Exhibit 10.1

 
AMENDMENT NUMBER ONE TO THE
PURCHASE AGREEMENT

dated as of

February 3, 2010

between

CONSECO, INC.

and

MORGAN STANLEY & CO. INCORPORATED

relating to the purchase and sale

of

UP TO $293,000,000 AGGREGATE PRINCIPAL AMOUNT

7.0% CONVERTIBLE SENIOR NOTES DUE 2016

of

CONSECO, INC.
 
 
 

 

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This AMENDMENT NUMBER ONE TO THE PURCHASE AGREEMENT, dated February 3, 2010 (the
“Amendment”), is entered into by Conseco, Inc. (the “Company”) and Morgan
Stanley & Co. Incorporated (“Morgan Stanley”).
 
WITNESSETH:
 
WHEREAS, on October 14, 2009, the Company and Morgan Stanley entered into a
Purchase Agreement (the “Agreement”) pursuant to which the Company has agreed to
issue and sell to Morgan Stanley, as initial purchaser, and Morgan Stanley has
agreed to buy from the Company, subject to the conditions set forth therein, up
to $293,000,000 aggregate principal amount of Securities on any Tender Offer
Closing Date, the Put Right Closing Date or the Redemption Closing Date;
 
WHEREAS, the Company seeks to repurchase its outstanding Existing Convertibles
from holders thereof pursuant to privately negotiated transactions and issue and
sell to Morgan Stanley an aggregate principal amount of Securities equal to the
aggregate principal amount of Existing Convertibles repurchased by the Company
in such transactions; and

WHEREAS, the Company and Morgan Stanley have determined that the Agreement
should be amended as set forth herein.
 
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto hereby agree as follows:
 
Section 1. Amendments to the Agreement.
 
(a)   The second paragraph of the Preamble to the Agreement shall be deleted and
replaced with the following:
 
“As described in Section 2, the Company will, upon receipt of payment therefor,
issue Securities as follows: (a) on the closing date for the cash tender offer
for any and all of its outstanding 3.50% Convertible Debentures due September
30, 2035 (the “Existing Convertibles”) that it intends to commence soon after
the execution of this Agreement and, if any Existing Convertibles remain
outstanding, on the closing date for any subsequent issuer tender offer for the
Existing Convertibles that expires before October 5, 2010, (each, a “Tender
Offer” and collectively, the “Tender Offers”), (b) on the closing date for any
privately negotiated repurchase by the Company of any of its outstanding
Existing Convertibles that settles before October 5, 2010 (each, a “Repurchase”
and collectively, the “Repurchases”), (c) if any Existing Convertibles remain
outstanding, on September 30, 2010, the date the holders of the Existing
Convertibles are entitled to require the Company to repurchase such securities
pursuant to their terms (if such holders exercise their repurchase right), and
(d) if any Existing Convertibles remain outstanding, on October 5, 2010, the
date the

 
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Company is entitled to redeem from the holders thereof the Existing Convertibles
pursuant to their terms (if the Company exercises its redemption right).”

(b)   The fourth paragraph of the Preamble to the Agreement shall be deleted and
replaced with the following:

“The Private Placement, the Tender Offers, any Repurchases and the offer and
sale of the Securities are hereinafter referred to as the “Transactions”. The
Indenture and this Agreement are hereinafter referred to as the “Transaction
Agreements.” Except where the context expressly provides for the contrary, the
representations, warranties and other provisions of this Agreement should not be
interpreted as referring to the Tender Offers, any Repurchases or the Private
Placement.”

(c)   Section 2 of the Agreement shall be deleted and replaced with the
following:
 
“Agreements to Sell and Purchase.  The Company hereby agrees to sell to the
Initial Purchaser, and the Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase from the Company the Securities at a
purchase price equal to the aggregate principal amount of the Securities
purchased on the applicable Closing Date (as defined below) multiplied by (1 –
(0.07 x N/365)), where N equals the number of days from, and including, the
Effectiveness Date to, and excluding, the applicable Closing Date, less an
amount equal to 2% of the aggregate principal amount of such Securities, (the
“Purchase Price”), as follows:

i.  
On each date that a Tender Offer settles (a “Tender Offer Closing Date”), the
Initial Purchaser will purchase an aggregate principal amount of Securities
equal to the aggregate principal amount of Existing Convertibles accepted for
purchase by the Company in each such Tender Offer; 

ii.  
On each date that a Repurchase settles (a “Repurchase Closing Date”), the
Initial Purchaser will purchase an aggregate principal amount of Securities
equal to the aggregate principal amount of Existing Convertibles repurchased by
the Company in each such Repurchase;

iii.  
On September 30, 2010 (the “Put Right Closing Date”), the Initial Purchaser will
purchase the aggregate principal amount of Existing Convertibles remaining after
the completion of the Tender Offers and any Repurchases, if any, that the
Company is required by holders thereof to repurchase pursuant to the terms of
the Existing Convertibles; and

iv.  
On October 5, 2010 (the “Redemption  Closing Date”), the Initial Purchaser will
purchase the aggregate principal amount of Existing

 
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Convertibles remaining after the completion of the Tender Offers, any
Repurchases and the Put Right Closing Date, if any, that the Company elects to
redeem from the holders thereof pursuant to the terms of the Existing
Convertibles.

Any Tender Offer Closing Date, any Repurchase Closing Date, the Put Right
Closing Date, and the Redemption Closing Date, each a “Closing Date,” are
collectively referred to herein as the “Closing Dates”. For the avoidance of
doubt, even if any Existing Convertibles remain outstanding on the Redemption
Closing Date, the Company shall be under no obligation to sell and the Initial
Purchaser shall be under no obligation to buy, any Securities subsequent to the
Redemption Closing Date and this Agreement shall immediately terminate without
any obligation or liability of either party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to the
other party to this Agreement by reason of this Agreement, provided that Section
9 and Section 11 shall survive any such termination.

Notwithstanding anything to the contrary set forth herein, but subject to the
conditions set forth in Section 5, this Agreement (including the Initial
Purchaser’s obligation to purchase and pay for the Securities on each Closing
Date, upon satisfaction of the conditions set forth in Section 6), shall become
effective two Business Days (as defined below) after execution and delivery of
this Agreement by the parties hereto (such date, the “Effectiveness Date”). For
purposes of this Agreement, a “Business Day” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York City or the City of Chicago are authorized or obligated by law or
executive order to close.”

 
Section 2. Effectiveness
 
This Amendment shall become effective upon execution by the parties hereto.
 
Section 3. Reference to and Effect on the Agreement.
 
(a)   On and after the date of this Amendment, each reference in the Agreement
to “this Agreement,” “hereunder,” “hereof,” or “herein” shall mean and be a
reference to the Agreement as amended by this Amendment.
 
(b)   Except as specifically amended above, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed.
 
Section 4. Due Authorization, Execution and Delivery.
 
Each of the Company and Morgan Stanley represents and warrants that this
Amendment has been duly authorized, executed and delivered by it.
 

 
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Section 5. Governing Law.
 
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

Section 6. Defined Terms.
 
Capitalized terms used herein and not otherwise defined shall have the
respective meanings given such terms in the Agreement.
 
Section 7. Counterparts and Method of Execution.
 
This Amendment may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall constitute
but one and the same instrument.
 
Section 8. Headings.
 
The headings of the sections of this Amendment have been inserted for
convenience of reference only and shall not be deemed a part of this Amendment.
 

 

 

 

 

 

 

 

[Signature Page Follows]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their duly authorized officers as of the date first written
above.

CONSECO, INC.

By:    /s/ Karl W. Kindig 
Name:  Karl W. Kindig
Title:  Secretary

MORGAN STANLEY & CO. INCORPORATED

By:     /s/ Kenneth G. Pott 
Name:  Kenneth G. Pott
Title:  Managing Director

 
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