AMENDMENT NO. 1
To
Stockholders' Agreement
This Amendment No. 1 (this "Amendment") to Stockholders' Agreement (the
"Underlying Agreement"), dated as of April 11, 1997, among General Acceptance
Corporation, an Indiana Corporation (the "Company"), Conseco, Inc., an Indiana
corporation ("Conseco"), Capitol American Life Insurance Company, an Arizona
life insurance company (the "Purchaser"), and each of the undersigned
"Stockholders" listed on the signature page hereof, is made as of September 16,
1997.
W I T N E S S T H:
Whereas, simultaneously with the execution and delivery of this
Amendment, the Company and 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
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shall mean the Underlying Agreement as amended by this Amendment.
3. The first sentence of Section 1(a) of the Underlying Agreement is
hereby amended by (x) inserting immediately after the first use of the term
"outstanding" therein the following: "and neither Conseco, its successors and
assigns nor any holder of the Note or a Warrant has any further right,
obligation or liability under the Guaranty, the Note or the Warrant", and (y) by
inserting immediately after the term "control" in the sixth line thereof before
the parenthetical the following, "including but not limited to the voluntary
resignation of such Stockholders and the Stockholders' Designee hereinafter
defined."
4. Section 1(a) of the Underlying Agreement is hereby amended by adding
a new subsection immediately after subsection (iv) thereof to be and read as
follows:
"(v) in the event that (x) 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, (y) Conseco becomes obligated to make
payment pursuant to the Guaranty, or (z) without the consent of Conseco, after
the date hereof, the Company incurs additional Obligations (as defined in the
Guaranty), amends, modifies or otherwise changes the terms of the Obligations,
GECC's obligations, responsibilities or liabilities with respect to the
Obligations or the terms or provisions of any document relating to the
Obligations or makes any waiver relating to the foregoing, the Board shall (so
long as the Debentures are outstanding or Conseco, its successors or assigns or
any holder of the Note or a Warrant has any right, obligation or liability under
the Guaranty, the Note or the Warrant) consist of eight (8) members, six (6) of
which shall be Conseco Designees."
5. Section 4 of the Underlying Agreement is hereby amended to
be and read in its entirety as follows:
"4. Action by Stockholders and the Company.
Each Stockholder shall vote all of his or her Securities which
are voting shares and any other voting securities of the Company over which such
Stockholder has voting control and shall take all other necessary action
(whether in his or her capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including attendance at
meetings in person or by proxy for purposes of obtaining a quorum and execution
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of written consents in lieu of meetings), and the Company shall take all
necessary or desirable actions within its control (including calling special
board or stockholder meetings) so that (x) the issuance of the Debentures to the
Purchaser, including but not limited to, the conversion features of the
Debentures, is approved and ratified at the next meeting of the stockholders of
the Company held after April 11, 1997, and (y) the issuance of the Warrant and
the Note to Conseco, including but not limited to the conversion features of the
Note, all corporate action which is necessary or desirable in connection with
the authorization and issuance of the shares of Common Stock issuable pursuant
to the Note or the Warrant, is authorized, approved and ratified by the
stockholders of the Company as soon as practicable after the date hereof, but in
no event more than 90 days after the date hereof (unless Conseco shall otherwise
agree)."
6. Section 7(a) of the Underlying Agreement is hereby amended
by inserting at thereof the following:
"(iv) as of September 16, 1997 such Stockholder is the record
or beneficial owner of the Securities set forth opposite his, her or its name on
the signature page hereof."
Except as otherwise provided herein, the terms and provisions of the
Underlying Agreement shall remain unchanged and continue in full force and
effect.
This Agreement may be executed in any number of counterparts, each of
which shall, collectively and separately, constitute one agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
GENERAL ACCEPTANCE CORPORATION
By /s/ R.E. ▇▇▇▇▇▇, President
CONSECO, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
CAPITOL AMERICAN LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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STOCKHOLDERS"
STOCKHOLDER SHARES
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,100,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,041,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ 956,000
▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇ 966,000
▇▇▇▇▇▇▇ ▇▇▇▇
(shrag913.wpd)
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