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): June 29, 2001
CONSECO, INC.
 (Exact name of registrant as specified in its charter)

    Indiana                            1-9250                35-1468632
  ----------------                    -----------            -------------------
   (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 5. OTHER EVENTS.
On June 29, 2001, Conseco, Inc. ("Conseco") closed the public offering of $400.0 million of 10 3/4 percent senior notes due 2008 (the "Notes"). The Notes were priced at 98.816 percent of par. Interest on the Notes is payable semi-annually on June 15 and December 15 of each year, beginning on December 15, 2001. The Notes are senior unsecured obligations and rank equally with all existing and future unsecured senior indebtedness of Conseco.
Proceeds from the offering of approximately $385.7 million (after underwriting discounts and estimated offering expenses) will be used by Conseco for the repayment of outstanding indebtedness.
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ITEM 7(c). EXHIBITS.
1.1 Underwriting Agreement dated June 26, 2001
4.1 First Supplemental Indenture dated June 29, 2001
4.2 Form of 10 3/4% Note due June 15, 2008
5.1 Opinion of David K. Herzog
12.1 Computation of Ratio of Earnings to Fixed Charges, Preferred Dividends and Distributions on Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts
23.1 Consent of David K. Herzog (included in Exhibit 5.1)
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SIGNATURE
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.

DATE:  June 29, 2001
                                       By:  /s/ CHARLES B. CHOKEL
                                           ----------------------------------
                                           Name:  Charles B. Chokel
                                           Title: Executive Vice President
                                                  and Chief Financial Officer	

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Exhibit 1.1

UNDERWRITING AGREEMENT
CONSECO, INC.
(AN INDIANA CORPORATION)
$400,000,000 10 3/4% Senior Notes due 2008
DATED AS OF JUNE 26, 2001

                                Table of Contents

SECTION 1.        Representations and Warranties..................................................................3

SECTION 2.        Sale and Delivery to Underwriters; Closing.....................................................11

SECTION 3.        Covenants of the Company.......................................................................12

SECTION 4.        Payment of Expenses............................................................................15

SECTION 5.        Conditions of Underwriters' Obligations........................................................16

SECTION 6.        Indemnification................................................................................23

SECTION 7.        Contribution...................................................................................26

SECTION 8.        Representations, Warranties and Agreements to Survive Delivery.................................27

SECTION 9.        Termination of Agreement.......................................................................28

SECTION 10.       Default by One or More of the Underwriters.....................................................28

SECTION 11.       Notices........................................................................................29

SECTION 12.       Parties........................................................................................29

SECTION 13.       Governing Law and Time.........................................................................30

SECTION 14.       Effect of Headings.............................................................................30

SECTION 15.       Counterparts...................................................................................30	

-ii-

CONSECO, INC.
 (an Indiana corporation)
$400,000,000 10 3/4% Senior Notes due 2008
Underwriting Agreement
June 26, 2001
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
UBS WARBURG LLC
 c/o Lehman Brothers Inc.
World Headquarters
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Conseco, Inc., an Indiana corporation (the "Company"), confirms its agreement with Lehman Brothers Inc., Banc of America Securities, LLC, J.P. Morgan Securities Inc. and UBS Warburg LLC (collectively, the "Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof) with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of $400,000,000 aggregate principal amount of the Company's 10 3/4% Notes due 2008 (the "Notes"), to be issued pursuant to an indenture dated as of November 13, 1997 (the "Base Indenture"), between the Company and The Bank of New York, as successor to LTCB Trust Company, as trustee (the "Trustee"), as supplemented by the first senior supplemental indenture to be dated as of June 29, 2001 between the Company and the Trustee (the "Supplemental Indenture"). Capitalized terms used herein without definition shall have the meanings ascribed in the Prospectus (as defined below).
The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-83465) covering the registration of securities of the Company, including the Notes, under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses, and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") and the Company has filed such post-effective amendments thereto as may be required prior to the execution of this Agreement. Such registration statement, as amended, has been declared effective by the Commission and the Base Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Promptly after

execution and delivery of this Agreement, the Company will either (i) prepare and file a final prospectus and final prospectus supplement in accordance with the provisions of paragraph (b) of Rule 424 of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, prepare and file a term sheet or abbreviated term sheet (the "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Such registration statement No. 333-83465, as amended, including the exhibits and schedules thereto, if any, and the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434 Information") is referred to herein as the "Registration Statement," and the final prospectus and the final prospectus supplement relating to the offering of the Notes, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Notes, are collectively referred to herein as the "Prospectus"; provided, however, that all references to the "Registration Statement" and the "Prospectus" shall be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement; provided, further, that if the Company files a registration statement with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (a "Rule 462(b) Registration Statement"), then after such filing, all references to the "Registration Statement" shall be deemed to include the Rule 462(b) Registration Statement; and provided, further, that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to "Prospectus" shall be deemed to include the final or preliminary prospectus and the applicable Term Sheet, in the form first furnished to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any prospectus used before the applicable registration statement became effective and any prospectus and any amendment or supplement thereto that omitted, as applicable, the Rule 430A Information, the Rule 434 Information or other information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used after such effectiveness and prior to the execution and delivery of the applicable underwriting agreement. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.
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The Company understands that the Underwriters propose to make a public offering of the Notes as soon as the Underwriters deem advisable after this Agreement has been executed and delivered. The terms of the public offering of the Notes are set forth in the Prospectus.
The Company and the Underwriters agree that up to $10 million aggregate principal amount of the Notes to be purchased by the Underwriters (the "Reserved Securities") shall be reserved for sale by the Underwriters to Gary Wendt, chief executive officer of the Company, as part of the distribution of the Notes by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the National Association of Securities Dealers, Inc. and all other applicable laws, rules and regulations. To the extent that such Reserved Securities are not orally confirmed for purchase by Mr. Wendt by the end of the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby. Any Reserved Securities sold to Mr. Wendt shall not be sold, transferred, assigned, pledged or hypothecated by Mr. Wendt for a period of three months following the Closing Time.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the date hereof (such date being hereinafter referred to as the "Representation Date") and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Underwriter that:
(i) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or, to the knowledge and information of the Company, threatened by the Commission.
(ii) The Company meets, and at the respective times of the commencement and consummation of the offering of the Notes will meet, the requirements for the use of Form S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act. At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective and at the Representation Date and at the Closing Time (as defined herein), the Registration Statement, any Rule 462 Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the "1939 Act Regulations") and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the date of the Prospectus and at the Closing Time, the Prospectus and any amendments and supplements thereto did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with the requirements of Rule 434.
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Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to (A) statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through Lehman Brothers Inc. expressly for use in the Registration Statement or the Prospectus or (B) the part of the Registration Statement which shall constitute the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and, if applicable, each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with the offering of Notes will, at the time of such delivery, be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by reference in the Registration Statement, or the Prospectus, at the time they were or hereafter are filed with the Commission or last amended, as the case may be, complied and will comply in all material respects with the requirements of the 1934 Act, and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective, at the time the Prospectus was issued and at the Closing Time, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any additional documents deemed to be incorporated by reference in the Registration Statement or the Prospectus will, if and when such documents are filed with the Commission, or when amended, as appropriate, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter through Lehman Brothers Inc. expressly for use in the Registration Statement or the Prospectus.
(iv) PricewaterhouseCoopers LLP, which certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement and the Prospectus, are independent public accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or incorporated by reference in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries, respectively, as of the dates indicated and the results of their operations, changes in shareholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been
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prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included or incorporated by reference in the Registration Statement and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. The ratio of earnings to fixed charges (and the ratio of earnings to fixed charges, preferred stock dividends and distributions on Company-obligated mandatorily redeemable preferred securities of subsidiary trusts) included in the Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K of the Commission. The selected financial information and summary financial data included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement and the Prospectus. There are no historical or pro forma financial statements that are required by the 1933 Act, the 1933 Act Regulations or Regulation S-X to be included in the Registration Statement and the Prospectus that are not included as required.
(vi) The statutory financial statements of each of the Company's insurance subsidiaries, from which certain ratios and other statistical data contained in the Registration Statement have been derived, have for each relevant period been prepared in accordance with accounting practices prescribed or permitted by the National Association of Insurance Commissioners, and with respect to each insurance subsidiary, the appropriate Insurance Department of the state of domicile of such insurance subsidiary, and such accounting practices have been applied on a consistent basis throughout the periods involved.
(vii) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, and except as otherwise stated therein, (A) there has been no material adverse change and no development which could reasonably be expected to result in a material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those arising in the ordinary course of business, which are material with respect to the Company and its subsidiaries, considered as one enterprise, and (C) except for regular dividends on the Preferred Stock of the Company outstanding as of the date of the Prospectus in amounts per share that are consistent with the applicable charter document or supplement thereto, respectively, in effect as of the date of the Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.
(viii) The Company has been incorporated, is validly existing as a corporation and its status is active under the laws of the State of Indiana, with corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under, or as contemplated under, this Agreement, the Base Indenture and the Supplemental Indenture. The Company is qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is
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required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect.
(ix) Each "significant subsidiary" of the Company within the meaning of Rule 1-02 of Regulation S-X promulgated under the 1933 Act is listed on Schedule C hereto, and each such subsidiary, and each of the other subsidiaries listed for purposes of this Agreement on Schedule C hereto (each of such subsidiaries listed on Schedule C, for purposes of this Agreement, a "Significant Subsidiary") has been incorporated and is validly existing as a corporation in good standing (to the extent such concept applies) under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus, and is qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect. Except as otherwise stated in the Registration Statement and the Prospectus, all of the issued and outstanding shares of capital stock of each Significant Subsidiary of the Company have been authorized and validly issued, are fully paid and non-assessable and all such shares are owned by the Company, directly or through its subsidiaries, free and clear of any material security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Significant Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Significant Subsidiary.
(x) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus; since the date indicated in the Prospectus there has been no change in the consolidated capitalization of the Company and its subsidiaries (other than changes in outstanding Common Stock of the Company resulting from incentive compensation plan, employee or agent benefit plan or dividend reinvestment and stock purchase plan transactions, including, without limitation, the purchase of shares of Common Stock of the Company or cancellation of options in connection therewith); and all of the issued and outstanding capital stock of the Company has been authorized and validly issued, is fully paid and non-assessable and conforms to the descriptions thereof contained in the Prospectus.
(xi) The Base Indenture has been duly authorized, executed and delivered by the Company and is qualified under the 1939 Act and constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity) (the "Bankruptcy Exceptions"); the Base Indenture conforms in all material respects to the description thereof contained in the Prospectus. The Supplemental Indenture has been duly authorized by the Company and, at the Closing Time, will have been duly executed and delivered by the Company and will
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constitute a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions and will conform in all material respects to the description thereof contained in the Prospectus.
(xii) The Notes have been duly authorized by the Company and, at the Closing Time, will have been executed by the Company and, when authenticated in the manner provided for in the Base Indenture and the Supplemental Indenture and delivered against payment therefor as described in the Prospectus, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions, and will be in the form contemplated by, and entitled to the benefits of, the Supplemental Indenture and will conform in all material respects to the descriptions thereof contained in the Prospectus.
(xiii) Neither the Company nor any of its Significant Subsidiaries is in violation of its charter or by-laws. Neither the Company nor any of its Significant Subsidiaries is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, note, lease, loan or credit agreement or any other agreement or instrument (the "Agreements and Instruments") to which the Company or any of its Significant Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or any Significant Subsidiary is subject, or in violation of any applicable law, rule or regulation or any judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its Significant Subsidiaries or any of their respective properties or assets, which violation or default would, singly or in the aggregate, have a Material Adverse Effect.
(xiv) The offer of the Notes as contemplated herein and in the Prospectus, the execution, delivery and performance of this Agreement, the Base Indenture and the Supplemental Indenture, and the consummation of the transactions contemplated herein, therein and in the Registration Statement (including the issuance and sale of the Notes and the use of proceeds from the sale of the Notes as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder and thereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of any of the terms or provisions of, or constitute a default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Significant Subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its Significant Subsidiaries, or any of their assets, properties or operations (except for such violations that would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the
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Company or any Significant Subsidiary. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness of the Company or any Significant Subsidiary (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any Significant Subsidiary.
(xv) There is no action, suit, proceeding, inquiry or investigation before or by any court or governmental agency or body, domestic or foreign (including, without limitation, any proceeding to revoke or deny renewal of any Licenses (as defined below)), now pending or to the knowledge of the Company threatened against or affecting the Company or any of its subsidiaries which is required to be disclosed in the Registration Statement and the Prospectus (other than as stated therein), or which might reasonably be expected to result in a Material Adverse Effect, or which might be reasonably expected to materially and adversely affect the consummation of this Agreement, the Base Indenture, the Supplemental Indenture or the transactions contemplated herein, therein or in the Registration Statement or the Prospectus. The aggregate of all pending legal or governmental proceedings to which the Company or any subsidiary thereof is a party or of which any of their respective properties or operations is the subject which are not described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business or the Company or any of its subsidiaries, could not reasonably be expected to result in a Material Adverse Effect; and there are no contracts or documents of the Company or any of its subsidiaries which are required to be filed as exhibits to the Registration Statement or to be incorporated by reference therein, by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, which have not been so filed or incorporated by reference.
(xvi) The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including, without limitation, insurance licenses from the insurance departments of the various states where the subsidiaries write insurance business and consumer lending licenses (collectively, the "Licenses") that are material to the Company and its subsidiaries taken as a whole and are necessary to conduct the business now operated by them; the Company and its subsidiaries are in compliance with the terms and conditions of all such Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the Licenses are valid and in full force and effect, except where the invalidity of such Licenses or the failure of such Licenses to be in full force and effect would not result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Licenses which, singly or in the aggregate, may reasonably be expected to result in a Material Adverse Effect.
(xvii) No filing, authorization, approval, consent, order, registration or qualification of or with any court or governmental authority or agency (including, without limitation, any insurance regulatory agency or body) is required in connection with the offering, issuance and sale of the Notes or for the execution, delivery or performance by the Company of this Agreement, the Base Indenture, the Supplemental Indenture, the
8

Notes or any other agreement or instrument entered into in connection herewith, or the consummation by the Company of any other transactions contemplated hereby, except such as have been obtained and made under the federal securities laws or state insurance laws and such as may be required under state or foreign securities or Blue Sky laws.
(xviii) This Agreement has been duly authorized, executed and delivered by the Company.
(xix) Neither the Company nor any of its Significant Subsidiaries is, and upon the issuance and sale of the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) None of the Company, its Significant Subsidiaries or any of their respective directors, officers or controlling persons, has taken, directly or indirectly, any action resulting in a violation of Regulation M under the 1934 Act, or designed to cause or result in, or that has constituted or that reasonably might be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes or the Common Stock of the Company, in each case in violation of applicable law.
(xxi) No "forward looking statement" (as defined in Rule 175 under the 1933 Act) contained in the Registration Statement, any preliminary prospectus or the Prospectus was made or reaffirmed without a reasonable basis or was disclosed other than in good faith.
(xxii) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.
(xxiii) The Company and its subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, and all such insurance is in full force and effect.
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(xxiv) The Company is, and immediately after the Closing Time will be, Solvent. As used herein, the term "Solvent" means, with respect to the Company, on a particular date, that on such date (A) the fair market value of the assets of the Company is greater than the total amount of liabilities (including contingent liabilities) of the Company, (B) the present fair salable value of the assets of the Company is greater than the amount that will be required to pay the probable liabilities of the Company on its debts as they become absolute and mature, (C) the Company is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (D) the Company does not have unreasonably small capital.
(xxv) Except as described in the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxvi) Except as described in the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) the Company and its subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and have paid all taxes shown thereon and all assessments received by them or any of them to the extent that such taxes have become due and are not being contested in good faith; and (B) there is no tax deficiency which has been or might reasonably be expected to be asserted or threatened against the Company or any subsidiary.
(xxvii) Except as described in the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and
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its affiliates (each, a "Plan") has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"), (B) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code has occurred with respect to any Plan excluding transaction effected pursuant to a statutory or administrative exemption and (C) for each Plan which is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, (1) no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, whether or not waived, and (2) the fair market value of the assets of each such Plan (excluding for these purposes accrued but unpaid contributions) exceeded the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
(xxviii) No person has the right to require the Company to file a registration statement under the 1933 Act with respect to any securities of the Company or to require the Company to include such securities with the Notes registered pursuant to the Registration Statement as a consequence of filing of the Registration Statement with the Commission.
(b) Any certificate signed by any officer of the Company and delivered to the Underwriters or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter severally and not jointly agrees to purchase from the Company, the principal amount of Notes set forth in Schedule A hereto opposite the name of such Underwriter, at the price and having such other terms set forth on Schedule B hereto, plus any additional principal amount of Notes which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Delivery of certificates for the Notes against payment of the purchase price for such Notes shall be made at the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York 10019 or at such other place as shall be agreed upon by the Underwriters and the Company, at 9:00 a.m. (New York City time) on the third business day after execution of this Agreement (or, if pricing of the Notes occurs after 4:30 p.m., New York City time, on the fourth full business day thereafter), or such other time not later than ten business days after such date as shall be agreed upon by the Underwriters and the Company (such time and date of payment and delivery being referred to herein as the "Closing Time"). Payment for the Notes purchased by the Underwriters shall be made by wire transfer of immediately available funds, payable to the Company, against delivery to the respective accounts of the Underwriters of the Notes to be purchased by them. Delivery of, and payment for, the Notes shall be made through the facilities of the Depository Trust Company.
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Certificates for the Notes, if any, shall be in such denominations and registered in such names as the Underwriters may request in writing at least two full business days before the Closing Time. Each Underwriter, severally and not jointly, may (but shall not be obligated to) make payment of the purchase price for the Notes, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder. The certificates for the Notes will be made available for examination by the Underwriters no later than 10:00 a.m. (New York City time) on the last business day prior to the Closing Time.
(c) The Company hereby confirms its engagement of Lehman Brothers Inc. as, and Lehman Brothers Inc. hereby confirms its agreement with the Company to render services as, a "qualified independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of the Notes. Lehman Brothers Inc., solely in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the "Independent Underwriter".
SECTION 3. Covenants of the Company. The Company agrees with the Underwriters as follows:
(a) Promptly following the execution of this Agreement, the Company will cause the Prospectus to be filed with the Commission pursuant to Rule 424 of the 1933 Act Regulations and the Company will promptly advise the Underwriters when such filing has been made. Prior to the filing, the Company will cooperate with the Underwriters in the preparation of the prospectus supplement to assure that the Underwriters have no reasonable objection to the form or content thereof when filed or mailed.
(b) The Company, subject to Section 3(c), will comply with the requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as applicable, and will notify the Underwriters immediately of (i) the effectiveness of any post-effective amendment to the Registration Statement or the filing of any supplement or amendment to the Prospectus, (ii) the receipt of any comments from the Commission, (iii) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose and
(v) the issuance by any state securities commission or other regulatory authority of any order suspending the qualification or the exemption from qualification of the Notes under state securities or Blue Sky laws or the initiation or threatening of any proceeding for such purpose. The Company will make all reasonable efforts to prevent the issuance of any stop order and, if any stop order is issued, to promptly obtain the lifting thereof.
(c) The Company will give the Underwriters notice of its intention to file or prepare any amendment to the Registration Statement (including any post-effective amendment and any filing under Rule 462(b) of the 1933 Act Regulations), any Term
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Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise; will furnish the Underwriters with copies of any such Rule 462(b) Registration Statement, Term Sheet, amendment, supplement or revision a reasonable amount of time prior to such proposed filing or use, as the case may be; and will not file any such Rule 462(b) Registration Statement, Term Sheet, amendment, supplement or revision to which the Underwriters or counsel for the Underwriters shall reasonably object.
(d) The Company will deliver to each of the Underwriters and counsel for the Underwriters, without charge, conformed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and conformed copies of all consents and certificates of experts, and will also deliver to each of the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits). If applicable, the copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company has delivered to each Underwriter, without charge, as many copies of any preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. If applicable, the Prospectus and any amendments or supplements thereto furnished to the Underwriter will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Notes as contemplated in this Agreement and in the Registration Statement and the Prospectus. If at any time when the Prospectus is required by the 1933 Act or the 1934 Act to be delivered in connection with sales of the Notes, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or to amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or
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amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(c), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request.
(g) The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Underwriters may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(h) The Company will make generally available to its securityholders as soon as practicable, but not later than 45 days (or 90 days, in the case of a period that is also the Company's fiscal year) after the close of the period covered thereby, an earnings statement of the Company and its subsidiaries (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the sale of the Notes in the manner specified in the Prospectus under "Use of Proceeds."
(j) If, at the time that the Registration Statement became (or in the case of a post-effective amendment becomes) effective, any information shall have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933 Act Regulations, then immediately following the execution of this Agreement, the Company will prepare, and file or transmit for filing with the Commission in accordance with such Rule 430A or Rule 434 and Rule 424(b) of the 1933 Act Regulations, copies of an amended Prospectus, or Term Sheet, or, if required by such Rule 430A, a post-effective amendment to the Registration Statement (including an amended Prospectus), containing all information so omitted.
(k) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. New York City time on the date of this Agreement and (ii) the time confirmations are sent or given, as specified by Rule 462(b)(2).
(l) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.
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(m) Between the date of the Prospectus and the Closing Time, the Company will not, without the prior written consent of the Underwriters, directly or indirectly, issue, sell, offer or contract to sell, grant any option for the sale of, or otherwise transfer or dispose of, any debt securities of the Company (other than the Notes or commercial paper in the ordinary course of business).
(n) The Company, during a period of one year from the Closing Time, will make generally available to the Underwriters copies of all reports and other communications (financial or other) mailed to stockholders, and deliver to the Underwriters promptly after they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission).
(o) Neither the Company nor its subsidiaries will take, directly or indirectly, any action resulting in a violation of Regulation M under the 1934 Act, or designed to cause or result in, or that reasonably might be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes or the Common Stock of the Company, in each case, in violation of applicable law.
(p) During a period of 60 days from the date of the Prospectus, the Company will not, without the prior written consent of Lehman Brothers Inc., directly or indirectly, issue, sell, offer or contract to sell, pledge or otherwise dispose of any debt securities of the Company having terms similar to the Notes, or options or warrants for such debt securities in connection with a public offering or an offering in accordance with Rule 144A under the 1933 Act.
SECTION 4. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including, without limitation, expenses related to the following, if incurred: (i) the preparation, delivery, printing and filing of the Registration Statement and Prospectus as originally filed (including financial statements and exhibits) and of each amendment thereto; (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement Among Underwriters, the Base Indenture, the Supplemental Indenture and such other documents as may be required in connection with the offering, purchase, sale and delivery of the Notes; (iii) the preparation, issuance and delivery of the certificates for the Notes; (iv) the fees and disbursements of the Company's counsel, accountants and other advisors or agents (including the transfer agents and registrars), as well as fees and disbursements of the Trustee and any Depositary, and their respective counsel (except as provided for in the Prospectus); (v) the qualification of the Notes under securities laws in accordance with the provisions of Section 3(g), including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed
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and of each amendment thereto, of each preliminary prospectus, any Term Sheet and of the Prospectus and any amendments or supplements thereto; (vii) the printing and delivery to the Underwriters of copies of any Blue Sky Survey and any Legal Investment Survey; (viii) any fees payable in connection with the rating of the Notes by nationally recognized statistical rating organizations;
(ix) the filing fees incident to, and the fees and disbursements of counsel to the Underwriters in connection with, the review, if any, by the NASD of the terms of the sale of the Notes; (x) any fees payable in connection with any listing of Notes on any securities exchange or quotation system; and (xi) any fees payable to the Commission.
If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the Underwriters to purchase and pay for the Notes pursuant to this Agreement are subject to the accuracy of the representations and warranties of the Company herein contained or in certificates of any officer of the Company or any subsidiary delivered pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration Statement, shall have become effective under the 1933 Act not later than 5:30
p.m., New York City time, on the date hereof, and on the date hereof and at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the satisfaction of counsel to the Underwriters. A prospectus containing information relating to the description of the Notes, the specific method of distribution and similar matters shall have been filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A), or, if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information shall have been filed with the Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of Mr. David K. Herzog, Executive Vice President, General Counsel and Secretary of the Company, in form and substance reasonably satisfactory to counsel for the Underwriters, to the effect that:
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(i) The Company has been incorporated and is validly existing as a corporation under the laws of the State of Indiana.
(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus.
(iii) The Company is qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus (including information which is incorporated by reference therein) (except for subsequent issuances, if any, pursuant to (x) incentive compensation plan, employee or agent benefit plan or dividend reinvestment and stock purchase plan transactions, including, without limitation, the purchase of shares of Common Stock of the Company or cancellation of options in connection therewith, or (y) the exercise of conversion or exchange rights with respect to securities outstanding as of the date of the Prospectus), and all the issued and outstanding capital stock of the Company has been authorized and validly issued and is fully paid and non-assessable and conforms to the descriptions thereof contained in the Prospectus.
(v) Each Significant Subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing (to the extent such concept is applicable) under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect; all of the issued and outstanding capital stock of each such Significant Subsidiary of the Company has been authorized and validly issued, is fully paid and non-assessable and, except as set forth in the Prospectus, all such shares are owned by the Company, directly or through its subsidiaries, free and clear of any material security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(vi) All legally required proceedings in connection with the authorization and valid issuance of the Notes and the sale of such Notes in accordance with this Agreement (other than the filing of post-issuance reports, the non-filing of which would not render the Notes invalid) have been taken and all legally required orders, consents or other authorizations or approvals of any other public boards or bodies (including, without limitation, any insurance regulatory
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agency or body) in connection with the authorization and valid issuance of the respective Notes and the sale of such Notes in accordance with this Agreement (other than in connection with or in compliance with the provisions of the securities or Blue Sky laws of any jurisdictions, as to which no opinion need be expressed) have been obtained and are in full force and effect.
(vii) The Registration Statement is effective under the 1933 Act and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings therefor have been initiated or threatened by the Commission.
(viii) The Registration Statement, as of its effective date, and the Prospectus, and each amendment or supplement thereto as of its issue date (in each case, other than the financial statements and the notes thereto, the financial schedules, and any other financial data included or incorporated by reference therein, as to which such counsel need express no belief), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; and each of the Base Indenture and the Supplemental Indenture complied as to form in all material respects with the requirements of the 1939 Act and the 1939 Act Regulations.
(ix) Each of the documents incorporated by reference or deemed to be incorporated by reference in the Registration Statement or the Prospectus at the time they were filed or last amended (other than the financial statements and the notes thereto, the financial schedules, and any other financial data included or incorporated by reference therein and the Statements of Eligibility on Form T-1 filed with the Commission as part of the Registration Statement, as to which such counsel need express no belief), complied as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, as applicable.
(x) The information in the Prospectus under the captions "Description of the Notes," "Notes to Financial Statements-Litigation" and "Description of Existing Indebtedness" and in the Registration Statement in Item 15, to the extent it involves matters of law, summaries of legal matters, documents or proceedings or legal conclusions, has been reviewed by such counsel and is correct in all material respects.
(xi) This Agreement has been duly authorized, executed and delivered by the Company.
(xii) Each of the Base Indenture and the Supplemental Indenture has been duly authorized, executed and delivered by the Company and, assuming authorization, execution, and delivery thereof by the Trustee, constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions; and each of the Base Indenture and the
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Supplemental Indenture has been duly qualified under the 1939 Act and conforms in all material respects to the description thereof contained in the Prospectus.
(xiii) The Notes are in the form contemplated by the Supplemental Indenture, have been duly authorized, executed and delivered by the Company and, when authenticated by the Trustee in the manner provided for in the Supplemental Indenture and the Base Indenture and delivered against payment therefor by the Company, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions, and such Notes conform in all material respects to the description thereof contained in the Prospectus.
(xiv) The offer of the Notes as contemplated herein and in the Prospectus; the execution, delivery and performance of this Agreement, the Base Indenture and the Supplemental Indenture, and the consummation of the transactions contemplated herein, therein and in the Registration Statement (including the issuance and sale of the Notes and the use of proceeds from the sale of the Notes as described in the prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder and thereunder have been authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of any of the terms or provisions of, or constitute a default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Significant Subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Significant Subsidiary or any of their assets, properties, or operations (except for such violations that would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any Significant Subsidiary.
(xv) To such counsel's knowledge, there are no statutes required to be described in or incorporated by reference in the Registration Statement which are not described or incorporated by reference; and there are no legal or governmental proceedings pending or, to such counsel's knowledge, threatened which are required to be disclosed or incorporated by reference in the Registration Statement, other than those disclosed or incorporated by reference therein.
(xvi) To such counsel's knowledge, there are no contracts, indentures, mortgages, agreements, notes, leases or other instruments required to be described or referred to or incorporated by reference in the Registration Statement or to be filed as exhibits thereto other than those described or referred to or
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incorporated by reference therein or filed as exhibits thereto; and the descriptions thereof or references thereto are true and correct in all material respects.
(xvii) No filing, authorization, approval, consent, order, registration or qualification of or with any court or federal or state governmental authority or agency (including, without limitation, any insurance regulatory agency or body) is required for the issuance and sale of the Notes by the Company to the Underwriters or the performance by the Company of its obligations under this Agreement, the Base Indenture, the Supplemental Indenture and the Notes except such as has been obtained and made under the federal securities laws or state insurance laws or such as may be required under state or foreign securities or Blue Sky laws.
(xviii) The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including, without limitation, the Licenses) that are material to the Company and its subsidiaries taken as a whole and are necessary to conduct the business now operated by them; the Company and its subsidiaries are in compliance with the terms and conditions of all such Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the Licenses are valid and in full force and effect, except where the invalidity of such Licenses or the failure of such Licenses to be in full force and effect would not result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Licenses which, singly or in the aggregate, may reasonably be expected to result in a Material Adverse Effect.
(xix) Neither the Company nor any of its subsidiaries is, and upon the issuance and sale of the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will be, an "investment company" as such term is defined in the 1940 Act.
Moreover, such counsel shall confirm that nothing has come to such counsel's attention that causes such counsel to believe that the Registration Statement, including any information provided pursuant to Rule 430A and related schedules and Rule 434 (except for financial statements and the notes thereto, the financial schedules and any other financial data included or incorporated by reference therein, and the Statements of Eligibility on Form T-1 filed with the Commission as part of the Registration Statement as to which such counsel need express no opinion), at the time it became effective or at the Representation
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Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and the notes thereto, the financial schedules, and any other financial data included or incorporated by reference therein, as to which such counsel need express no opinion), at the Representation Date (unless the term "Prospectus" refers to a prospectus which has been provided to the Underwriters by the Company for use in connection with the offering of the Notes which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective, in which case at the time it is first provided to the Underwriters for such use) or at the Closing Time, included (or includes) an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Time, of Baker & Daniels, special counsel to the Company, in form and substance reasonably satisfactory to counsel for the Underwriters, to the effect that (i) subject to the limitations and qualifications stated therein, the statements in the Prospectus under the heading "Certain United States Federal Income Tax Consequences" fairly summarize the provisions of the United States tax laws therein described; and (ii) nothing has come to such counsel's attention that causes such counsel to believe that the Registration Statement, including any information provided pursuant to Rule 434 (except for financial statements and the notes thereto, the financial schedules and any other financial data included or incorporated by reference therein, and the Statements of Eligibility on Form T-1 filed with the Commission as part of the Registration Statement as to which counsel need express no opinion), at the time it became effective or at the Representation Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and the notes thereto, the financial schedules, and any other financial data included or incorporated by reference therein, as to which counsel need express no opinion), at the Representation Date (unless the term "Prospectus" refers to a prospectus which has been provided to the Underwriters by the Company for use in connection with the offering of the Notes which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective, in which case at the time it is first provided to the Underwriters for such use) or at the Closing Time, included (or includes) an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(3) The favorable opinion, dated as of the Closing Time, of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, in form and substance satisfactory to the Underwriters, with respect to the issuance and sale of the Notes, and other related matters as the Underwriters may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In rendering such opinion, LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely as to matters governed by the laws of Indiana upon the opinion referred to in Section 5(b)(1) hereto.
(c) Between the Representation Date and the Closing Time, no change in the Capital Stock or long term debt of the Company or any of its subsidiaries shall have occurred and no material adverse change shall have occurred in the condition, financial or
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otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, whether or not in the ordinary course of business.
(d) At the Closing Time, the Underwriters shall have received a certificate of the Chief Executive Officer, the President or a Vice-President of the Company and of the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not in the ordinary course of business,
(ii) the representations and warranties in Section 1 hereof are true and correct as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the knowledge of such officers, threatened by the Commission.
(e) At the Representation Date, the Underwriters shall have received from PricewaterhouseCoopers LLP a "comfort letter", with respect to the financial information of the Company, dated such date in form and substance satisfactory to the Underwriters and counsel to the Underwriters.
(f) At the Closing Time, the Underwriters shall have received a letter from PricewaterhouseCoopers LLP, with respect to the Company, dated as of the Closing Time, to the effect that it reaffirms the statements made in the letter furnished pursuant to subsection (e) of this Section and other customary matters, except that (i) such statements shall include any financial statements and pro forma financial information incorporated by reference in the Registration Statement and the Prospectus which are filed subsequent to the date of this Agreement and prior to the Closing Time and (ii) the specified date referred to shall be a date not more than three business days prior to the Closing Time.
(g) At the Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Notes as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Notes as herein contemplated shall be satisfactory in form and substance to the Underwriters and counsel for the Underwriters.
(h) At the Closing Time, the Notes shall be rated at least BB- by Standard & Poor's, a Division of The McGraw-Hill Companies and B1 by Moody's Investors Service, and the Company shall have delivered to the Underwriters a letter, dated the Closing Time, from each such rating agency, or other evidence satisfactory to the Underwriters, confirming that the Notes have such ratings; and between the Representation Date and the
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Closing Time, (i) there shall not have occurred any decrease in the rating assigned to the Notes or any securities of the Company or of the financial strength or claims paying ability of the Company by any "nationally recognized statistical rating organization," as defined for purposes of Rule 436(g)(2) under the 1933 Act Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review, without indicating an improvement, its rating of the Notes or any securities of the Company or of the financial strength or claims paying ability of the Company.
If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company at any time at or prior to the Closing Time and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 434 Information deemed to be part thereof, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever arising out of or based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided, that (subject to Section 6(e) below) any such settlement is effected with the written consent of the Company, such consent not to be unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Underwriters), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body,
23

commenced or threatened, or any claim whatsoever arising out of or based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that the foregoing indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of or based upon any untrue statement or omission or alleged untrue statement or omission (A) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Underwriters expressly for use in the Registration Statement (or any amendment thereto), including the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or (B) made in any preliminary prospectus supplement and corrected in the Prospectus, as supplemented, as of the Closing Time, where the person asserting any such loss, liability, claim, damage or expense purchased the Notes that are the subject thereof, and it shall have been established (i) that there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) in any case where such delivery is required by the 1933 Act and (ii) the Company shall have previously furnished copies thereof in sufficient quantities to such Underwriter.
(b) In addition to and without limitation of the Company's obligation to indemnify Lehman Brothers Inc. as an Underwriter, the Company also agrees to indemnify and hold harmless the Independent Underwriter and each person, if any, who controls the Independent Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against (i) any and all loss, liability, claim, damage and expense to the same extent and in the same manner as provided with respect to Lehman Brothers Inc. as an Underwriter under Section 6(a)(i) and (ii) any and all loss, liability, claim, damage and expense, whatsoever, as otherwise incurred as a result of the Independent Underwriter's participation as a "qualified independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of the NASD in connection with the offering of the Notes, except, solely with respect to this clause (ii), any loss, liability claim, damage or expense resulting from the Independent Underwriter's willful misconduct or gross negligence.
(c) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Underwriters expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto).
24

(d) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 6(c) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, that, if indemnity is sought pursuant to Section 6(b), then, in addition to the fees and expenses of such counsel for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one counsel (in addition to any local counsel) separate from its own counsel and that of the other indemnified parties for the Independent Underwriter in its capacity as a "qualified independent underwriter" and all persons, if any, who control the Independent Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of 1934 Act in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances if, in the reasonable judgment of the Independent Underwriter, there may exist a conflict of interest between the Independent Underwriter and the other indemnified parties. Any such separate counsel for the Independent Underwriter and such control persons of the Independent Underwriter shall be designated in writing by the Independent Underwriter. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(e) No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such
25

settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(f) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated by Section 6(a)(ii) affected without its consent if such indemnifying party (i) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Notes pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Notes pursuant to this Agreement shall in each case be deemed to be in the same respective proportions as the total net proceeds from the offering of such Notes (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters in respect of such Notes, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of such Notes as set forth on such cover.
26

The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, 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 Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that Lehman Brothers Inc. will not receive any additional benefits hereunder for serving as the Independent Underwriter in connection with the offering and sale of the Notes.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 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 does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes 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.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the aggregate principal amount of Notes set forth opposite their respective names in Schedule A to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative
27

and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of and payment for the Notes to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Underwriters may terminate this Agreement, by notice to the Company at any time at or prior to the Closing Time, if (i) there has been, since the date of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change or any development which could reasonably be expected to result in a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation of hostilities or other calamity or crisis, or any change or development involving a prospective change in national or international political, financial or economic conditions the effect of which is such as to make it, in the judgment of the Underwriters, impracticable to market the Notes or to enforce contracts for the sale of the Notes, or (iii) if trading in the Common Stock or any other security of or guaranteed by the Company has been suspended or limited by the Commission, the NASD or the New York Stock Exchange, or if trading generally on any of the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or in the over-the-counter market has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of such exchanges or by such system or by order of the Commission, the NASD or any other governmental authority, or
(iv) if a banking moratorium has been declared by any Federal, New York or Indiana banking authority.
(b) If this Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4, and provided, further, that Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time to purchase the Notes which it or they are obligated to purchase under this Agreement (the "Defaulted Notes"), the Underwriters shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Underwriters shall not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Notes does not exceed 10% of the total aggregate principal amount of Notes, the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions
28

that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10% of the total aggregate principal amount of the Notes to be purchased on such date, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either the Underwriters or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements. As used herein, the term "Underwriter" includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Underwriters c/o Lehman Brothers Inc., 3 World Financial Center, World Headquarters, New York, New York 10285, Attention of Ted Conway; to Banc of America Securities LLC, 9 West 57th Street, 31st Floor, New York, New York 10019, Attention of the Head of the High Yield Capital Markets Group; to J.P. Morgan Securities, 270 Park Avenue, New York, New York 10017, Attention of Stephanie Cuskley; and to UBS Warburg LLC, 677 Washington Blvd., Stamford, CT 06901, Attention of the Head of High Yield Capital Markets, with a copy (which shall not constitute notice under this Agreement) to UBS Warburg LLC, 677 Washington Blvd., Stamford, CT 06901, Attention of the Legal and Compliance Department; and with a copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York 10019, Attention of Michael Groll, Esq. and Stephen G. Rooney, Esq.; notices to the Company shall be directed to the Company at Conseco, Inc., 11825 N. Pennsylvania Street, Carmel, Indiana 46032, Attention of David K. Herzog, Executive Vice President, General Counsel and Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Company and the Underwriters and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein or therein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and thereto and their respective successors and legal representatives, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or
29

corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument.
30

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, shall become a binding agreement among the Company and the Underwriters in accordance with its terms.
Very truly yours,
CONSECO, INC.

By:  /s/ THOMAS J. KILIAN
     ---------------------------
     Name: Thomas J. Kilian
     Title: President	

CONFIRMED AND ACCEPTED, as
 of the date first above written:
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
UBS WARBURG LLC
By: LEHMAN BROTHERS INC.

By:  /s/ MICHAEL KONIGSBERG
     --------------------------
     Authorized Signatory	

31

                                   Schedule A

                                                                   Principal
                                                                   Amount of
                          Underwriters                               Notes
                          ------------                             ----------

Lehman Brothers Inc.............................................   $200,000,000
Banc of America Securities LLC..................................     72,000,000
J.P. Morgan Securities Inc......................................     72,000,000
UBS Warburg LLC.................................................     56,000,000
                                                                   ------------
                  Total.........................................   $400,000,000
                                                                   ============	

32

Schedule B
CONSECO, INC.
$400,000,000 10 3/4% Senior Notes due 2008
1. The initial public offering price of the Notes shall be 98.816% of the principal amount thereof, plus accrued interest, if any, from the date of issuance
2. The purchase price to be paid by the Underwriters for the Notes shall be 96.566% of the principal amount thereof; provided that any Reserved Securities purchased by Mr. Wendt pursuant to the terms of the Underwriting Agreement shall be purchased by the Underwriters at the initial public offering price and sold to Mr. Wendt at the initial public offering price.
3. The interest rate on the Notes shall be 10 3/4% per annum.
4. On and after the issue date of the Notes, the Company may redeem all or any portion of the Notes, at once or over time, after giving the required notice under the Indenture, at a redemption price equal to the sum of the principal amount of the Notes plus accrued and unpaid interest, if any, to the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), plus the Applicable Premium.
5. At any time prior to June 15, 2004, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a redemption price of 110.75% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings by the Company, provided that:
(a) at least 65% of the aggregate principal amount of the Notes remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and
(b) the redemption occurs within 45 days of the date of the closing of such Equity Offering.
6. After June 15, 2005, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on June 15 of the years indicated below:

Year                                                    Percentage
----                                                    ----------

2005.................................................... 105.375%
2006.................................................... 102.688%
2007 and thereafter..................................... 100.000%	

33

Schedule C
Significant Subsidiaries
Conseco Life Insurance Company of Texas
Wabash Life Insurance Company
CIHC, Incorporated
Bankers Life Insurance Company of Illinois Bankers Life and Casualty Company
Conseco Annuity Assurance Company
Conseco Senior Health Insurance Company
Pioneer Life Insurance Company
Conseco Finance Corp.
Conseco Health Insurance Company
Conseco Life Insurance Company
34

Exhibit 4.1
CONSECO, INC.
10-3/4% Senior Notes due 2008
FIRST SENIOR SUPPLEMENTAL INDENTURE
Dated as of June 29, 2001
to
Senior Indenture Dated as of November 13, 1997
THE BANK OF NEW YORK,
Trustee

TABLE OF CONTENTS

                                                                                                                Page
                                                                                                                ----

ARTICLE I APPLICATION OF SUPPLEMENTAL INDENTURE AND CREATION OF 10 3/4% SENIOR NOTES DUE 2008.....................1
   Section 1.01.     Application of this Supplemental Indenture...................................................1
   Section 1.02.     Effect of Supplemental Indenture.............................................................1
   Section 1.03.     Amount of Notes..............................................................................2
   Section 1.04.     Terms of the Initial Notes and the Additional Notes; Form of Security........................2
   Section 1.05.     Registrar and Paying Agent...................................................................3

ARTICLE II DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................3
   Section 2.01.     Definitions..................................................................................3
   Section 2.02.     Other Definitions...........................................................................28
   Section 2.03.     Incorporation by Reference of Trust Indenture Act...........................................28

ARTICLE III REDEMPTION...........................................................................................29
   Section 3.01.     Optional Redemption.........................................................................29
   Section 3.02.     Selection...................................................................................30
   Section 3.03.     No Conditional Redemption...................................................................30

ARTICLE IV COVENANTS............................................................................................ 30
   Section 4.01.     Covenant Cancellation.......................................................................30
   Section 4.02.     Change of Control...........................................................................30
   Section 4.03.     Limitation on Asset Sales...................................................................32
   Section 4.04.     Limitation on Restricted Payments...........................................................33
   Section 4.05.     Incurrence of Indebtedness and Issuance of Preferred Stock..................................36
   Section 4.06.     Limitation on Liens.........................................................................37
   Section 4.07.     Dividend and Other Payment Restrictions Affecting Subsidiaries..............................37
   Section 4.08.     Limitation on Transactions with Affiliates..................................................38
   Section 4.09.     Designation of Restricted and Unrestricted Subsidiaries.....................................39
   Section 4.10.     Limitation on the Company's Business........................................................40
   Section 4.11.     Limitation on Investments...................................................................40
   Section 4.12.     Commission Reports..........................................................................40
   Section 4.13.     Further Instruments and Acts................................................................40

ARTICLE V SUCCESSOR COMPANY......................................................................................41
   Section 5.01.     When the Company May Merge or Transfer Assets...............................................41

ARTICLE VI DEFAULTS AND REMEDIES.................................................................................42
   Section 6.01.     Events and Remedies.........................................................................42
   Section 6.02.     Waiver of Default or Event of Default by Holders............................................44
   Section 6.03.     Acceleration of Maturity....................................................................45

                                       i	

ARTICLE VII DISCHARGE OF INDENTURE; DEFEASANCE...................................................................45
   Section 7.01.     Discharge of Liability on the Notes.........................................................45
   Section 7.02.     Additional Provisions Regarding Covenant Defeasance.........................................45
   Section 7.03.     Additional Conditions to Defeasance.........................................................45

ARTICLE VIII AMENDMENTS..........................................................................................46
   Section 8.01.     Without Consent of Holders..................................................................46
   Section 8.02.     With Consent of Holders.....................................................................47
   Section 8.03.     Payments for Consent........................................................................47

ARTICLE IX MISCELLANEOUS.........................................................................................47
   Section 9.01.     Trust Indenture Act Controls................................................................47
   Section 9.02.     Notices.....................................................................................47
   Section 9.03.     When Notes Disregarded......................................................................48
   Section 9.04.     Rules by Trustee, Paying Agent and Registrar................................................48
   Section 9.05.     Legal Holidays..............................................................................48
   Section 9.06.     Governing Law...............................................................................48
   Section 9.07.     No Personal Liability of Directors, Officers, Employees and Shareholders....................48
   Section 9.08.     Successors..................................................................................49
   Section 9.09.     Multiple Originals..........................................................................49
   Section 9.10.     Table of Contents; Headings.................................................................49
   Section 9.11.     Not  Responsible for Recitals or Issuance of Notes..........................................49	

ii

This FIRST SENIOR SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of June 29, 2001, to the Senior Indenture (the "Existing Indenture") dated as of November 13, 1997, between CONSECO, INC., an Indiana corporation (the "Company"), and THE BANK OF NEW YORK, a New York corporation, successor to LTCB Trust Company, as Trustee (the "Trustee") (the Existing Indenture as supplemented by this Supplemental Indenture, the "Indenture").
RECITALS
WHEREAS, the Company and the Trustee have heretofore executed and delivered the Existing Indenture to provide for the issuance of the Company's securities in one or more series;
WHEREAS, Sections 3.1 and 8.1 of the Existing Indenture provide, among other things, that the Company and the Trustee may without the consent of Holders enter into indentures supplemental to the Existing Indenture to provide for specific terms applicable to any series of Securities and to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series);
WHEREAS, the Company desires to provide for the issuance of new series of debt securities to be designated as the 10 3/4% Senior Notes due 2008, and to set forth the terms that will be applicable thereto; and
WHEREAS, all action on the part of the Company necessary to make this Supplemental Indenture a valid agreement of the Company and to authorize the issuance of the Notes under the Indenture (as supplemented hereby) has been duly taken;
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
APPLICATION OF SUPPLEMENTAL INDENTURE
AND CREATION OF 10 3/4% SENIOR NOTES DUE 2008
Section 1.01. Application of this Supplemental Indenture. The covenants included in this Supplemental Indenture are expressly being included solely for the benefit of the 10 3/4% Senior Notes due 2008 (the "Notes"). The Notes constitute a series of Securities as provided in Section 3.1 of the Existing Indenture.
Section 1.02. Effect of Supplemental Indenture. The Existing Indenture shall be supplemented pursuant to Sections 3.1 and 8.1 to establish the terms of the Notes as set forth in this Supplemental Indenture, including as follows:

(a) The definitions set forth in Article 1 of the Existing Indenture shall be modified to the extent provided in Article II of this Supplemental Indenture;
(b) The forms of the securities representing the Notes required to be established pursuant to Sections 2.1 and 3.1(b)(20) of the Existing Indenture shall be established in accordance with
Section 1.03 of this Supplemental Indenture;
(c) The provisions of Article VII of this Supplemental Indenture shall supplement the provisions of Article 4 of the Existing Indenture;
(d) The provisions of Article 5 of the Existing Indenture specifying certain Events of Default are deleted as contemplated by Section 3.1(b)(16) of the Existing Indenture and are replaced in their entirety by Article VI hereof;
(e) The provisions of Article V hereof regarding merger and transfer of assets shall supersede in their entirety the provisions of Article 7 of the Existing Indenture, as permitted by Section 8.1(5) of the Existing Indenture;
(f) The provisions of Sections 8.1 and 8.2 of the Existing Indenture regarding supplemental indentures are supplemented as provided in Article VIII of this Supplemental Indenture;
(g) The provisions of Article 9 of the Existing Indenture regarding certain covenants of the Company shall be supplemented by the provisions of Article IV of this Supplemental Indenture;
(h) The provisions of Article 10 of the Existing Indenture regarding redemption shall be supplemented by the provisions of Article III of this Supplemental Indenture.
Section 1.03. Amount of Notes. The Notes shall be known and designated as the "10 3/4% Senior Notes due 2008." The aggregate principal amount of Notes that may be authenticated and delivered under this Supplemental Indenture is up to $750,000,000, except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, Notes pursuant to Section 3.4, 3.5, 3.6, 8.6 or 10.7 of the Existing Indenture. The aggregate principal amount that shall be initially authenticated and delivered by the Trustee (the "Initial Notes") shall be an amount up to $400,000,000; the aggregate principal amount of additional Notes that may be authenticated and delivered under the Indenture on one or more occasions (the "Additional Notes") is $350,000,000 (the issuance of any Additional Notes being subject to compliance with Section 4.05 below).
Section 1.04. Terms of the Initial Notes and the Additional Notes; Form of Security. The Initial Notes and the Additional Notes shall together constitute one series for purposes of the Existing Indenture and this Supplemental Indenture. Notwithstanding the foregoing, the Company shall establish the terms of any Additional Notes and appropriate modifications to Exhibit A with respect to such Additional Notes by a resolution of the board of
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directors of the Company in the manner set forth in Section 3.1 of the Existing Indenture. The Notes are issuable in fully registered form without coupons in substantially the form of Exhibit A hereto. The Notes are not issuable in bearer form. The terms and provisions contained in the form of Note shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereto. Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and are not inconsistent with the provisions of the Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed.
Section 1.05. Registrar and Paying Agent. The Company hereby initially appoints the Trustee as Paying Agent, Registrar and transfer agent for the Notes.
ARTICLE II
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 2.01. Definitions.
(a) All capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Existing Indenture.
(b) The following are definitions used in this Supplemental Indenture and to the extent that a term is defined both herein and in the Existing Indenture, the definition in this Supplemental Indenture shall govern with respect to the Notes.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
"Adjusted Total Shareholders' Equity" means, with respect to any specified Person, as of any date of determination, the Total Shareholders' Equity of such Person as of the end of its most recent fiscal quarter ending at least 45 days prior to such date of determination; provided, however, that pro forma effect shall be given to (x) any of the following that shall have occurred since the end of the relevant fiscal quarter or that shall occur simultaneously with or immediately following the transaction giving rise to the need to calculate Adjusted Total Shareholders' Equity and (y) the use of any proceeds of such transaction to effect any of the
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following (in each case without duplication and as if the following had occurred on the last day of such fiscal quarter):
(a) issuances and sales of Capital Stock by such specified Person or any of its Subsidiaries;
(b) Investments in (by merger or otherwise) or acquisitions of any Subsidiary of such specified Person or any Person that becomes such a Subsidiary as a result of such Investment or acquisition or in assets which constitute all or substantially all of an operating unit of a business;
(c) Restricted Payments and Permitted Investments; and
(d) Asset Sales.
"Admitted Assets" means with respect to an Insurance Subsidiary the total assets of such Insurance Subsidiary determined under Statutory Accounting Practices.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided, that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have corresponding meanings.
"Applicable Premium" means, with respect to a Note at any time of determination, the excess, if any, of (A) the present value at such time of determination of the remaining required interest and principal payments (including any past due or accrued and unpaid interest) in respect of the portion of such note to be redeemed, computed using a discount rate equal to the applicable Treasury Rate plus 50 basis points, over (B) the then Outstanding principal amount of the portion of such Note to be redeemed.
"Asset Finance Indebtedness" means any Indebtedness by Conseco Finance which is not Non-Asset Finance Indebtedness.
"Asset Sale" means:
(a) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory or equipment (including, without limitation, repossessed and/or off-lease property of Conseco Finance) in the ordinary course of business consistent with past practices; provided, that the sale, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions described in Section 4.02 hereof and/or the provisions described in Article V hereof and not by the provisions of Section 4.03 hereof; and
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(b) the issuance of Equity Interests in any of the Company's Restricted Subsidiaries or the sale of Equity Interests in any of the Company's Subsidiaries.
Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:
(a) any single transaction or series of related transactions that involves assets having a fair market value of less than $50 million;
(b) a transfer of assets between or among the Company and its Restricted Subsidiaries (or between or among Restricted Subsidiaries and other such Restricted Subsidiaries);
(c) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary of the Company;
(d) (i) a disposition of assets pursuant to any reinsurance arrangements in the ordinary course of business or (ii) any other disposition pursuant to a reinsurance agreement so long as (x) the proceeds therefrom are retained by an Insurance Subsidiary, (y) such proceeds are used for the general corporate purposes of the Insurance Subsidiaries (including for reinvestment within insurance lines of business similar to the Company's insurance lines of business at the time of the relevant transaction) and (z) the aggregate statutory profit and/or gains on insurance policy sales or other portfolio transfers resulting from all dispositions described in this clause
(ii) consummated after August 25, 2000 shall not exceed $250 million;
(e) a sale or lease of assets in the ordinary course of business;
(f) the issuance of Equity Interests in the Company;
(g) a sale or other disposition of cash or Cash Equivalents;
(h) a Restricted Payment or Permitted Investment that is permitted by Section 4.04 hereof;
(i) 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:
(j) dispositions of Investments by Insurance Subsidiaries (other than any of their respective Investments in Persons engaged in insurance lines of business) in the ordinary course of business consistent with past practices;
(k) dispositions of (i) in the case of Conseco Finance, loans, leases, receivables, installment contracts and other financial products originated, acquired, sold or securitized by Conseco Finance or (ii) interests in or components of Interest Only Securities;
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(l) transfers resulting from any casualty or condemnation of property or assets;
(m) licenses or sublicenses of intellectual property and general intangibles and licenses, leases or subleases of other property in the ordinary course of business;
(n) any consignment arrangements or similar arrangements for the sale of assets in the ordinary course of business and consistent with the past practices of the Company and its Subsidiaries; and
(o) the sale or discount of overdue accounts receivable arising in the ordinary course of business and consistent with the past practices of the Company and its Subsidiaries, but only in connection with the compromise or collection thereof.
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, at any date of determination:
(a) if such Sale and Leaseback Transaction is a Capital Lease Obligation, the amount of Indebtedness represented thereby according to the definition of "Capital Lease Obligation;" and
(b) in all other instances, the greater of:
(1) the fair market value of the property subject to such Sale and Leaseback Transaction (which shall be determined, if such property has a fair market value in excess of $50 million, by a Senior Executive and evidenced by a resolution, dated within 30 days of the relevant transaction, delivered to the Trustee); and
(2) the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended).
"B-Share Financings" means the financing of fees or commissions related to B-Shares.
"B-Shares" means those shares or ownership representing a mutual interest in a pool of assets on which 12b-1 fees or contingent deferred sales commissions (CDSC), as defined under the Investment Company Act of 1940, as amended, are applicable.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable
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or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"board of directors" means:
(a) with respect to a corporation, the board of directors of the corporation;
(b) with respect to a partnership, the board of directors of the general partner of the partnership; and
(c) with respect to any other Person, the board or committee of such Person serving a similar function.
"Business Day" means each day that is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.
"Capital Stock" means:
(a) in the case of a corporation, corporate stock;
(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(a) Dollars;
(b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided, that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than one year from the date of acquisition;
(c) certificates of deposit, time deposits and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with
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any lender party to any of the Credit Agreements or with any domestic commercial bank having capital and surplus in excess of $500.0 million and short term debt rating of at least A-1 by S&P and P-1 by Moody's;
(d) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications specified in clause (c) above;
(e) commercial paper having a rating of at least P-1 by Moody's or A-1 by S&P and in each case maturing within six months after the date of acquisition;
(f) 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 A-2 by Moody's;
(g) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any lender party to any of the Credit Agreements or any commercial bank satisfying the requirements of clause (c) of this definition; and
(h) money market funds or similar funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (g) of this definition.
"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.
"Change of Control" means the occurrence of any of the following:
(a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act);
(b) the adoption of a plan relating to the liquidation or dissolution of the Company;
(c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Company's Voting Stock, measured by voting power rather than number of shares; or
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(d) the first day on which a majority of the members of the Company's board of directors are not Continuing Directors.
"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, as amended.
"Conseco Facilities" means:
(a) the Senior Secured Revolving Credit Agreement, dated as of May 30, 2000, among the Company, the banks parties thereto, Chase Manhattan Bank, as administrative agent and Chase Securities Inc. and Banc of America Securities LLC as co-lead arrangers and co-lead book managers;
(b) the 364-Day Credit Agreement, dated as of September 25, 1998, among the Company, the banks parties thereto, the syndication agents and documentation agent named therein and Bank of America, N.A., as agent, as amended to incorporate the obligations of the Company under the ECN Dealer Agreement between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated September 28, 1999; and
(c) the Five-Year Credit Agreement, dated as of September 25, 1998, among the Company, the banks parties thereto, the syndication agents and documentation agent named therein and Bank of America, N.A., as agent;
in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Conseco Finance" means, collectively, Conseco Finance Corp., a Delaware corporation, and its consolidated Subsidiaries.
"Consolidated Adjusted Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period:
(1) net investment losses and minus net investment gains (adjusted for that portion of cost of policies purchased and cost of policies produced relating to such losses or gains); plus
(2) venture capital losses and minus venture capital income related to the Investment in TeleCorp PCS, Inc. (adjusted for that portion of cost of policies purchased and cost of policies produced relating to such losses or income); plus
(3) special expense or loss items and minus special income or gain items not relating to the continuing operations of the specified business of such Person (including impairment charges to reduce the value of interest only securities and servicing rights, the provision for losses related to loan guarantees, expenses related to restructuring activities and other special charges); plus
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(4) the net loss or minus the net gain related to businesses such Person intends to sell; plus
(5) any expense resulting from a change in the regulatory environment; plus
(6) an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus
(7) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
(8) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations (excluding Hedging Obligations of Insurance Subsidiaries), but excluding the interest expense on direct third party borrowings of Conseco Finance and investment borrowings of Insurance Subsidiaries to the extent that any such expense was deducted in computing such Consolidated Net Income; plus
(9) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding (a) any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period, (b) amortization of a prepaid cash expense that was paid in a prior period, including deferred policy acquisition costs, (c) amortization of the present value of future profits, and (d) any non-cash expense constituting an extraordinary item of loss) of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus
(10) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; plus
(11) amounts applicable to minority interest including payment of dividends under Trust Preferred Securities;
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified person (the "Specified Person"), for any period, the net income of such Specified Person and its consolidated
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Subsidiaries determined on a consolidated basis in accordance with GAAP (and if not otherwise deducted, after deduction of amounts applicable to minority interest, including payment of dividends under Trust Preferred Securities).
"Continuing Director" means, as of any date of determination, any member of the Company's board of directors who:
(a) was a member of the Company's board of directors on the date hereof; or
(b) was nominated for election or elected to the Company's board of directors with the approval of a majority of the Continuing Directors who were members of the Company's board at the time of such nomination or election.
"Credit Agreements" means:
(a) the Conseco Facilities; and
(b) the D&O Facilities; in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means, one or more debt facilities (including, without limitation, the Credit Agreements) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
"D&O Facilities" means:
(a) the Termination and Replacement Agreement, dated as of May 30, 2000, among the individual borrowers parties thereto, the banks parties thereto, Chase Manhattan Bank, as administrative agent and Chase Securities Inc. and Banc of America Securities LLC as co-lead arrangers and co-lead book managers and the related guaranty by each of the Company and CIHC, Incorporated;
(b) the Credit Agreement, dated as of August 21, 1998, among the individual borrowers party thereto, the banks party thereto and Bank of America, N.A., as administrative agent and the related guaranty by each of the Company and CIHC, Incorporated;
(c) the Amended and Restated Credit Agreement, dated as of August 26, 1997, among the individual borrowers parties thereto, the banks parties thereto and Bank of America, N.A., as administrative agent and the related guaranty by each of the Company and CIHC, Incorporated;
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(d) the Credit Agreement, dated as of November 22, 2000, among the persons listed on the signature pages thereto, as Borrowers, the other financial institutions party thereto and Bank of America, N.A., as administrative agent (relating to refinancing of certain loans under that certain Credit Agreement, dated as of August 21, 1998) and the related guaranty by each of the Company and CIHC, Incorporated;
(e) the Credit Agreement, dated as of November 22, 2000, among the persons listed on the signature pages thereto, as Borrowers, the other financial institutions party thereto and Bank of America, N.A., as administrative agent (relating to refinancing of certain loans under that certain Credit Agreement, dated as of August 26, 1997) and the related guaranty by each of the Company and CIHC, Incorporated; and
(f) the Credit Agreement, dated as of November 22, 2000, among the persons listed on the signature pages thereto, as Borrowers, the other financial institutions party thereto and The Chase Manhattan Bank, as administrative agent (relating to refinancing of certain loans under that certain Credit Agreement, dated as of September 15, 1999, as terminated and replaced by that certain Termination Replacement Agreement, dated as of May 30, 2000) and the related guaranty by each of the Company and CIHC, Incorporated;
in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.04 hereof.
"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). For the avoidance of doubt, the term "Equity Interests" will not include Trust Preferred Securities.
"Equity Offering" means any public or private sale of Capital Stock (other than Disqualified Stock) made for cash on a primary basis by the Company after the date hereof.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
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"Existing Indebtedness" means the aggregate principal amount of the Company's and its Restricted Subsidiaries' Indebtedness (other than Indebtedness under the Credit Agreements) in existence on the date hereof, until such amounts are repaid.
"Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of:
(a) the consolidated interest expense on Indebtedness of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations of the Company; plus
(b) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus
(c) any interest expense on Indebtedness of another Person that is Guaranteed and funded by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries; plus
(d) the product of (i) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of such Person or any of its Restricted Subsidiaries, times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
Notwithstanding the foregoing, interest expense or other amounts incurred in the ordinary course of business by Conseco Finance shall not be included as part of Fixed Charges and interest expense related to investment borrowings of Insurance Subsidiaries shall be excluded from Fixed Charges.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person for any period, the ratio of the Consolidated Adjusted Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase
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or redemption of Preferred Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(a) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Consolidated Adjusted Cash Flow for such reference period will be calculated on a pro forma basis in accordance with Regulation S-X under the Securities Act;
(b) the Consolidated Adjusted Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, will be excluded; and
(c) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, which are in effect on the date of the determination.
"Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person, the obligations of such Person incurred in the normal course of business and consistent with past practices and not for speculative purposes under:
(a) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;
(b) foreign exchange contracts and currency protection agreements entered into with one or more financial institutions designed to protect the person or entity entering into the agreement against fluctuations in interest rates or currency exchanges rates with respect to Indebtedness incurred and not for purposes of speculation;
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(c) any commodity futures contract, commodity option or other similar agreement or arrangement designed to protect against fluctuations in the price of commodities used by that entity at the time;
(d) other agreements designed to hedge against market risks associated with the issuance of insurance products; and
(e) other agreements or arrangements designed to protect such person against fluctuations in interest rates or currency exchange rates.
"Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(c) in respect of banker's acceptances;
(d) representing Capital Lease Obligations;
(e) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or
(f) representing any Hedging Obligations;
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP; it being understood that for the avoidance of doubt Trust Preferred Securities shall be Indebtedness for purposes hereof. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and
(b) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.
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"Insurance Subsidiary" means any of the Company's Subsidiaries that is subject to regulation as an insurance company by the insurance regulatory authorities of its jurisdiction of domicile.
"Interest Only Security" means any interest, including servicing fees, retained by Conseco Finance relating to the sale or securitization of loans, leases, receivables or installment contracts, which constitutes either an interest only security or a servicing right asset in accordance with GAAP.
"Investment Grade Securities" means (i) cash or Cash Equivalents, (ii) debt securities or debt instruments with a BBB- or higher rating by S&P, Baa3 or higher rating by Moody's, or Class (2) or higher rating by the NAIC, or (iii) commercial paper with an A-2 or higher rating by S&P or a P-2 or higher rating by Moody's, or the equivalent of such ratings by S&P, Moody's or the NAIC, or, if neither S&P, Moody's nor the NAIC makes a rating publicly available, the equivalent of such ratings by a nationally recognized securities rating agency or agencies, as the case may be, selected by the Company which shall be substituted for S&P, Moody's or the NAIC. For purposes of this definition, Indebtedness secured by one or more mortgages shall not be deemed to be debt securities or debt instruments.
"Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any of its Subsidiaries sell or otherwise dispose of any Equity Interests of any of the Company's direct or indirect Subsidiaries such that, after giving effect to any such sale or disposition, such Person is no longer the Company's Subsidiary, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in Section 4.04(c) hereof. The acquisition by the Company or any of its Subsidiaries of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person in an amount determined as provided in
Section 4.04(c) hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York or Indiana.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
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"Moody's" means Moody's Investors Service, Inc., or any successor to the rating business thereof.
"NAIC" means National Association of Insurance Commissioners, or any successor organization thereto.
"Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.
"Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, other than Senior Debt secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.
"Non-Asset Finance Indebtedness" means total Indebtedness of Conseco Finance less the sum of unrestricted cash and Cash Equivalents of Conseco Finance, book value of all finance receivables of Conseco Finance and 85% of servicing advance receivables of Conseco Finance.
"Non-Investment Grade Securities" means any equity securities or debt securities or debt instruments other than Investment Grade Securities, except for (i) debt securities or debt instruments issued by the Company or its Subsidiaries and (ii) Specified Investments.
"Non-Recourse Debt" means Indebtedness:
(a) as to which neither the Company nor any of the Company's Restricted Subsidiaries (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor or otherwise, or (iii) constitutes the lender;
(b) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both, any holder of any other Indebtedness (other than the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its stated maturity; and
(c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.
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"Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
"Permitted Business" means (a) the life insurance and reinsurance business, (b) the investment management business, (c) consumer and commercial finance business and (d) any business incidental or reasonably related thereto or which is a reasonable extension thereof as determined in good faith by the Company's board of directors or executive committee thereof and set forth in an Officers' Certificate delivered to the Trustee.
"Permitted Debt" means:
(a) the incurrence by the Company and any of its Subsidiaries of Indebtedness and letters of credit (with letters of credit being deemed to have a principal amount equal to the Company's or any of its Subsidiaries' maximum potential liability thereunder) under:
(i) the Conseco Facilities in an aggregate amount at any one time outstanding not to exceed $1.5 billion; and
(ii) the D&O Facilities in an aggregate amount at any one time outstanding not to exceed the amount outstanding on the date hereof;
provided, that the aggregate principal balance of Indebtedness that may be outstanding at any one time under the Credit Agreements shall be permanently reduced to the extent that the amount available under the Credit Agreements is, by the terms of any Credit Agreement then in effect, permanently reduced as a result of one or more Asset Sales;
(b) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(c) the incurrence of Indebtedness represented by the Notes issued and sold in the offering;
(d) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by Section 4.05 hereof or clauses (b), (c), (d), (i) or (q) of this definition;
(e) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and its Restricted Subsidiaries (or between Restricted Subsidiaries); provided, however, that: (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or any of its Subsidiaries and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or its Restricted Subsidiary; will be deemed, in each case, to constitute an
18

incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, that was not permitted by this clause (e);
(f) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations;
(g) the Guarantee by the Company or any of its Subsidiaries of the Company's or its Subsidiaries' Indebtedness that was permitted to be incurred by another provision of this definition;
(h) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this definition; provided, in each such case, that the amount thereof is included in the Company's Fixed Charges as accrued;
(i) the incurrence by Subsidiaries of Indebtedness related to Permitted Transactions;
(j) contingent obligations of the Company and/or any of the Company's Subsidiaries in the ordinary course of business not otherwise described above or below in an aggregate amount not to exceed at any time ten percent (10%) of Total Shareholders' Equity of the Company;
(k) the incurrence by the Company or any of its Subsidiaries of Permitted Nonrecourse Transaction Indebtedness;
(l) the incurrence by the Company or any of its Subsidiaries of secured Indebtedness, including without limitation, capitalized lease liabilities and purchase money debt; provided, that the aggregate outstanding principal amount of Indebtedness of this type does not exceed at any time ten percent (10%) of Total Shareholders' Equity of the Company at such time;
(m) Indebtedness in respect of surplus debentures entered into by an Insurance Subsidiary;
(n) the incurrence by the Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by the Company's Restricted Subsidiary that was not permitted by this clause (n);
(o) Asset Finance Indebtedness; provided, that such Indebtedness is non-recourse to the Company;
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(p) Non-Asset Finance Indebtedness; provided, however, that such Non-Asset Finance Indebtedness shall not exceed at any time outstanding fifty percent (50%) of Total Shareholders' Equity of Conseco Finance and provided, further, that at the time of incurrence of such Non-Asset Finance Indebtedness, the ratio of Conseco Finance's Total Shareholders' Equity to Total Managed Receivables shall be at least 4%; and
(q) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause
(q), not to exceed $200 million.
For purposes of determining compliance with Section 4.05 hereof, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (q) above, or is entitled to be incurred pursuant to such covenant, the Company will be permitted to classify or (later classify or reclassify in whole or in part in the Company's sole discretion) such item of Indebtedness in any manner that complies with such Section.
"Permitted Investments" means:
(a) any Investment in the Company or any of its Restricted Subsidiaries;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any of its Subsidiaries in a Person, if as a result of such Investment:
(i) such Person becomes the Company's Restricted Subsidiary; or
(ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or any of its Restricted Subsidiary;
(d) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.03;
(e) any acquisition of assets solely in exchange for the issuance of the Company's Equity Interests (other than Disqualified Stock);
(f) any Investments received in compromise of obligations of such Persons incurred in the ordinary course of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer;
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(g) any Investment made by a Subsidiary (other than CIHC, Incorporated) in the ordinary course of its business;
(h) Hedging Obligations permitted to be incurred under Section 4.05; and
(i) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (i) that are at the time outstanding, not to exceed $50 million per year.
"Permitted Liens" means:
(a) Liens of the Company existing on the date hereof securing Senior Debt referred to in clauses (a), (b) and (c) of the definition of "Permitted Debt" herein that was permitted by the terms of Section 4.05 hereof to be incurred;
(b) Liens in the Company's favor;
(c) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any of its Restricted Subsidiary; provided, that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or such Restricted Subsidiary;
(d) Liens on property existing at the time of acquisition of the property by the Company or any of its Restricted Subsidiaries, provided, that such Liens were in existence prior to the contemplation of such acquisition;
(e) Liens existing on the date hereof, including any subsequent renewals, extensions or replacements thereof which do not increase with respect to the Obligations secured;
(f) Liens for taxes, assessments or governmental charges or claims that are not delinquent for more than 60 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided, that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(g) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries;
(h) Liens in connection with Permitted Transactions;
(i) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or other forms of governmental insurance or benefits or to secure performance of tenders, statutory obligations, leases
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and contracts (other than for borrowed money) entered into the ordinary course of business or to secure obligations on surety or appeal bonds;
(j) Liens of mechanics, carriers, and materialmen and other like Liens 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;
(k) 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;
(l) Liens in favor of the trustees on sums required to be deposited with such trustees under the senior and subordinated indentures of the Company and its Subsidiaries existing as of the date hereof;
(m) Liens incurred on assets of Conseco Finance securing Indebtedness which is expressly permitted by clause (o) or (p) of the definition of Permitted Debt herein;
(n) Liens securing Indebtedness permitted by clause (l) of the definition of Permitted Debt herein;
(o) easements, rights-of-way, zoning restrictions, restrictions and other similar encumbrances incurred in the ordinary course of business and which do not materially interfere with the ordinary course of business of the Company and its Subsidiaries;
(p) Liens on property of the Company and its Subsidiaries in favor of landlords securing licenses, subleases or leases of property permitted hereunder;
(q) licenses, leases or subleases permitted hereunder granted to others not interfering in any material respect in the business of the Company and its Subsidiaries;
(r) attachment or judgment Liens not constituting an Event of Default under the Indenture;
(s) 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;
(t) Liens in connection with a Permitted TeleCorp Hedge Transaction; and
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(u) Liens incurred in the ordinary course of business of the Company or its Subsidiaries with respect to obligations that do not exceed $50 million at any time outstanding.
"Permitted Nonrecourse Transaction Indebtedness" means nonrecourse Indebtedness of the Company and its Restricted Subsidiaries (other than Conseco Finance) resulting from the sale or securitization of non-Admitted Assets, policy loans, B-Share Financings, CBOs and CMOs.
"Permitted Refinancing Indebtedness" means any of the Company's or its Subsidiaries' Indebtedness issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund of the Company's or its Subsidiaries' other Indebtedness (other than intercompany Indebtedness); provided, that:
(a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith);
(b) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
(d) such Indebtedness is incurred either by the Company or by the Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.
"Permitted TeleCorp Hedge Transaction" means Liens securing obligations under hedging transactions relating to the value of the capital stock in TeleCorp PCS, Inc. with counterparties having a senior unsecured non-credit enhancing long-term debt rating of at least A2 from Moody's and A from S&P.
"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
23

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, (e) transactions in which a federal home loan mortgage bank (a "FHLMB") makes loans, which are sufficiently secured by appropriate assets consisting of government agency mortgage-backed securities, in accordance with the rules, regulations and guidelines of such FHLMB for its loan programs, (f) financing transactions in which Conseco Finance sells or transfers as collateral loans, leases, receivables or installment contracts to a third party while simultaneously contracting to repurchase or reacquire substantially the same assets and (g) the issuance of any asset backed securities by Conseco Finance.
"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or any agency or political subdivision thereof.
"Preferred Stock" means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of any other class of Capital Stock issued by such Person. Preferred Stock includes Disqualified Stock and any Trust Preferred Securities.
"Receivables" means consumer and commercial loans, leases and receivables purchased or originated by the Company or any Restricted Subsidiary in the ordinary course of business; provided, however, that for purposes of determining the amount of a Receivable at any time, such amount shall be determined in accordance with GAAP, consistently applied, as of the most recent practicable date.
"Restricted Investment" means an Investment other than a Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation, or any successor to the rating business thereto.
"Sale and Leaseback Transaction" means any direct or indirect arrangement relating to property now owned or hereafter acquired whereby the Company or any of its Subsidiaries transfer such property to another Person and the Company or any of its Subsidiaries lease it from such Person.
"Senior Debt" means:
(a) the Company's Indebtedness outstanding under Credit Facilities and all Hedging Obligations with respect thereto;
(b) any other Indebtedness of the Company permitted to be incurred under the terms of the Indenture, unless the instrument under which such Indebtedness is
24

incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes; and
(c) all Obligations with respect to the items listed in the preceding clauses (a) and (b).
Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:
(a) any liability for federal, state, local or other taxes owed or owing by the Company;
(b) any intercompany Indebtedness of the Company or any of its Subsidiaries to the Company or any of its Affiliates;
(c) any trade payables; or
(d) the portion of any Indebtedness that is incurred in violation of the Indenture.
"Senior Executive" means the chief financial officer, treasurer or member of the office of the chief executive of the Company.
"Shorter-Term Public Debt" means the Company's 8.5% Notes due October 15, 2002, 6.4% Notes due February 10, 2003, 8?% Senior Notes due February 15, 2003, 10.5% Senior Notes due December 15, 2004, 8.75% Notes due February 9, 2004, 6.8% Notes due June 15, 2005 and 9% Notes due October 15, 2006.
"Significant Subsidiary" means any Subsidiary of the Company with, after the elimination of intercompany accounts, (a) assets which constituted at least 5% of the Company's consolidated total assets, or (b) revenues which constituted at least 5% of the Company's consolidated total revenue or (c) net earnings which constituted at least 5% of the Company's consolidated total net earnings, but not less than $10,000,000, all as determined as of the date of the Company's most recently prepared quarterly financial statements for the 12-month period then ended.
"Specified Investments" means Investments by the Company or any of its Subsidiaries of up to $50 million in the aggregate at any one time in (1) companies conducting solely insurance business (or holding companies holding solely Capital Stock of such companies), or (2) debt or equity securities of one or more Persons controlled by the Company or its Affiliates, or in Persons controlled by such Persons, which are formed primarily for the purpose of investing in or acquiring, and owning and operating, insurance businesses.
"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
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"Statutory Accounting Practices" means, with respect to an Insurance Subsidiary, applicable statutory accounting practices prescribed or permitted by the state of domicile of such Insurance Subsidiary.
"Subsidiary" means, with respect to any specified Person:
(a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof);
(b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are that Person or one of more Subsidiaries of that Person (or any combination thereof);
(c) any limited liability company of which more than 50% of the membership interest is owned or controlled by that Person or a Subsidiary of such Person; and
(d) a trust, association or other unincorporated organization of which more than 50% of the beneficial interest is owned or controlled by such Person or a Subsidiary of such Person; provided, that, with respect to any Investment made by the Company in any Person in the ordinary course of business solely for investment purposes, such Person shall not be considered a Subsidiary of the Company for the purposes of this Supplemental Indenture if such Person is not integral to the business or operations of the Company or any Significant Subsidiary.
"Total Managed Receivables" means the averaged managed receivables of Conseco Finance, as reported in its most recent annual report on Form 10-K filed with the Commission.
"Total Shareholders' Equity" means, with respect to any specified Person, the sum of, without duplication, total common and preferred shareholders' equity of such specified Person as determined in accordance with GAAP (calculated excluding unrealized gains (losses) of securities as determined in accordance with FAS 115), less any amounts attributable to Disqualified Stock.
"Treasury Rate" means, with respect to the Notes, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) which has become publicly available at least two Business Days prior to the date fixed for redemption (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the then remaining Weighted Average Life to Maturity of the Notes; provided, however, that if the Weighted Average Life to Maturity of the Notes is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given,
26

the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that, if the Weighted Average Life to Maturity of such series is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
"Trust Preferred Securities" means mandatorily redeemable preferred securities (a) issued by one or more Delaware business trusts formed by the Company and (b) guaranteed by the Company, including specifically, "MIPS," "QuIPS," "TOPrS," "TruPS" and similar instruments.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means any of the Company's Subsidiaries that is designated by the Company's board of directors or the executive committee thereof as an Unrestricted Subsidiary pursuant to a resolution, but only to the extent that such Subsidiary:
(a) has no Indebtedness other than Non-Recourse Debt;
(b) is not party to any agreement, contract, arrangement or understanding with the Company or any of its Restricted Subsidiaries unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or any of its Restricted Subsidiary than those that might be obtained at the time from Persons who are not the Company's Affiliates;
(c) is a Person with respect to which neither the Company nor any of the Company's Restricted Subsidiaries have any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results;
(d) has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and
(e) has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of any of the Company's Subsidiaries as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of the board resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.04. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such
27

Subsidiary will be deemed to be incurred by the Company's Restricted Subsidiaries as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.05, the Company will be in default of such Section. The Company's board of directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that such designation will be deemed to be an incurrence of Indebtedness by the Company's Restricted Subsidiaries of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.05, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(b) the then outstanding principal amount of such Indebtedness.
Section 2.02. Other Definitions.

Term                                                                                            Defined in Section
----                                                                                            ------------------
"Additional Notes"                                                                                            1.02
"Affiliate Transaction"                                                                                       4.08
"Bankruptcy Law"                                                                                              6.01
"Change of Control Offer"                                                                                     4.02
"Change of Control Payment"                                                                                   4.02
"Change of Control Payment Date"                                                                              4.02
"covenant defeasance"                                                                                         7.02
"Custodian"                                                                                                   6.01
"defeasance"                                                                                                  7.03
"Events of Default"                                                                                           6.01
"Initial Notes"                                                                                               1.02
"Notice of Default"                                                                                           6.01
"Payment Default"                                                                                             6.01	

Section 2.03. Incorporation by Reference of Trust Indenture Act. The Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of the Indenture. The following Trust Indenture Act terms have the following meanings:
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"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Supplemental Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other obligor on the indenture securities.
All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions.
ARTICLE III
REDEMPTION
The provisions set forth below shall be applicable to the Company and the Trustee in addition to the provisions in Article 10 of the Existing Indenture, which shall be otherwise applicable in respect of the Notes.
Section 3.01. Optional Redemption. (a) From and after the issuance of Notes, Notes will be subject to redemption at the option of the Company, in whole or in part, at any time or from time to time at a Redemption Price equal to the sum of the principal amount of the Notes plus accrued and unpaid interest, if any, accrued to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date) plus the Applicable Premium.
(b) From and after June 15, 2005, the Notes shall be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the Redemption Prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to the applicable Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date) if redeemed during the twelve-month period beginning on June 15 of the years indicated below:

Year                               Percentage
----                               ----------
2005                               105.375%
2006                               102.688%
2007 and thereafter                100.000%	

(c) At any time and from time to time prior to June 15, 2004, the Company may redeem in the aggregate up to 35% of the aggregate principal amount of the Notes then Outstanding with the proceeds of one or more Equity Offerings, at a Redemption Price of 110.75% of the principal amount plus accrued and unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on
29

the relevant Interest Payment Date); provided, that (i) at least 65% of the aggregate principal amount of the Notes then Outstanding remain Outstanding immediately after the occurrence of such redemption excluding Notes held by the Company or any of its Subsidiaries and (ii) the redemption occurs within 45 days of the date of the closing of such Equity Offering.
Section 3.02. Selection. If less than all of the Notes are to be redeemed at any time, the Trustee shall select Notes for redemption as follows:
(1) if the Notes are listed on any national securities exchange (within the meaning of a "national securities exchange" in Section 6 of the Exchange Act), in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any "national securities exchange," on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate.
Section 3.03. No Conditional Redemption. No notice of redemption with respect to the Notes may provide that such redemption is conditioned upon the deposit of moneys by the Company or that the Company retains the right to rescind such notice.
ARTICLE IV
COVENANTS
The covenants set forth below shall be applicable to the Company in addition to the covenants in Article 9 of the Existing Indenture, which shall in all respects be applicable in respect of the Notes.
Section 4.01. Covenant Cancellation. When:
(i) the Notes have been rated as Investment Grade Securities by either S&P or Moody's; and
(ii) no Default or Event of Default has occurred and is continuing under the Indenture as of such time;
the Company and the Subsidiaries will not thereafter be subject to the following provisions of this Supplemental Indenture: Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.10, 4.11, 5.01(a)(4) and 5.01(a)(5).
Section 4.02. Change of Control. Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of purchase (the "Change of Control Payment"). Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that
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constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by this Section 4.02 and described in such notice. The notice, which shall govern the terms of the Change of Control Offer, shall state:
(a) that the Change of Control Offer is being made pursuant to this Section 4.02 and that all Notes tendered will be accepted for payment;
(b) the Change of Control Payment and the Change of Control Payment Date;
(c) that any Notes not tendered will continue to accrue interest in accordance with the terms of the Indenture;
(d) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;
(e) that Holders electing to have Notes purchased pursuant to the Change of Control Offer will be required to surrender their Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date;
(f) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased;
(g) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof; and
(h) the circumstances and relevant facts regarding such Change of Control (including, but not limited to, information with respect to pro forma historical and, if available, projected financial information after giving effect to such Change of Control, information regarding the Person or Persons acquiring control and such Person's or Persons' business plans going forward).
The Company shall comply with the requirements of Rule 14e-1 of the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.02, the Company shall comply with the applicable securities laws
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and regulations and shall not be deemed to have breached its obligations under this Section 4.02 by virtue thereof.
On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
The Change of Control provisions described in this Section 4.02 shall be applicable whether or not any other provisions of the Indenture are applicable.
The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.02 applicable to a Change of Control Offer made by the Company, and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
Section 4.03. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of, (ii) such fair market value is determined by the board of directors of the Company or the executive committee thereof and evidenced by its resolution set forth in an Officers' Certificate delivered to the Trustee, and (iii) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash. For purposes of this Section 4.03, the following will be deemed to be cash: (x) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are expressly assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability and (y) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are contemporaneously, subject to ordinary settlement periods, converted by the Company or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion.
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Notwithstanding clause (iii) of the first sentence of paragraph
(a) above, any Asset Sale having a fair market value of up to $200 million in the aggregate per year may be for consideration that is less than 75% but at least 50% in the form of cash.
(b) The Company or the Restricted Subsidiary, as the case may be, within 360 days after the receipt of any Net Proceeds from an Asset Sale subject to this Section, may apply such Net Proceeds at its option (1) to reduce (A) Indebtedness under a Credit Facility and to correspondingly reduce commitments with respect thereto, (B) any Shorter-Term Public Debt or (C) any Indebtedness of a Restricted Subsidiary; (2) to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, another Permitted Business; (3) to make a capital expenditure; (4) to acquire any other assets, in each case, that are used or useful in a Permitted Business; or (5) to fund the cash on hand of the Company, up to a maximum of $200 million of additions to such cash on hand.
Pending the final application of any such Net Proceeds, the Company or such Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited hereby or by the Existing Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested as provided in paragraph (b) shall be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $50 million, the Company shall be required to make an offer (pro rata in proportion to the principal amount (or accreted value, if applicable) outstanding in respect of any of the Notes or any Indebtedness ranking pari passu in right of payment with the Notes, the terms of which Indebtedness contain provisions similar to those set forth herein with respect to offers to purchase or redeem with the proceeds of sales of assets) to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase. The Company shall settle its obligations to Holders in respect of any Asset Sale Offer in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of the Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of the Excess Proceeds will be reset at zero.
(d) The Company shall comply, to the extent applicable, with the requirements of Rule 14e-1 of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.03. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.03, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.03 by virtue thereof.
Section 4.04. Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
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(i) (A) declare or pay any dividend or make any other payment or distribution on account of the Company's or to the extent non-ratable any of the Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company's or to the extent non-ratable any of the Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) or to the Company or one of its Restricted Subsidiaries);
(B) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any of the Company's Equity Interests or its Restricted Subsidiaries' Equity Interests not held by the Company or a Restricted Subsidiary or Trust Preferred Securities;
(C) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes, except (A) a payment of interest or principal at the Stated Maturity thereof, (B) intercompany Indebtedness, (C) prepayments of capital lease liabilities in connection with the disposition of the related asset or property and (D) payments on Indebtedness of Conseco Finance; or
(D) make any Restricted Investment (all such payments and other actions set forth in these clauses (A) through (D) being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(ii) (A) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in the second proviso of Section 4.05; and
(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date hereof (excluding Restricted Payments permitted by clauses (ii), (iii) and (iv) of paragraph (b) below), is less than the sum, without duplication, of:
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(1) 50% of the Company's Consolidated Net Income for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date hereof to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus
(2) 100% of the aggregate net cash proceeds received by the Company since the date hereof as a contribution to the Company's common equity capital or from the issue or sale of the Company's Equity Interests (other than Disqualified Stock) or from the issue or sale of the Company's convertible or exchangeable Disqualified Stock or the Company's convertible or exchangeable debt securities that have been converted into or exchanged for such Equity Interests (other than Equity Interests or Disqualified Stock or debt securities) sold to any of the Company's Subsidiaries; plus
(3) to the extent that any Restricted Investment that was made after the date hereof is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment; plus
(4) to the extent that the Company redesignates any Unrestricted Subsidiary as a Restricted Subsidiary after the date hereof and elects to treat the amount specified in
Section 4.09 as a Restricted Payment for purposes of this paragraph (as permitted by such Section 4.09), the lesser of
(i) the fair market value of the Company's Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which the Company originally designated such Subsidiary as an Unrestricted Subsidiary.
(b) So long as no Default or Event of Default has occurred and is continuing or would be caused thereby, paragraph (a) above shall not prohibit:
(i) the payment of any dividend within 60 days after the date of declaration of the dividend, if at the date of declaration the dividend payment would have complied with the provisions of the Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other acquisition of any of the Company's subordinated Indebtedness or of any of the Company's Equity Interests in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to any of the Company's Subsidiaries) of, the Company's Equity Interests (other than Disqualified Stock); provided, that the
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amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (ii)(C)(2) of paragraph (a) above;
(iii) the defeasance, redemption, repurchase or other acquisition of the Company's subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) the repurchase, redemption or other acquisition or retirement for value of any of the Company's or any of its Restricted Subsidiaries' Equity Interests held by any member of the Company's (or any of its Restricted Subsidiaries') management pursuant to any management equity subscription agreement, stock option agreement, employment agreement or similar agreement; provided, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $25 million in any twelve-month period (excluding for this purpose any such repurchases not involving a cash payment by the Company or its Restricted Subsidiaries);
(v) the payment of interest and principal at maturity on the Company's debentures underlying the Trust Preferred Securities (and the related trusts may pay dividends under such Trust Preferred Securities);
(vi) the payment in respect of fractional shares of the Company's Equity Interests;
(vii) the redemption of the Company's common stock and Preferred Stock owned by the Company's Subsidiaries; or
(viii) other Restricted Payments in an aggregate amount since the date hereof not to exceed $150 million.
(c) The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued under this Section shall be determined by a Senior Executive whose certificate with respect thereto shall be delivered to the Trustee. Such Senior Executive's determination shall be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $25 million. No later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.
Section 4.05. Incurrence of Indebtedness and Issuance of Preferred Stock. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including
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Acquired Debt); and, the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock other than to the Company or another Restricted Subsidiary; provided, however, that this Section shall not prohibit the incurrence of Permitted Debt; and, provided, further, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the Net Proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
Section 4.06. Limitation on Liens. The Company shall not and shall not permit any of its Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing Indebtedness or trade payables (other than Permitted Liens) upon any of the Company's property or assets, now owned or hereafter acquired, unless all payments due under the Indenture are secured on an equal and ratable basis with the Obligations so secured until such time as such Obligations are no longer secured by a Lien.
Section 4.07. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
(a) pay dividends or make any other distributions on its Capital Stock to the Company or to any of its Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(b) make loans or advances to the Company or any of its Restricted Subsidiaries; or
(c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(a) agreements governing Existing Indebtedness and Credit Facilities as in effect on the date of this Supplemental Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those agreements, provided, that the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of this Supplemental Indenture;
(b) the Indenture and the Notes;
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(c) applicable law, regulations promulgated under any applicable statute, or action of any governmental agency having regulatory supervision over the Company or any of its Subsidiaries;
(d) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided, that in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;
(e) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;
(f) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on that property of the nature described in clause (c) of the preceding section;
(g) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;
(h) Permitted Refinancing Indebtedness, provided, that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(i) Liens securing Indebtedness otherwise permitted to be incurred under the provisions of Section 4.06 that limit the right of the debtor to dispose of the assets subject to such Liens;
(j) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, assets sale agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business; and
(k) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.
Section 4.08. Limitation on Transactions with Affiliates. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any material payment to, sell, lease, transfer or otherwise dispose of any of its material properties or assets to, or purchase any material property or assets from, or enter into or make or amend any material transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing actions, considered separately, an "Affiliate Transaction"), unless
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(i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee:
(1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15 million, a resolution of its board of directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (i) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the board of directors; and
(2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30 million, an opinion as to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing;
provided, that, for purposes of the foregoing covenant set forth in this Section 4.08, "Affiliate Transactions" shall not include:
(A) any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary and consistent with the past practice of the Company or such Restricted Subsidiary;
(B) transactions between or among the Company and/or its Restricted Subsidiaries not otherwise prohibited hereby or by the Existing Indenture;
(C) transactions with a Person that is the Company's Affiliate solely because the Company owns an Equity Interest in, or controls, such Person;
(D) payment of reasonable directors fees to Persons who are not otherwise the Company's Affiliates;
(E) sales of Equity Interests (other than Disqualified Stock) to the Company's Affiliates; and
(F) Restricted Payments that are permitted by the provisions of Section 4.04 hereof.
Section 4.09. Designation of Restricted and Unrestricted Subsidiaries. The board of directors of the Company or the executive committee thereof may designate any
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Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated shall be deemed to be a Restricted Payment or Investment at the time of such designation and shall be deemed to be either a Restricted Payment for purposes of clause (ii)(C)(4) of paragraph (a) of Section 4.04 or a Permitted Investment for purposes of clause
(i) of the definition of Permitted Investment, as elected by the Company. All such outstanding Investments shall be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation. Such designation shall only be permitted if such Investment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The board of directors of the Company or the executive committee thereof may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if such designation would not cause a Default or Event of Default.
Section 4.10. Limitation on the Company's Business. The Company shall not, and shall not permit any Restricted Subsidiary, to, directly or indirectly, engage in any business other than the Permitted Business, except to the extent as would not be material to the Company and its Subsidiaries taken as a whole.
Section 4.11. Limitation on Investments. The Company shall not, and shall not permit any of its Insurance Subsidiaries to, directly or indirectly, make or hold Investments in Non-Investment Grade Securities which at any time exceed, in the aggregate, 20% of the Admitted Assets of the Insurance Subsidiaries determined as of the end of the preceding calendar quarter.
Section 4.12. Commission Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the Commission and provide the Trustee and Holders of Notes with such annual reports and such information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such information, documents and reports to be so filed and provided at the times specified for the filing of such information, documents and reports under such Sections; provided, however, that the Company shall not be so obligated to file such information, documents and reports with the Commission if the Commission does not permit such filings.
Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including information concerning the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely on certain advice or documents pursuant to
Section 6.2(c) of the Existing Indenture); provided, that the foregoing shall not relieve the Trustee of any of its responsibilities hereunder.
Section 4.13. Further Instruments and Acts. Upon request of the Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Supplemental Indenture.
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ARTICLE V
SUCCESSOR COMPANY
Section 5.01. When the Company May Merge or Transfer Assets. (a) The Company shall not merge, consolidate or amalgamate with or into any other Person or sell, assign, transfer or convey or otherwise dispose of all or substantially all its and its Restricted Subsidiaries' properties or assets in one transaction or series of related transactions to another Person unless:
(1) the Company shall be the surviving corporation or the Person formed by or surviving any such merger, consolidation or amalgamation (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition is made shall be a corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or limited liability company organized or existing under the laws of the United States, any State of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Company under the Notes and the Indenture pursuant to agreements reasonably satisfactory to the Trustee;
(3) immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall exist;
(4) immediately after giving effect to such transaction or series of transactions on a pro forma basis including any financing transactions, the Company or the Person surviving any such merger, consolidation or amalgamation (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made, shall, on the date of such transaction after giving pro forma effect thereto and any related financing transactions, as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the second proviso of Section 4.05; and
(5) immediately after giving effect to such transaction or series of transactions on a pro forma basis, the Person surviving any such merger or consolidation shall have an Adjusted Total Shareholders' Equity in an amount which is not less than the Adjusted Total Shareholders' Equity of the Company immediately prior to such transaction or series of transactions.
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(b) Any Person formed by or surviving any merger, consolidation or amalgamation (if not the Company) shall succeed to, and be substituted for, and may exercise every right and power of the Company under the Indenture, but the predecessor Company in the case of a sale, assignment, transfer, conveyance or other disposition shall not be released from any of the obligations or covenants under the Indenture, including with respect to the payment of the Notes (unless such sale, transfer, assignment, conveyance or other disposition is of all the assets of the Company as an entirety or virtually as an entirety).
(c) The Company shall not, directly or indirectly, lease all or substantially all of its property or assets, in one or more related transactions, to any other Person.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events and Remedies. The following events shall be "Events of Default":
(1) the Company defaults in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of, or premium on (if any), any Note when the same becomes due and payable at its Stated Maturity, upon acceleration, required repurchase or otherwise;
(3) the Company or any of its Restricted Subsidiaries fails to comply with the provisions of Section 4.04, Section 4.05 or Article V;
(4) the Company or any of its Restricted Subsidiaries fails to comply with any provision of Section 4.02 or Section 4.03 and such failure continues for 30 days after written notice of such default or breach is given by registered or certified mail to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes then Outstanding, a written notice specifying such default or breach and requiring it to be remedied by the Trustee or by the Holders as described in this Section 6.01(a)(4), a "Notice of Default";
(5) the Company or any of its Restricted Subsidiaries fails to comply with any other agreement or covenant in, or any provisions of, the Indenture or the Notes (other than a default or breach specified in (1), (2), (3) or (4) above) and such failure continues for 60 days after a Notice of Default is given;
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(6) the Company or any of its Restricted Subsidiaries defaults under any mortgage, agreement indenture or instrument under which there may be issued or by which there may be secured, guaranteed or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the date of this Supplemental Indenture, which default
(a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default") or
(b) results in the acceleration of such Indebtedness prior to its Stated Maturity and such acceleration shall not be rescinded or annulled;
and, in each case, the principal amount of any such Indebtedness is more than $50 million;
(7) any judgment or judgments for the payment of money in an aggregate amount in excess of $50 million or its foreign currency equivalent at the time is entered against the Company or any Subsidiary and shall not be paid, vacated, discharged, stayed or bonded pending appeal for a period of 60 days from entry thereof;
(8) the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding or files a petition or answer or consent seeking reorganization;
(b) consents to the entry of an order for relief against it in an involuntary case or proceeding in which it is the debtor;
(c) consents to the appointment of a Custodian of it or for all or substantially all of its property;
(d) makes a general assignment for the benefit of its creditors;
(e) admits in writing its inability generally to pay its debts as the same become due; or
43

(f) takes corporate action in furtherance of any such action; and
(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(a) is for relief against the Company or any Significant Subsidiary in an involuntary case in which it is the debtor;
(b) adjudges the Company as bankrupt or insolvent, or approves as properly filed a petition seeking reorganization, arrangement, and adjustment or composition of or in respect of the Company, appoints a Custodian of the Company or any Significant Subsidiary thereof or for all or substantially all of the property of the Company or any Significant Subsidiary thereof; or
(c) orders the liquidation of the Company or any Significant Subsidiary of the Company, and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal or state bankruptcy, insolvency, reorganization or other law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions contained in Section 3.01 hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to June 15, 2005 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to June 15, 2005, then, in addition to all amounts otherwise payable with respect to such Notes, the premium with respect thereto (expressed as a percentage of the amount that would otherwise be due but for the provisions of this sentence), shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.
Section 6.02. Waiver of Default or Event of Default by Holders. The provisions of Section 5.7 of the Existing Indenture shall be applicable to any waiver of Default or Event of Default.
44

Section 6.03. Acceleration of Maturity.
(a) If an Event of Default other than an Event of Default specified in clause (8) or (9) of Section 6.01 occurs and is continuing with respect to the Company or any Significant Subsidiary of the Company, the Trustee, or the Holders of at least 25% in aggregate principal amount of the Notes then Outstanding by written notice to the Company and the Trustee, may declare due and payable 100% of the principal amount of all the Notes then Outstanding plus any accrued and unpaid interest to the date of payment. Upon a declaration of acceleration, such principal and accrued and unpaid interest to the date of payment shall be immediately due and payable. If an Event of Default specified in clause (8) or (9) of Section 6.01(a) occurs and is continuing with respect to the Company or any Significant Subsidiary of the Company, the principal amount of all Notes then Outstanding plus any accrued and unpaid interest to the date of payment shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
(b) The Holders of a majority in principal amount of the Notes then Outstanding by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to the Notes for the nonpayment of principal, interest or premium (except nonpayment of principal, interest or premium that has become due solely as a result of such acceleration) have been cured or waived.
ARTICLE VII
DISCHARGE OF INDENTURE; DEFEASANCE
Section 7.01. Discharge of Liability on the Notes(a) . In addition to the provisions of Section 4.1 of the Existing Indenture, it shall be an additional condition to any termination of the Company's Obligations pursuant to such Section that, insofar as the Company shall be required to make a deposit of funds in Trust as a condition to such termination (as described in Clause
(1)(B)(iii) of paragraph (a) of such Section 4.1), no Default or Event of Default has occurred or is continuing on the date of the deposit or will occur as a result of the deposit and the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Company (or any of its Significant Subsidiaries) is a party or by which it is bound.
Section 7.02. Additional Provisions Regarding Covenant Defeasance. In the event the Company elects to exercise the option specified in Section 4.3 of the Existing Indenture to apply the provisions of Section 4.5 regarding "covenant defeasance" (as defined in such Section 4.5) to certain obligations as permitted therein, by such Section 4.5, in addition to the covenants the obligations under which are released pursuant to such Section, the Company's obligations under the following provisions of this Supplemental Indenture shall be released: Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.10, 4.11, 5.01(a)(4) and 5.01(a)(5).
Section 7.03. Additional Conditions to Defeasance. The following additional provisions shall apply to Section 4.6 of the Existing Indenture and, except as indicated, will
45

apply in addition to, and not in lieu of, the conditions set forth in Section 4.6 of the Existing Indenture:
(i) any Government Obligations deposited pursuant to clause
(a) of Section 4.6 of the Existing Indenture shall be non-callable obligations. The Company shall, upon making the deposit specified in such clause, indicate whether the Notes are being defeased to maturity or to a particular Redemption Date;
(ii) in lieu of the Opinion of Counsel specified in paragraph (c) of Section 4.6 of the Existing Indenture, in the case of an election providing for "defeasance" under Section 4.4 of the Existing Indenture, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Supplemental Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;
(iii) in the case of the covenant defeasance, the Company shall have delivered to the Trustee the Opinion of Counsel described in paragraph (d) of Section 4.6;
(iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default under
Section 6.01(8) and/or (9) are concerned, at any time in the period ending on the 91st day after the date of deposit; and
(v) such defeasance shall not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound.
ARTICLE VIII
AMENDMENTS
Section 8.01. Without Consent of Holders. In addition to the purposes for which the Company and the Trustee may amend the Indenture without the consent of Holders as specified in Section 8.1 of the Existing Indenture, the Company and the Trustee may enter into a supplemental indenture for the purpose of providing for uncertificated Notes and may amend the
46

Indenture to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
Section 8.02. With Consent of Holders(a). (a) For the purposes of the Notes: (i) the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then Outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes); and (ii) any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then Outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).
(b) In addition to those provisions set forth in Section 8.2 of the Existing Indenture as requiring the consent of all Holders, no supplemental indenture may, without the consent of all Holders affected, (i) reduce the principal of or change the Stated Maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to Sections 4.02 and 4.03) or (ii) waive any redemption payment with respect to any Note (other than a payment required pursuant to Sections 4.02 and 4.03).
Section 8.03. Payments for Consent. Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Trust Indenture Act Controls. If any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision that is required to be included in this Supplemental Indenture by the Trust Indenture Act, the required provision shall control.
Section 9.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:
if to the Company:
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Attention: David K. Herzog
Facsimile: (317) 817-6327
47

if to the Trustee:
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile: (212) 815-5915
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
Section 9.03. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be Outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes Outstanding at the time shall be considered in any such determination.
Section 9.04. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent or co-registrar may make reasonable rules for their functions.
Section 9.05. Legal Holidays. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a Regular Record Date is a Legal Holiday, the Record Date shall not be affected.
Section 9.06. Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 9.07. No Personal Liability of Directors, Officers, Employees and Shareholders. A director, officer, employee, incorporator or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their
48

creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes.
Section 9.08. Successors. All agreements of the Company in the Indenture and the Notes shall bind its successors. All agreements of the Trustee in the Indenture shall bind its successors.
Section 9.09. Multiple Originals. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Supplemental Indenture.
Section 9.10. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
Section 9.11. Not Responsible for Recitals or Issuance of Notes.. The recitals contained herein and in the Notes, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture or of the Notes. The Trustee shall not be accountable for the Company's use of the proceeds from the Notes or for monies paid over to the Company pursuant to this Supplemental Indenture.
49

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
CONSECO, INC.

By:/s/ CHARLES B. CHOKEL
   ------------------------
   Name: Charles B. Chokel
   Title: Executive Vice
          President and Chief
          Financial Officer	

THE BANK OF NEW YORK

By:/s/ ROBERT MASSIMILLO
   ------------------------
   Name: Robert Massimillo
   Title: Vice President	

50

EXHIBIT 4.2
FORM OF FACE OF NOTE
[Global Securities Legend]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY"), 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 THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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 AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
[Definitive Securities Legend]
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS SET FORTH IN THE INDENTURE (AS DEFINED BELOW) RELATING TO THESE NOTES.]
CONSECO, INC.
10-3/4% SENIOR NOTES DUE 2008
CUSIP _________

No. ___  US$______________

1.       Principal and Interest; Method of Payment

          CONSECO, INC., a corporation duly organized and existing under the	

laws of Indiana (herein called the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _______________ ($_______________) on June 15, 2008, and to pay interest thereon from June 29, 2001 or from the most recent Interest Payment

Date (as hereinafter defined) to which interest has been paid or duly provided for, as the case may be.
Interest will be payable on June 15 and December 15 of each year (each an "Interest Payment Date"), at the rate of 10-3/4% per annum, commencing December 15, 2001 (except as provided below) until the principal hereof becomes due and payable. Interest payments will be made in an amount equal to the amount accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or duly made available for payment (or from and including the date of issue, if no interest has been paid or duly made available for payment) to but excluding the applicable Interest Payment Date or Stated Maturity. The interest so payable and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more predecessor Securities) is registered at the close of Business on the Regular Record Date for such interest payment, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate born by the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest from time to time on demand at the same rate to the extent lawful.
If any Interest Payment Date(s) or the Stated Maturity falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after such Interest Payment Date or the Stated Maturity, as the case may be, to the date of such payment on the next succeeding Business Day.
While this Security is represented by one or more global notes registered in the name of the Depository or its nominee, the Company will cause payments of principal of, premium, if any, and interest on this Security to be made to the Depository or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by, the Depository or its nominee, and otherwise in accordance with such agreements, regulations and procedures.
The Company will make all payments in respect of the Notes (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Notes may also be made, by wire transfer to a Dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to the Indenture, which shall incorporate the terms of the Trust Indenture Act. The agreement shall implement the provisions of the Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent.
2

If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 6.9(a) of the Indenture. The Company or any of its domestically incorporated Restricted Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.
Unless the certificate of authentication hereon has been executed by the Trustee referred to herein, or its successor as Trustee, or its Authenticating Agent, by manual signature of an authorized signatory, this Security will not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
2. Indenture
This Security is one of a duly authorized issue of securities of the Company (the "Securities") issued under an indenture, dated as of November 13, 1997, as amended by the First Supplemental Indenture dated as of June 29, 2001 (the "First Supplemental Indenture") and as further amended from time to time (together, the "Indenture"), between the Company and The Bank of New York (successor to LTCB Trust Company), as trustee (the "Trustee") and is one of the "Notes" referred to in the First Supplemental Indenture, to which Indenture, First Supplemental Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the Notes designated on the face hereof limited in aggregate principal amount to $750,000,000.
3. Denomination; Transfer; Exchange.
The Notes of this series are issuable only in global or certificated registered form, without coupons, in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein specified and to the limitations described below, if applicable, Notes of this series are exchangeable for Notes of this series of like aggregate principal amount of a different authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein specified and to the limitations described below, if applicable, the transfer of this Note is registerable in the Register upon surrender of this Note for registration of transfer at the office or agency of the Company maintained for that purpose duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series with like terms and conditions, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
3

This Note is exchangeable for certificated Notes only upon the terms and conditions provided in the Indenture. Except as provided in the Indenture, owners of beneficial interests in this Note will not be entitled to receive physical delivery of Notes in certificated registered form and will not be considered the Holders thereof for any purpose under the Indenture.
4. Optional Redemption.
The Company may redeem the Notes, at its option, in whole or in part, at any time or from time to time prior to their maturity at a redemption price equal to the sum of the principal amount thereof, plus accrued and unpaid interest (if any) to the Redemption Date (subject to the right of the Holder on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date) plus the Applicable Premium (if any).
From and after June 15, 2005, this Note will be redeemable at the option of the Company, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days' notice, at the following Redemption Prices (expressed in percentages of principal amount), plus accrued and unpaid interest thereon to the applicable Redemption Date (subject to the right of the Holder on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period commencing on June 15 of the years set forth below:

                                 REDEMPTION
PERIOD                             PRICE
------                           ----------
2005                              105.375%
2006                              102.688%
2007 and thereafter               100.000%	

In addition, at any time and from time to time prior to June 15, 2004, the Company may redeem in the aggregate up to 35% of the aggregate principal amount of the Notes with the proceeds of one or more Equity Offerings, at a Redemption Price (expressed as a percentage of principal amount) of 110.75% plus accrued and unpaid interest to the Redemption Date (subject to the right of Holders on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date); provided, that (i) at least 65% of the aggregate principal amount of the Notes then Outstanding remain Outstanding immediately after the occurrence of such redemption excluding Notes held by the Company or any of its Subsidiaries and (ii) the redemption occurs within 45 days of the date of the closing of such Equity Offering.
5. Repurchase At Option Of Holder.
If a Change of Control occurs, each Holder shall have the right to require the Company to make an offer (a "Change of Control Offer") to each Holder to repurchase all or any part, equal to $1,000 or an integral multiple of $1,000, of the Holder's Notes at an offer price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, on Notes repurchased to the date fixed for repurchase. In the event of a Change of Control, notice thereof will be given by the Company to the Holders as provided in the
4

Indenture. To exercise a repurchase right, a Holder must surrender the Notes to be repurchased to the Paying Agent as provided in the Indenture.
If the Company or a Restricted Subsidiary consummates any Asset Sale, when the aggregate amount of Excess Proceeds exceeds $50.0 million in any calendar year, the Company shall make a pro rata offer to purchase (an "Asset Sale Offer") to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be deemed to have been reset at zero.
6. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to pay, among other things, dividends or make other payments, consummate sales of assets, incur additional indebtedness and issue preferred stock, create certain liens, enter into certain mergers and consolidations and enter into certain transactions with affiliates.
7. Covenant Cancellation.
When (i) the Notes have been rated as Investment Grade Securities by either S&P or Moody's and (ii) no Default or Event of Default has occurred and is continuing under the Indenture as of such time, the Company and the Subsidiaries will not thereafter be subject to certain limitations imposed by the Indenture, including restrictions on distributions of dividends or other payments, consummations of sales of assets, incurrences of additional indebtedness or issuances of preferred stock, entrances into certain mergers and consolidations and entrances into certain transactions with affiliates.
8. [Provisions Applicable to Global Certificates.]
No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue and notwithstanding any notation of ownership or other writing hereon, and none of the Company, the Trustee or any such agent will be affected by notice to the contrary.
5

[This Note is in the form of a Global Security as provided in the Indenture. If at any time the Depository notifies the Company that it is unwilling or unable to continue as Depository for this Note or if at any time the Depository for this series shall no longer be eligible or in good standing under the Exchange Act, or other applicable statute or regulation, the Company shall appoint a successor Depository with respect to this Note. If a successor Depository for this Note is not appointed by the Company within 90 days after the Company receives notice or becomes aware of such ineligibility, the Company will execute, and the Trustee or its agent, upon receipt of a Company Request for the authentication and delivery of certificates representing Notes of this series in exchange for this Note will authenticate and deliver, certificates representing securities of this series of like tenor and terms in an aggregate principal amount equal to the principal amount of this Note in exchange for this Note.
If specified by the Company pursuant to the Indenture with respect to this Note, the Depository may surrender this Note in exchange in whole or in part for certificates representing Notes of this series of like tenor and terms in definitive form on such terms as are acceptable to the Company and the Depository. Thereupon the Company shall execute, and the trustee or its agent shall authenticate and deliver, without a service charge, (1) to each Holder specified by the Registrar or the Depository a certificate or certificates representing Notes of this series of like tenor and terms and of any authorized denomination as requested by such person in an aggregate principal amount equal to and in exchange for such Holder's beneficial interest as specified by the Registrar or the Depository in this Note; and (2) to the Depository a new Global Security of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Security and the aggregate principal amount of certificates representing Notes delivered to Holders thereof.]
The Indenture and the Notes will be governed by and construed in accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture will have the meanings assigned to them in the Indenture unless otherwise defined herein; and all references in the Indenture to "Security" or "Securities" will be deemed to include this Note.
6

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Date:  _________, 2001                             CONSECO, INC.

                                                   By
                                                   _________________, President
SEAL

                                                   Attest:
                                                   By
                                                   __________________, Secretary	

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

Dated:  _________, 2001                            THE BANK OF NEW YORK,
                                                   as Trustee

                                                   By: ____________________
                                                   Authorized Signatory	

7

ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT - .............Custodian................
(Cust) (Minor) Under Uniform Gifts to Minors Act .................................
(State)
Additional abbreviations may also be used though not in the above list.

8

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Security and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.
Date:

Signature
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED BY AN "ELIGIBLE GUARANTOR INSTITUTION" THAT IS A MEMBER OR PARTICIPANT IN A "SIGNATURE GUARANTEE PROGRAM" (E.G., THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM, THE STOCK EXCHANGE MEDALLION PROGRAM OR THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM).
9

OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the Company pursuant to Section 4.02 or Section 4.03 of the First Supplemental Indenture, check the appropriate box:
/ / Section 4.02 / / Section 4.03
 (Change of Control) (Asset Sale)
If you want to have only part of the Security purchased by the Company pursuant to Section 4.02 or Section 4.03 of the First Supplemental Indenture, state the amount you elect to have purchased:
$------------------
Date:______________
Your Signature:___________________ (Sign exactly as your name appears on the face of this Note)
Signature Guarantee.*

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
10

June 28, 2001 Exhibit 5.1
Board of Directors
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Re: Conseco, Inc.
10 3/4% Notes due 2008
Gentlemen:
I am Executive Vice President, General Counsel and Secretary of Conseco, Inc., an Indiana corporation (the "Company"), and in such capacity I have general supervision of the legal affairs of the Company. I, and lawyers under my supervision (collectively, "we"), have acted as counsel for the Company in connection with the sale by the Company pursuant to the Underwriting Agreement dated June 26, 2001 (the "Underwriting Agreement") of a total of $400,000,000 aggregate principal amount of 10 3/4% Notes due 2008 of the Company (the "Notes").
In our capacity as such counsel, we have examined (i) the Notes, (ii) the Registration Statement on Form S-3 (No. 333-83465), as originally filed with the Commission on July 22, 1999, as amended by Pre-Effective Amendment No. 1 thereto (together, the "Registration Statement"), (iii) the Underwriting Agreement, (iv) the Indenture, dated as of November 13, 1997, between the Company and The Bank of New York successor to LTCB Trust Company) , as Trustee (the "Indenture"), (v) the First Senior Supplemental Indenture dated as of June 29, 2001 (the "Supplemental Indenture") and (vi) the Prospectus Supplement dated June 26, 2001 and the final Prospectus dated October 1, 1999 relating to the Notes, in the form filed with the Commission pursuant to Rule 424(b) under the 1933 Act Regulations (collectively, the "Prospectus") . We have also examined originals, or copies certified or otherwise identified to our satisfaction, of such other records and documents as we have deemed necessary as a basis for the opinions expressed below. In such examination and for the purposes of this opinion, we have assumed that all natural persons have legal capacity, all items submitted to us as originals are authentic and all signatures thereon are genuine, all items submitted to us as copies conform to the originals and each original or copy is complete and has been duly executed and delivered by each party (other than the Company) pursuant to due authorization as such party's legal, valid and binding obligation, enforceable against such party in accordance with its respective terms. As to facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of the Company. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Underwriting Agreement.
Based upon and subject to the matters stated herein and upon such investigation as we have deemed necessary and subject to the qualifications, limitations and assumptions set forth herein, I advise you that in the opinion of the undersigned:

Board of Directors
June 28, 2001
Page 2
1. The Company has been incorporated and is validly existing as a corporation under the laws of the State of Indiana.
2. All legally required proceedings in connection with the authorization and valid issuance of the Notes and the sale of the Notes in accordance with the Underwriting Agreement (other than the filing of post-issuance reports, the non-filing of which would not render the Notes invalid) have been taken and all legally required orders, consents or other authorizations or approvals of any other public boards or bodies (including, without limitation, any insurance regulatory agency or body) in connection with the authorization and valid issuance of the Notes and the sale of the Notes in accordance with the Underwriting Agreement (other than in connection with or in compliance with the provisions of the securities or Blue Sky laws of any jurisdictions, as to which I express no opinion) have been obtained and are in full force and effect.
3. The Notes are in the form contemplated by the Indenture and the Supplemental Indenture, have been duly authorized, executed and delivered by the Company and, when authenticated by the Trustee in the manner provided for in the Indenture and delivered against payment therefor by the Company, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors', rights generally and by the effect of general principles of equity, regardless of whether considered in a proceeding in equity or at law.
My opinions expressed herein are limited to the laws of the State of Indiana and the federal laws of the United States, and I do not express any opinion herein concerning any other law. I note that the Underwriting Agreement, the Notes, the Indenture and the Supplemental Indenture are expressly governed by the laws of the State of New York and I have assumed, with your permission and without any investigation, that the substantive laws of the State of Indiana are substantially identical to those of the State of New York.
The opinions expressed herein are matters of professional judgment and not a guarantee of result. The opinions expressed herein are effective as of the date hereof. I do not undertake to advise you of any matter within the scope of this letter that comes to my attention after the date of this letter and disclaim any responsibility to advise you of any future changes in law or in fact that may affect the opinions set forth herein. The opinions expressed herein are being delivered to you solely for your benefit and may not be relied upon by any other person in any manner or for any purpose without my prior written approval; accordingly, this letter may not be quoted, filed with any governmental authority or other regulatory agency or otherwise circulated or utilized for any other purpose without my written consent.
I consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Company's Report on Form 8-K being filed on or about the date hereof. In giving the foregoing consent, I do not admit that I come within the category of persons whose consent is required under the

Board of Directors
June 28, 2001
Page 3
Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,

/s/ David K Herzog
--------------------------------------------
David K Herzog,
Executive Vice President and General Counsel	

                         CONSECO, INC. AND SUBSIDIARIES                             Exhibit 12.1

               Computation of Ratio of Earnings to Fixed Charges,
     Preferred Dividends and Distributions on Company-Obligated Mandatorily
                  Redeemable Preferred Securities of Subsidiary Trusts
                              (Dollars in millions)

                                                                             Three months
                                                                                 ended                     Year ended
                                                                            March 31, 2001              December 31, 2000
                                                                         --------------------          ---------------------
                                                                                     Pro forma                     Pro forma
                                                                         Actual    as adjusted (1)     Actual    as adjusted (1)
                                                                         ------    ---------------     ------    ---------------

Pretax income (loss) from operations:
    Net income (loss)..................................................  $ 84.1      $ 81.1          $(1,191.2)   $(1,203.2)
    Add income tax expense (benefit)...................................    58.3        56.7             (376.2)      (382.7)
    Add extraordinary charge (gain) on extinguishment of debt..........    (0.3)        (.3)               5.0          5.0
    Add minority interest..............................................    32.2        32.2              145.3        145.3
    Add cumulative effect of accounting change.........................     -           -                 55.3         55.3
                                                                         ------      ------          ---------    ---------

       Pretax income (loss) from operations............................   174.3       169.7           (1,361.8)    (1,380.3)
                                                                         ------      ------          ---------    ---------
Add fixed charges:
    Interest expense on corporate debt, including amortization.........   105.1       109.7              438.4        456.9
    Interest expense on finance debt...................................   309.4       309.4              996.1        996.1
    Interest expense on investment borrowings..........................     4.5         4.5               18.6         18.6
    Portion of rental (2)..............................................     5.8         5.8               23.5         23.5
                                                                         ------      ------          ---------    ---------

       Fixed charges...................................................   424.8       429.4            1,476.6      1,495.l
                                                                         ------      ------          ---------    ---------

       Adjusted earnings...............................................  $599.1      $599.1          $   114.8    $   114.8
                                                                         ======      ======          =========    =========

          Ratio of earnings to fixed charges...........................   1.41X       1.40X                 (3)          (5)
                                                                          =====       =====                  =            =

          Ratio of earnings to fixed charges, excluding interest
           expense on finance debt and investment borrowings...........   2.57X       2.47X                 (3)          (5)
                                                                          =====       =====                  =            =

Fixed charges..........................................................  $424.8      $429.4            1,476.6    $ 1,495.1
Add dividends on preferred stock, including dividends on preferred
    stock of subsidiaries (divided by the ratio of income before
    minority interest and extraordinary charge to pretax income).......     6.0         6.0               17.0         17.0
Add distributions on Company-obligated mandatorily redeemable
    preferred securities of subsidiary trusts..........................    49.5        49.5              223.6        223.6
                                                                         ------      ------          ---------    ---------

       Fixed charges...................................................  $480.3      $484.9          $ 1,717.2    $ 1,735.7
                                                                         ======      ======          =========     ========

       Adjusted earnings...............................................  $599.1      $599.1          $   114.8    $   114.8
                                                                         ======      ======          =========    =========

          Ratio of earnings to fixed charges, preferred dividends and
              distributions on Company-obligated mandatorily
              redeemable preferred securities of subsidiary trust.....    1.25X       1.24X                 (4)         (6)
                                                                          =====       =====                  =           =

          Ratio of earnings to fixed charges, preferred dividends and
              distributions on Company-obligated mandatorily
              redeemable preferred securities of subsidiary trusts,
              excluding interest expense on finance debt and
              investment borrowings....................................   1.71X       1.67X                 (4)          (6)
                                                                          =====       =====                  =            =

---------------
    (1)   The pro forma ratio of earnings to fixed charges, preferred dividends
          and distributions on Company-Obligated Mandatorily Redeemable
          Preferred Securities of Subsidiaries information is presented to give
          effect to the issuance of $400 million par value of 10 3/4% Senior
          Notes due 2008 and the use of the net proceeds therefrom to repay a
          portion of our bank credit facilities, as if such issuance and use of
          net proceeds therefrom had occurred at the beginning of each period
          presented.
    (2)   Interest portion of rental is estimated to be 33 percent.
    (3)   For such ratios, adjusted earnings were $1,361.8 million less than
          fixed charges. Adjusted earnings for the year ended December 31, 2000,
          included: (i) special and impairment charges of $1,215.0 million; and
          (ii) provision for losses related to loan guarantees of $231.5
          million.
    (4)   For such ratios, adjusted earnings were $1,602.4 million less than
          fixed charges. Adjusted earnings for the year ended December 31, 2000,
          included: (i) special and impairment charges of $1,215.0 million; and
          (ii) provision for losses related to loan guarantees of $231.5
          million.
    (5)   For such pro forma ratios, adjusted earnings were $1,380.3 million
          less than fixed charges. Adjusted earnings for the year ended December
          31, 2000, included: (i) special and impairment charges of $1,215.0
          million; and (ii) provision for losses related to loan guarantees of
          $231.5 million.
    (6)   For such pro forma ratios, adjusted earnings were $1,620.9 million
          less than fixed charges. Adjusted earnings for the year ended December
          31, 2000, included: (i) special and impairment charges of $1,215.0
          million; and (ii) provision for losses related to loan guarantees of
          $231.5 million.