AMENDMENT NO. 1
To
Securities Purchase Agreement
This Amendment No. 1 (this "Amendment") to Securities Purchase
Agreement (the "Underlying Agreement"), dated as of April 11, 1997, between
General Acceptance Corporation, an Indiana corporation (the "Company"), and
Capitol American Life Insurance Company, an Arizona life insurance company (the
"Purchaser"), is made as of September 16, 1997 between the Company and the
Purchaser.
W I T N E S S T H:
Whereas, simultaneously with the execution and delivery of this
Amendment, the Company and Conseco, Inc., an Indiana corporation ("Conseco"),
are entering into an Agreement, of even date herewith (the "September
Agreement"), which provides, among other things, for the guarantee by Conseco of
certain obligations of the Company to General Electric Capital Corporation
("GECC") pursuant to that certain Limited Continuing Guaranty, of even date
herewith, issued by Conseco for the benefit of GECC (the "Guaranty") in
consideration, among other things, for the issuance to Conseco of (x) the
Company's 12% Subordinated Convertible Note, of even date herewith (the "Note"),
in an aggregate principal amount of $10,000,000 and all other amounts paid by,
or on behalf of, Conseco pursuant to the Guaranty which is convertible into
shares of common stock, no par value, of the Company ("Common Stock"), and (y) a
Warrant, of even date herewith (the "Warrant"), to purchase 500,000 shares of
Common Stock, in each case adjustable as provided therein; and
Whereas, the parties desire to amend the Underlying Agreement as
provided by this Amendment.
NOW, THEREFORE, in order to induce the parties hereto to enter into the
September Agreement and the Supplemental Agreements referred to therein and to
consummate the transactions contemplated thereby, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Underlying Agreement is hereby amended as of the date hereof
as follows:
1. Terms defined herein shall have the meanings ascribed to them in
this Amendment. Unless otherwise defined herein or unless the context otherwise
requires, capitalized terms used herein shall have the meanings set forth in the
Underlying Agreement.
2. All references in the Underlying Agreement to the Agreement shall
mean the Underlying Agreement as amended by this Amendment.
3. Section 9.1 of the Underlying Agreement is hereby amended by
inserting at the end thereof the following: "(l) An Event of Default (as defined
in the September Agreement) shall occur."
4. Section 10.1 of the Underlying Agreement is hereby amended to be
and read in its entirety as follows:
"10.1. Events. The following events shall be considered
triggering events under this Agreement ("Triggering Events"): if (x) upon the
earlier of a request for conversion or exercise under the Debentures, the Note
or the Warrant or the maturity date of the Debentures or the Warrant, the
Company fails or refuses to register shares of Common Stock issued or issuable
to the Purchaser pursuant to the terms and provisions of the Registration Rights
Agreement, or (y) at any time a holder of Common Stock obtained through
conversion under the Debentures or the Note or upon exercise under the Warrant
requests registration of such securities pursuant to an existing registration
rights agreement with the Company, the Company fails or refuses to register such
shares of Common Stock pursuant to the terms and provisions of such registration
agreement."
5. Section 10.2 of the Underlying Agreement is hereby amended to insert
in lieu of the term "to redeem the Debentures" in the third line thereof the
following: "to redeem or repurchase, as the case may be, the Debentures, the
Note or the Warrant, as the case may be,".
Except as otherwise provided herein, the terms and provisions of the
Underlying Agreement shall remain unchanged and continue in full force and
effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
CAPITOL AMERICAN LIFE
INSURANCE COMPANY
By /s/ XXXXXX X. XXXX
GENERAL ACCEPTANCE
CORPORATION
By /s/ R.E. XXXXXX, President
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