, and (ii) as between the Issuer on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Issuer and of each Selling Holder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Selling Holders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Issuer and the Selling Holders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Issuer and the Selling Holders on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer and the Selling Holders or by the Underwriters. The relative fault of the Issuer on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
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The Issuer and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which did not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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 Selling Holders' obligations to contribute pursuant to this Section 4.4 are several in proportion to the proceeds of the offering received by each such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Participation in Underwritten Registrations. No Person may participate in any underwritten registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and hereunder.
SECTION 5.2 Rule 144 and Rule 145. The Issuer covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act and that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 and Rule 145 under the Securities Act, as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Issuer will deliver to such Holder a written statement as to whether it has complied with such requirements.
SECTION 5.3 Holdback Agreements. (a) Restrictions on Public Sale by Holder of Registrable Securities. To the extent not inconsistent with applicable law, each Holder whose securities are included in a registration statement agrees not to effect any public sale or distribution of securities of the same class as the securities being registered or a similar security
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of the Issuer, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or Rule 145 under the Securities Act, during the 14 days prior to, and during the up to 180-day period beginning on, the effective date of such registration statement (except as part of such registration), if and to the extent requested by the Issuer in the case of a non-underwritten public offering or if and to the extent requested by the managing Underwriter or Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Issuer and Others. The Issuer agrees not to effect any public sale or distribution of any securities of the same class as those being registered in accordance with Section 2.2 or Section 2.3 hereof, or any securities convertible into or exchangeable or exercisable for such securities, during the 14 days prior to, and during the period beginning on, the effective date requested by the managing Underwriter or Underwriters (which period shall not exceed 90 days) of any registration statement with respect to an underwritten public offering (except as part of such registration statement as provided herein); provided that the provisions of this paragraph
(b) shall not prevent the conversion or exchange of any securities pursuant to their terms into or for other securities.
SECTION 5.4 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the implementation of this Agreement.
SECTION 5.5 Governing Law. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of New York.
SECTION 5.6 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.
SECTION 5.7 Entire Agreement; Amendment; Waiver. This Agreement constitutes the full and entire understanding and agreement between the parties hereto with respect to the subject hereof. Neither this Agreement nor any terms hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the holders of at least a majority of the Registrable Securities outstanding as of such time and the Issuer and any such amendment, waiver, discharge or termination shall be binding on all the Holders, but in no event shall the obligation of any Holder hereunder be materially increased, except upon the written consent of such Holder.
SECTION 5.8 Notices, etc. All notices and other communications required or permitted hereunder to the Issuer shall be in writing and shall be mailed by first-class mail, postage prepaid, or delivered by hand, facsimile transmission or by messenger, addressed to it at 11825 North Pennsylvania Street, Carmel, IN 46032, Attn.: General Counsel, or to such other address as the Issuer may specify by notice to the Holders.
SECTION 5.9 Separability. In case any provision of this Agreement 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.
13

SECTION 5.10 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
SECTION 5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first above written.
CONSECO, INC.

By:/s/Daniel J. Murphy
   ------------------------------------------
   Name:  Daniel J. Murphy
   Title: Senior Vice President and
          Treasurer	

ANGELO GORDON & CO., L.P.,
 on behalf of itself and its affiliates
By: AG Partners, L.P.,
Its General Partner

By:/s/Jeffrey H. Aronson
   -------------------------------------------
   Name:  Jeffrey H. Aronson
   Title: Authorized Signatory	

BANK OF AMERICA, N.A.

By:/s/Bridget A. Garavalia
   -------------------------------------------
   Name:  Bridget A. Garavalia
   Title: Managing Director	

NAUGATUCK HOLDING CORP.

By:/s/Charles O. Freegood
   -------------------------------------------
   Name:  Charles O. Freegood
   Title: President	

[SIGNATURE PAGE TO PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT]

ANNEX A
FORM OF NOTICE TO BE DELIVERED
IN CONNECTION WITH A REQUEST FOR
DEMAND REGISTRATION
, 200
CONSECO, INC.
 11825 N. Pennsylvania Street
Carmel, IN 46032
Dear Sirs:
Pursuant to Section 2.2 of the Registration Rights Agreement dated September 10, 2003, the undersigned hereby requests Conseco, Inc. (the "Company") to register __________ shares of the Company's Convertible Exchangeable Preferred Stock, of which the undersigned is the registered holder.
[We request that such securities be sold in an underwritten offering [to be lead-managed by ____________]].
[Name of Transferor]
By:

For Release Immediate
Contacts (News Media) Jim Rosensteele, SVP, Corporate Communications 317.817.4418 (News Media) Brenda Adrian, Sitrick and Company Inc. 212.573.6100 (Investors) Tammy Hill, SVP, Investor Relations 317.817.2893
Conseco, Inc. Announces Confirmation of Plan of Reorganization
Indianapolis, Ind., Sept. 9, 2003: Conseco, Inc. (OTCBB:CNCEQ) today announced that the U.S. Bankruptcy Court confirmed the Company's Sixth Amended Joint Plan of Reorganization. Confirmation of the plan clears the way for the Company's emergence from Chapter 11, which is expected shortly.
William J. Shea, Conseco's president and chief executive officer, said, "Today we thank the associates and outside experts who worked so hard to help us navigate the bankruptcy process. To have completed such a large and complex restructuring in less than nine months is truly a remarkable achievement. We thank the insurance regulators, distribution partners, customers and suppliers who supported us at each step along the way. And we especially thank all those associates who demonstrated their resilience by continuing to write and issue new business, process and pay claims, and serve customers and agents."
"Because of this tremendous team effort, Conseco will emerge as a re-energized company with greatly reduced debt and a single business focus," Shea said. The reorganization will eliminate approximately $5.2 billion of debt and trust preferred securities. "As we emerge, we intend to apply the same effort to building our capital and growing profitably," Shea said.
Conseco, Inc. filed for protection under Chapter 11 of the federal bankruptcy code in December 2002. Under the Plan of Reorganization, the Company's existing bank debt will be cancelled as of the effective date in favor of a new credit facility. The Company's outstanding bonds, trust preferred securities and common stock also will be cancelled. Shares of new common stock, new preferred stock and new warrants will be issued by the company's successor, Conseco, Inc., a Delaware corporation, and distributed to various classes of the company's creditors as outlined in the Plan of Reorganization upon emergence.
The court today also confirmed Conseco Finance's reorganization plan. Both reorganization plans, confirmation orders and related documents will be available at http://www.bmccorp.net/conseco.
Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for the financial future.
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Conseco (2) Sept. 9, 2003
Cautionary Statement Regarding Forward-Looking Statements: All statements, trend analyses and other information contained in this report and elsewhere (such as in filings by Conseco with the Securities and Exchange Commission, press releases, presentations by Conseco or its management or oral statements) relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempts," "seeks," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic" and other similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) the ability of Conseco to consummate one or more plans of reorganization with respect to the Chapter 11 Cases under the Bankruptcy Code filed by Conseco and some of its subsidiaries, including CFC and CIHC; (ii) the potential lingering adverse impact of the Chapter 11 Cases on Conseco's operations, management and employees; (iii) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) Conseco's ability to sell its products, the market value of Conseco's investments and the lapse rate and profitability of policies; (iv) Conseco's ability to achieve anticipated synergies and levels of operational efficiencies and to achieve the goals of recent restructuring initiatives undertaken at Conseco Insurance Group; (v) customer response to new products, distribution channels, marketing initiatives and the Chapter 11 Cases; (vi) mortality, morbidity, usage of health care services and other factors which may affect the profitability of Conseco's insurance products; (vii) performance of our investments; (viii) changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of Conseco's products; (ix) increasing competition in the sale of insurance and annuities; (x) regulatory changes or actions, including those relating to regulation of the financial affairs of our insurance companies, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; (xi) actions by rating agencies and the effects of past or future actions by these agencies on Conseco's business, including the impact of recent rating downgrades; (xii) the ultimate outcome of lawsuits filed against Conseco;
(xiii) the risk factors or uncertainties listed from time to time in Conseco's filings with the SEC and with the Bankruptcy Court in connection with the Chapter 11 Cases; (xiv) our ability to continue as a going concern; and (xv) our ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 proceedings from time to time. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.
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For Release Immediate
Contacts (News Media) Jim Rosensteele, SVP, Corporate Communications 317.817.4418 (News Media) Brenda Adrian, Sitrick and Company Inc. 212.573.6100 (Investors) Tammy Hill, SVP, Investor Relations 317.817.2893
Conseco, Inc. Emerges from Chapter 11
Indianapolis, Ind., Sept. 10, 2003. Conseco, Inc. announced today that its sixth amended joint plan of reorganization under Chapter 11, which was confirmed by the U.S. Bankruptcy Court yesterday, has become effective. William J. Shea, Conseco's president and CEO, said, "We are very pleased to announce that Conseco has emerged from bankruptcy court protection as a financially stable company now totally focused on the insurance business."
New capital structure
Under the terms of the plan, the company has emerged as a Delaware corporation with a new capital structure consisting of: (1) a $1.3 billion secured bank facility; (2) new convertible preferred stock with an aggregate liquidation preference of approximately $860 million; (3) new warrants to purchase 6 million shares of common stock at an exercise price of $27.60 per share; and (4) approximately 100 million shares of new common stock. The company expects to issue these securities shortly, pursuant to the terms of the plan.
The new common stock has been approved for listing on the New York Stock Exchange (NYSE) under the symbol "CNO," and the new warrants have been approved for listing on the NYSE under the symbol "CNO WS." "Regular way" trading of the new common stock and new warrants is expected to commence in the near future. The common stock is currently trading on a "when issued" basis in the over-the-counter market under the symbol "CNSJV." The company's former common stock (OTCBB:CNCEQ) has been cancelled.
The new convertible preferred stock will be distributed to the prepetition lenders, the new warrants will be distributed to the holders of the Trust Preferred Securities commonly known as "TOPrS," and the new common stock will be distributed to the holders of the following prepetition claims: (1) bonds, which were separately classified as the Exchange Note Claims (those who had exchanged their bonds in 2002) and the Original Note Claims (those who had not); (2) general unsecured claims against Conseco, Inc.; (3) general unsecured claims against CIHC, Incorporated (CIHC); and (4) TOPrS. The initial distribution of approximately 98 million shares of new common stock is expected to be made as follows:
o Exchange Note Claims will receive approximately 60.6 million shares, which corresponds to a projected recovery of approximately 72%.
o Original Note Claims will receive approximately 32.3 million shares, which corresponds to a projected recovery of approximately 42%.
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Conseco (2) Sept. 10, 2003
o Conseco General Unsecured Claims will receive approximately 1 million shares, which corresponds to a projected recovery of approximately 22%.
o CIHC General Unsecured Claims will receive approximately 1.9 million shares, which corresponds to a projected recovery of approximately 100%.
o TOPrS will receive 1.5 million shares, which corresponds to a projected recovery of approximately 1.27% (excluding the new Conseco warrants and other collection rights).
In each case, the projected recoveries are based on an estimated value of the common stock of $16.40 per share for purposes of the plan. The initial distributions are expected to represent approximately 98% of all new common stock to be distributed under the plan. The company may make additional distributions to holders of prepetition bonds and/or general unsecured claims on account of disputed claims. Under the plan, there will be only one distribution of new common stock to holders of the TOPrS.
New board of directors takes office
"As part of the reorganization," Shea said, "we have selected a new board of directors. I have been joined on the Board by six new independent directors selected by the official creditors committee through a formal selection process:"
o R. Glenn Hilliard (60) (the non-executive chairman of the board) is the retired former chairman and chief executive officer of ING Americas. As CEO of ING Americas, he was responsible for insurance, funds and retail banking operations in North and South America. He also served as chairman of the ING America Insurance Holdings Board.
o Philip Roberts (61) is a consultant for investment management firms, advising on mergers, acquisitions and product development, having retired as chief investment officer of the trust business at Mellon Financial Corporation.
o Neal Schneider (58) is managing partner of the New York office of Smart and Associates LLP, a business advisory and accounting firm.
o Mike Shannon (45) is the co-founder and current president and chief executive officer of KSL Resorts, a firm that owns and operates resort hotels and golf courses throughout the United States.
o Michael Tokarz (53) is a founding member and current CEO of Tokarz Cadigan Partners LLC, a private investment firm focused on middle-market companies.
o John Turner (62) is chairman of Hillcrest Capital Partners, a private equity firm, and is the retired vice chairman and member of the executive committee for ING Americas.
(Visit conseco.com for more detailed biographical information on the members of Conseco's new board.)
R. Glenn Hilliard, Conseco's new non-executive chairman, said: "Our near-term goal is to build the capital in the insurance companies in order to put Conseco on a track toward steady growth. Longer-term, our goal is to build a company that delivers meaningful value to our customers, our shareholders, our distribution partners and our associates. I'm convinced that this management team and board will make that happen."
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Conseco (3) Sept. 10, 2003
"Fresh start" accounting to be implemented Conseco will adopt "fresh-start" reporting as of its emergence from Chapter 11, in accordance with accounting rules. These rules require Conseco to revalue its assets and liabilities to current estimated fair value, re-establish shareholders' equity at the reorganization value determined in connection with the plan, and record any portion of the reorganization value which cannot be attributed to specific tangible or identified intangible assets as goodwill. The adoption of fresh start accounting will have a material effect on Conseco's financial statements. As a result, the company's financial statements published for periods following Sept. 9, 2003, will not be comparable with those prepared before that date.
The Sixth Amended Joint Plan of Reorganization is available at http://www.bmccorp.net/conseco.
Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial future.
Note on forward-looking statements: Some of the statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include those that use words such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempts," "seeks," "should," "could," "goal," and other similar expressions. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things:
(i) the potential lingering adverse impact of the Chapter 11 petitions on Conseco's operations, management and employees; (ii) the successful consummation of the plan of reorganization of Conseco Finance; (iii) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) Conseco's ability to sell its products, its ability to make loans and access capital resources and the costs associated therewith, the market value of Conseco's investments, the lapse rate and profitability of policies, and the level of defaults and prepayments of loans made by Conseco; (v) Conseco's ability to achieve anticipated synergies and levels of operational efficiencies, including from our process excellence initiatives; (iv) customer response to new products, distribution channels and marketing initiatives; (v) mortality, morbidity, usage of health care services and other factors which may affect the profitability of Conseco's insurance products; (vi) performance of our investments; (vii) changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of Conseco's products;
(viii) increasing competition in the sale of insurance and annuities; (ix) regulatory changes or actions, including those relating to regulation of the financial affairs of our insurance companies, regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; (x) actions by rating agencies and the effects of past or future actions by these agencies on Conseco's business, including the impact of recent rating downgrades; (xi) the ultimate outcome of lawsuits filed against Conseco; and (xii) the risk factors or uncertainties listed from time to time in Conseco's filings with the Securities and Exchange Commission and with the U.S. Bankruptcy Court in connection with the Company's Chapter 11 petitions. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.
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