<PAGE> 1
As filed with the Securities and Exchange Commission on December 5, 1997.
REGISTRATION NO. 333-40423
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C> <C>
CONSECO, INC. INDIANA 35-1468632
CONSECO FINANCING TRUST IV DELAWARE 35-6653356
CONSECO FINANCING TRUST V DELAWARE 35-6653357
CONSECO FINANCING TRUST VI DELAWARE 35-6653358
CONSECO FINANCING TRUST VII DELAWARE 35-6653359
(Exact name of the Registrants (State or other (I.R.S. Employer
as specified in their respective charters) jurisdiction Identification No.)
of incorporation or
organization)
</TABLE>
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6100
(Address, including zip code, and telephone number, including
area code, of each Registrant's principal executive offices)
---------------------
John J. Sabl, Esq.
Executive Vice President
and General Counsel
Conseco, Inc.
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6163
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each Registrant)
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
(Continued on next page)
================================================================================
<PAGE> 2
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 348,485
New York Stock Exchange listing fee......................... 50,000
Legal fees and expenses..................................... 200,000
Accounting fees and expenses................................ 50,000
Printing and engraving expenses............................. 150,000
Trustee's fees and expenses................................. 80,000
Rating agencies' fees....................................... 300,000
Miscellaneous............................................... 121,515
----------
Total....................................................... $1,300,000
==========
</TABLE>
Except for the SEC registration fee, all of the foregoing are estimates.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Indiana Business Corporation Law grants authorization to Indiana
corporations to indemnify officers and directors for their conduct if such
conduct was in good faith and was in the corporation's best interests or, in the
case of directors, was not opposed to such best interests, and permits the
purchase of insurance in this regard. In addition, the shareholders of a
corporation may approve the inclusion of other or additional indemnification
provisions in the articles of incorporation and by-laws.
The By-laws of Conseco provides for the indemnification of any person made
a party to any action, suit or proceeding by reason of the fact that he is a
director, officer or employee of Conseco, unless it is adjudged in such action,
suit or proceeding that such person is liable for negligence or misconduct in
the performance of his duties. Such indemnification shall be against the
reasonable expenses, including attorneys' fees, incurred by such person in
connection with the defense of such action, suit or proceeding. In some
circumstances, Conseco may reimburse any such person for the reasonable costs of
settlement of any such action, suit or proceeding if a majority of the members
of the Board of Directors not involved in the controversy shall determine that
it was in the interests of Conseco that such settlement be made and that such
person was not guilty of negligence or misconduct.
The above discussion of Conseco's By-laws and the Indiana Business
Corporation Law is not intended to be exhaustive and is qualified in its
entirety by such By-laws and the Indiana Business Corporation Law.
The Declaration of Trust for each of Conseco Financing Trust IV, Conseco
Financing Trust V, Conseco Financing Trust VI and Conseco Financing Trust VII
(the "Trusts") provides that no Institutional Trustee or any of its Affiliates,
Delaware Trustee or any of its Affiliates, or any officer, director,
shareholder, member, partner, employee, representative, custodian, nominee or
agent of the Institutional Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any Regular Trustee,
or any officer, director, shareholder, member, partner, employee, representative
or agent of any Regular Trustee or any Affiliate thereof, or any employee or
agent of any of the Trusts or any of their Affiliates (each a "Company
Indemnified Person") shall be liable, responsible or accountable in damages or
otherwise to any of such Trusts or any officer, director, shareholder, partner,
member, representative, employee or agent of any such Trust or its Affiliates or
to any holder of Preferred Securities for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Fiduciary Indemnified
Person or Company Indemnified Person in good faith on behalf of any of such
Trusts and in a manner such Fiduciary Indemnified Person or Company Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Fiduciary Indemnified Person or Company Indemnified Person by such
Declaration or by law, except
II-1
<PAGE> 4
that a Fiduciary Indemnified Person or Company Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Fiduciary
Indemnified Person's or Company Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
The Declaration of Trust for each of such Trusts also provides that to the
full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of any such Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of any such Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. Each of the Declaration of Trusts also provides that to
the full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of any
such trust to procure a judgment in its favor by reason of the fact that such
person is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of any such trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Company Indemnified Person shall have been adjudged to be liable to
any such trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper. The Declaration of Trust for each such Trust further provides
that expenses (including attorneys' fees) incurred by a Company Indemnified
Person in defending a civil, criminal, administrative or investigative action,
suit or proceeding referred to in the immediately preceding two sentences shall
be paid by the Company in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Company as authorized
in any such Declaration.
The Declaration of Trust for each Trust also provides that the Company
shall indemnify each Fiduciary Indemnified Person against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts under
any such Trust, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties thereunder.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
1.1 Form of Purchase Agreement -- Debt Securities is
incorporated herein by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of the Registrant (No.
33-53095)
1.2 Form of Purchase Agreement -- Equity is incorporated herein
by reference to Exhibit 1.2 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
3.1 Amended and Restated Articles of Incorporation of Conseco,
Inc. were filed with the Commission as Exhibit 3.1 to the
Registration Statement on Form S-2, No. 33-8498; Articles of
Amendment thereto, as filed September 9, 1988 with the
Indiana Secretary of State, were filed with the Commission
as Exhibit 3.1.1 to Conseco's Annual Report on Form 10-K for
1988; Articles of Amendment thereto, as filed June 13, 1989
with the Indiana Secretary of State, were filed with the
Commission as Exhibit 3.1.2 to Conseco's Report on Form 10-Q
for the quarter ended June 30, 1989; and Articles of
Amendment thereto, as filed June 29, 1993 with the Indiana
Secretary of State, were filed with the Commission as
Exhibit 3.1.3 to Conseco's Report on Form 10-Q for the
quarter ended June 30, 1993, and Articles of Amendment
thereto relating to the PRIDES were filed with the
Commission as Exhibit 3.(i).3 to the Registrant's Report on
Form 8-K dated January 17, 1996, and are incorporated herein
by this reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. effective
February 10, 1986 were filed with the Commission as Exhibit
3.2 to its Registration Statement of Form S-1, No. 33-4367,
and an Amendment thereto was filed with the Commission as
Exhibit 3.2.1 to Amendment No. 2 to its Registration
Statement of Form S-1, No. 33-4367; and are incorporated
herein by this reference.
4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and LTCB Trust Company, as Trustee,
pursuant to which the Senior Debt Securities are to be
issued*
4.2 Form of Subordinated Indenture between Conseco, Inc. and The
First National Bank of Chicago, as Trustee.
4.3 Form of Deposit Agreement is incorporated herein by
reference to Exhibit 4.3 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
4.4 Certificate of Trust of Conseco Financing Trust IV*
4.5 Declaration of Trust of Conseco Financing Trust IV*
4.6 Certificate of Trust of Conseco Financing Trust V*
4.7 Declaration of Trust of Conseco Financing Trust V*
4.8 Certificate of Trust of Conseco Financing Trust VI*
4.9 Declaration of Trust of Conseco Financing Trust VI*
4.10 Certificate of Trust of Conseco Financing Trust VII*
4.11 Declaration of Trust of Conseco Financing Trust VII*
4.12 Form of Amended and Restated Declaration of Trust of Conseco
Financing Trust IV
4.13 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc.
4.14 Form of Debt Security
The form or forms of such Debt Securities with respect to
each particular offering will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.15 Form of Preferred Stock
Any amendment to the Company's Articles of Incorporation
authorizing the creation of any series of Preferred Stock or
Depositary Shares representing such shares of Preferred
Stock and setting forth the rights, preferences and
designations thereof will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.16 Form of Warrant Agreement is incorporated herein by
reference to Exhibit 4.4 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095).
4.17 Form of Preferred Security is incorporated by reference to
Exhibit 4.15 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.18 Form of First Supplemental Indenture
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
4.19 Form of % Subordinated Deferrable Interest Debenture is
incorporated by reference to Exhibit 4.17 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
4.20 Form of Purchase Contract Agreement between Conseco, Inc.
and The First National Bank of Chicago, as Purchase Contract
Agent
4.21 Form of Pledge Agreement among Conseco, Inc., The Chase
Manhattan Bank, as Collateral Agent, and The First National
Bank of Chicago, as Purchase Contract Agent
4.22 Form of Remarketing Agreement
4.23 Form of Common Securities Guarantee Agreement by Conseco,
Inc.
5.1 Opinion of Karl W. Kindig, Esquire
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts**
23.1 Consent of Karl W. Kindig, Esquire (included in Exhibit 5.1
hereto)
23.2 Consent of Coopers & Lybrand L.L.P. with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
24.1 Powers of Attorney of Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Ngaire E. Cuneo, Donald F. Gongaware, David
R. Decatur, M. Phil Hathaway, James D. Massey, John M. Mutz
and Dennis E. Murray, Sr. were included on the signature
page of the initial filing of this Registration Statement
and are incorporated herein by reference
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of LTCB Trust Company, as
Trustee under the Senior Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Subordinated Indenture
and as Trustee of the Preferred Securities Guarantees for
the benefit of the holders of Preferred Securities of
Conseco Financing Trust IV, Conseco Financing Trust V,
Conseco Financing Trust VI and Conseco Financing Trust VII
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust IV
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust V
25.5 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust VI
25.6 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust VII
</TABLE>
* Incorporated herein by reference to the corresponding exhibit to the
Registration Statement on Form S-3 of Conseco (No. 333-27803).
** Previously filed.
II-4
<PAGE> 7
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; Provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned Registrants hereby undertake: (1) to use its
best efforts to distribute prior to the opening of bids, to prospective
bidders, underwriters, and dealers, a reasonable number of copies of a
prospectus which at that time meets the requirements of Section 10(a) of
the Act, and relating to the securities offered at competitive bidding,
as contained in the Registration Statement, together with any
supplements thereto, and (2) to file an amendment to the Registration
Statement reflecting the results of bidding, the terms of the reoffering
and related matters to the extent required by the applicable form, not
later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the
issuer and no reoffering of such securities by the purchasers is
proposed to be made.
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<PAGE> 8
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, each of the Registrants has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of
expenses incurred or paid by a director, officer or controlling person
of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication
of such issue.
(e) The undersigned Registrants hereby undertake that (1) for purposes of
determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective;
and (2) for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(f) The undersigned Registrants hereby undertake to file, if necessary, an
application for the purpose of determining the eligibility of the
Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939, as amended, in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission under
Section 305(b)(2) of such Act.
(g) The undersigned Registrants hereby undertake to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
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<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on December 5, 1997.
CONSECO, INC.
By: /s/ DONALD F. GONGAWARE
------------------------------------
Donald F. Gongaware,
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director, Chairman of the Board, December 5, 1997
- --------------------------------------------- President and Chief Executive
Stephen C. Hilbert Officer (Principal Executive Officer
of Conseco, Inc.)
* Director, Executive Vice President December 5, 1997
- --------------------------------------------- and Chief Financial Officer
Rollin M. Dick (Principal Financial Officer of
Conseco, Inc.)
* Senior Vice President, Chief December 5, 1997
- --------------------------------------------- Accounting Officer and Treasurer
James S. Adams (Principal Accounting Officer of
Conseco, Inc.)
* Director December 5, 1997
- ---------------------------------------------
Ngaire E. Cuneo
* Director December 5, 1997
- ---------------------------------------------
David R. Decatur
* Director December 5, 1997
- ---------------------------------------------
M. Phil Hathaway
* Director December 5, 1997
- ---------------------------------------------
Donald F. Gongaware
* Director December 5, 1997
- ---------------------------------------------
James D. Massey
* Director December 5, 1997
- ---------------------------------------------
Dennis E. Murray, Sr.
* Director December 5, 1997
- ---------------------------------------------
John M. Mutz
</TABLE>
*By /s/ KARL W. KINDIG
----------------------------
Karl W. Kindig,
Attorney-in-Fact
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<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust IV certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on December 5, 1997.
CONSECO FINANCING TRUST IV
By: *
------------------------------------
Stephen C. Hilbert, as Trustee
By: *
------------------------------------
Rollin M. Dick, as Trustee
*By: /s/ KARL W. KINDIG
-----------------------------------
Karl W. Kindig,
Attorney-in-Fact
II-8
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust V certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on December 5, 1997.
CONSECO FINANCING TRUST V
By: *
------------------------------------
Stephen C. Hilbert, as Trustee
By: *
------------------------------------
Rollin M. Dick, as Trustee
*By: /s/ KARL W. KINDIG
------------------------------------
Karl W. Kindig
Attorney-in-Fact
II-9
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VI certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on December 5, 1997.
CONSECO FINANCING TRUST VI
By: *
------------------------------------
Stephen C. Hilbert, as Trustee
By: *
------------------------------------
Rollin M. Dick, as Trustee
*By: /s/ KARL W. KINDIG
-----------------------------------
Karl W. Kindig,
Attorney-in-Fact
II-10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VII certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on December 5, 1997.
CONSECO FINANCING TRUST VII
By: *
------------------------------------
Stephen C. Hilbert, as Trustee
By: *
------------------------------------
Rollin M. Dick, as Trustee
*By: /s/ KARL W. KINDIG
------------------------------------
Karl W. Kindig,
Attorney-in-Fact
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<PAGE> 14
EXHIBIT INDEX
TO REGISTRATION STATEMENT
ON FORM S-3
CONSECO, INC.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
<C> <S>
1.1 Form of Purchase Agreement -- Debt Securities is
incorporated herein by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of the Registrant (No.
33-53095)
1.2 Form of Purchase Agreement -- Equity is incorporated herein
by reference to Exhibit 1.2 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
3.1 Amended and Restated Articles of Incorporation of Conseco,
Inc. were filed with the Commission as Exhibit 3.1 to the
Registration Statement on Form S-2, No. 33-8498; Articles of
Amendment thereto, as filed September 9, 1988 with the
Indiana Secretary of State, were filed with the Commission
as Exhibit 3.1.1 to Conseco's Annual Report on Form 10-K for
1988; Articles of Amendment thereto, as filed June 13, 1989
with the Indiana Secretary of State, were filed with the
Commission as Exhibit 3.1.2 to Conseco's Report on Form 10-Q
for the quarter ended June 30, 1989; and Articles of
Amendment thereto, as filed June 29, 1993 with the Indiana
Secretary of State, were filed with the Commission as
Exhibit 3.1.3 to Conseco's Report on Form 10-Q for the
quarter ended June 30, 1993, and Articles of Amendment
thereto relating to the PRIDES were filed with the
Commission as Exhibit 3.(i).3 to the Registrant's Report on
Form 8-K dated January 17, 1996, and are incorporated herein
by this reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. effective
February 10, 1986 were filed with the Commission as Exhibit
3.2 to its Registration Statement of Form S-1, No. 33-4367,
and an Amendment thereto was filed with the Commission as
Exhibit 3.2.1 to Amendment No. 2 to its Registration
Statement of Form S-1, No. 33-4367; and are incorporated
herein by this reference.
4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and LTCB Trust Company, as Trustee,
pursuant to which the Senior Debt Securities are to be
issued*
4.2 Form of Subordinated Indenture between Conseco, Inc. and The
First National Bank of Chicago, as Trustee.
4.3 Form of Deposit Agreement is incorporated herein by
reference to Exhibit 4.3 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
4.4 Certificate of Trust of Conseco Financing Trust IV*
4.5 Declaration of Trust of Conseco Financing Trust IV*
4.6 Certificate of Trust of Conseco Financing Trust V*
4.7 Declaration of Trust of Conseco Financing Trust V*
4.8 Certificate of Trust of Conseco Financing Trust VI*
4.9 Declaration of Trust of Conseco Financing Trust VI*
4.10 Certificate of Trust of Conseco Financing Trust VII*
4.11 Declaration of Trust of Conseco Financing Trust VII*
4.12 Form of Amended and Restated Declaration of Trust of Conseco
Financing Trust IV
4.13 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc.
4.14 Form of Debt Security
The form or forms of such Debt Securities with respect to
each particular offering will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.15 Form of Preferred Stock
Any amendment to the Company's Articles of Incorporation
authorizing the creation of any series of Preferred Stock or
Depositary Shares representing such shares of Preferred
Stock and setting forth the rights, preferences and
designations thereof will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.16 Form of Warrant Agreement is incorporated herein by
reference to Exhibit 4.4 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095).
</TABLE>
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<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
<C> <S>
4.17 Form of Preferred Security is incorporated by reference to
Exhibit 4.15 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.18 Form of First Supplemental Indenture
4.19 Form of % Subordinated Deferrable Interest Debenture is
incorporated by reference to Exhibit 4.17 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
4.20 Form of Purchase Contract Agreement between Conseco, Inc.
and The First National Bank of Chicago, as Purchase Contract
Agent
4.21 Form of Pledge Agreement among Conseco, Inc., The Chase
Manhattan Bank, as Collateral Agent, and The First National
Bank of Chicago, as Purchase Contract Agent
4.22 Form of Remarketing Agreement
4.23 Form of Common Securities Guarantee Agreement by Conseco,
Inc.
5.1 Opinion of Karl W. Kindig, Esquire
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts***
23.1 Consent of Karl W. Kindig, Esquire (included in Exhibit 5.1
hereto)
23.2 Consent of Coopers & Lybrand L.L.P. with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
24.1 Powers of Attorney of Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Ngaire E. Cuneo, Donald F. Gongaware, David
R. Decatur, M. Phil Hathaway, James D. Massey, John M. Mutz
and Dennis E. Murray, Sr. were included on the signature
page of the initial filing of this Registration Statement
and are incorporated herein by reference
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of LTCB Trust Company, as
Trustee under the Senior Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Subordinated Indenture
and as Trustee of the Preferred Securities Guarantees for
the benefit of the holders of Preferred Securities of
Conseco Financing Trust IV, Conseco Financing Trust V,
Conseco Financing Trust VI and Conseco Financing Trust VII
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust IV
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust V
25.5 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust VI
25.6 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Declaration of Trust
of Conseco Financing Trust VII
</TABLE>
* Incorporated herein by reference to the corresponding exhibit to the
Registration Statement on Form S-3 of Conseco (No. 333-27803).
** Previously filed.
II-13
<PAGE> 1
EXHIBIT 4.2
CONSECO, INC.
to
THE FIRST NATIONAL BANK OF CHICAGO, Trustee
FORM OF SUBORDINATED INDENTURE
-------------------------
Dated as of December , 1997
-------------------------
Providing for Issuance of Subordinated
Debt Securities in Series
<PAGE> 2
{Reconciliation and tie between Subordinated Indenture, dated as of December ,
1997, and the Trust Indenture Act of 1939, as amended.
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SUBORDINATED
OF 1939 SECTION INDENTURE SECTION
------------------- -----------------
<S> <C> <C>
310 (a) (1)........................................................... 6.12
(a) (2)........................................................... 6.12
(a) (3)........................................................... TIA
(a) (4)........................................................... Not applicable
(a) (5)........................................................... TIA
(b) .............................................................. 6.10; 6.12(b); TIA
311 (a) .............................................................. TIA
(b) .............................................................. TIA
312 (a) .............................................................. 6.8
(b) .............................................................. TIA
(c) .............................................................. TIA
313 (a) .............................................................. 6.7; TIA
(b) .............................................................. TIA
(c) .............................................................. TIA
(d) .............................................................. TIA
314 (a) .............................................................. 9.6; 9.7; TIA
(b) .............................................................. Not Applicable
(c) (1)........................................................... 1.2
(c) (2)........................................................... 1.2
(c) (3)........................................................... Not Applicable
(d) .............................................................. Not Applicable
(e) .............................................................. TIA
(f) .............................................................. TIA
315 (a) .............................................................. 6.1
(b) .............................................................. 6.6
(c) .............................................................. 6.1
(d) (1)........................................................... TIA
(d) (2)........................................................... TIA
(d) (3)........................................................... TIA
(e) .............................................................. TIA
316 (a) (last sentence)............................................... 1.1
(a) (1) (A)...................................................... 5.2; 5.8
(a) (1) (B)...................................................... 5.7
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(b) .............................................................. 5.9; 5.10
(c) .............................................................. TIA
317 (a) (1)........................................................... 5.3
(a) (2)........................................................... 5.4
(b) .............................................................. 9.3
318 (a) .............................................................. 1.11
(b) .............................................................. TIA
(c) .............................................................. 1.11; TIA
</TABLE>
- -------------------------
This reconciliation and tie section does not constitute part of the
Subordinated Indenture.}
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1
Section 1.1. DEFINITIONS....................................................................................... 1
Section 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.............................................................. 8
Section 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE............................................................ 9
Section 1.4. ACTS OF HOLDERS................................................................................... 9
Section 1.5. NOTICES, ETC., TO TRUSTEE AND COMPANY............................................................. 11
Section 1.6. NOTICE TO HOLDERS; WAIVER......................................................................... 11
Section 1.7. HEADINGS AND TABLE OF CONTENTS.................................................................... 12
Section 1.8. SUCCESSOR AND ASSIGNS............................................................................. 12
Section 1.9. SEPARABILITY...................................................................................... 12
Section 1.10. BENEFITS OF INDENTURE............................................................................. 12
Section 1.11. GOVERNING LAW..................................................................................... 12
Section 1.12. LEGAL HOLIDAYS.................................................................................... 12
ARTICLE 2
SECURITY FORMS
Section 2.1. FORMS GENERALLY................................................................................... 13
Section 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION................................................... 13
Section 2.3. SECURITIES IN GLOBAL FORM......................................................................... 13
Section 2.4. FORM OF LEGEND FOR SECURITIES IN GLOBAL FORM...................................................... 14
ARTICLE 3
THE SECURITIES
Section 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES.............................................................. 14
Section 3.2. DENOMINATIONS..................................................................................... 18
Section 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.................................................... 18
Section 3.4. TEMPORARY SECURITIES.............................................................................. 20
Section 3.5. REGISTRATION, TRANSFER AND EXCHANGE............................................................... 20
Section 3.6. REPLACEMENT SECURITIES............................................................................ 23
Section 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.................................................... 24
Section 3.8. PERSONS DEEMED OWNERS............................................................................. 26
Section 3.9. CANCELLATION...................................................................................... 26
Section 3.10. COMPUTATION OF INTEREST........................................................................... 26
Section 3.11. CUSIP NUMBERS..................................................................................... 26
Section 3.12. CURRENCY AND MANNER OF PAYMENT IN RESPECT OF SECURITIES........................................... 27
</TABLE>
i
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<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 3.13. APPOINTMENT AND RESIGNATION OF EXCHANGE RATE AGENT............................................... 30
Section 3.14. AGREED TAX TREATMENT............................................................................. 30
ARTICLE 4
SATISFACTION, DISCHARGE AND DEFEASANCE
Section 4.1. TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE INDENTURE......................................... 30
Section 4.2. APPLICATION OF TRUST FUNDS....................................................................... 32
Section 4.3. APPLICABILITY OF DEFEASANCE PROVISIONS; COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE....................................................................................... 32
Section 4.4. DEFEASANCE AND DISCHARGE......................................................................... 32
Section 4.5. COVENANT DEFEASANCE.............................................................................. 32
Section 4.6. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.................................................. 33
Section 4.7. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST................................... 34
Section 4.8. REPAYMENT TO COMPANY............................................................................. 35
Section 4.9. INDEMNITY FOR GOVERNMENT OBLIGATIONS............................................................. 35
Section 4.10. REINSTATEMENT.................................................................................... 35
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.1. EVENTS OF DEFAULT................................................................................ 36
Section 5.2. ACCELERATION; RESCISSION AND ANNULMENT........................................................... 37
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.................................. 37
Section 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................. 37
Section 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES...................................... 38
Section 5.6. DELAY OR OMISSION NOT WAIVER..................................................................... 38
Section 5.7. WAIVER OF PAST DEFAULTS.......................................................................... 38
Section 5.8. CONTROL BY MAJORITY.............................................................................. 38
Section 5.9. LIMITATION ON SUITS BY HOLDERS................................................................... 38
Section 5.10. RIGHTS OF HOLDERS TO RECEIVE PAYMENT............................................................. 39
Section 5.11. APPLICATION OF MONEY COLLECTED................................................................... 39
Section 5.12. RESTORATION OF RIGHTS AND REMEDIES............................................................... 40
Section 5.13. RIGHTS AND REMEDIES CUMULATIVE................................................................... 40
Section 5.14. WAIVER OF USURY, STAY OR EXTENSION LAWS.......................................................... 40
Section 5.15. UNDERTAKING FOR COSTS............................................................................ 40
ARTICLE 6
THE TRUSTEE
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 6.1. CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE............................................... 40
Section 6.2. RIGHTS OF TRUSTEE................................................................................ 40
Section 6.3. TRUSTEE MAY HOLD SECURITIES...................................................................... 41
Section 6.4. MONEY HELD IN TRUST.............................................................................. 41
Section 6.5. TRUSTEE'S DISCLAIMER............................................................................. 42
Section 6.6. NOTICE OF DEFAULTS............................................................................... 42
Section 6.7. REPORTS BY TRUSTEE TO HOLDERS.................................................................... 42
Section 6.8. SECURITYHOLDER LISTS............................................................................. 42
Section 6.9. COMPENSATION AND INDEMNITY....................................................................... 42
Section 6.10. REPLACEMENT OF TRUSTEE........................................................................... 43
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................................................... 44
Section 6.12. ELIGIBILITY; DISQUALIFICATION.................................................................... 45
Section 6.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...................................... 45
Section 6.14. APPOINTMENT OF AUTHENTICATING AGENT.............................................................. 45
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
Section 7.1. CONSOLIDATION, MERGER OR SALE OF ASSETS PERMITTED................................................ 47
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............................................... 48
Section 8.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.................................................. 49
Section 8.3. COMPLIANCE WITH TRUST INDENTURE ACT.............................................................. 50
Section 8.4. EXECUTION OF SUPPLEMENTAL INDENTURES............................................................. 50
Section 8.5. EFFECT OF SUPPLEMENTAL INDENTURES................................................................ 50
Section 8.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES............................................... 50
ARTICLE 9
COVENANTS
Section 9.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.............................................. 50
Section 9.2. MAINTENANCE OF OFFICE OR AGENCY.................................................................. 51
Section 9.3. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST; UNCLAIMED MONEY............................... 51
Section 9.4. CORPORATE EXISTENCE.............................................................................. 52
Section 9.5. REPORTS BY THE COMPANY........................................................................... 52
Section 9.6. ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULTS OR EVENTS OF DEFAULT............................... 53
</TABLE>
iii
<PAGE> 7
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 9.7. BOOKS OF RECORD AND ACCOUNT...................................................................... 53
ARTICLE 10
REDEMPTION
Section 10.1. APPLICABILITY OF ARTICLE......................................................................... 54
Section 10.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE............................................................ 54
Section 10.3. SELECTION OF SECURITIES TO BE REDEEMED........................................................... 54
Section 10.4. NOTICE OF REDEMPTION............................................................................. 55
Section 10.5. DEPOSIT OF REDEMPTION PRICE...................................................................... 56
Section 10.6. SECURITIES PAYABLE ON REDEMPTION DATE............................................................ 56
Section 10.7. SECURITIES REDEEMED IN PART...................................................................... 56
ARTICLE 11
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE......................................................................... 57
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES............................................ 57
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND........................................................ 57
ARTICLE 12
SUBORDINATION
Section 12.1. AGREEMENT TO SUBORDINATE......................................................................... 58
Section 12.2. CERTAIN DEFINITIONS.............................................................................. 58
Section 12.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY; ETC........................................................ 58
Section 12.4. DEFAULT ON SENIOR INDEBTEDNESS................................................................... 59
Section 12.5. WHEN DISTRIBUTION MUST BE PAID OVER.............................................................. 59
Section 12.6. NOTICE BY COMPANY................................................................................ 59
Section 12.7. SUBROGATION...................................................................................... 59
Section 12.8. RELATIVE RIGHTS.................................................................................. 60
Section 12.9. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY..................................................... 60
Section 12.10. DISTRIBUTION..................................................................................... 60
Section 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT............................................................... 60
Section 12.12. AUTHORIZATION TO EFFECT SUBORDINATION............................................................ 61
</TABLE>
iv
<PAGE> 8
SUBORDINATED INDENTURE, dated as of December , 1997, from
Conseco, Inc., an Indiana corporation (the "Company"), to The First National
Bank of Chicago, Trustee, a national banking association (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness ("Securities")
to be issued in one or more series as herein provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. DEFINITIONS. (a) For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"AFFILIATE" of a specified Person mean any 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"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGENT" means any Paying Agent or Registrar.
<PAGE> 9
"AUTHENTICATING AGENT" means any authenticating agent
appointed by the Trustee pursuant to Section 6.14.
"AUTHORIZED NEWSPAPER" means a newspaper of general
circulation, in the official language of the country of publication or in the
English language customarily published on each Business Day whether or not
published on Saturdays, Sundays or holidays. Whenever successive publications in
an Authorized Newspaper are required hereunder they may be made (unless
otherwise expressly provided herein) on the same or different days of the week
and in the same or different Authorized Newspapers.
"BEARER SECURITY" means any Security issued hereunder which is
payable to bearer.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company, the Executive Committee or any other duly authorized committee
thereof.
"BOARD RESOLUTION" means a copy of a resolution of the Board
of Directors, certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of the certificate, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means unless otherwise specified with respect to any Securities
pursuant to Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment or
particular location are authorized or obligated by law or executive order to
close.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of 1934
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"COMPANY" means the party named as the Company in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter means
such successor.
"COMPANY ORDER" and "COMPANY REQUEST" mean, respectively, a
written order or request signed in the name of the Company by two Officers, one
of whom must be the Chairman of the Board, the President, the Chief Financial
Officer, the Treasurer, the Assistant Treasurer, the Controller or a Vice
President of the Company.
"CONVERSION EVENT" means the cessation of use of (i) a Foreign
Currency both by the issuer of such currency and for the settlement of
transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any Currency Unit other than the ECU
for the purposes for which it was established.
"CORPORATE TRUST OFFICE" means the principal corporate trust
office of the Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention:
Corporate Trust Services Division,
2
<PAGE> 10
except for purposes of Section 9.2 such term shall mean the office or agency of
the Trustee in the Borough of Manhattan, the City of New York, which office at
the date hereof is located at First Chicago Trust Company of New York, 14 Wall
Street, Eighth Floor, New York, New York 10005.
"CURRENCY UNIT" for all purposes of this Indenture shall
include any composite currency.
"DEBT" means indebtedness for money borrowed.
"DEFAULT" means any event which is or after notice or passage
of time, or both, would be, an Event of Default.
"DEPOSITORY", when used with respect to the Securities of or
within any series issuable or issued in whole or in part in global form, means
the Person designated as Depository by the Company pursuant to Section 3.1 until
a successor Depository shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter shall mean or include each Person
which is then a Depository hereunder, and if at any time there is more than one
such Person, shall be a collective reference to such Persons.
"DOLLAR" means the currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"EUROPEAN COMMUNITIES" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"EUROPEAN MONETARY SYSTEM" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"EXCHANGE RATE AGENT", when used with respect to Securities of
or within any series, means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, a New York Clearing House bank designated
pursuant to Section 3.1 or Section 3.13 (which may include any such bank acting
as Trustee hereunder).
"EXCHANGE RATE OFFICER'S CERTIFICATE" means a certificate
setting forth (i) the applicable Market Exchange Rate or the applicable bid
quotation and (ii) the Dollar or Foreign Currency amounts of principal (and
premium, if any) and interest, if any, (on an aggregate basis and on the basis
of a Security having the lowest denomination principal amount in the relevant
currency or currency unit), payable with respect to a Security of any series on
the basis of such Market Exchange Rate or the applicable bid quotation, signed
by the Chief Financial Officer, the Treasurer, the Controller, any Vice
President or the Assistant Treasurer of the Company.
"FOREIGN CURRENCY" means any currency issued by the government
of one or more countries other than the United States or by any recognized
confederation or association of such governments.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct
obligations of the United States or if specified as contemplated by Section 3.1,
the government which issued the currency in which the Securities of a particular
series are payable, for the payment of which its full faith and credit is
pledged or (ii) obligations a
3
<PAGE> 11
Person controlled or supervised by and acting as an agency or instrumentality of
the United States or if specified as contemplated by Section 3.1, such
government which issued the foreign currency in which the Securities of such
series are payable, the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States or such other
government, which, in either case are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government obligation held by such custodian for the account of the holder of a
depository receipt, PROVIDED that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation evidenced by such depository receipt.
"HOLDER" means, with respect to a Bearer Security, a bearer
thereof or of a coupon appertaining thereto and, with respect to a Registered
Security, a person in whose name a Security is registered on the Register.
"INDENTURE" means this Subordinated Indenture as originally
executed or as amended or supplemented from time to time and shall include the
forms and terms of particular series of Securities established as contemplated
hereunder.
"INDEXED SECURITY" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"INTEREST", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"INTEREST PAYMENT DATE", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"MARKET EXCHANGE RATE" means, unless otherwise specified with
respect to any Securities pursuant to Section 3.1(i) for any conversion
involving a currency unit on the one hand and Dollars or any Foreign Currency on
the other, the exchange rate between the relevant currency unit and Dollars or
such Foreign Currency calculated by the method specified pursuant to Section 3.1
for the Securities of the relevant series, (ii) for any conversion of Dollars
into any Foreign Currency, the noon buying rate for such Foreign Currency for
cable transfers quoted in New York City as certified for customs purposes by the
Federal Reserve Bank of New York and (iii) for any conversion of one Foreign
Currency into Dollars or another Foreign Currency, the spot rate at noon local
time in the relevant market at which, in accordance with normal banking
procedures, the Dollars or Foreign Currency into which conversion is being made
could be purchased with the Foreign Currency from which conversion is being made
from major banks located in New York City, London or any other principal market
for Dollars or such purchased Foreign Currency, in each case Determined by the
Exchange Rate Agent. Unless otherwise specified with respect to any Securities
pursuant to Section 3.1, in the event of the unavailability of any of the
exchange rates provided for in the foregoing clauses (i), (ii) and (iii), the
Exchange Rate Agent shall use, in its sole discretion and without liability on
its part, such quotation of the Federal Reserve Bank of New York as of the most
recent available date, or quotations from one or more major banks in New York
City, London or other principal market for such currency or currency unit in
question (which may include any such bank acting as Trustee under this
Indenture), or such other quotations as the Exchange Rate Agent shall deem
appropriate. If there is more than one market for dealing in any currency or
currency unit by reason of foreign exchange regulations or otherwise the market
to be used in respect of such currency or currency unit shall be that upon which
a nonresident issuer of securities designated in such currency
4
<PAGE> 12
or currency unit would purchase such currency or currency unit in order to make
payments in respect of such securities.
"MATURITY", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"OFFICER" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Assistant
Treasurer, the Controller, the Secretary or any Assistant Secretary of the
Company.
"OFFICERS' CERTIFICATE", when used with respect to the
Company, means a certificate signed by two Officers, one of whom must be the
Chairman of the Board, the President, the Chief Financial Officer, the
Treasurer, the Assistant Treasurer, the Controller or a Vice President of the
Company.
"OPINION OF COUNSEL" means a written opinion from the general
counsel of the Company or other legal counsel who is reasonably acceptable to
the Trustee. Such counsel may be an employee of or counsel to the Company.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which
provides for an amount less than the stated principal amount thereof to be due
and payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
"OUTSTANDING", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
payment or redemption money or Government Obligations in the
necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities and any coupons appertaining thereto PROVIDED
that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provisions therefor satisfactory to the Trustee have been
made;
(iii) Securities, except to the extent provided in
Sections 4.4 and 4.5, with respect to which the Company has
effected defeasance and/or covenant defeasance as provided in
Article 4; and
(iv) Securities which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid
obligations of the Company;
5
<PAGE> 13
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any other purpose and for
the purpose of making the calculations required by section 313 of the Trust
Indenture Act, (W) the principal amount of any Original Issue Discount
Securities that may be counted in making such determination or calculation and
that shall be deemed to be Outstanding for such purpose shall be equal to the
amount of principal thereof that would be (or shall have been declared to be)
due and payable at the time of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.2, (X) the principal
amount of any Security denominated in a Foreign Currency that may be counted in
making such determination or calculation and that shall be deemed Outstanding
for such purpose shall be equal to the Dollar equivalent, determined as of the
date such Security is originally issued by the Company as set forth in an
Exchange Rate Officer's Certificate delivered to the Trustee, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined as
provided in clause (W) above) of such Security, (Y) the principal amount of any
Indexed Security that may be counted in making such determination or calculation
and that shall be deemed Outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(Z) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver only
Securities which the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to
pay the principal of, premium, if any, or interest and any other payments on any
Securities on behalf of the Company.
"PERIODIC OFFERING" means an offering of Securities of a
series from time to time the specific terms of which Securities, including,
without limitation, the rate or rates of interest or formula for determining the
rate or rates of interest thereon, if any, the Maturity thereof and the
redemption provisions if any, with respect thereto, are to be determined by the
Company upon the issuance of such Securities.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PLACE OF PAYMENT", when used with respect to the Securities
of or within any series, means the place or places where the principal of,
premium, if any, and interest and any other payments on such Securities are
payable as specified as contemplated by Sections 3.1 and 9.2.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"PRINCIPAL AMOUNT", when used with respect to any Security,
means the amount of principal, if any, payable in respect thereof at Maturity;
PROVIDED, HOWEVER, that when used with respect to an Indexed
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<PAGE> 14
Security in any context other than the making of payments at Maturity,
"principal amount" means the principal face amount of such Indexed Security at
original issuance.
"REDEMPTION DATE", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to
be redeemed, in whole or in part, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGISTERED SECURITY" means any Security issued hereunder and
registered as to principal and interest in the Register.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.1.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
shall mean any officer in the Corporate Trust Office, including any vice
president, any assistant vice president, the secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer, the controller, any assistant controller, or any
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers in the Corporate
Trust Office, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with a particular subject.
"SECURITY" or "SECURITIES" has the meaning stated in the first
recital of this Indenture and more particularly means a Security or Securities
of the Company issued, authenticated and delivered under this Indenture.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.7.
"STATED MATURITY", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or in a coupon representing such installment of
interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable (subject to any of the
Company to defer such payments in the manner set forth therein).
"SUBSIDIARY" of any Person means any Person of which at least
a majority of capital stock having ordinary voting power for the election of
directors or other governing body of such Person is owned by such Person
directly or through one or more Subsidiaries of such Person.
"TOTAL ASSETS" means, at any date, the total assets appearing
on the most recently prepared consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as
in effect on the date of this Indenture, except as provided in Section 8.3.
"TRUSTEE" means the party named as such in the first paragraph
of this Indenture until a successor Trustee replaces it pursuant to the
applicable provisions of this Indenture, and thereafter means such successor
Trustee
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<PAGE> 15
and if, at any time, there is more than one Trustee, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
the Securities of that series.
"UNITED STATES" means, unless otherwise specified with respect
to the Securities of any series as contemplated by Section 3.1, the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
"U.S. PERSON" has the same meaning as given in Section
7701(a)(30) of the Internal Revenue Code of 1986.
(b) The following terms shall have the meanings specified in
the Sections referred to opposite such term below:
<TABLE>
<CAPTION>
TERM SECTION
---- -------
<S> <C>
"Act" 1.4(a)
"Bankruptcy Law" 5.1
"Component Currency" 3.12(d)
"Conversion Date" 3.12(d)
"Custodian" 5.1
"Defaulted Interest" 3.7(b)
"Election Date" 3.12(h)
"Event of Default" 5.1
"Notice of Default" 5.1(3)
"Register" 3.5
"Registrar" 3.5
"Senior Indebtedness" 12.2
"Valuation Date" 3.7(c)
</TABLE>
Section 1.2. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Sections 2.3 and 9.6) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
8
<PAGE> 16
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such condition or covenant has been complied
with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
Section 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person or that they be
so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations as to such matters are
erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion is based are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.4. ACTS OF HOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by Agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such Agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his
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<PAGE> 17
individual capacity, such certificate or Affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed by any trust
company, bank, banker or other depository, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depository, or
exhibited to it, the Bearer Securities therein described; or such acts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (i) another such certificate or affidavit
bearing a later date issued in respect of the same Bearer Security is produced,
(ii) such Bearer Security is produced to the Trustee by some other Person, (iii)
such Bearer Security is surrendered in exchange for a Registered Security or
(iv) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(d) The ownership of Registered Securities shall be proved by
the Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) If the Company shall solicit from the Holders of any
series any request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by or pursuant to a Board Resolution,
fix in advance a record date for the determination of Holders of such series
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so,
PROVIDED that the Company may not set a record date for, and the provisions of
this paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph. If
such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act and for that purpose the Outstanding Securities
shall be computed as of such record date; PROVIDED that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
(g) The Trustee may set any day as a record date for the
purpose of determining the Holders of any series entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration or rescission of
acceleration referred to in Section 5.2, (iii) any direction referred to in
Section 5.8 or (iv) any request to institute proceedings referred to in Section
5.9(2), and (v) any waiver of past defaults pursuant to Section 5.7 in each case
with respect to Securities of such series. If such a record date is fixed
pursuant to this Paragraph, the relevant action may be taken or given before or
after such record date, but only the Holders of record at the close of business
on such record date shall be deemed to be holders of a series for the purposes
of determining whether Holders of the requisite proportion of Outstanding
Securities of such series have authorized or agreed or consented to such action,
and for that
10
<PAGE> 18
purpose the Outstanding Securities of such series shall be computed as of such
record date; PROVIDED that no such action by Holders on such record date shall
be deemed effective unless it shall become effective pursuant to the provisions
of this Indenture not later than six months after the record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date and the proposed
action by Holders to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
Section 1.5. NOTICES, ETC., TO TRUSTEE AND COMPANY. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) in writing and mailed, first-class
postage prepaid, to the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) in writing and mailed, first-class
postage prepaid, to the Company addressed to it at Conseco,
Inc., 11825 N. Pennsylvania Street, Carmel, Indiana 46032,
Attention: General Counsel or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.6. NOTICE TO HOLDERS; WAIVER. Where this Indenture
provides for notice to Holders of any event, (i) if any of the Securities
affected by such event are Registered Securities, such notice to the Holders
thereof shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each such Holder
affected by such event, at his address as it appears in the Register within the
time prescribed for the giving of such notice and, (ii) if any of the Securities
affected by such event are Bearer Securities, notice to the Holders thereof
shall be sufficiently given (unless otherwise herein or in the terms of such
Bearer Securities expressly provided) if published once in an Authorized
Newspaper in New York, New York, and in such other city or cities, if any, as
may be specified as contemplated by Section 3.1.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. In any case where notice
is given to Holders by publication, neither the failure to publish such notice,
nor any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
If it is impossible or, in the opinion of
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<PAGE> 19
the Trustee, impracticable to give any notice by publication in the manner
herein required, then such publication in lieu thereof as shall be made with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event and such waiver shall be equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.7. HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8. SUCCESSOR AND ASSIGNS. All covenants and
agreements in this Indenture by the Company shall bind its successor and
assigns, whether so expressed or not.
Section 1.9. SEPARABILITY. In case any provision of this
Indenture or the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.10. BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Securities, expressed or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, the Holders of Senior
Indebtedness and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 1.11. GOVERNING LAW. THIS INDENTURE, THE SECURITIES
AND ANY COUPONS APPERTAINING THERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS. This Indenture is subject to the Trust Indenture Act and
if any provision hereof limits, qualifies or conflicts with any provision of the
Trust Indenture Act, which is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be. Whether or
not this Indenture is required to be qualified under the Trust Indenture Act,
the provisions of the Trust Indenture Act required to be included in an
indenture in order for such indenture to be so qualified shall be deemed to be
included in this Indenture with the same effect as if such provisions were set
forth herein and any provisions hereof which may not be included in an indenture
which is so qualified shall be deemed to be deleted or modified to the extent
such provisions would be required to be deleted or modified in an indenture so
qualified.
Section 1.12. LEGAL HOLIDAYS. In any case where any Interest
Payment Date, Redemption Date, sinking fund payment date, Stated Maturity or
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of any Security
or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu of this Section),
payment of principal, premium, if any, or interest need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on
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<PAGE> 20
such date; PROVIDED that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date, sinking
fund payment date, Stated Maturity or Maturity, as the case may be.
ARTICLE 2
SECURITY FORMS
Section 2.1. FORMS GENERALLY. The Securities of each series
and the coupons, if any, to be attached thereto shall be in substantially such
form as shall be established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depository
therefor or as may, consistently herewith, be determined by the officers
executing such Securities and coupons, if any, as evidenced by their execution
of the Securities and coupons, if any. If temporary Securities of any series are
issued as permitted by Section 3.4, the form thereof also shall be established
as provided in the preceding sentence. If the forms of Securities and coupons,
if any, of any series are established by, or by action taken pursuant to, a
Board Resolution, a copy of the Board Resolution together with an appropriate
record of any such action taken pursuant thereto, including a copy of the
approved form of Securities or coupons, if any, shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 3.3 for
the authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Section 3.1,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such Securities
and coupons, if any, as evidenced by their execution of such Securities and
coupons, if any.
Section 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series described in the
within-mentioned Indenture.
------------------------,
as Trustee
By
------------------------
Authorized Signatory
Section 2.3. SECURITIES IN GLOBAL FORM. If Securities of or
within a series are issuable in whole or in part in global form, any such
Security may provide that it shall represent the aggregate or specified amount
of Outstanding Securities from time to time endorsed thereon and may also
provide that the aggregate amount of Outstanding Securities represented thereby
may from time to time be reduced or increased to reflect exchanges.
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<PAGE> 21
Any endorsement of a Security in global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Securities represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein or in the Company Order to
be delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 1.2 hereof and need not be accompanied
by an Opinion of Counsel.
The provisions of the last paragraph of Section 3.3 shall
apply to any Security in global form if such Security was never issued and sold
by the Company and the Company delivers to the Trustee the Security in global
form together with written instructions (which need not comply with Section 1.2
and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last paragraph of Section 3.3.
Notwithstanding the provisions of Section 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of,
premium, if any, and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Section 2.4. FORM OF LEGEND FOR SECURITIES IN GLOBAL FORM. Any
Registered Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form with such changes as may be
required by the Depository:
THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF 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 DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY.
ARTICLE 3
THE SECURITIES
Section 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. The Securities may be issued from
time to time in one or more series.
(b) The following matters shall be established with respect to
each series of Securities issued hereunder (i) by a Board Resolution, (ii) by
action taken pursuant to a Board Resolution and (subject to Section 3.3) set
forth, or determined in the manner provided, in an Officers' Certificate or
(iii) in one or more indentures supplemental hereto:
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(1) the title, designation and purchase price of the
Securities of the series (which title shall distinguish the
Securities of the series from all other series of Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authenticated and
delivered under this Indenture (which limit shall not pertain
to Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 3.4, 3.5, 3.6,
8.6, or 10.7);
(3) the date or dates on which the principal of and
premium, if any, on the Securities of the series is payable or
the method of determination thereof;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method of
calculating such rate or rates of interest, the date or dates
from which such interest shall accrue or the method by which
such date or dates shall be determined, the Interest Payment
Dates on which any such interest shall be payable and, with
respect to Registered Securities, the Regular Record Date, if
any, for the interest payable on any Registered Security on
any Interest Payment Date;
(5) the place or places where the principal of,
premium, if any, and interest, if any, on Securities of the
series shall be payable;
(6) the right, if any, of the Company to defer
payment of interest and the maximum length of any such
deferral period.
(7) the period or periods within which, the price or
prices at which, the currency or currencies (including
currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company
and, if other than as provided in Section 10.3, the manner in
which the particular Securities of such series (if less than
all Securities of such series are to be redeemed) are to be
selected for redemption;
(8) the obligation, if any, of the Company to redeem
or purchase Securities of the series pursuant to any sinking
fund or analogous provisions or upon the happening of a
specified event or at the option of a Holder thereof and the
period or periods within which, the price or prices at which,
and the other terms and conditions upon which, Securities of
the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, if Registered Securities, and if
other than the denomination of $5,000 and any integral
multiple thereof, if Bearer Securities, the denominations in
which Securities of the series shall be issuable;
(10) if other than Dollars, the currency or
currencies (including currency unit or units) in which the
principal of, premium, if any, and interest, if any, on the
Securities of the series shall be payable, or in which the
Securities of the series shall be denominated and the
particular provisions applicable thereto in accordance with,
in addition to, or in lieu of the provisions of Section 3.12;
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(11) if the payments of principal of, premium, if
any, or interest, if any, on the Securities of the series are
to be made, at the election of the Company or a Holder, in a
currency or currencies (including currency unit or units)
other than that in which such Securities are denominated or
designated to be payable, the currency or currencies
(including currency unit or units) in which such payments are
to be made, the terms and conditions of such payments and the
manner in which the exchange rate with respect to such
payments shall be determined, and the particular provisions
applicable thereto in accordance with, in addition to, or in
lieu of, the provisions of Section 3.12;
(12) if the amount of payments of principal of,
premium, if any, and interest, if any, on the Securities of
the series shall be determined with reference to an index,
formula or other method (which index, formula or method may be
based, without limitation, on a currency or currencies
(including currency unit or units) other than that in which
the Securities of the series are denominated or designated to
be payable), the index, formula or other method by which such
amounts shall be determined;
(13) if other than the principal amount thereof, the
portion of the principal amount of such Securities of the
series which shall be payable upon declaration of acceleration
thereof pursuant to Section 5.2 or the method by which such
portion shall be determined;
(14) if the principal amount payable at the Stated
Maturity of any Securities of the series will not be
determinable as of any one or more dates prior to the Stated
Maturity, the amount which shall be deemed to be the principal
amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount
thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be
Outstanding as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be
the principal amount shall be determined);
(15) if other than as provided in Section 3.7, the
Person to whom, any interest on any Registered Security of the
series shall be payable and the manner in which, or the Person
to whom, any interest on any Bearer Securities of the series
shall be payable;
(16) provisions, if any, granting special rights to
the Holders of Securities of the series upon the occurrence of
such events as may be specified;
(17) any deletions from, modifications of or
additions to the Events of Default set forth in Section 5.1 or
covenants of the Company set forth in Article 9 pertaining to
the Securities of the series;
(18) under what circumstances, if any, the Company
will pay additional amounts on the Securities of that series
held by a Person who is not a U.S. Person in respect of taxes
or similar charges withheld or deducted and, if so, whether
the Company will have the option to redeem such Securities
rather than pay such additional amounts (and the terms of any
such option);
(19) whether Securities of the series shall be
issuable as Registered Securities or Bearer Securities (with
or without interest coupons), or both, and any restrictions
applicable to the offering, sale or delivery of Bearer
Securities and, if other than as provided in Section 3.5, the
terms upon
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which Bearer Securities of a series may be exchanged for
Registered Securities of the same series and vice versa;
(20) the date as of which any Bearer Securities of
the series and any temporary global Security representing
Outstanding Securities of the series shall be dated if other
than the date of original issuance of the first Security of
the series to be issued;
(21) the forms of the Securities and coupons, if any,
of the series;
(22) the applicability, if any, to the Securities of
or within the series of Sections 4.4 and 4.5, or such other
means of defeasance or covenant defeasance as may be specified
for the Securities and coupons, if any, of such series, and,
if the Securities are payable in a currency other than
Dollars, whether, for the purpose of such defeasance or
covenant defeasance, the term "Government Obligations" shall
include obligations referred to in the definition of such term
which are not obligations of the United States or an agency or
instrumentality of the United States;
(23) if other than the Trustee, the identity of the
Registrar and any Paying Agent;
(24) the designation of the initial Exchange Rate
Agent, if any;
(25) if the Securities of the series shall be issued
in whole or in part in global form (i) the Depository for such
global Securities, (ii) the form of any legend in addition to
or in lieu of that in Section 2.4 which shall be borne by such
global security, (iii) whether beneficial owners of interests
in any Securities of the series in global form may exchange
such interests for certificated Securities of such series and
of like tenor of any authorized form and denomination, and
(iv) if other than as provided in Section 3.5, the
circumstances under which any such exchange may occur; and
(26) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture)
including any terms which may be required by or advisable
under United States laws or regulations or advisable (as
determined by the Company) in connection with the marketing of
Securities of the series.
(c) All Securities of any one series and coupons, if any,
appertaining to any Bearer Securities of such series shall be substantially
identical except as to denomination and except as may otherwise be provided (i)
by a Board Resolution, (ii) by action taken pursuant to a Board Resolution and
(subject to Section 3.3) set forth, or determined in the manner provided, in the
related Officers' Certificate or (iii) in an indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the
Holders, for issuances of additional Securities of such series.
(d) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of such Board
Resolution shall be certified by the Corporate Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth or providing the manner for
determining, the terms of the Securities of such series, and an appropriate
record of any action taken pursuant thereto in connection with the issuance of
any Securities of such series shall be delivered to the Trustee prior to the
authentication and delivery thereof.
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Section 3.2. DENOMINATIONS. Unless otherwise provided as
contemplated by Section 3.1 any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in the denomination of $5,000
and any integral multiples thereof.
Section 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Securities shall be executed on behalf of the Company by two Officers. The
Company's seal shall be reproduced on the Securities. The signatures of any of
these officers on the Securities may be manual or facsimile. The coupons, if
any, of Bearer Securities shall bear the facsimile signature of two officers.
Securities and coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time, the Company may deliver
Securities, together with any coupons appertaining thereto, of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities; PROVIDED, HOWEVER, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series.
If the form or terms of the Securities of a series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to section 315(a) through
(d) of the Trust Indenture Act) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(1) if the forms of such Securities and any coupons
have been established by or pursuant to a Board Resolution as
permitted by Section 2.1, that such forms have been
established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities and any coupons
have been established by or pursuant to a Board Resolution as
permitted by Section 3.1, that such terms have been, or in the
case of Securities of a series offered in a Periodic Offering,
will be, established in conformity with the provisions of this
Indenture, subject in the case of Securities offered in a
Periodic Offering, to any conditions specified in such Opinion
of Counsel; and
(3) that such Securities together with any coupons
appertaining thereto, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general
applicability relating to or affecting the enforcement of
creditors' rights and to general equity
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principles and except further as enforcement thereof may be
limited by (A) requirements that a claim with respect to any
Securities denominated other than in Dollars (or a Foreign
Currency or currency unit judgment in respect of such claim)
be converted into Dollars at a rate of exchange prevailing on
a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making
of payments in Foreign Currencies or currency units or
payments outside the United States.
Notwithstanding that such form or terms have been so established, the Trustee
shall have the right to decline to authenticate such Securities if, in the
written opinion of counsel to the Trustee (which counsel may be an employee of
the Trustee) reasonably acceptable to the Company, the issue of such Securities
pursuant to this Indenture will adversely affect the Trustee's own rights,
duties or immunities under this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee. Notwithstanding the generality of the
foregoing, the Trustee will not be required to authenticate Securities
denominated in a Foreign Currency if the Trustee reasonably believes that it
would be unable to perform its duties with respect to such Securities.
Notwithstanding the provisions of Section 3.1 and of the two
preceding paragraphs, if all of the Securities of any series are not to be
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 3.1 or the Company Order and
Opinion of Counsel otherwise required pursuant to the two preceding paragraphs
in connection with the authentication of each Security of such series if such
documents, with appropriate modifications to cover such future issuances, are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company of any of
such Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 2.1 and 3.1 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.
If the Company shall establish pursuant to Section 3.1 that
the Securities of a series are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order with respect to such series, authenticate and
deliver one or more Securities in global form that (i) shall represent and shall
be denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by such Security or
Securities in global form, (ii) shall be registered, if a Registered Security,
in the name of the Depository for such Security or Securities in global form or
the nominee of such Depository, (iii) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instruction and (iv) shall bear the
legends set forth in Section 2.4 and the terms of the Board Resolution or
supplemental indenture relating to such series.
Each Depository designated pursuant to Section 3.1 for a
Registered Security in global form must, at the time of its designation and at
all times while it serves as Depository, be a clearing agency registered under
the Securities Exchange Act of 1934 and any other applicable statute or
regulation. The Trustee shall have no responsibility to determine if the
Depository is so registered. Each Depository shall enter into an agreement with
the Trustee and the Company governing the respective duties and rights of such
Depository, the Company and the Trustee with regard to Securities issued in
global form.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 3.1.
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No Security or coupon appertaining thereto shall be entitled
to any benefits under this Indenture or be valid or obligatory for any purpose
until authenticated by the manual signature of one of the authorized signatories
of the Trustee or an Authenticating Agent and no coupon shall be valid until the
Security to which it appertains has been so authenticated. Such signature upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered under this Indenture and is
entitled to the benefits of this Indenture. Except as permitted by Section 3.6
or 3.7, the Trustee shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
cancelled.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating
that such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
Section 3.4. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series, the Company may execute and, upon Company
Order, the Trustee shall authenticate and deliver temporary Securities of such
series which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor and form,
with or without coupons, of the definitive Securities in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities and coupons, if
any. In the case of Securities of any series, such temporary Securities may be
in global form, representing all or a portion of the Outstanding Securities of
such series.
Except in the case of temporary Securities in global form,
each of which shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company pursuant to Section 9.2 in a Place of Payment for such series,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor; PROVIDED, HOWEVER, that no definitive Bearer Security shall be delivered
in exchange for a temporary Registered Security; and PROVIDED FURTHER that no
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security unless the Trustee shall have received from the person entitled to
receive the definitive Bearer Security a certificate substantially in the form
approved in or pursuant to the Board Resolutions relating thereto and such
delivery shall occur only outside the United States. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series except as
otherwise specified as contemplated by Section 3.1.
Section 3.5. REGISTRATION, TRANSFER AND EXCHANGE. The Company
shall cause to be kept at the Corporate Trust Office of the Trustee or in any
office or agency to be maintained by the Company in accordance with Section 9.2
in a Place of Payment a register (the "Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and the registration of transfers of
Registered Securities. The Register shall be in written form or any other form
capable of
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being converted into written form within a reasonable time. The Trustee is
hereby appointed "Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to Section
9.2 in a Place of Payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount containing
identical terms and provisions.
Bearer Securities or any coupons appertaining thereto shall be
transferable by delivery.
At the option of the Holder, Registered Securities of any
series (except a Registered Security in global form) may be exchanged for other
Registered Securities of the same series, of any authorized denominations and of
a like aggregate principal amount containing identical terms and provisions,
upon surrender of the Registered Securities to be exchanged at such office or
agency. Whenever any Registered Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive. Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.
Unless otherwise specified as contemplated by Section 3.1, at
the option of the Holder, Bearer Securities of such series may be exchanged for
Registered Securities (if the Securities of such series are issuable in
registered form) or Bearer Securities (if Bearer Securities of such series are
issuable in more than one denomination and such exchanges are permitted by such
series) of the same series, of any authorized denominations and of like tenor
and aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to the Company and the
Trustee in an amount equal to the face amount of such missing coupon or coupons,
or the surrender of such missing coupon or coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; PROVIDED, HOWEVER,
that, except as otherwise provided in Section 9.2, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case any Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series after
the close of business at such office or agency on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date of payment, as the case may be
(or, if such coupon is so surrendered with such Bearer Security, such coupon
shall be returned to the person so surrendering the Bearer Security), and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon, when due in accordance
with the provisions of this Indenture.
Each Security issued in global form authenticated under this
Indenture shall be registered in the name of the Depository designated for such
series or a nominee thereof and delivered to such Depository or a nominee
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thereof or custodian therefor, and each such Security issued in global form
shall constitute a single Security for all purposes of this Indenture.
Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for Securities in certificated
form in the circumstances described below, a Security in global form
representing all or a portion of the Securities of a series may not be
transferred except as a whole by the Depository for such series to a nominee of
such Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any such nominee to a
successor Depository for such series or a nominee of such successor Depository.
If at any time the Depository for the Securities of a series
notifies the Company that it is unwilling or unable to continue as Depository
for the Securities of such series or if at any time the Depository for the
Securities of such series shall no longer be eligible under Section 3.3, the
Company shall appoint a successor Depository with respect to the Securities of
such series. If a successor Depository for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 3.1(b)(24) shall no longer be effective with respect to the Securities
of such series and the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of certificated Securities of
such series of like tenor, shall authenticate and deliver, Securities of such
series of like tenor in certificated form, in authorized denominations and in an
aggregate principal amount equal to the principal amount of the Security or
Securities of such series of like tenor in global form in exchange for such
Security or Securities in global form.
The Company may at any time in its sole discretion determine
that Securities issued in global form shall no longer be represented by such a
Security or Securities in global form. In such event the Company shall execute,
and the Trustee, upon receipt of a Company Order for the authentication and
delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
If specified by the Company pursuant to Section 3.1 with
respect to a series of Securities, the Depository for such series may surrender
a Security in global form of such series in exchange in whole or in part for
Securities of such series in certificated form on such terms as are acceptable
to the Company and such Depository. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge,
(i) to each Person specified by such Depository a new
certificated Security or Securities of the same series of like
tenor, of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Security in
global form; and
(ii) to such Depository a new Security in global form
of like tenor in a denomination equal to the difference, if
any, between the principal amount of the surrendered Security
in global form and the aggregate principal amount of
certificated securities delivered to Holders thereof.
Upon the exchange of a Security in global form for Securities
in certificated form, such Security in global form shall be cancelled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a
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Security in global form pursuant to this Section shall be registered in such
names and in such authorized denominations as the Depository for such Security
in global form, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Securities to the Persons in whose names such Securities are so registered.
Whenever any Securities are surrendered for exchange, the
Company shall execute, and the trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
upon any exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company,
the Registrar or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Registrar and
the Trustee duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of
transfer or for any exchange of Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration or transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4 or 10.7 not involving
any transfer.
If the Securities of any series (or of any series and
specified tenor) are to be redeemed in part, the Company shall not be required
(i) to issue, register the transfer of, or exchange any Securities for a period
beginning at the opening of business 15 days before any selection or redemption
of Securities of like tenor and of the series of which such Security is a part
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of Securities
of like tenor and of such series to be redeemed; (ii) to register the transfer
of or exchange any Registered Security so selected for redemption, in whole or
in part, except the unredeemed portion of any Security being redeemed in part;
or (iii) to exchange any Bearer Security so selected for redemption, except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor; PROVIDED that such Registered Security shall be simultaneously
surrendered for redemption.
The foregoing provisions relating to registration, transfer
and exchange may be modified, supplemented or superseded with respect to any
series of Securities by a Board Resolution or in one or more indentures
supplemental hereto.
Section 3.6. REPLACEMENT SECURITIES. If a mutilated Security
or a Security with a mutilated coupon appertaining to it is surrendered to the
Trustee, together with, in proper cases, such security or indemnity as may be
required by the Company or the Trustee to save each of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver a
replacement Registered Security, if such surrendered Security was a Registered
Security, or a replacement Bearer Security with coupons corresponding to the
coupons appertaining to the surrendered Security, if such surrendered Security
was a Bearer Security, of the same series and date of maturity, if the Trustee's
requirements are met.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or Security with a destroyed, lost or stolen coupon and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the
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absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall authenticate and deliver in lieu of any such destroyed, lost or
stolen Security or in exchange for the Security to which a destroyed, lost or
stolen coupon appertains (with all appurtenant coupons not destroyed, lost or
stolen), a replacement Registered Security, if such Holder's claim appertains to
a Registered Security, or a replacement Bearer Security with coupons
corresponding to the coupons appertaining to the destroyed, lost or stolen
Bearer Security or the Bearer Security to which such lost, destroyed or stolen
coupon appertains, if such Holder's claim appertains to a Bearer Security, of
the same series and principal amount, containing identical terms and provisions
and bearing a number not contemporaneously outstanding with coupons
corresponding to the coupons, if any, appertaining to the destroyed, lost or
stolen Security.
In case any such mutilated, destroyed, lost or stolen Security
or coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or coupon, pay such Security
or coupon; PROVIDED, HOWEVER, that payment of principal of and any premium or
interest on Bearer Securities shall, except as otherwise provided in Section
9.2, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 3.1, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee, its agents and
counsel) connected therewith.
Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupon, if any, or the destroyed, lost or stolen coupon, shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
Section 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Unless otherwise provided as contemplated by Section 3.1 with respect to any
series of Securities, interest, if any, on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency maintained for such
purpose pursuant to Section 9.2; PROVIDED, HOWEVER, that at the option of the
Company, interest on any series of Registered Securities that bear interest may
be paid (i) by check mailed to the address of the Person entitled thereto as it
shall appear on the Register of Holders of Securities of such series or (ii) at
the expense of the Company, by wire transfer to an account maintained by the
Person entitled thereto as specified in the Register of Holders of Securities of
such series.
Unless otherwise provided as contemplated by Section 3.1 with
respect to any series of Securities, (i) interest, if any, on Bearer Securities
shall be paid only against presentation and surrender of the coupons for such
interest installments as are evidenced thereby as they mature and (ii) original
issue discount, if any, on Bearer Securities shall be paid only against
presentation and surrender of such Securities; in either case at the office of a
Paying Agent located outside the United States, unless the Company shall have
otherwise instructed the Trustee in
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writing and delivered an Opinion of Counsel stating that payment in the United
States does not cause any Bearer Security to be treated as a
"registration-required obligation" under United States laws and regulations. The
interest, if any, on any temporary Bearer Security shall be paid, as to any
installment of interest evidenced by a coupon attached thereto only upon
presentation and surrender of such coupon and, as to other installments of
interest, only upon presentation of such Security for notation thereon of the
payment of such interest. If at the time a payment of principal of or interest
and premium, if any, on a Bearer Security or coupon shall become due, the
payment of the full amount so payable at the office or offices of all the Paying
Agents outside the United States is illegal or effectively precluded because of
the imposition of exchange controls or other similar restrictions on the payment
of such amount in Dollars, then the Company may instruct the Trustee in writing
to make such payments at a Paying Agent located in the United States, and shall
deliver an Opinion of Counsel stating that such payment in the United States
would not cause such Bearer Security to be treated as a "registration-required
obligation" under United States laws and regulations.
(b) Unless otherwise provided as contemplated by Section 3.1
with respect to any series of Securities, any interest on Registered Securities
of any series which is payable, but is not punctually paid or duly provided for,
on any interest payment date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holders on the relevant Regular Record Date
by virtue of their having been such Holders, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in clause (1) or
(2) below:
(1) The Company may elect to make payment of such
Defaulted Interest to the Persons in whose names such
Registered Securities (or their respective Predecessor
Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause (1) provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of such Registered
Securities at his address as it appears in the Register, not
less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names
such Registered Securities (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of such Defaulted
Interest to the Persons in whose names such Registered
Securities (or their respective Predecessor Securities) are
registered at the close of business on a specified date in any
other lawful manner not inconsistent with the requirements of
any securities exchange on which such Registered Securities
may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause (2), such
manner of payment shall be deemed practicable by the Trustee.
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(c) Subject to the foregoing provisions of this Section and
Section 3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Section 3.8. PERSONS DEEMED OWNERS. Prior to due presentment
of any Registered Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.7) interest on such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Bearer Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon be overdue and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee or any agent of the Company
or the Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Security in global form,
nothing herein shall prevent the Company or the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Depository (or its nominee), as a
Holder, with respect to such Security in global form or impair, as between such
Depository and owners of beneficial interests in such Security in global form,
the operation of customary practices governing the exercise of the rights of
such Depository (or its nominee) as Holder of such Security in global form.
Section 3.9. CANCELLATION. The Company at any time may
deliver Securities and coupons to the Trustee for cancellation. The Registrar
and any Paying Agent shall forward to the Trustee any Securities and coupons
surrendered to them for replacement, for registration of transfer, or for
exchange or payment. The Trustee shall cancel all Securities and coupons
surrendered for replacement, for registration of transfer, or for exchange,
payment, redemption or cancellation and may, but shall not be required to,
dispose of cancelled Securities and coupons and issue a certificate of
destruction to the Company. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
Section 3.10. COMPUTATION OF INTEREST. Except as otherwise
specified as contemplated by Section 3.1, interest on the Securities of each
series shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. CUSIP NUMBERS. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, in such
case, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
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Section 3.12. CURRENCY AND MANNER OF PAYMENT IN RESPECT OF
SECURITIES. (a) Unless otherwise specified with respect to any Securities
pursuant to section 3.1, with respect to Registered Securities of any series not
permitting the election provided for in paragraph (b) below or the Holders of
which have not made the election provided for in paragraph (b) below, and with
respect to Bearer Securities of any series except as provided in paragraph (d)
below, payment of the principal of, premium, if any, and interest, if any, on
any Registered or Bearer Security of such series will be made in the currency or
currencies or currency unit or units in which such Registered Security or Bearer
Security, as the case may be, is payable. The provisions of this Section 3.12
may be modified or superseded pursuant to Section 3.1 with respect to any
Securities.
(b) It may be provided pursuant to Section 3.1, with respect
to Registered Securities of any series, that Holders shall have the option,
subject to paragraphs (d) and (e) below, to receive payments of principal of,
premium, if any, or interest, if any, on such Registered Securities in any of
the currencies or currency units which may be designated for such election by
delivering to the Trustee (or the applicable Paying Agent) a written election
with signature guarantees and in the applicable form established pursuant to
Section 3.1, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such currency or currency unit, such election will
remain in effect for such Holder or any transferee of such Holder until changed
by such Holder or such transferee by written notice to the Trustee (or any
applicable Paying Agent) for such series of Registered Securities (but any such
change must be made not later than the close of business on the Election Date
immediately preceding the next payment date to be effective for the payment to
be made on such payment date, and no such change of election may be made with
respect to payments to be made on any Registered Security of such series with
respect to which an Event of Default has occurred or with respect to which the
Company has deposited funds pursuant to Article 4 or with respect to which a
notice of redemption has been given by or on behalf of the Company). Any Holder
of any such Registered Security who shall not have delivered any such election
to the Trustee (or any applicable Paying Agent) not later than the close of
business on the applicable Election Date will be paid the amount due on the
applicable payment date in the relevant currency or currency unit as provided in
Section 3.12(a). The Trustee (or the applicable Paying Agent) shall notify the
Exchange Rate Agent as soon as practicable after the Election Date of the
aggregate principal amount of Registered Securities for which Holders have made
such written election.
(c) If the election referred to in paragraph (b) above has
been provided for with respect to any Registered Securities of a series pursuant
to Section 3.1, then, unless otherwise specified pursuant to Section 3.1 with
respect to any such Registered Securities, not later than the fourth Business
Day after the Election Date for each payment date for such Registered
Securities, the Exchange Rate Agent will deliver to the Company a written notice
specifying, in the currency or currencies or currency unit or units in which
Registered Securities of such series are payable, the respective aggregate
amounts of principal of, premium, if any, and interest, if any, on such
Registered Securities to be paid on such payment date, and specifying the
amounts in such currency or currencies or currency unit or units so payable in
respect of such Registered Securities as to which the Holders of Registered
Securities denominated in any currency or currencies or currency unit or units
shall have elected to be paid in another currency or currency unit as provided
in paragraph (b) above. If the election referred to in paragraph (b) above has
been provided for with respect to any Registered Securities of a series pursuant
to Section 3.1, and if at least one Holder has made such election, then, unless
otherwise specified pursuant to Section 3.1, on the second Business Day
preceding such payment date the Company will deliver to the Trustee (or the
applicable Paying Agent) an Exchange Rate Officers' Certificate in respect of
the Dollar, Foreign Currency or Currencies, ECU or other currency unit payments
to be made on such payment date. Unless otherwise specified pursuant to Section
3.1, the Dollar, Foreign Currency or Currencies, ECU or other currency unit
amount receivable by Holders of Registered Securities who have elected payment
in a currency or currency unit as provided in paragraph (b) above shall be
determined by the Company on the basis of the applicable Market Exchange Rate in
effect on the second Business Day (the "Valuation
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Date") immediately preceding each payment date, and such determination shall be
conclusive and binding for all purposes, absent manifest error.
(d) If a Conversion Event occurs with respect to a Foreign
Currency, ECU or any other currency unit in which any of the Securities are
denominated or payable otherwise than pursuant to an election provided for
pursuant to paragraph (b) above, then, with respect to each date for the payment
of principal of, premium, if any, and interest, if any, on the applicable
Securities denominated or payable in such Foreign Currency, ECU or such other
currency unit occurring after the last date on which such Foreign Currency, ECU
or such other currency unit was used (the "Conversion Date"), the Dollar shall
be the currency of payment for use on each such payment date (but such Foreign
Currency, ECU or such other currency unit that was previously the currency of
payment shall, at the Company's election, resume being the currency of payment
on the first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no longer
prevail). Unless otherwise specified pursuant to Section 3.1 the Dollar amount
to be paid by the Company to the Trustee or any applicable Paying Agent and by
the Trustee or any applicable Paying Agent to the Holders of such Securities
with respect to such payment date shall be, in the case of a Foreign Currency
other than a currency unit, the Dollar Equivalent of the Foreign Currency or in
the case of a Foreign Currency that is a currency unit, the Dollar Equivalent of
the Currency Unit, in each case as determined by the Exchange Rate Agent in the
manner provided in paragraph (f) or (g) below.
(e) Unless otherwise specified pursuant to Section 3.1, if the
Holder of a Registered Security denominated in any currency or currency unit
shall have elected to be paid in another currency or currency unit or in other
currencies as provided in paragraph (b) above, and (i) a Conversion Event occurs
with respect to any such elected currency or currency unit, such Holder shall
receive payment in the currency or currency unit in which payment would have
been made in the absence of such election and (ii) if a Conversion Event occurs
with respect to the currency or currency unit in which payment would have been
made in the absence of such election, such Holder shall receive payment in
Dollars as provided in paragraph (d) of this Section 3.12 (but, subject to any
contravening valid election pursuant to paragraph (b) above, the elected payment
currency or currency unit, in the case of the circumstances described in clause
(i) above, or the payment currency or currency unit in the absence of such
election, in the case of the circumstances described in clause (ii) above,
shall, at the Company's election, resume being the currency or currency unit of
payment with respect to Holders who have so elected, but only with respect to
payments on payment dates preceded by 15 Business Days during which the
circumstances which gave rise to such currency or currency unit, in the case of
the circumstances described in clause (i) above, or the Dollar, in the case of
the circumstances described in clause (ii) above, as applicable, becoming the
currency or currency unit of payment, no longer prevail).
(f) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Exchange Rate Agent and shall be obtained for each subsequent
payment date by the Exchange Rate Agent by converting the specified Foreign
Currency into Dollars at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be
determined by the Exchange Rate Agent and, subject to the provisions of
paragraph (h) below, shall be the sum of each amount obtained by converting the
Specified Amount of each Component Currency (as each such term is defined in
paragraph (h) below) into Dollars at the Market Exchange Rate for such Component
Currency on the Valuation Date with respect to each payment.
(h) For purposes of this Section 3.12 the following terms
shall have the following meanings:
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A "Component Currency" shall mean any currency which, on the
Conversion Date, was a component currency of the relevant currency unit,
including, but not limited to, ECU.
"Election Date" shall mean the Regular Record Date for the
applicable series of Registered Securities as specified pursuant to Section 3.1
by which the written election referred to in Section 3.12(b) may be made.
A "Specified Amount" of a Component Currency shall mean the
number of units of such Component Currency or fractions thereof which such
Component Currency represented in the relevant currency unit, including, but not
limited to, ECU, on the Conversion Date. If after the Conversion Date the
official unit of any Component Currency is altered by way of combination or
subdivision, the Specified Amount of such Component Currency shall be divided or
multiplied in the same proportion. If after the Conversion Date two or more
Component Currencies are consolidated into a single currency, the respective
Specified Amounts of such Component Currencies shall be replaced by an amount in
such single currency equal to the sum of the respective Specified Amounts of
such consolidated Component Currencies expressed in such single currency, and
such amount shall thereafter be a Specified Amount and such single currency
shall thereafter be a Component Currency. If after the Conversion Date any
Component Currency shall be divided into two or more currencies, the Specified
Amount of such Component Currency shall be replaced by specified amounts of such
two or more currencies, the sum of which, at the Market Exchange Rate of such
two or more currencies on the date of such replacement, shall be equal to the
Specified Amount of such former Component Currency and such amounts shall
thereafter be Specified Amounts and such currencies shall thereafter be
Component Currencies. If, after the Conversion Date of the relevant currency
unit, including, but not limited to, ECU, a Conversion Event (other than any
event referred to above in this definition of "Specified Amount") occurs with
respect to any Component Currency of such currency unit and is continuing on the
applicable Valuation Date, the Specified Amount of such Component Currency
shall, for purposes of calculating the Dollar Equivalent of the Currency Unit,
be converted into Dollars at the Market Exchange Rate in effect on the
Conversion Date of such Component Currency.
All decisions and determinations of the Exchange Rate Agent
regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent
of the Currency Unit, the Market Exchange Rate and changes in the Specified
Amounts as specified above shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Company, the Trustee (and any applicable Paying Agent) and all
Holders of Securities denominated or payable in the relevant currency,
currencies or currency units. The Exchange Rate Agent shall promptly give
written notice to the Company and the Trustee of any such decision or
determination.
In the event that the Company determines in good faith that a
Conversion Event has occurred with respect to a Foreign Currency, the Company
will promptly give written notice thereof specifying the Conversion Date to the
Trustee (or any applicable Paying Agent) and to the Exchange Rate Agent (and the
Trustee (or such Paying Agent) will promptly thereafter give notice in the
manner provided in Section 1.6 to the affected Holders) specifying the
Conversion Date. In the event the Company so determines that a Conversion Event
has occurred with respect to ECU or any other currency unit in which Securities
are denominated or payable, the Company will promptly give written notice
thereof specifying the Conversion Date and the specified amount of each
component currency on the Conversion Date to the Trustee (or any applicable
Paying Agent) and to the Exchange Rate Agent (and the Trustee (or such Paying
Agent)) will promptly thereafter give notice in the manner provided in Section
1.6 to the affected Holders) specifying the Conversion Date and the Specified
Amount of each Component Currency on the Conversion Date. In the event the
Company determines in good faith that any subsequent change in any Component
Currency as set forth in the definition of Specified Amount above has occurred,
the Company will similarly give written notice to the Trustee (or any applicable
Paying Agent) and to the Exchange Rate Agent.
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The Trustee of the appropriate series of Securities shall be
fully justified and protected in relying and acting upon information received by
it from the Company and the Exchange Rate Agent and shall not otherwise have any
duty or obligation to determine the accuracy or validity of such information
independent of the Company or the Exchange Rate Agent.
Section 3.13. APPOINTMENT AND RESIGNATION OF EXCHANGE RATE
AGENT. (a) Unless otherwise specified pursuant to Section 3.1, if and so long as
the Securities of any series (i) are denominated in a currency other than
Dollars or (ii) may be payable in a currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one Exchange Rate Agent. The Company will cause the Exchange Rate Agent
to make the necessary foreign exchange determinations at the time and in the
manner specified pursuant to Section 3.12 for the purpose of determining the
applicable rate of exchange and, if applicable, for the purpose of converting
the issued currency or currencies or currency unit or units into the applicable
payment currency or currency unit for the payment of principal, premium, if any,
and interest, if any, pursuant to Section 3.12.
(b) No resignation of the Exchange Rate Agent and no
appointment of a successor Exchange Rate Agent pursuant to this Section shall
become effective until the acceptance of appointment by the successor Exchange
Rate Agent as evidenced by a written instrument delivered to the Company and the
Trustee of the appropriate series of Securities accepting such appointment
executed by the successor Exchange Rate Agent.
(c) If the Exchange Rate Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of the
Exchange Rate Agency for any cause, with respect to the Securities of one or
more series, the Company, by or pursuant to a Board Resolution, shall promptly
appoint a successor Exchange Rate Agent or Exchange Rate Agents with respect to
the Securities of that or those series (it being understood that any such
successor Exchange Rate Agent may be appointed with respect to the Securities of
one or more or all of such series and that, unless otherwise specified pursuant
to Section 3.1, at any time there shall only be one Exchange Rate Agent with
respect to the Securities of any particular series that are originally issued by
the Company on the same date and that are initially denominated and/or payable
in the same currency or currencies or currency unit or units).
Section 3.14. AGREED TAX TREATMENT. Each Security issued
hereunder shall provide that the Company and the Holder of such Security agree
(i) that for United States federal, state and local tax purposes it is intended
that such Security constitute indebtedness and (ii) to withhold and file all
United States federal, state and local tax returns and reports on such basis
(unless the Company or such Holder, as the case may be, shall have received an
opinion of independent nationally recognized tax counsel to the effect that as a
result of a change in law after the date of the issuance of such Security the
Company or such Holder, as the case may be, is prohibited from filing on such
basis).
ARTICLE 4
SATISFACTION, DISCHARGE AND DEFEASANCE
Section 4.1. TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE
INDENTURE. (a) This Indenture shall upon a Company Request cease to be of
further effect with respect to Securities of or within any series and any
coupons appertaining thereto (except as to any surviving rights of registration
of transfer or exchange of such Securities and replacement of such Securities
which may have been lost, stolen or mutilated as herein expressly provided for)
and the Trustee, at the expense of the Company, shall execute proper instruments
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acknowledging satisfaction and discharge of this Indenture with respect to such
Securities and any coupons appertaining thereto when
(1) either
(A) such Securities previously authenticated
and delivered and all coupons appertaining thereto
(other than (i) such coupons appertaining to Bearer
Securities surrendered in exchange for Registered
Securities and maturing after such exchange,
surrender of which is not required or has been waived
as provided in Section 3.5, (ii) such Securities and
coupons which have been destroyed, lost or stolen and
which have been replaced or paid as provided in
Section 3.6, (iii) such coupons appertaining to
Bearer Securities called for redemption and maturing
after the relevant Redemption Date, surrender of
which has been waived as provided in Section 10.6 and
(iv) such Securities and coupons for whose payment
money has theretofore been deposited in trust or
segregated and held in trust by the Company and
thereafter repaid to the Company or discharge from
such trust as provided in Section 9.3) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the
case of (i) or (ii) below, all coupons appertaining
thereto not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company,
are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
for the purpose an amount in the currency or
currencies or currency unit or units in which the
Securities of such series are payable, sufficient to
pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal,
premium, if any, and interest, with respect thereto,
to the date of such deposit (in the case of
Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture as to such
series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligation
of the Company to the Trustee and any predecessor Trustee under Section 6.9, the
obligations of the Company to any Authenticating Agent under Section 6.14
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and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of clause (1) of this Section, the obligations of the Trustee under Section
4.2 and the last paragraph of Section 9.3 shall survive.
Section 4.2. APPLICATION OF TRUST FUNDS. Subject to the
revisions of the last paragraph of Section 9.3, all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto of the principal, premium, if any and
any interest for whose payment such money has been deposited with or received by
the Trustee, but such money need not be segregated from other funds except to
the extent required by law.
Section 4.3. APPLICABILITY OF DEFEASANCE PROVISIONS; COMPANY'S
OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. If pursuant to Section 3.1
provision is made for either or both of (i) defeasance of the Securities of or
within a series under Section 4.4 or (ii) covenant defeasance of the Securities
of or within a series under Section 4.5, then the provisions of such Section or
Sections, as the case may be, together with the provisions of Sections 4.6
through 4.9 inclusive, with such modifications thereto as may be specified
pursuant to Section 3.1 with respect to any Securities, shall be applicable to
such Securities and any coupons appertaining thereto, and the Company may at its
option by or pursuant to Board Resolution, at any time, with respect to such
Securities and any coupons appertaining thereto, elect to have Section 4.4 (if
applicable) or Section 4.5 (if applicable) be applied to such Outstanding
Securities and any coupons appertaining thereto upon compliance with the
conditions set forth below in this Article.
Section 4.4. DEFEASANCE AND DISCHARGE. Upon the Company's
exercise of the option specified in Section 4.3 applicable to this Section with
respect to the Securities of or within a series, the Company shall be deemed to
have been discharged from its obligations with respect to such Securities and
any coupons appertaining thereto on and after the date the conditions set forth
in Section 4.6 are satisfied (hereinafter "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Securities and any coupons
appertaining thereto which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 4.7 and the other Sections of this Indenture
referred to in clause (ii) of this Section, and to have satisfied all its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall on a Company
Order execute proper instruments acknowledging the same), except the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of such Securities and any coupons appertaining thereto to
receive, solely from the trust funds described in Section 4.6 (a) and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest, if any, on such Securities or any coupons
appertaining thereto when such payments are due; (ii) the Company's obligations
with respect to such Securities under Sections 3.5, 3.6, 9.2 and 9.3 and with
respect to the payment of additional amounts, if any, payable with respect to
such Securities as specified pursuant to Section 3.1(b); (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (iv) this
Article 4. Subject to compliance with this Article 4, the Company may exercise
its option under this Section notwithstanding the prior exercise of its option
under Section 4.5 with respect to such Securities and any coupons appertaining
thereto. Following a defeasance, payment of such Securities may not be
accelerated because of an Event of Default.
Section 4.5. COVENANT DEFEASANCE. Upon the Company's exercise
of the option specified in Section 4.3 applicable to this Section with respect
to any Securities of or within a series, the Company shall be released from its
obligations under Sections 7.1, 9.4 and 9.7 and, if specified pursuant to
Section 3.1, its
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obligations under any other covenant with respect to such Securities and any
coupons appertaining thereto on and after the date the conditions set forth in
Section 4.6 are satisfied (hereinafter, "covenant defeasance"), and such
Securities and any coupons appertaining thereto shall thereafter be deemed to be
not "Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with Sections 7.1, 9.4 and 9.7 or such other covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Securities
and any coupons appertaining thereto, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 5.1(3) or 5.1(7) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
Section 4.6. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of Section 4.4 or Section
4.5 to any Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall have deposited or caused to be
deposited irrevocably with the Trustee (or another trustee
satisfying the requirements of Section 6.12 who shall agree to
comply with, and shall be entitled to the benefits of, the
provisions of Sections 4.3 through 4.9 inclusive and the last
paragraph of Section 9.3 applicable to the Trustee, for
purposes of such Sections also a "Trustee") as trust funds in
trust for the purpose of making the payments referred to in
clauses (x) and (y) of this Section 4.6(a), specifically
pledged as security for, and dedicated solely to, the benefit
of the Holders of such Securities and any coupons appertaining
thereto, with instructions to the Trustee as to the
application thereof, (A) money in an amount (in such currency,
currencies or currency unit or units in which such Securities
and any coupons appertaining thereto are then specified as
payable at Maturity), or (B) if Securities of such series are
not subject to repayment at the option of Holders, Government
Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of
any payment referred to in clause (x) or (y) of this Section
4.6(a), money in an amount or (C) a combination thereof in an
amount sufficient, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in
a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee
to pay and discharge, (X) the principal of, premium, if any,
and interest, if any, on such Securities and any coupons
appertaining thereto on the Maturity of such principal or
installment of principal or interest and (Y) any mandatory
sinking fund payments applicable to such Securities on the day
on which such payments are due and payable in accordance with
the terms of this Indenture and such Securities and any
coupons appertaining thereto. Before such a deposit the
Company may make arrangements satisfactory to the Trustee for
the redemption of Securities at a future date or dates in
accordance with Article 10 which shall be given effect in
applying the foregoing.
(b) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or
Event of Default under, this Indenture or result in a breach
or violation of, or constitute a default under, any other
material agreement or instrument to which the Company is a
party or by which it is bound.
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(c) In the case of an election under Section 4.4, the
Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i)
the Company has received from, or there has been published by,
the Internal Revenue Service a ruling, or (ii) since the date
of execution of this 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 shall confirm
that, the Holders of such Securities and any coupons
appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amount
and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had
not occurred.
(d) In the case of an election under Section 4.5, the
Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities and
any coupons appertaining thereto will not recognize income,
gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will 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 covenant defeasance
had not occurred.
(e) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent to the defeasance under
Section 4.4 or the covenant defeasance under Section 4.5 (as
the case may be), including those contained in this Section
4.6 other than the 90 day period specified in Section 4.6(g),
have been complied with.
(f) The Company shall have delivered to the Trustee
an Officers' Certificate to the effect that neither such
Securities nor any other Securities of the same series, if
then listed on any securities exchange, will be delisted as a
result of such deposit.
(g) No event which is, or after notice or lapse of
time or both would become, an Event of Default with respect to
such Securities or any other Securities shall have occurred
and be continuing at the time of such deposit or, with regard
to any such event specified in Sections 5.1(5) and (6), at any
time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(h) Such Defeasance or Covenant Defeasance shall not
result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment
Company Act of 1940 unless such trust shall be registered
under such Act or exempt from registration thereunder.
(i) Such defeasance or covenant defeasance shall be
effected in compliance with any additional or substitute
terms, conditions or limitations which may be imposed on the
Company in connection therewith as contemplated by Section
3.1.
(j) No event or condition shall exist that, pursuant
to the provisions of Article 12, would prevent the Company
from making payments of the principal of premium, if any, or
interest on the Securities of such series and coupons
appertaining thereto on the date of such deposit.
Section 4.7. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST. Subject to the provisions of the last paragraph of Section 9.3,
all money and Government Obligations (or
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other property as may be provided pursuant to Section 3.1) (including the
proceeds thereof) deposited with the Trustee pursuant to Section 4.6 in respect
of any Securities of any series and any coupons appertaining thereto shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Securities and any coupons appertaining thereto and this Indenture, to the
payment, either directly or through any paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities and any coupons appertaining thereto of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
Unless otherwise specified with respect to any Security
pursuant to Section 3.1, if, after a deposit referred to in Section 4.6(a) has
been made, (i) the Holder of a Security in respect of which such deposit was
made is entitled to, and does, elect pursuant to Section 3.12(b) or the terms of
such Security to receive payment in a currency or currency unit other than that
in which the deposit pursuant to Section 4.6(a) has been made in respect of such
Security, or (ii) a Conversion Event occurs as contemplated in Section 3.12(d)
or 3.12(e) or by the terms of any Security in respect of which the deposit
pursuant to Section 4.6(a) has been made, the indebtedness represented by such
Security and any coupons appertaining thereto shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of,
premium, if any, and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable Market Exchange Rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
Section 4.8. REPAYMENT TO COMPANY. The Trustee (and any
Paying Agent) shall promptly pay to the Company upon Company Request any excess
money or securities held by them at any time.
Section 4.9. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The
Company shall pay, and shall indemnify the Trustee against, any tax, fee or
other charge imposed on or assessed against Government Obligations deposited
pursuant to this Article or the principal and interest and any other amount
received on such Government Obligations.
Section 4.10. REINSTATEMENT. If the Trustee or the Paying
Agent is unable to apply any money in accordance with this Article with respect
to any Securities by reason of any order or judgment of any court or government
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 4.4 or 4.5 shall be revived
and reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 4.7 with respect
to such Securities in accordance with this Article; PROVIDED, HOWEVER, that if
the Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
ARTICLE 5
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DEFAULTS AND REMEDIES
Section 5.1. EVENTS OF DEFAULT. An "Event of Default" occurs
with respect to the Securities of any series if (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
an order, rule or regulation of any administrative or governmental body):
(1) the Company defaults in the payment of interest
on any Security of that series or any coupon appertaining
thereto or any additional amount payable with respect to any
Security of that series as specified pursuant to Section
3.1(b) 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 any premium on any Security of that series
when the same becomes due and payable at its Maturity or on
redemption or otherwise, or in the payment of a mandatory
sinking fund payment when and as due by the terms of the
Securities of that series;
(3) the Company fails to comply in any material
respect with any of its agreements or covenants in, or any of
the provisions of, this Indenture with respect to any Security
of that series (other than an agreement, covenant or provision
for which non-compliance is elsewhere in this Section
specifically dealt with), and such non-compliance continues
for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25%
in principal amount of the Outstanding Securities of the
series, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) the Company, pursuant to or within the meaning of
any Bankruptcy Law, (A) commences a voluntary case or
proceeding, (B) consents to the entry of an order for relief
against it in an involuntary case or proceeding, (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) makes an
admission in writing of its inability to its debts generally
as they become due or (F) takes corporate action in
furtherance of any such action;
(5) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that (A) is for relief
against the Company, in an involuntary case, (B) adjudges the
Company as bankrupt or insolvent, or approves as properly
filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company, or
appoints a Custodian of the Company, or for all or
substantially all of its property, or (C) orders the
liquidation of the Company, and the order or decree remains
unstayed and in effect for 60 days; or
(6) any other Event of Default provided as
contemplated by Section 3.1 with respect to Securities of that
series.
As used in this Indenture, 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. As used in this
Indenture, the term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
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Section 5.2. ACCELERATION; RESCISSION AND ANNULMENT. If an
Event of Default with respect to the Securities of any series at the time
Outstanding occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of all of the Outstanding Securities of that
series, by written notice to the Company (and, if given by the Holders, to the
Trustee), may declare the principal (or, if the Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of the
original principal amount as may be specified in the terms of that series) of
and accrued interest, if any, on all the Securities of that series to be due and
payable and upon any such declaration such principal (or, in the case of
Original Issue Discount Securities or Indexed Securities, such specified amount)
and interest, if any, shall be immediately due and payable, PROVIDED, HOWEVER,
that payment of principal and interest, if any, on the Securities of such series
shall remain subordinated to the extent provided in Article 12.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series, by written notice
to the Trustee, may rescind and annul such declaration and its consequences if
all existing Defaults and Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.7. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. The Company covenants that if
(1) default is made in the payment of any interest on
any Security or coupon, if any, when such interest becomes due
and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal
of (or premium, if any, on) any Security at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities or coupons, if any, the whole amount then due and
payable on such Securities for principal, premium, if any, and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal, premium, if any, and on any overdue interest, at the
rate or rates prescribed therefor in such Securities or coupons, if any, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, PROVIDED,
HOWEVER, that payment of all such amounts shall remain subordinated to the
extent provided in Article 12.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to secure any other proper remedy.
Section 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may
file such proofs of claim and other papers or documents and take such actions
authorized under the Trust Indenture Act as may be necessary or advisable in
order to have the claims of the Trustee and the Holders of Securities allowed in
any judicial
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proceedings relating to the Company, its creditors or its property. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.9.
Section 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee, in its own name as an
express trust, without the possession of any of the Securities or the production
thereof in any proceeding relating thereto and any recovery of judgment shall,
after provision for the reasonable fees and expenses of the Trustee and its
counsel, be for the ratable benefit of the Holders of the Securities in respect
of which judgment was recovered.
Section 5.6. DELAY OR OMISSION NOT WAIVER. No delay or
omission by the Trustee or any Holder of any Securities to exercise any right or
remedy accruing upon an Event of Default shall impair any such right or remedy
or constitute a waiver of or acquiescence in any such Event of Default.
Section 5.7. WAIVER OF PAST DEFAULTS. The Holders of a
majority in aggregate principal amount of Outstanding Securities of any series
by written notice to the Trustee may waive on behalf of the Holders of all
Securities of such series a past Default or Event of Default with respect to
that series and its consequences except (i) a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on any Security of
such series or any coupon appertaining thereto or (ii) in respect of a covenant
or provision hereof which pursuant to Section 8.2 cannot be amended or modified
without the consent of the Holder of each Outstanding Security of such series
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture.
Section 5.8. CONTROL BY MAJORITY. The Holders of a majority in
aggregate principal amount of the Outstanding Securities of each series affected
(with each such series voting as a class) shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it with respect to
Securities of that series; PROVIDED, HOWEVER, that (i) the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, (ii) the Trustee
may refuse to follow any direction that is unduly prejudicial to the rights of
the Holders of Securities of such series not consenting or of any other series
for which the Trustee is trustee, or that would in the good faith judgment of
the Trustee have a substantial likelihood of involving the Trustee in personal
liability and (iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.9. LIMITATION ON SUITS BY HOLDERS. No Holder of any
Security of any series or any coupons appertaining thereto shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) the Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to
the Securities of that series;
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(2) the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series
have made a written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense to be, or which may be, incurred by
the Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such
notice, request and the offer of indemnity has failed to
institute any such proceedings; and
(5) during such 60 day period, the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of that series have not given to the Trustee a
direction inconsistent with such written request.
No one or more Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all such Holders.
Section 5.10. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, but subject to Section
9.2, the right of any Holder of a Security or coupon to receive payment of
principal of, premium, if any, and, subject to Sections 3.5 and 3.7, interest on
the Security, on or after the respective due dates expressed in the Security
(or, in case of redemption, on the redemption dates), and the right of any
Holder of a coupon to receive payment of interest due as provided in such
coupon, or, subject to Section 5.9, to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 5.11. APPLICATION OF MONEY COLLECTED. If the Trustee
collects any money pursuant to this Article, it shall, subject to the
subordination provisions hereof, pay out the money in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section
6.9;
SECOND: to Holders of Securities and coupons in
respect of which or for the benefit of which such money has
been collected for amounts due and unpaid on such Securities
for principal of, premium, if any, and interest ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal,
premium, if any, and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 5.11. At least 15 days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
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Section 5.12. RESTORATION OF RIGHTS AND REMEDIES. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.13. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.14. WAIVER OF USURY, STAY OR EXTENSION LAWS. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorney's fees, against any party
litigant in the suit having due regard to the merits and good faith of the
claims or defenses made by the party litigant.
ARTICLE 6
THE TRUSTEE
Section 6.1. CERTAIN DUTIES AND RESPONSIBILITIES OF THE
TRUSTEE. (a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and shall use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
Section 6.2. RIGHTS OF TRUSTEE. Subject to the provisions of
the Trust Indenture Act:
(a) The Trustee may rely and shall be protected in
acting or refraining from acting upon any document believed by
it to be genuine and to have been signed or presented by the
proper party or parties. The Trustee need not investigate any
fact or matter stated in the document.
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(b) Any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order (other than delivery of any Security, together
with any coupons appertaining thereto, to the Trustee for
authentication and delivery pursuant to Section 3.3, which
shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(c) Before the Trustee acts or refrains from acting,
it may consult with counsel of its selection or require an
Officers' Certificate. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on
a Board Resolution, the written or oral advice of counsel
acceptable to the Company and the Trustee (which advice, if
oral, shall be promptly confirmed in writing to the Trustee),
a certificate of an Officer or Officers delivered pursuant to
Section 1.2, an Officers' Certificate or an Opinion of
Counsel.
(d) The Trustee may act through agents or attorneys
and shall not be responsible for the misconduct or negligence
of any agent or attorney appointed with due care.
(e) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(f) The Trustee shall not be required to expend or
risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the
exercise of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
(g) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company,
personally or by agent or attorney.
(h) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section
6.2.
Section 6.3. TRUSTEE MAY HOLD SECURITIES. The Trustee, any
Paying Agent, any Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and coupons
and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may
otherwise deal with the Company, an Affiliate or Subsidiary with the same rights
it would have if it were not Trustee, Paying Agent, Registrar or such other
agent.
Section 6.4. MONEY HELD IN TRUST. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed upon in writing with
the Company.
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Section 6.5. TRUSTEE'S DISCLAIMER. The recitals contained
herein and in the Securities, except the Trustee's certificate 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 adequacy of this Indenture or the
Securities or any coupon. The Trustee shall not be accountable for the Company's
use of the proceeds from the Securities or for monies paid over to the Company
pursuant to the Indenture.
Section 6.6. NOTICE OF DEFAULTS. If a Default occurs and is
continuing with respect to the Securities of any series and if it is actually
known to a Responsible Officer of the Trustee, the Trustee shall, within 30 days
after it occurs, transmit by mail to the Holders of Securities of such series,
in the manner and to the extent provided in Section 313(c) of the Trust
Indenture Act, notice of all Defaults known to it unless such Default shall have
been cured or waived; PROVIDED, HOWEVER, that except in the case of a Default in
payment on the Securities of any series, the Trustee may withhold the notice if
and so long as the board of directors, the executive committee or a committee of
its Responsible Officers in good faith determines that withholding such notice
is in the interests of Holders of Securities of that series.
Section 6.7. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days
after each May 15 of each year commencing with the first May 15 after the first
issuance of Securities pursuant to this Indenture, the Trustee shall transmit by
mail to all Holders of Securities as provided in Section 313(c) of the Trust
Indenture Act a brief report dated as of such May 15 if required by and in
compliance with Section 313(a) of the Trust Indenture Act. A copy of each such
report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange, if any, upon which the Securities are listed,
with the Commission and with the Company. The Company will promptly notify the
Trustee when the Securities are listed on any stock exchange.
Section 6.8. SECURITYHOLDER LISTS. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders of Securities of each series. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee
semiannually on or before the last day of June and December in each year, and at
such other times as the Trustee may request in writing, a list, in such form and
as of such date as the Trustee may reasonably require, containing all the
information in the possession or control of the Registrar, the Company or any of
its Paying Agents other than the Trustee as to the names and addresses of
Holders of Securities of each such series. If there are Bearer Securities of any
series Outstanding, even if the Trustee is the Registrar, the Company shall
furnish to the Trustee such a list containing such information with respect to
Holders of such Bearer Securities only.
Section 6.9. COMPENSATION AND INDEMNITY. (a) The Company shall
pay to the Trustee from time to time such reasonable compensation for its
services as the Company and the Trustee shall agree in writing from time to
time. The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it in connection
with the performance of its duties under this Indenture, except any such expense
as may be attributable to its negligence or bad faith. Such expenses shall
include the reasonable compensation and expenses of the Trustee's agents and
counsel.
(b) The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability, damage, claim or reasonable expense
including taxes (other than taxes based upon or determined or measured by the
income of the Trustee) incurred by it arising out of or in connection with its
acceptance or administration of the trust or trusts hereunder, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company shall defend the claim
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and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
(c) The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or bad
faith.
(d) To secure the payment obligations of the Company pursuant
to this Section, the Trustee shall have a lien prior to the Securities of any
series on all money or property held or collected by the Trustee, except that
held in trust to pay principal, premium, if any, and interest on particular
Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(5) or Section
5.1(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination
of this Indenture or the resignation or removal of the Trustee.
Section 6.10. REPLACEMENT OF TRUSTEE. (a) The resignation or
removal of the Trustee and the appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of any series by giving written notice thereof to the Company.
(c) The Holders of a majority in aggregate principal amount of
the Outstanding Securities of any series may remove the Trustee with respect to
that series by so notifying the Trustee and the Company and may appoint a
successor Trustee for such series with the Company's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section 6.12
of this Indenture or Section 310(a) of the Trust Indenture Act and
shall fail to resign after written request therefor by the Company or
by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee becomes incapable of acting, is adjudged a
bankrupt or an insolvent or a receiver or public officer takes charge
of the Trustee or its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to Section
315(e) of the Trust Indenture Act, any Holder who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any
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court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.
(e) If the instrument of acceptance by a successor Trustee
required by Section 6.11 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation or removal, the Trustee
resigning or being removed may petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, with respect to Securities of
one or more series, the Company, by or pursuant to Board Resolution, shall
promptly appoint a successor Trustee with respect to the Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee, without further act, deed or
conveyance, shall become vested with all the rights, powers and duties of the
retiring Trustee; but, on the request of the Company or the successor Trustee,
such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and such successor Trustee shall execute and
deliver an indenture supplemental hereto wherein such successor Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, such
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the securities of that or those series to which the
appointment of such successor Trustee relates, (ii) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (iii) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a
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trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in subparagraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be eligible under
the Trust Indenture Act.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 1.6.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 6.12. ELIGIBILITY; DISQUALIFICATION. There shall at
all times be a Trustee hereunder which shall be eligible to act as Trustee under
Section 310(a)(1) of the Trust Indenture Act and shall have a combined capital
and surplus of at least $75,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the revisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 6.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 6.14. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue, exchange or
registration of transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy
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of which instrument shall be promptly furnished to the Company. Wherever
reference is made in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and, except as may
otherwise be provided pursuant to Section 3.1, shall at all times be a bank or
trust company or corporation organized and doing business and in good standing
under the laws of the United States of America or of any State or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $25,000,000 and subject to
supervision or examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the Trustee for such
series and to the Company. The Trustee for any series of Securities may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
This is one of the Securities of the series described in the
within-mentioned Indenture.
--------------------------,
as Trustee
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By
--------------------------
as Authenticating Agent
By
--------------------------
Authorized Signatory
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
Section 7.1. CONSOLIDATION, MERGER OR SALE OF ASSETS
PERMITTED. The Company shall not consolidate or merge with or into, or transfer
or lease all or substantially all of its assets to, any Person unless:
(1) the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such transfer or lease shall have been made, is a
corporation organized and existing under the laws of the
United States, any State thereof or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such transfer or lease shall have been made, assumes by
supplemental indenture all the obligations of the Company
under the Securities and this Indenture;
(3) immediately after giving effect to the
transaction no Default or Event of Default exists; and
(4) if, as a result of any such consolidation or
merger or such conveyance, transfer or lease, properties or
assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which
would not be permitted by the Securities of any series, the
Company or such successor Person, as the case may be, shall
take such steps as shall be necessary effectively to secure
such Securities equally and ratably with all indebtedness
secured thereby.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture and that all conditions precedent to the consummation
of the transaction under this Indenture have been met.
In the event of the assumption by a successor corporation as
provided in clause (2) above, such successor corporation shall succeed to and be
substituted for the Company hereunder and under the Securities with the same
effect as if it had been named hereunder and thereunder and any coupons
appertaining thereto and all such obligations of the Company shall terminate.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into indentures supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation
to the Company and the assumption by any such successor of the
covenants and obligations of the Company herein and in the
Securities; or
(2) 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) or to surrender any right or power herein conferred
upon the Company; or
(3) to add any additional Events of Default with
respect to all or any series of Securities (and if such Events
of Default are to be for the benefit of less than all series
of Securities, stating that such Events of Default are
expressly included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to facilitate
the issuance of Bearer Securities (including, without
limitation, to provide that Bearer Securities may be
registrable as to principal only) or to facilitate the
issuance of Securities in global form; or
(5) to change or eliminate any of the provisions of
this Indenture, PROVIDED that any such change or elimination
shall become effective only when there is no Security
Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the
requirements of Section 6.11; or
(9) if allowed without penalty under applicable laws
and regulations, to permit payment in the United States
(including any of the States and the District of Columbia),
its territories, its possessions and other areas subject to
its jurisdiction of principal, premium, if any, or interest,
if any, on Bearer Securities or coupons, if any; or
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(10) to correct or supplement any provision herein
which may be inconsistent with any other provision herein or
to make any other provisions with respect to matters or
questions arising under this Indenture, PROVIDED such action
shall not adversely affect the interests of the Holders of
Securities of any series; or
(11) to cure any ambiguity or correct any mistake,
PROVIDED such action shall not adversely affect the interests
of the Holders of Securities of any series; or
(12) to modify the provisions of Article 12 (except
with respect to any Outstanding Securities, to the extent
prohibited by clause (5) of Section 8.2); or
(13) to provide for the satisfaction, discharge or
defeasance of the Indenture with respect to any Series of
Securities pursuant to Article 4.
Section 8.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the written consent of the Holders of a majority of the aggregate principal
amount of the Outstanding Securities of each series adversely affected by such
supplemental indenture (with the Securities of each series voting as a class),
the Company, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto to add any provisions to or
to change or eliminate any provisions of this Indenture or of any other
indenture supplemental hereto or to modify the rights of the Holders of such
Securities; PROVIDED, HOWEVER, that without the consent of the Holder of each
Outstanding Security affected thereby, a supplemental indenture under this
Section may not:
(1) change the Stated Maturity of the principal of or
premium, if any, on, or any installment of principal of or
premium, if any, or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption, repurchase or
repayment thereof, or change the manner in which the amount of
any principal thereof or premium, if any, or interest thereon
is determined or reduce the amount of the principal of any
Original Issue Discount Security or Indexed Security that
would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 5.2, or change the
Place of Payment where or the currency in which any Securities
or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date);
(2) reduce the percentage in principal amount of the
Outstanding Securities affected thereby, the consent of whose
Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided
for in this Indenture;
(3) change any obligation of the Company to maintain
an office or agency in the places and for the purposes
specified in Section 9.2; or
(4) make any change in Section 5.7 or this 8.2 except
to increase any percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived with
the consent of the Holders of each Outstanding Security
affected thereby; or
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(5) modify the provisions of this Indenture with
respect to the subordination of the Outstanding Securities of
any series in a manner adverse to the Holders thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It is not necessary under this Section 8.2 for the Holders to
consent to the particular form of any proposed supplemental indenture, but it is
sufficient if they consent to the substance thereof.
Section 8.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every
amendment to this Indenture or the Securities of one or more series shall be set
forth in a supplemental indenture that complies with the Trust Indenture Act as
then in effect.
Section 8.4. EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.5. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
Section 8.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES. Securities, including any coupons, of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company, shall so determine, new Securities including any
coupons of any series so modified as to conform, in the opinion of the Trustee
and the Company to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities including any coupons of such series.
ARTICLE 9
COVENANTS
Section 9.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST. The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest together with additional amounts, if any, on the
Securities of that series in accordance with the terms of the Securities of such
series, any coupons appertaining thereto and this Indenture. Any installment of
principal, premium, if any, or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay the installment.
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Section 9.2. MAINTENANCE OF OFFICE OR AGENCY. If Securities of
a series are issued as Registered Securities, the Company will maintain in each
Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. If Securities of a
series are issuable as Bearer Securities, the Company will maintain, (i) subject
to any laws or regulations applicable thereto, an office or agency in a Place of
Payment for that series which is located outside the United States where
Securities of that series and related coupons may be presented and surrendered
for payment; PROVIDED, HOWEVER that if the Securities of that series are listed
on The International Stock Exchange of the United Kingdom and the Republic of
Ireland Limited, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of that series are listed on such
exchange, and (ii) subject to any laws or regulations applicable thereto, an
office or agency in a Place of Payment for that series which is located outside
the United States, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its Agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified as contemplated by Section 3.1, no
payment of principal, premium or interest on Bearer Securities shall be made at
any office or agency of the Company in the United States, by check mailed to any
address in the United States, by transfer to an account located in the United
States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; PROVIDED, HOWEVER, that, if the
Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium or interest on any such Bearer Security shall be
made at the office of the Company's Paying Agent located within the United
States, if (but only if) payment in Dollars of the full amount of such
principal, premium or interest, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may also from time to time designate one or more
other offices or agencies where the Securities (including any coupons, if any)
of one or more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in each Place of Payment for
Securities (including any coupons, if any) of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Unless otherwise specified as contemplated by Section 3.1, the
Trustee shall initially serve as Paying Agent.
Section 9.3. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN
TRUST; UNCLAIMED MONEY. If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of, premium, if any, or interest on any of the Securities
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of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee in
writing of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Securities of
that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities of that
series) in the making of any payment of principal, premium, if
any, or interest on the Securities; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge or defeasance of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same terms as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of any principal, premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
and coupon, if any, shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing of notice, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 9.4. CORPORATE EXISTENCE. Subject to Article 7, the
Company will at all times do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and its
rights and franchises; PROVIDED that nothing in this Section 9.4 shall prevent
the abandonment or termination of any right or franchise of the Company if, in
the opinion of the Company, such abandonment or termination is in the best
interests of the Company and not prejudicial in any material respect to the
Holders of the Securities.
Section 9.5. REPORTS BY THE COMPANY. The Company covenants:
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(a) to file with the Trustee, within 30 days after
the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13 or Section 15
(d) of the Securities Exchange Act of 1934, as amended; or, if
the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission,
such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended, in respect of
a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules
and regulations;
(b) to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time
to time by the Commission, such additional information,
documents and reports with respect to compliance by the
Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules
and regulations; and
(c) to transmit to all Holders of Securities, within
30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in Section 313(c) of the
Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section 9.5 as may
be required by rules and regulations prescribed from time to
time by the Commission.
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,
PROVIDED that the foregoing shall not relieve the Trustee of any of its
responsibilities hereunder.
Section 9.6. ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULTS OR
EVENTS OF DEFAULT.
(a) The Company covenants and agrees to deliver to
the Trustee, within 120 days after the end of each fiscal year
of the Company, a certificate from the principal executive
officer, principal financial officer or principal accounting
officer as to his or her knowledge of the Company's compliance
with all conditions and covenants under this Indenture. For
purposes of this Section 9.6, such compliance shall be
determined without regard to any period of grace or
requirement of notice provided under this Indenture.
(b) The Company covenants and agrees to deliver to
the Trustee, within a reasonable time after the Company
becomes aware of the occurrence of a Default or an Event of
Default, written notice of the occurrence of such Default or
Event of Default.
Section 9.7. BOOKS OF RECORD AND ACCOUNT. The Company will
keep proper books of record and account, either on a consolidated or individual
basis. The Company shall cause its books of record and account to be examined,
either on a consolidated or individual basis, by one or more firms of
independent public
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accountants not less frequently than annually. The Company shall prepare its
financial statements in accordance with generally accepted accounting
principles.
ARTICLE 10
REDEMPTION
Section 10.1. APPLICABILITY OF ARTICLE. Securities (including
coupons, if any) of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in
accordance with this Article.
Section 10.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The
election of the Company to redeem any Securities, including coupons, if any,
shall be evidenced by or pursuant to a Board Resolution. In the case of any
redemption at the election of the Company of less than all the Securities or
coupons, if any, of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and
Redemption Price, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in terms of such Securities or elsewhere
in this Indenture or (ii) pursuant to an election of the Company which is
subject to a condition specified in the terms of such Securities, the Company
shall furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction or condition.
Section 10.3. SELECTION OF SECURITIES TO BE REDEEMED. Unless
otherwise specified as contemplated by Section 3.1, if less than all the
Securities (including coupons, if any) of a series with the same terms are to be
redeemed, the Trustee, not more than 45 days prior to the Redemption Date, shall
select the Securities of the series to be redeemed in such manner as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
PROVIDED that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. The Trustee shall make the selection
from Securities of the series that are Outstanding and that have not previously
been called for redemption and may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities, including
coupons, if any, of that series or any integral multiple thereof) of the
principal amount of Securities, including coupons, if any, of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series. The Trustee shall promptly notify the Company in writing of the
Securities selected by the Trustee for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption. If less than all the Securities of any
series with differing issue dates, interest rates and stated maturities are to
be redeemed, the Company in its sole discretion shall select the particular
Securities to be redeemed and shall notify the Trustee in writing thereof at
least 45 days prior to the relevant redemption date.
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For Purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities (including
coupons, if any) shall relate, in the case of any Securities (including coupons,
if any) redeemed or to be redeemed only in part, to the portion of the principal
amount of such Securities (including coupons, if any) which has been or is to be
redeemed.
Section 10.4. NOTICE OF REDEMPTION. Unless otherwise specified
as contemplated by Section 3.1, notice of redemption shall be given in the
manner provided in Section 1.6 not less than 30 days nor more than 60 days prior
to the Redemption Date to the Holders of the Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of a
series are to be redeemed, the identification (and in the case
of partial redemption, the principal amounts) of the
particular Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part
only, the notice which relates to such Security shall state
that on and after the Redemption Date, upon surrender of such
Security, the holder will receive, without a charge, a new
Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(5) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all
coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment or the
Redemption Price;
(6) that Securities of the series called for
redemption and all unmatured coupons, if any, appertaining
thereto must be surrendered to the Paying Agent to collect the
Redemption Price;
(7) that, on the Redemption Date, the Redemption
Price will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(8) that the redemption is for a sinking fund, if
such is the case;
(9) that, unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for
redemption must be accompanied by all coupons maturing
subsequent to the Redemption Date or the amount of any such
missing coupon or coupons will be deducted from the Redemption
Price, unless security or indemnity satisfactory to the
Company, the Trustee and any Paying Agent is furnished; and
(10) the CUSIP number, if any, of the Securities.
Notice of redemption of Securities to be redeemed shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
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Section 10.5. DEPOSIT OF REDEMPTION PRICE. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article 11, segregate and hold in
trust as provided in Section 9.3) an amount of money in the currency or
currencies (including currency unit or units) in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 3.1 for
the Securities of such series) sufficient to pay on the Redemption Date the
Redemption Price of, and (unless the Redemption Date shall be an Interest
Payment Date) interest accrued to the Redemption Date on, all Securities or
portions thereof which are to be redeemed on that date.
Unless any Security by its terms prohibits any sinking fund
payment obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
Section 10.6. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for any such interest
appertaining to any Bearer Security so to be redeemed, except to the extent
provided below, shall be void. Except as provided in the next succeeding
paragraph, upon surrender of any such Security, including coupons, if any, for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States and it
possessions (except as otherwise provided in Section 9.2) and, unless otherwise
specified as contemplated by Section 3.1, only upon presentation and surrender
of coupons for such interest; and PROVIDED, FURTHER, that, unless otherwise
specified as contemplated by Section 3.1, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price any amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
PROVIDED, HOWEVER, that interest represented by coupons shall be payable only at
an office or agency located outside of the United States (except as otherwise
provided pursuant to Section 9.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 10.7. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part at any Place of Payment therefor (with, if the
Company or the Trustee so require, due endorsement
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by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of that Security, without service charge, a new Security
or Securities of the same series, having the same form, terms and Stated
Maturity, in any authorized denomination equal in aggregate principal amount to
the unredeemed portion of the principal amount of the Security surrendered.
ARTICLE 11
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES. The Company (i) may deliver Outstanding Securities of a series
(other than any previously called for redemption) together, in the case of
Bearer Securities of such series, with all unmatured coupons appertaining
thereto and (ii) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, or (iii) apply Securities of
a series previously cancelled or delivered to the Trustee for cancellation
pursuant to Section 3.9 in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of
such series; PROVIDED that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND. Not
less than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 11.2 and will also deliver to the Trustee any Securities to be so
delivered to the extent it has not previously done so. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 10.3 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 10.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
10.6 and 10.7.
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ARTICLE 12
SUBORDINATION
Section 12.1. AGREEMENT TO SUBORDINATE. The Company agrees,
and each Holder by accepting a Security agrees, that the indebtedness evidenced
by the Security is subordinated in right of payment, to the extent and in the
manner provided in this Article 12, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness, without any act or
notice of acceptance hereof or reliance hereon.
Section 12.2. CERTAIN DEFINITIONS.
"SENIOR INDEBTEDNESS" means (i) all indebtedness of the
Company, whether outstanding on the date hereof or thereafter created, incurred
or assumed, that is for borrowed money, or evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets, including securities, (ii) any indebtedness of any other Person of
the kind described in the preceding clause (i) for the payment of which the
Company is responsible or liable as guarantor or otherwise and (iii) amendments,
renewals, extensions and refundings of any such indebtedness. Senior
Indebtedness shall continue to be Senior Indebtedness and to be entitled to the
benefits of the subordination provisions of this Article 12 irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (A) any indebtedness of the Company to any of its
Subsidiaries, (B) indebtedness incurred for the purchase of goods or materials
or for services obtained in the ordinary course of business and (C) any
indebtedness which by its terms is expressly made PARI PASSU with or
subordinated to the Securities.
Section 12.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY; ETC. In
the event of
(i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or
other similar proceeding relating to the Company, its
creditors or its property,
(ii) any proceeding for the liquidation, dissolution
or other winding up of the Company, voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit
of creditors, or
(iv) any other marshalling of the assets of the
Company,
all Senior Indebtedness (including, without limitation, interest accruing after
the commencement of any such proceeding, assignment or marshalling of assets)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made by the Company on account of the
Securities. In any such event, any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or a readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions of this Indenture with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment) which would otherwise (but for the
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provisions of this Article 12) be payable or deliverable in respect of the
Securities (including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Securities) shall be paid or delivered
directly to the holders of Senior Indebtedness or to their representative or
trustee in accordance with the priorities then existing among such holders until
all Senior Indebtedness shall have been paid in full.
Section 12.4. DEFAULT ON SENIOR INDEBTEDNESS. If (i) the
Company defaults in the payment of any principal or premium, if any, or interest
on any Senior Indebtedness when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or declaration or otherwise or (ii)
an event of default occurs with respect to any Senior Indebtedness permitting
the holders thereof to accelerate the maturity thereof and written notice of
such event of default (requesting that payments on the Securities cease) is
given to the Company by the holders of Senior Indebtedness, then unless and
until such default in payment or event of default shall have been cured or
waived or shall have ceased to exist no direct or indirect payment (in cash,
property or securities, by set-off or otherwise) shall be made or agreed to be
made on account of the Securities or interest thereon or in respect of any
repayment, redemption, retirement, purchase or other acquisition of the
Securities. This Article 12 shall not apply to any payments to be made on the
Securities from funds held in trust pursuant to Article 4 provided that Article
12 did not prohibit the deposit of such funds into trust at the time of such
deposit.
Section 12.5. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to the Trustee or any Holder at a time when a Responsible
Officer of the Trustee or such Holder, respectively, has actual knowledge that
because of this Article 12 such distribution should not have been made to it,
the Trustee or such Holder who receives the distribution shall hold it in trust
for the benefit of, and, upon written request, shall pay it over to, the holders
of Senior Indebtedness as their interests may appear, or their agent or
representative or the trustee under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all principal, premium,
if any, and interest then payable with respect to any Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 12 and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
12, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
Section 12.6. NOTICE BY COMPANY. The Company shall promptly
notify in writing the Trustee and any Paying Agent of any facts known to the
Company that would cause a payment with respect to the Securities to violate
this Article 12, but failure to give such notice shall not affect the
subordination of the Securities to the Senior Indebtedness provided in this
Article 12.
Section 12.7. SUBROGATION. Senior Indebtedness shall not be
deemed to have been paid in full unless the holders thereof shall have received
cash, securities or other property equal to the amount of such Senior
Indebtedness then outstanding. After all Senior Indebtedness is paid in full and
until the Securities are paid in full, Holders shall be subrogated (equally and
ratably with all other indebtedness as to which the right to receive payment is
PARI PASSU with the Securities) to the rights of holders of Senior Indebtedness
to receive distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Indebtedness, and such payments or distributions received by any
Holder of Securities, by reason
59
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of such subrogation, of cash, securities or other property which otherwise would
be paid or distributed to the holders of Senior Indebtedness, shall, as between
the Company and its creditors other than the holders of Senior Indebtedness on
the one hand, and the Holders of Securities, on the other, be deemed to be a
payment by the Company on account of Senior Indebtedness, and not on account of
Securities.
Section 12.8. RELATIVE RIGHTS. This Article 12 defines the
relative rights of Holders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(i) impair as between the Company and Holders, the
obligation of the Company, which is absolute and unconditional
to pay principal of and interest on the Securities in
accordance with their terms;
(ii) affect the relative rights of Holders and
creditors of the Company other than their rights in relation
to holders of Senior Indebtedness; or
(iii) prevent the Trustee or any Holder from
exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders and owners of Senior
Indebtedness to receive distributions and payments otherwise
payable to Holders.
If the Company fails because of this Article 12 to pay
principal of premium, if any, or interest on a Security on the due date, the
failure is still a Default or Event of Default.
Section 12.9. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No present or future holder of any Senior Indebtedness shall be prejudiced in
the right to enforce subordination of the indebtedness constituting the
Securities by any act or failure to act on the part of the Company.
Section 12.10. DISTRIBUTION. Upon any payment or distribution
of assets of the Company referred to in this Article 12, the Trustee and the
Holders shall be entitled to rely upon an order or decree made by any court of
competent jurisdiction or upon any certificate of the liquidating trustee or
agent or other person making any Distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Debt of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other acts pertinent thereto or to this Article 12
and the Trustee and the Holders shall not be required to take any action with
respect to such payment or distribution in the absence of such order, decree or
certificate.
Section 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other provision of this
Indenture, neither the Trustee nor any Paying Agent shall be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment or distribution by the Trustee or such Paying Agent, or the taking of
any action by the Trustee or such Paying Agent, and the Trustee or such Paying
Agent may continue to make payments on the Securities unless, in the case of the
Trustee, and in the case of such Paying Agent as long as the Trustee is such
Paying Agent, a Responsible Officer shall have received at the Corporate Trust
Office of the Trustee, and in the case of a Paying Agent other than the Trustee
it shall have received, in each case at least two Business Days prior to the
date of such payment, written notice of facts that would cause any such payment
with respect to the Securities to violate this Article 12 which notice must
specifically refer to this Article 12. The Trustee or any Paying Agent, as
applicable, shall promptly provide a copy of such notice to the Holders. Nothing
in this Article 12 shall limit the right of the holders of Senior Indebtedness
to recover payments as
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contemplated elsewhere in this Article 12 or impair the claims of, or payments
to, the Trustee under or pursuant to Section 6.9 hereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee,
subject to Trust Indenture Act Sections 310(b) and 311. Any Agent may do the
same with like rights.
Section 12.12. AUTHORIZATION TO EFFECT SUBORDINATION. Each
Holder of a Security by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 12, and appoints the
Trustee his attorney-in-fact for any and all such purposes.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
CONSECO, INC.
By:
-------------------------------
Rollin M. Dick, Executive
Vice President and Chief
Financial Officer
[Seal]
Attest:
- ----------------------------------
John J. Sabl, Secretary
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------
Name:
Title:
62
<PAGE> 1
EXHIBIT 4.12
FORM OF AMENDED AND RESTATED DECLARATION
OF TRUST
Conseco Financing Trust IV
Dated as of December , 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS........................................................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION................................................... 9
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES..................................................... 9
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE.............................................. 10
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE......................................... 10
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT......................................................................... 10
SECTION 2.6 EVENTS OF DEFAULT; WAIVER......................................................... 10
SECTION 2.7 EVENT OF DEFAULT; NOTICE........................................................... 12
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME............................................................................... 12
SECTION 3.2 OFFICE............................................................................. 12
SECTION 3.3 PURPOSE............................................................................ 12
SECTION 3.4 AUTHORITY.......................................................................... 13
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST..................................................... 13
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.......................................... 13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE
TRUSTEES........................................................................... 15
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE..................................... 16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE
INSTITUTIONAL TRUSTEE.............................................................. 18
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE............................................ 20
SECTION 3.11 DELAWARE TRUSTEE................................................................... 21
SECTION 3.12 EXECUTION OF DOCUMENTS............................................................. 22
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES......................................................................... 22
SECTION 3.14 DURATION OF TRUST.................................................................. 22
SECTION 3.15 MERGERS............................................................................ 22
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES............................................ 24
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.................................................... 24
SECTION 4.3 RIGHT TO PROCEED................................................................... 24
SECTION 4.4 EXPENSES........................................................................... 24
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES................................................................. 25
SECTION 5.2 DELAWARE TRUSTEE................................................................... 26
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY................................................. 26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY......................................................... 27
SECTION 5.5 REGULAR TRUSTEES................................................................... 27
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES........................................................................... 28
SECTION 5.7 VACANCIES AMONG TRUSTEES........................................................... 29
SECTION 5.8 EFFECT OF VACANCIES................................................................ 29
SECTION 5.9 MEETINGS........................................................................... 29
SECTION 5.10 DELEGATION OF POWER................................................................ 30
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION
TO BUSINESS........................................................................ 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS...................................................................... 30
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES............................................ 31
SECTION 7.2 PAYING AGENT....................................................................... 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST............................................................... 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES............................................................. 32
SECTION 9.2 TRANSFER OF CERTIFICATES........................................................... 33
SECTION 9.3 DEEMED SECURITY HOLDERS............................................................ 33
SECTION 9.4 BOOK ENTRY INTERESTS............................................................... 33
SECTION 9.5 NOTICES TO CLEARING AGENCY......................................................... 34
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY........................................... 34
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES......................................... 34
SECTION 9.8 MUTILATED, DESTROYED LOST OR STOLEN CERTIFICATES................................... 35
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.......................................................................... 35
SECTION 10.2 EXCULPATION........................................................................ 36
SECTION 10.3 FIDUCIARY DUTY..................................................................... 36
SECTION 10.4 INDEMNIFICATION.................................................................... 37
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 10.5 OUTSIDE BUSINESSES................................................................. 39
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR........................................................................ 40
SECTION 11.2 CERTAIN ACCOUNTING MATTERS......................................................... 40
SECTION 11.3 BANKING............................................................................ 40
SECTION 11.4 WITHHOLDING........................................................................ 40
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS......................................................................... 41
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT.................................................................... 42
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL
TRUSTEE............................................................................ 44
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE
TRUSTEE............................................................................ 44
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES............................................................................ 45
SECTION 14.2 GOVERNING LAW...................................................................... 46
SECTION 14.3 INTENTION OF THE PARTIES........................................................... 46
SECTION 14.4 HEADINGS........................................................................... 46
SECTION 14.5 SUCCESSORS AND ASSIGNS............................................................. 46
SECTION 14.6 PARTIAL ENFORCEABILITY............................................................. 46
SECTION 14.7 COUNTERPARTS....................................................................... 46
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CONSECO FINANCING TRUST IV
December , 1997
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") dated and
effective as of December , 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders (as defined herein), from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, First Union Trust Company, National Association (the "Original
Delaware Trustee"), Rollin M. Dick and Stephen C. Hilbert, as trustees, and the
Sponsor established Conseco Financing Trust IV (the "Trust"), a trust under the
Business Trust Act (as defined herein) pursuant to a Declaration of Trust dated
as of May 21, 1997 (the "Original Declaration") and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on May 23, 1997, for the
sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as defined herein);
WHEREAS, pursuant to Section __ of the Original Declaration, the
Sponsor replaced the Original Delaware Trustee with First Chicago Delaware Inc.
pursuant to Amendment No. 1 to the Declaration of Trust dated November __, 1997
(the "Amendment"; the Original Declaration, as amended by the Amendment is
hereinafter referred to as the "Amended Original Declaration").
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Amended Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the Trust and Holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE II
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
<PAGE> 6
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Applicable Ownership Interest" has the meaning set forth in
Annex I hereto.
"Applicable Principal Amount" has the meaning set forth in
Annex I hereto.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
Purposes of the Reset Spread Announcement Date, is currently anticipated to be
The Wall Street Journal.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or
any day on which banking institutions in New York City, in the State of New
York, are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
2
<PAGE> 7
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to
be dated as of December , 1997 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Conseco, Inc., an Indiana
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer under the Indenture, a specimen certificate for such series
of Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any
Debentures put to the Sponsor on March , 2001, an amount per Debenture equal to
$50, plus accumulated and unpaid interest (including deferred interest, if any).
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
3
<PAGE> 8
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that
Person; or
(b) in any other case, in the name of such
Person by one or more Authorized Officers of that Person.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Failed Remarketing" has the meaning specified in Section
5.4(b) of the Purchase Contract Agreement.
"FELINE PRIDES"((sm)) means a security which, upon issuance,
will consist of a unit (referred to as an "Income PRIDES"((sm))) comprised of
(i) a stock purchase contract under which (a) the holder of the unit will
purchase from the Sponsor, for an amount in cash, a certain number of shares of
common stock of the Sponsor and (b) in the event that contract adjustment
payments constitute a component of FELINE PRIDES, the Sponsor will pay the
holder such contract adjustment payments, and (ii) beneficial ownership of a
Preferred Security or in certain circumstances upon the occurrence of a Tax
Event Redemption, the Applicable Ownership Interest in the Treasury Portfolio.
After issuance, FELINE PRIDES((sm)) units with respect to which Treasury
Securities have been substituted for Preferred Securities or the Treasury
Portfolio, as applicable, will be referred to as "Growth PRIDES"((sm)).
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" or "holder" means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
4
<PAGE> 9
"Indenture" means the Indenture dated as of December , 1997,
among the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex
I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms and conditions of the Preferred Securities set
forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
the Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by the officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
5
<PAGE> 10
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pledge Agreement" means the Pledge Agreement dated as of
December , 1997 among the Sponsor, The Chase Manhattan Bank, as collateral agent
(the "Collateral Agent"), and The First National Bank of Chicago, as purchase
contract agent (the "Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee agreement
to be dated as of December , 1997 of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the
Trust, the Debenture Issuer, and the underwriters designated by the Regular
Trustees with respect to the offer and sale of the Preferred Securities.
"Primary Treasury Dealer" has the meaning set forth in Annex I
hereto.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of December , 1997 among The First National Bank of Chicago,
as Purchase Contract Agent, and the Sponsor.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Annex I hereto.
"Redemption Amount" has the meaning set forth in Annex I
hereto.
"Redemption Price" has the meaning set forth in Annex I
hereto.
6
<PAGE> 11
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Reset Agent" means a nationally recognized investment banking
firm chosen by the Sponsor to determine the Reset Rate. It is currently
anticipated that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the tenth (10) Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be
determined by the Reset Agent), equal to the sum of (X) the Reset Spread and (Y)
the rate of interest on the Two-Year Benchmark Treasury in effect on the third
Business Day immediately preceding Purchase Contract Settlement Date, that the
Preferred Securities should bear in order for the Preferred Securities to have
an approximate market value of 100.5% of their aggregate liquidation amount on
the third Business Day immediately preceding the Purchase Contract Settlement
Date; provided, that the Sponsor may limit such Reset Spread to be no higher
than 200 basis points (2%).
"Reset Spread" means a spread amount to be determined by the
Reset Agent on the tenth (10) Business Day immediately preceding the Purchase
Contract Settlement Date.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including, without limitation, any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Institutional Trustee
assigned by the Institutional Trustee to administer its corporate trust matters
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Guarantees" means the Common Securities Guarantee
and the Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Conseco, Inc., an Indiana corporation, or any
successor entity in a merger or consolidation, in its capacity as sponsor of the
Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
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"Tax Event" has the meaning set forth in Annex I hereto.
"Tax Event Redemption" has the meaning set forth in Annex I
hereto.
"Tax Event Redemption Date" has the meaning set forth in Annex
I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on repayment, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Termination Event" has the meaning set forth in Section 1 of
the Purchase Contract Agreement.
"Treasury Portfolio" has the meaning set forth in Annex I
hereto.
"Treasury Portfolio Purchase Price" has the meaning set forth
in Annex I hereto.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Treasury Securities" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Two-Year Benchmark Treasury" means direct obligations of the
United States (which may be obligations traded on a when-issued basis only)
having a maturity comparable to the remaining term to maturity of the Preferred
Securities, as agreed upon by the Sponsor and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M.,
New York City time, on the third Business Day immediately preceding the Purchase
Contract Settlement Date in the Telerate system (or if the Telerate system is
(a) no longer available on the third Business Day immediately preceding the
Purchase Contract Settlement Date or (b) in the opinion of the Reset Agent
(after consultation with the Sponsor) no longer an appropriate system from which
to obtain such rate, such other nationally recognized quotation system as, in
the opinion of the Reset Agent (after consultation with the Sponsor) is
appropriate).
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If such rate is not so displayed, the rate for the Two-Year Benchmark Treasury
shall be, as calculated by the Reset Agent, the yield to maturity for the
Two-Year Benchmark Treasury, expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis, and
computed by taking the arithmetic mean of the secondary market bid rates, as of
10:30 A.M., New York City time, on the third Business Day immediately preceding
the Purchase Contract Settlement Date of three leading United States government
securities dealers selected by the Reset Agent (after consultation with the
Sponsor) (which may include the Reset Agent or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities.
ARTICLE III
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control.
(d) Any application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees, on behalf of the Trust, shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
by the Institutional Trustee for a List of Holders as of a date no more than 14
days before such List of Holders is given to the Institutional Trustee. The
Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in the Lists of Holders given to it or
which it receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 310(b) and 312(b) of the Trust Indenture Act.
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SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15, 1998, the
Institutional Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by ss.313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss.313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of ss.313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee such documents, reports and
information as required by ss.314 (if any) and the compliance certificate
required by ss.314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss.314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss. 314(c)
(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority")
to be waived under the Indenture, the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Preferred Securities that
the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss. 316(a)
(1)(B) of the Trust Indenture Act and such ss. 316(a) (1) (B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Preferred Securities, as permitted by the Trust Indenture Act. Upon such waiver,
any such default shall cease to exist, and any Event of Default with respect to
the Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair
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any right consequent thereon. Any waiver by the Holders of the Preferred
Securities of an Event of Default with respect to the Preferred Securities shall
also be deemed to constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities for all purposes
of this Declaration without any further act, vote, or consent of the Holders of
the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of
Default under this Declaration as provided below in this Section
2.6(b), the Event of Default under this Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under this Declaration as provided below
in this Section 2.6(b), the Event of Default under this Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Institutional Trustee in accordance
with the terms of the Securities. The foregoing provisions of this Section
2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and such ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the corresponding
Event of Default under this Declaration with respect to the Common Securities
for all purposes of this Declaration without further act, vote or consent of the
Holders of the Common Securities. The foregoing provisions of this Section
2.6(c) shall be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such
ss. 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
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SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, actually known to a Responsible Officer of
the Institutional Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all such defaults with respect to the
Securities, unless such defaults have been cured before the giving of such
notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.1 and 5.3 of the
Indenture; or
(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible
Officer of the Institutional Trustee charged with the
administration of this Declaration shall have actual knowledge.
ARTICLE V
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Conseco Financing Trust IV," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of the Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Conseco, Inc.,
11825 N. Pennsylvania Street, Carmel, IN 46032. On ten Business Days written
notice to the Institutional Trustee and Holders of the Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise set forth herein, to engage in only
those other activities necessary, appropriate, convenient or incidental thereto.
The Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust. It is the intent
of the parties to this Declaration for the Trust to be classified as a grantor
trust for United States federal income tax purposes under Subpart E of
Subchapter J of the Code, pursuant to which the owners of the Preferred
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Securities and the Common Securities will be the owners of the Trust for United
States federal income tax purposes, and such owners will include directly in
their gross income the income, gain, deduction or loss of the Trust as if the
Trust did not exist. By the acceptance of this Trust neither the Trustees, the
Sponsor nor the Holders of the Preferred Securities or Common Securities will
take any position for United States federal income tax purposes which is
contrary to the classification of the Trust as a grantor trust.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. A Holder
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a simultaneous issuance of both Preferred Securities and
Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:s
(i) execute and file with the Commission the registration
stasatement and the prospectus relating to the registration statement on
Form S-3 prepared by the Sponsor, including any amendments or supplement
thereto, pertaining to the Preferred Securities and to take any other
action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the FELINE
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PRIDES in any State in which the Sponsor has determined to qualify or
register such FELINE PRIDES for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange, Inc. or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice of
issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration statement
on Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Preferred Securities under Section
12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the FELINE PRIDES;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Institutional Trustee for the benefit of the Trust and the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event or an Investment Company Event; provided
that the Regular Trustees shall consult with the Sponsor before taking or
refraining from taking any Ministerial Action in relation to a Tax Event or
Investment Company Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss.316(c) of the Trust Indenture Act, Distributions,
voting rights, repayments, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities and this
Declaration;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e) the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
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(k to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust, including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes, provided that such action
relating to this clause (iii) does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary, appropriate, convenient or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8. No permissive power or authority available to the Regular Trustees shall be
construed to be a duty.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
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SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness for borrowed money,
other than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required unless the Trust shall
have received an opinion of counsel to the effect that such modification
will not cause more than an insubstantial risk that for United States
federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
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(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name
of and under the exclusive control of the Institutional Trustee on
behalf of the Trust and the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration. The Institutional Trustee Account
shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is rated at least "A"
or above by a "nationally recognized statistical rating organization",
as that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be necessary,
appropriate, convenient or incidental to effect the repayment of the
Preferred Securities and the Common Securities to the extent the
Debentures mature or are redeemed or the Put Option is exercised; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary, appropriate, convenient or
incidental to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law or
a change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities and this Declaration.
(e) The Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration, the Business Trust Act or the
Trust Indenture Act; provided, however, that if the Institutional Trustee fails
to enforce its rights under the Debentures after a Holder of Preferred
Securities has made a written request, such Holder of Preferred Securities may,
to the fullest extent permitted by applicable law, institute a legal proceeding
against the Debenture Issuer without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest on
or principal of the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of Common Securities will be subrogated to the
rights of such Holders of Preferred Securities. In connection with such Direct
Action, the Debenture Issuer shall be subrogated to the rights of such Holder of
Preferred Securities with respect to payments on the Preferred Securities under
this Declaration to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action. Except as provided in
the preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Debentures.
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(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities and this Declaration.
(h) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL
TRUSTEE.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
Trustee against such risk or liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Institutional Trustee Account shall be to deal with such property in
a similar manner as the Institutional Trustee deals with similar
property for its fiduciary accounts generally, subject to the
protections and limitations on liability afforded to the Institutional
Trustee under this Declaration, the Business Trust Act and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency
of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
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SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officer's Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts'
area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Institutional Trustee shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other
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paper or document, but the Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the
Institutional Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its Agent's taking such
action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from
the Holders of the Securities which instructions may only be given by
the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee
under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in conclusively relying on or acting in or accordance with
such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Institutional Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall trrrrrrrhe Delaware Trustee have any of the duties and
responsibilities of the Trustees (except as required under the Business Trust
Act) described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of ss. 3807 of thre Business Trust Act.
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SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representation3333333s as to the validity or sufficiency of this Declaration
or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on December 1, 2004.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided that
if the Trust is not the surviving entity:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities"), so long as the Successor
Securities rank the same as the Preferred Securities rank with
respect to Distributions and payments upon liquidation, redemption,
repayment and otherwise and substitutes for the Common Securities
other securities having substantially the same terms as the Common
Securities (the "Successor Common Securities"), so long as the
Successor Common Securities rank the same as the Common Securities
rank with respect to Distributions and payments upon liquidation,
redemption, repayment and otherwise;
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(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) if necessary, the Preferred Securities or any Successor
Securities will be listed, or any Successor Securities will be listed
upon notification of issuance, on any national securities exchange or
with another organization on which the Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities and any
Successor Common Securities) in any material respect (other than with
respect to any diution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to
be classified as a grantor trust for United States federal income
tax purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
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ARTICLE VII
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3.0% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue, sale and, if necessary, the remarketing
of the Preferred Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) if necessary, to determine the States in which to take appropriate
action to qualify or register for sale all or part of the FELINE PRIDES and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if necessary, to prepare for filing by the Trust of an application
to the New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Preferred
Securities;
(d) if necessary, to prepare for filing by the Trust with the Commission
of a registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Remarketing Agreement, the Remarketing
Underwriting Agreement, Underwriting Agreement and Pricing Agreement providing
for the sale of the FELINE PRIDES.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a Direct
Action as set forth in Section 3.8(e) hereto.
SECTION 4.4 EXPENSES.
In connection with the offering, sale and issuance of the Debentures to
the Institutional Trustee and in connection with the sale of the Securities by
the Trust, the Sponsor, in its capacity as borrower with respect to the
Debentures, shall:
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(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and Pricing Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of the
Indenture;
(b) be responsible for and shall pay all debts and obligations (other
than with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust, the offering, sale and issuance of the
Securities (including commissions to the underwriters in connection therewith),
the fees and expenses (including reasonable counsel fees and expenses) of the
Institutional Trustee, the Delaware Trustee and the Regular Trustees (including
any amounts payable under Article X of this Declaration), the costs and expenses
relating to the operation of the Trust, including, without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equient, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets and the
enforcement by the Institutional Trustee of the rights of the Holders of the
Securities;
(c) be primarily liable for any indemnification obligations arising
under Section 10.4 with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.4 shall be for the
benefit of, and shall be enforceable by, any person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.4 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Debenture Issuer agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to the
provisions of this Section 4.4.
ARTICLE IX
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that, the number of Trustees shall in
no event be less than two (2); provided further that (1) one Trustee, shall meet
the requirements of
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Section 5.2 (a) and (b); (2) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (a "Regular Trustee");
and (3) one Trustee shall be the Institutional Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Institutional Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
(c) The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee for so long as this Declaration is required to qualify as
an Indenture under the Trust Indenture Act, which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section 5.3(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities
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(as if it were the obligor referred to in ss. 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of ss. 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration for purposes of clause
(i) of the first provision contained in Section 310(b) of the Trust Indenture
Act.
(e) The initial Institutional Trustee shall be:
The First National Bank of Chicago
Global Corporate Trust Service
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Rollin M. Dick
Stephen C. Hilbert
c/o Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents that the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
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(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Institutional
Trustee possessing the qualifications to act as Institutional Trustee under
Sections 5.2 and 5.3 (a "Successor Institutional Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Institutional Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until such
Trustee's successor shall have been appointed or until such Trustee's death,
removal or resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all reasonable
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee, as the case may be, if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
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(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Institutional Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two Regular Trustees, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy among the Regular Trustees
shall occur, until such vacancy is filled by the appointment of a Regular
Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at (i) a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or (ii) without a meeting by the
unanimous written consent of the Regular Trustees. In the event there is only
one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
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SECTION 5.10 DELEGATION OF POWER.
(a) Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any documents contemplated in Section 3.6,
including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE XI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Institutional Trustee (the amount of any such payment being a "Payment
Amount"), the Institutional Trustee shall and is directed, to the extent funds
are available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders.
ARTICLE XIII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial
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interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Preferred Securities and the
Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee who shall
have signed any of the Securities shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 PAYING AGENT.
In the event that the Preferred Securities are not in book-entry only
form, the Trust shall maintain in the borough of Manhattan, City of New York,
State of New York, an office or agency where the Preferred Securities may be
presented for payment ("Paying Agent"), and any such Paying Agent shall comply
with Section 317(b) of the Trust Indenture Act. The Trust may appoint the Paying
Agent and may appoint one or more additional paying agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and address
of any Paying Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Institutional Trustee
shall act as such. The Trust or any of its Affiliates (including the Sponsor)
may act as Paying Agent. The Institutional Trustee shall initially act as Paying
Agent for the Preferred Securities and the Common Securities.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon a Termination Event;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Investment Company
Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(v) when all the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding-up of the Trust and its
termination, the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 4.4 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to
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the condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal income
tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
The Preferred Securities Certificates, on original issuance, in
addition to being issued in the form of one or more definitive, fully registered
Preferred Securities Certificate (each a "Definitive Preferred Securities
Certificate") registered initially in the books and records of the Trust in the
name of The First National Bank of Chicago, as Purchase Contract Agent, will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificate(s)
shall initially be registered on the books and records of the Trust in the name
of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certificate(s),
except as provided in Section 9.7. Except for the Definitive Preferred Security
Certificates as specified herein and the definitive, fully registered Preferred
Securities Certificates that have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
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(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificate(s) and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificate(s) and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants; provided, that, solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as Definitive
Preferred Security Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Preferred Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until definitive fully
registered Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7 or otherwise, the
Regular Trustees shall give all such notices and communications specified herein
to be given to the Preferred Security Holders to the Clearing Agency, and shall
have no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:
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(c) definitive fully registered Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
definitive fully registered Preferred Securities Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing Agency.
The definitive fully registered Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, 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 stock
exchange on which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them and the Trust
harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Debentures,
the Securities Guarantees and the terms of the Securities, the Sponsor shall not
be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities, which
shall be made solely from assets of the Trust; or
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(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests,
and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Trust or any other Person;
or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall
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determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum consisting of
such Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that such person is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made (i)
by the Regular Trustees by a majority vote of a quorum of disinterested
Regular Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Regular Trustees, independent legal counsel or Common Security Holder
at the time such determination is made, such person acted in bad faith
or in a manner that such person did not believe to be in or not opposed
to the best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably
determine that such person deliberately breached such person's duty to
the Trust or its Common or Preferred Security Holders.
(v) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of shareholders or disinterested
directors of the Sponsor or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vi) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the
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Sponsor would have the power to indemnify him against such liability
under the provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or Agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as such person would have with respect to such
constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the successors, heirs, executors and administrators of
such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee or the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or, in the case of the Institutional
Trustee, pursuant to Section 3.9, negligence) or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or Agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Trust shall cause to be duly prepared and delivered to each of
the Holders of Securities, any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(c) The Trust shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust shall comply with all withholding requirements under United
States federal, state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are necessary to
establish an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Trust shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit
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amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by the Regular Trustees (or, if there
are more than two Regular Trustees, a majority of the Regular Trustees); and
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, also by the
Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware
Trustee;
(b) no amendment shall be made:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's Certificate
from each of the Trust and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this Declaration (including the terms
of the Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officer's Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
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<PAGE> 46
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would materially and adversely affect the
rights, privileges or preferences of any Holder of Securities may be effected
only with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the
Declaration to such extent as may be necessary.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. [The Regular Trustees shall call a meeting
of the Holders of such class if directed to do so by the Holders of at
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<PAGE> 47
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.]
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration, the terms of the Securities or the
rules of any stock exchange on which the Preferred Securities are
listed or admitted for trading, such vote, consent or approval may be
given at a meeting of the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred Securities are then listed
or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under the
laws of the United States of America, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
the Declaration;
(b) the Institutional Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(d) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) The Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, the Declaration;
(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable
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bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Declaration; and
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
Conseco Financing Trust IV
c/o Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
Attn: Global Corporate Trust Service
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Administration (or such other address
as the Institutional Trustee may give notice of to the Holders of the
Securities):
The First National Bank of Chicago
Global Corporate Trust Service
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attn: Global Corporate Trust Service
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
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Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Attn: Corporate Secretary
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have
the same force and effect as though all of the signers had signed a single
signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
-----------------------------------------
, as Regular Trustee
-----------------------------------------
, as Regular Trustee
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By
----------------------------------------
Name
--------------------------------------
Title
-------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Institutional Trustee
By
----------------------------------------
Name
--------------------------------------
Title
-------------------------------------
CONSECO, INC.,
as Sponsor
By
----------------------------------------
Name
--------------------------------------
Title
-------------------------------------
<PAGE> 52
ANNEX I
TERMS AND CONDITIONS OF
% TRUST ORIGINATED PREFERRED SECURITIES
% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of December , 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in the
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. ____________ Preferred Securities of
the Trust, with an aggregate liquidation amount with respect to the assets of
the Trust of _____________ Dollars (____________) and a liquidation amount with
respect to the assets of the Trust of $50 per preferred security, are hereby
designated for the purposes of identification only as " % Trust Originated
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by applicable law or the rules of any
stock exchange on which the Preferred Securities are listed or to conform to
ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust, with an
aggregate liquidation amount with respect to the assets of the Trust of
______________ Dollars ( ) and a liquidation amount with respect to the
assets of the Trust of $50 per common security, are hereby designated for the
purposes of identification only as " % Trust Originated Common Securities" (the
"Common Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by applicable law or to conform to ordinary usage, custom or
practice.
2. Distributions.
(a Distributions payable on each Security will be fixed
initially at a rate per annum of % (the "Coupon Rate") of the stated
liquidation amount of $50 per Security until February 15, 2001, and at the
Reset Rate thereafter, such rates being the rates of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at
the rate of % until February 15, 2001, and at the Reset Rate thereafter (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and to
the extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year consisting of twelve 30-day
months, and for any period shorter than a full quarterly Distribution period
for which Distributions are computed, Distributions will be computed on the
basis of the actual number of days elapsed per 30-day month.
<PAGE> 53
(b) Distributions on the Securities will be cumulative, will
accrue from December , 1997, and will be payable quarterly in arrears, on
February 16, May 16, August 16 and November 16 of each year, commencing on
February 16, 1998, except as otherwise described below. The Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
extending, in the aggregate, beyond the maturity date of the Debentures (each an
"Extension Period"). During such Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon at the rate of % until February 15, 2001, and at
the Reset Rate thereafter, compounded quarterly during any such Extension Period
(to the extent permitted by applicable law). Payments of accrued Distributions
aill be payable to Holders as they appear on the books and records of the Trust
on the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period; provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed beyond the maturity date of the Debentures.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust at the
close of business on the Business Day immediately preceding each of the relevant
payment dates on the Securities. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment in respect of the
Preferred Securities will be made as described under the heading "Description of
the Trust Preferred Securities -- Book Entry Only Issuance -The Depository Trust
Company" in the Prospectus Supplement dated December , 1997 to the Prospectus
dated December __, 1997 (collectively, the "Prospectus") of the Trust relating
to the Registration Statement on Form S-3 (file no. 333-40423) of the Sponsor
and the Trust. The relevant record dates for the Common Securities shall be the
same record date as for the Preferred Securities. If the Preferred Securities
shall not continue to remain in book-entry only form or are not in book-entry
only form at issuance, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, as shall be selected by the Regular Trustees, which
dates shall be at least more than one, but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. So long as the Holder of any Preferred Securities is the
Collateral Agent, the payment of Distributions on such Preferred Securities held
by the Collateral Agent will be made at such place and to such account as may be
designated by the Collateral Agent.
(d) The Coupon Rate on the Securities (as well as the interest
rate on the Debentures) will be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date to the Reset Rate (which reset
Rate will be in effect on and after the Purchase Contract Settlement Date). On
the Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury
to be used to
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determine the Reset Rate will be announced by the Sponsor. On the Business Day
immediately following the Reset Announcement Date, the Holders of Securities
will be notified of such Reset Spread and Two-Year Benchmark Treasury by the
Sponsor. Such notice shall be sufficiently given to Holders of Securities if
published in an Authorized Newspaper.
(e) Not later than 7 calendar days nor more than 15 calendar
days prior to the Reset Announcement Date, the Sponsor will notify the DTC or
its nominee (or any successor Clearing Agency or its nominee) by first-class
mail, postage prepaid, to notify the Preferred Security Beneficial Owner or
Clearing Agency Participants holding Preferred Securities, Income PRIDES or
Growth PRIDES, of such Reset Announcement Date and in procedures to be followed
by such Holders of Income PRIDES who intend to settle their obligation under the
Purchase Contract with separate cash.
(f) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of the Trust
(unless a Tax Event Redemption has occurred), the Holders of the Securities on
the date of the dissolution will be entitled to receive out of the assets of the
Trust, after satisfaction of liabilities to creditors, Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the rate of %, if on or
prior to February 15, 2001, and the Reset Rate thereafter, and bearing accrued
and unpaid interest in an amount equal to the accrued and unpaid Distributions
on such Securities and which shall be distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities (such amount being
"Liquidation Distribution").
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the redemption of the Debentures in whole (but not in
part), at maturity, the proceeds from such redemption shall, after satisfaction
of liabilities to creditors, be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed at a redemption price of $50 per Security plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
repayment, payable in cash. Holders will be given not less than 30 nor more than
60 days notice of such redemption.
(b) If an Investment Company Event (as defined herein) shall
occur and be continuing the Regular Trustees shall dissolve the Trust and, after
satisfaction of liabilities to creditors, cause Debentures held by the
Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate the rate of %,
if on or prior to February 15, 2001, and the Reset Rate thereafter, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having
the same record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Investment Company Event (the "90 Day Period");provided, however,
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<PAGE> 55
that, if at the time there is available to the Trust the opportunity to
eliminate, within the 90 Day Period, the Investment Company Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure that will have no adverse effect on the
Trust, the Debenture Issuer, the Sponsor or the Holders of the Securities and
will involve no material cost ("Ministerial Action"), the Regular Trustees will
pursue such Ministerial Action in lieu of dissolution.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act (an "Investment Company Event Opinion") to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), which Change in 1940 Act Law becomes effective on or after
the date of the Prospectus, there is a more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
(c) If a Tax Event shall occur and be continuing, the
Debentures are redeemable at the option of the Debenture Issuer, in whole but
not in part, on not less than 30 days nor more than 60 days notice ("Tax Event
Redemption"). If the Debenture Issuer redeems the Debentures upon the occurrence
and continuance of a Tax Event, the proceeds from such redemption shall
simultaneously be applied by the Institutional Trustee to redeem Trust Preferred
Securities having an aggregate stated liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed at a redemption price (the
"Redemption Price"), per Trust Preferred Security, equal to the Redemption
Amount plus any accumulated and unpaid distributions thereon to the date of such
redemption. If, following the occurrence of a Tax Event, the Debenture Issuer
exercises its option to redeem the Debentures, the Debenture Issuer shall
appoint the Quotation Agent to assemble the Treasury Portfolio in consultation
with the Company. The Institutional Trustee will distribute to the record Holder
of the Preferred Securities, the Redemption Price payable in liquidation of such
Holders interests in the Trust.
"Tax Event" means the receipt by the Regular Trustees of an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any amendment to or change
in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority or (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the generally accepted position on
the date the Securities are issued, which amendment or change is effective or
which interpretation or pronouncement is announced on or after the date of
issuance of the Securities under the Declaration, there is more than an
insubstantial risk that (i) interest payable by the Debenture Issuer on the
Debentures would not be deductible, in whole or in part, by the Debenture Issuer
for federal income tax purposes or (ii) the Trust would be subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Treasury Portfolio" means, with respect to the Applicable
Principal Amount of Debentures (a) if the Tax Event Redemption Date occurs prior
to February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
Declaration consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to February 15, 2001 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after
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<PAGE> 56
the Tax Event Redemption Date principal or interest strips of U.S. Treasury
Securities which mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the Applicable Principal
Amount of the Debentures on such date, and (b) if the Tax Event Redemption Date
occurs after February 16, 2001, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to February 15, 2003 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date principal or interest strips of such U.S. Treasury Securities
which mature on or prior to such date in an aggregate amount equal to the
aggregate interest payment that would be due on the Applicable Principal Amount
of the Debentures on such date. Such Treasury Portfolio will be assembled by the
Quotation Agent.
"Applicable Ownership Interest" means, with respect to an
Income PRIDES and the Treasury Securities in the Treasury Portfolio, (A) a 1/20,
or 5%, undivided beneficial ownership interest in $1,000 principal amount of
each such security which is a principal strip and (B) for each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption date, a % undivided beneficial ownership interest in $1,000 face
amount of such security which is an interest strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax
Event Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggre gate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on the
Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on or after
February 16, 2001, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Redemption Amount" means for each Debenture, the product of
the principal amount of such Debenture and the Treasury Portfolio Purchase
Price, expressed as a percentage of the Applicable Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
"Quotation Agent" means (i) Merrill Lynch Government
Securities, Inc. and its respective successors, provided, however, that if the
foregoing shall cease to be a Primary Treasury Dealer, the Sponsor shall
substitute therefor another Primary Treasury Dealer.
On and from the date fixed by the Regular Trustees for a Tax Event
Redemption or any distribution of Debentures and dissolution of the Trust: (i)
the Securities will no longer be deemed to be outstanding, (ii) The Depository
Trust Company ("DTC") or its nominee (or any successor Clearing Agency or its
nominee) or the Collateral Agent, as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and any
certificates representing Securities, except for certificates representing
Preferred Securities held by the DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of $50, with an interest rate of % if on or prior to February
15, 2001, and at the
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Reset Rate thereafter, and accrued and unpaid interest equal to accrued and
unpaid Distributions on such Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
5. Redemption or Distribution Procedures.
(a) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
Tax Event Redemption Date. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 4(d)(i), a Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution Notice
or in the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (such notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will deposit
irrevocably with the DTC or its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Securities and will give the DTC irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred Securities
so called for redemption, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer has
paid the Institutional Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Institutional Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust. Notwithstanding the foregoing, so long as the Holder of
any Preferred Securities is the Collateral Agent, the payment of the Redemption
Price in respect of such Preferred Securities held by the Collateral Agent shall
be made no later than 12:00 noon, New York City time, on the Tax Event
Redemption Date by check or wire transfer in immediately available funds at such
place and to such account as may be designated by the Collateral Agent. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
date of such deposit, or on the redemption date, as applicable, distributions
will cease to accrue on the Securities so redeemed and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without interest
on such Redemption Price. Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Securities
that have been so called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for repayment. If payment of the
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the
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Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for repayment for
purposes of calculating the Redemption Price.
(c) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder thereof.
(d) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided the
acquiror is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from time
to time purchase outstanding Preferred Securities by tender, in the open market
or by private agreement.
12. Repayment at Option of Holders.
(a) If a Failed Remarketing (as described in Section 5.4(b) of
the Purchase Contract Agreement and incorporated herein by reference) has
occurred, each Holder of Securities who holds such Securities on the day
immediately following the Purchase Contract Settlement Date, shall have the
right on or after the Business Day immediately following February 16, 2001 to
require the Trust to repay all or a portion of such Securities owned by such
Holder (the "Put Option") on March __, 2001 (the "Put Option Exercise Date") at
a repayment price of $50 per Security plus an amount equal to the accrued and
unpaid Distributions (including deferred distributions if any) thereon to the
date of payment (the "Put Option Repayment Price").
(b) The Trust will obtain funds to pay the Put Option
Repayment Price of Securities being repaid under the Put Option through
presentation by the Institutional Trustee, on behalf of the Trust, to the
Debenture Issuer, pursuant to the right of the holder of the Debentures to
require the Debenture Issuer to repay all or a portion of the Debenture on the
Put Option Exercise Date, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities for repayment on the
Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put Option
Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the third
Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Institutional Trustee, the Securities to be repaid
with the form entitled "Option to Elect Repayment" on the reverse thereof or
otherwise accompanying such Security duly completed. Any such notice received by
the Trust shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Securities for repayment shall
be determined by the Trust, whose determination shall be final and binding.
(d) Payment of the Put Option Repayment Price to Holders of
Securities shall be made at the Corporate Trust Office of the Institutional
Trustee, provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related repayment of the
Debenture no later than 1:00 p.m., New York City time, on the Put Option
Exercise Date by check or wire transfer in immediately available funds at such
place and to such account as may be designated by such Holders. If the
Institutional Trustee holds immediately available funds sufficient to pay the
Put Option Repayment
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Price of such Securities, then, immediately prior to the close of business on
the Put Option Exercise Date, such Securities will cease to be outstanding and
distributions thereon will cease to accrue, whether or not Securities are
delivered to the Institutional Trustee, and all other rights of the Holder in
respect of the Securities, including the Holder's right to require the Trust to
repay such Securities, shall terminate and lapse (other than the right to
receive the Put Option Repayment Price but without interest on such Put Option
Repayment Price). Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities for which
repayment has been elected. If payment of the Put Option Repayment Price in
respect of Securities is (i) improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant to the
Securities Guarantee, or (ii) not paid by the Institutional Trustee as the
result of an Event of Default with respect to the Debentures presented for
repayment as described in paragraph 6(b), Distributions on such Securities will
continue to accrue, from the original Put Option Exercise Date to the actual
date of payment, in which case the actual payment date will be considered the
Put Option Exercise Date for purposes of calculating the Put Option Repayment
Price.
(e) The Debenture Issuer will request, not later than seven
nor more than 15 calendar days prior to February __, 2001 (the date on which
some or all of the Preferred Securities could be remarketed in the manner
described in Section 5.4(b) of the Purchase Contract Agreement and incorporated
herein by reference) that DTC notify the Preferred Securities Holders as well as
the Income PRIDES and Growth PRIDES holders of such remarketing and of the
procedures that must be followed if a Holder of Preferred Securities wishes to
exercise such Holder's rights with respect to the Put Option.
14. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 7(b) and 9 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in liquidation amount of the Preferred Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or the exercise of any trust or power conferred upon the Institutional Trustee
under the Declaration, including (i) directing the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee with respect to
the Debentures, (ii) waiving any past default and its consequences that is
waivable under the Indenture, (iii) exercising any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
or (iv) consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required, provided, however, that,
where a consent under the Indenture would require the consent or act of the
Holders of greater than a majority of the Holders in principal amount of
Debentures affected thereby (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
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States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Debentures after a Holder of Preferred Securities
has made a written request, such Holder of Preferred Securities may, to the
fullest extent permitted by applicable law, institute a legal proceeding
directly against the Debenture Issuer to enforce the Institutional Trustee's
rights under the Debentures without first instituting a legal proceeding against
the Institutional Trustee or any other Person. Notwithstanding the foregoing, if
an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder on or after the respective due date specified in the
Debentures. Except as provided in the preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record, of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to repay and cancel Preferred Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities. Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
8. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b) & (c) and Section 9
and as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or
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exercising any trust or power conferred on the Debenture Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
provided that, where a consent or action under the Indenture would require the
consent or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this Section 7(c),
the Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If
the Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
9. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
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(b) In the event the consent of the Institutional Trustee as
the holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Securities
under this Section 8(b) unless the Institutional Trustee has obtained an opinion
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action.
10. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
11. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
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14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
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EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its Agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
CONSECO FINANCING TRUST IV
% Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)
Conseco Financing Trust IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that __________
(the "Holder") is the registered owner of ___________ preferred securities of
the Trust representing preferred undivided beneficial interests in the assets of
the Trust designated the % Trust Originated Preferred Securities (liquidation
amount $50 per preferred security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation rights, privileges,
restrictions preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of December , 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
<PAGE> 65
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
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IN WITNESS WHEREOF, the Trust has executed this certificate this day of
, 1997.
CONSECO FINANCING TRUST IV
By:
----------------------------------------
Name:
--------------------------------------
Title: Regular Trustee
A1-3
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
rate of % until February 15, 2001, and at the Reset Rate thereafter (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year consisting of twelve 30-day
months, and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on February 16, 1998, to holders of record,
if in book-entry only form, one Business Day prior to such payment date, which
payment dates shall correspond to the interest payment dates on the Debentures.
In the event that the Preferred Securities are not in book-entry form, the
Regular Trustees will have the right to select relevant record dates, which will
be more than one Business Day but less than 60 Business Days prior to the
relevant payment dates. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding beyond the date of maturity
of the Debentures (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon at the rate of %
until February 15, 2001, and at the Reset Rate thereafter, compounded quarterly
during any such Extension Period (to the extent permitted by applicable law).
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed beyond the maturity date of the
Debenture.
The Preferred Securities shall be redeemable as provided in the
Declaration.
<PAGE> 68
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $_____ stated liquidation amount of the within Preferred Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a new
Preferred Security or Preferred Securities representing the remaining stated
liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, this Preferred Security with
the Option to Elect Repayment duly completed must be received by the Trust at
the Corporate Trust Office of the Institutional Trustee at Attention: Corporate
Trust Administration.
Dated: Signature:
--------------------------- ---------------------------------
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
<PAGE> 69
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent to transfer this Preferred Security Certificate on the books of the Trust.
The Agent may substitute another to act for him or her.
Date:
-------------------------------
Signature:
----------------------------------
(Sign exactly as your name appears on the other side
of this Preferred Security Certificate)
<PAGE> 70
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the Debenture
Issuer and any Related Party to the Debenture Issuer or a Related Party of the
Debenture Issuer; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
CONSECO FINANCING TRUST IV
% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
Conseco Financing Trust IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that_____________
(the "Holder") is the registered owner of ____________ common securities of the
Trust representing common undivided beneficial interests in the assets of the
Trust designated the % Trust Originated Common Securities (liquidation amount
$50 per common security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of December ,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
<PAGE> 71
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
, 1997.
CONSECO FINANCING TRUST IV
By:
-----------------------------------------
Name:
---------------------------------------
Title: Regular Trustee
<PAGE> 72
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the rate of %
until February 15, 2001, and at the Reset Rate thereafter (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on February 16, 1998, to Holders of record
one Business Day prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture Issuer
has the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding beyond the date of maturity of the Debentures (each an "Extension
Period") and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the rate of
% until February 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
on the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period; provided, that such
Extension Period together with all such previous and further extensions thereof
may not exceed beyond the maturity date of the Debentures.
The Common Securities shall be redeemable as provided in the
Declaration.
<PAGE> 73
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent to transfer this Preferred Security Certificate on the books of the Trust.
The Agent may substitute another to act for him or her.
Date:
-------------------------------
Signature:
----------------------------------
(Sign exactly as your name appears on the other side
of this Preferred Security Certificate)
<PAGE> 1
EXHIBIT 4.13
-------------------------------------------
FORM OF PREFERRED SECURITIES GUARANTEE AGREEMENT
CONSECO FINANCING TRUST IV
Dated as of December , 1997
-------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation....................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application..................................................... 4
SECTION 2.2 List of Holders of Securities........................................................ 4
SECTION 2.3 Reports by the Preferred Guarantee Trustee........................................... 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee...................................... 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent..................................... 5
SECTION 2.6 Events of Default; Waiver............................................................ 5
SECTION 2.7 Event of Default; Notice............................................................. 5
SECTION 2.8 Conflicting Interests................................................................ 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee................................. 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee........................................ 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee................................ 9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility............................................. 9
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees................. 9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................................................ 10
SECTION 5.2 Waiver of Notice and Demand.......................................................... 10
SECTION 5.3 Obligations Not Affected............................................................. 11
SECTION 5.4 Rights of Holders.................................................................... 11
SECTION 5.5 Guarantee of Payment................................................................. 12
SECTION 5.6 Subrogation.......................................................................... 12
SECTION 5.7 Independent Obligations.............................................................. 12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........................................................... 12
SECTION 6.2 Ranking.............................................................................. 13
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................................................................... 13
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................................................................... 13
SECTION 8.2 Indemnification...................................................................... 14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................................... 14
SECTION 9.2 Amendments........................................................................... 14
SECTION 9.3 Notices.............................................................................. 15
SECTION 9.4 Benefit.............................................................................. 15
SECTION 9.5 Governing Law........................................................................ 15
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of December , 1997, is executed and delivered by Conseco, Inc., an Indiana
corporation (the "Guarantor"), and The
First National Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of Conseco Financing Trust IV, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December , 1997, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof preferred securities, liquidation amount $50 per
preferred security, having an aggregate liquidation amount of $ designated the %
Trust Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all reference to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
<PAGE> 5
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by any
applicable law to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at The First National Bank of
Chicago, Global Corporate Trust, One First National Plaza, Suite 0126, Chicago,
IL 60670-0126, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor or designated the % Junior Subordinated Debentures due 2003 held
by the Institutional Trustee (as defined in the Declaration) of the Issuer.
"Direction" by a person means a written direction signed: (a) if the
Person is a natural person, by that Person; or (b) in any other case in the name
of such Person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid distributions to the date of redemption
(the ["Repayment] Price") with respect to Preferred Securities in respect of
which the related Debentures have been redeemed by the Company upon the
occurrence of a Tax Event Redemption, to the extent the Issuer has funds
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid
2
<PAGE> 6
Distributions on the Preferred Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of default
under the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of December , 1997, among the
Guarantor (the "Debenture Issuer") and The First National Bank of Chicago, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
3
<PAGE> 7
"Preferred Guarantee Trustee" means The First National Bank of Chicago,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Tax Event Redemption" has the same meaning as defined in Annex I to
the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within 1 Business Day after January 1 and July 1
of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
4
<PAGE> 8
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
5
<PAGE> 9
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express provisions
of this Preferred Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall be
read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee; and
(B) In the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Preferred Guarantee Trustee and conforming to
the requirements of this Preferred Securities
6
<PAGE> 10
Guarantee; but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Preferred Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting upon,
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
a Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
7
<PAGE> 11
(v) The Preferred Guarantee Trustee may consult with
competent legal counsel, and the written advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees. The Preferred
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Preferred Securities Guarantee
from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such Security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustees, agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2 (a) (vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the authority
of the Preferred Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
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<PAGE> 12
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal,
or in which the referred Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Preferred Guarantee Trustee shall be construed to
be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 750 million U.S. dollars ($750,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1 (a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
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<PAGE> 13
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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<PAGE> 14
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Repayment Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Repayment Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the Debentures permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against the
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<PAGE> 15
Issuer, the Preferred Guarantee Trustee or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a holder of
Preferred Securities may directly institute a proceeding against the Guarantor
for enforcement of the Preferred Security Guarantee for such payment. The
Guarantor waives any right or remedy to require that any action on this
Preferred Securities Guarantee be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all rights, if any, of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an Event of Default under the Declaration
and written notice of such Event of Default has been given to the Guarantor,
then (a) the Guarantor shall not declare or pay dividends or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Guarantor in connection with the
satisfaction by the Guarantor of its obligations under any employee or agent
benefit plans or the satisfaction by the Guarantor of its obligations pursuant
to any contract or security outstanding on the date of such event requiring the
Guarantor to purchase capital stock of the Guarantor, (ii) as a result of a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another class or
series of the Guarantor's capital stock, (iii) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange
12
<PAGE> 16
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends or distributions in capital stock of the Guarantor (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or purchases
of any rights outstanding under a shareholder rights plan), (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor that
rank junior to the Debentures to the extent appropriate notice has been given to
the holders thereof effectively blocking such payment or to the extent the
failure to make any such payment is otherwise authorized under the agreements
governing such debt securities, and (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than payments pursuant
to the Guarantee or the Common Securities Guarantee) to the extent appropriate
notice has been given to the beneficiaries thereof effectively blocking such
payment or to the extent the failure to make any such payment is otherwise
authorized under the agreements governing such guarantee payments.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to the liabilities of the Guarantor except those liabilities of the
Guarantor made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock, the most senior
preferred or preference stock now or hereafter issued, from time to time, by the
Guarantor and to any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any affiliate of the Guarantor.
If an Event of Default has occurred and is continuing under the
Declaration, the rights of the holders of the Common Securities to receive any
payments under the Common Securities Guarantee Agreement shall be subordinated
to the rights of the Holders of Preferred Securities to receive Guarantee
Payments hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Repayment Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred Securities
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
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<PAGE> 17
ARTICLE VIII
UNDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
out-of-pocket expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of the Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
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<PAGE> 18
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders of the
Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
Global Corporate Trust Services
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: Secretary
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
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<PAGE> 19
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
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<PAGE> 20
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CONSECO, INC., as Guarantor
By:
-------------------------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Preferred Guarantee
Trustee
By:
-------------------------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.18
--------------------------------------------------
FORM OF FIRST SUPPLEMENTAL INDENTURE
Dated as of December , 1997
between
CONSECO, INC.,
AS ISSUER
and
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
--------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I
DEFINITIONS........................................................................................... 1
SECTION 1.1. Definition of Terms.......................................................................... 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES........................................................ 4
SECTION 2.1. Designation and Principal Amount............................................................. 4
SECTION 2.2. Maturity..................................................................................... 4
SECTION 2.3. Form and Payment............................................................................. 4
SECTION 2.4. Global Debenture............................................................................. 4
SECTION 2.5. Interest..................................................................................... 5
ARTICLE III
REDEMPTION OF THE DEBENTURES.......................................................................... 6
SECTION 3.1. Tax Event Redemption......................................................................... 6
SECTION 3.2. Redemption Procedure for Debentures.......................................................... 6
SECTION 3.3. No Sinking Fund.............................................................................. 7
SECTION 3.4. Option to Put Debentures..................................................................... 7
SECTION 3.5. Repurchase Procedure for Debentures.............................................................. 7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD.................................................................. 7
SECTION 4.1. Extension of Interest Payment Period......................................................... 7
SECTION 4.2. Notice of Extension.......................................................................... 8
SECTION 4.3. Limitation of Transactions................................................................... 8
ARTICLE V
EXPENSES.............................................................................................. 9
SECTION 5.1. Payment of Expenses.......................................................................... 9
SECTION 5.2. Payment Upon Resignation or Removal.......................................................... 9
ARTICLE VI
NOTICE................................................................................................ 10
SECTION 6.1. Notice by the Company........................................................................ 10
ARTICLE VII
FORM OF DEBENTURE..................................................................................... 10
SECTION 7.1. Form of Debenture............................................................................ 10
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES.......................................................................... 16
SECTION 8.1. Original Issue of Debentures................................................................. 16
ARTICLE IX
MISCELLANEOUS......................................................................................... 16
SECTION 9.1. Ratification of Indenture.................................................................... 16
SECTION 9.2. Trustee Not Responsible for Recitals......................................................... 16
SECTION 9.3. Governing Law................................................................................ 16
SECTION 9.4. Separability................................................................................. 16
</TABLE>
ii
<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of December , 1997 (the "First
Supplemental Indenture"), between CONSECO, INC., a corporation duly organized
and existing under the laws of the State of Indiana, having its principal office
at 11825 N. Pennsylvania Street (the "Company" ), and The First National Bank of
Chicago, a national banking association, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture dated as of
December , 1997 (the "Base Indenture"), to the Trustee to provide for the future
issuance of the Company's unsecured and subordinated debentures, notes or other
evidence of indebtedness (the "Securities"), to be issued from time to time in
one or more series as might be determined by the Company under the Base
Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its % Junior Subordinated Debentures due February 16, 2003 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Base
Indenture and this First Supplemental Indenture (together, the "Indenture");
WHEREAS, Conseco Financing Trust IV, a Delaware statutory business
trust (the "Trust"), has offered to the public $ million aggregate liquidation
amount of its % Trust Originated Preferred Securities (the "Preferred
Securities"), representing preferred, undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $ million aggregate liquidation amount of its % Trust Originated Common
Securities (the "Common Securities" and together with the Preferred Securities,
the "Trust Securities"), in $ million aggregate principal amount of the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
<PAGE> 5
(e) the following terms have the meanings given to them in the
Declaration: (i) Authorized Newspaper; (ii) Business Day; (iii) Clearing Agency;
(iv) Delaware Trustee; (v) DTC; (vi) FELINE PRIDES; (vii) Growth PRIDES; (viii)
Income PRIDES; (xix) Institutional Trustee; (x) Investment Company Event; (xi)
Preferred Security Certificate; (xii) Pricing Agreement; (xiii) Regular
Trustees; (xiv) Reset Agent; (xv) Reset Announcement Date; (xvi) Reset Spread;
(xvii) Two-Year Benchmark Treasury; (xviii) Treasury Securities and (xix)
Underwriting Agreement;
(f) the following terms have the meanings given to them in this Section
1.11(f):
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on the
Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on or after
February 16, 2001, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Debentures Redemption Price" shall have the meaning set forth in
Section 3.4.
"Declaration" means the Amended and Restated Declaration of Trust of
Conseco Financing Trust IV, a Delaware statutory business trust, dated as of
December , 1997.
"Deferred Interest" shall have the meaning set forth in Section 4.1
hereof.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, an Investment Company Event or otherwise, the Trust
is to be dissolved in accordance with the Declaration, and, except in the case
of a Tax Event Redemption, the Debentures held by the Institutional Trustee are
to be distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Failed Remarketing" shall have the meaning set forth in Section 5.4(b)
of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in Section 2.4.
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and expenses and taxes of
the Trust set forth in Section 4.1 hereof, if any.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4 .
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement, dated as of December , 1997, between the Company and The
First National Bank of Chicago, as purchase contract agent.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" shall have the meaning set forth in Section 3.4.
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"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Institutional Trustee after consultation with the Company.
"Redemption Amount" means for each Debenture, the product of the
principal amount of such Debenture and the Treasury Portfolio Purchase Price,
expressed as a percentage of the Applicable Principal Amount.
"Tax Event" means the receipt by the Trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Trust Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance of
the Trust Securities under the Declaration, there is more than an insubstantial
risk that (i) interest payable by the Company on the Debentures would not be
deductible, in whole or in part, by the Company for federal income tax purposes
or (ii) the Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption Date" shall have the meaning set forth in Section
3.1 hereof.
"Treasury Portfolio" means with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) principal or interest strips of U.S. Treasury Securities which
mature on or prior to February 15, 2001 in an aggregate amount equal to the
Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Debentures that occurs after the Tax Event Redemption Date
principal or interest strips of U.S. Treasury Securities which mature on or
prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Debentures
on such date, and (b) if the Tax Event Redemption Date occurs after February 16,
2001, a portfolio of zero-coupon U.S. Treasury Securities con sisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to February 15, 2003 in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Debentures that occurs after the Tax Event Redemption Date principal or
interest strips of such U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
(g) the following terms shall have the meanings given to them in the
Purchase Contract: (i) Collateral Agent and (ii) Purchase Contract Settlement
Date.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the ___%
Junior Subordinated Debentures due February 16, 2003, limited in aggregate
principal amount to $600,000,000, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Debentures
pursuant to Section 3.3 of the Indenture.
SECTION 2.2. Maturity. The Maturity Date will be February 16, 2003.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions at the office
or agency of the Institutional Trustee; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the Holder
at such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of any Debentures is the Institutional Trustee,
the payment of the principal of and interest (including Compounded Interest and
expenses and taxes of the Trust set forth in Section 4.1 hereof, if any) on such
Debentures held by the Institutional Trustee will be made at such place and to
such account as may be designated by the Institutional Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to
the Trustee by the Institutional Trustee in exchange for a global Debenture in
an aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name of
the Clearing Agency, or its nominee, and delivered by the Institutional Trustee
to the Clearing Agency for crediting to the accounts of its participants
pursuant to the instructions of the Regular Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture. Payments on the Debentures issued as a Global
Debenture will be made to the Clearing Agency; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee and any Preferred Security Certificate
which represents Preferred Securities other than Preferred Securities held by
the Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will
be deemed to represent beneficial interests in Debentures presented to the
Trustee by the Institutional Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the Security
Registrar for transfer or reissuance at which time such Preferred Security
Certificates will be cancelled and a Debenture, registered in the name of the
holder of the Preferred Security Certificate or the transferee of the holder of
such Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with the Indenture. On
issue of such Debentures, Debentures with an equivalent aggregate principal
amount that were presented by the Institutional Trustee to the Trustee will be
deemed to have been cancelled.
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(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of DTC, or to a successor Clearing Agency selected or approved
by the Company or to a nominee of such successor Clearing Agency.
(c) If at any time DTC notifies the Company that it is unwilling or
unable to continue as a Clearing Agency or if at any time the Clearing Agency
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Clearing Agency for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, the Company will execute, and,
subject to Article III of the Indenture, the Trustee, upon written notice from
the Company, will authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by Global
Debenture. In such event the Company will execute, and subject to Section 301 of
the Indenture, the Trustee, upon receipt of an Officers Certificate evidencing
such determination by the Company, will authenticate and deliver the Debentures
in definitive registered form without coupons, in authorized denominations, and
in an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. Upon the exchange of the Global
Debenture for such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be cancelled by the
Trustee. Such Debentures in definitive registered form issued in exchange for
the Global Debenture shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the Clearing Agency for delivery to the Persons
in whose names such Securities are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the rate of % per
annum (the Coupon Rate") from the original date of issuance until February 15,
2001, and at the Reset Rate thereafter until the principal thereof becomes due
and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ___% until February 15, 2001 and at the Reset Rate
thereafter, compounded quarterly, payable (subject to the provisions of Article
IV) quarterly in arrears on February 16, May 16, August 16 and November 16 of
each year (each, an "Interest Payment Date") commencing on February 16, 1998, to
the Person in whose name such Debenture or any predecessor Debenture is
registered, at the close of business on the regular record date for such
interest installment, which, in respect of (i) Debentures of which the
Institutional Trustee is the Holder and the Preferred Securities are in
book-entry only form or (ii) a Global Debenture, shall be the close of business
on the Business Day next preceding that Interest Payment Date. Notwithstanding
the foregoing sentence, if (i) the Debentures are held by the Institutional
Trustee and the Preferred Securities are no longer in book-entry only form or
(ii) the Debentures are not represented by a Global Debenture, the Company may
select a regular record date for such interest installment which shall be any
date at least ten Business Days before an Interest Payment Date.
(b) The Coupon Rate on the Debentures will be reset on the Third
Business Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (which Reset Rate will became effective on and after the Purchase
Contract Settlement Date. On the tenth (10) Business Day immediately preceding
the Purchase Contract Settlement Date, the Reset Announcement Date, the Reset
Spread and the relevant Two-Year Benchmark Treasury will be announced by the
Company. On the Business Day immediately following such Reset Announcement Date,
the Holders of Debentures will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be sufficiently given to
such Holders of Debentures if published in an Authorized Newspaper.
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(c) Not later than seven calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date the Company will request that
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) or the Institutional Trustee, notify the Holders of Debentures of such
Reset Announcement Date and the procedures to be followed by such holders of
Income PRIDES wishing to settle the related Purchase Contract with separate
cash.
(d) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a 90-day
period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time prior to
the Purchase Contract Settlement Date at a Redemption Price per Debenture equal
to the Redemption Amount plus accrued and unpaid interest thereon, including
Compounded Interest and the expenses and taxes of the Trust set forth in Section
4.1 hereof, if any, to the date of such redemption (the "Tax Event Redemption
Date"). If, following the occurrence of a Tax Event, the Company exercises its
option to redeem the Debentures, then the proceeds of such redemption, if
distributed to the Institutional Trustee as the holder of such Debentures, will
be applied by the Institutional Trustee to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed, at the Redemption Price. If, following the occurrence of
a Tax Event, the Company exercises its option to redeem the Debentures, the
Company shall appoint the Quotation Agent to assemble the Treasury Portfolio in
consultation with the Company. Notice of any redemption will be mailed at least
30 days but not more than 60 days before the Tax Event Redemption Date to each
registered Holder of the Debentures to be prepaid at its registered address.
Unless the Company defaults in payment of the Redemption Price, on and after the
redemption date interest shall cease to accrue on such Debentures.
SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Paying Agent, no later than 12:00 noon, New York City time, on the
Tax Event Redemption Date, by check or wire transfer in immediately available
funds at such place and to such account as may be designated by each such Holder
of Debentures, including the Institutional Trustee or the Collateral Agent, as
the case may be. If the Trustee holds immediately available funds sufficient to
pay the Redemption Price of the Debentures (or, if the Company is acting as
Paying Agent or the Institutional Trustee has received the Redemption Price),
then, on such Tax Event Redemption Date, such Debentures will cease to be
outstanding and interest thereon will cease to accrue, whether or not such
Debentures have been received by the Company, and all other rights of the Holder
in respect of the Debentures shall terminate and lapse (other than the right to
receive the Redemption Price upon delivery of such Debentures but without
interest on such Redemption Price).
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SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4. Option to Put Debentures.
If a Failed Remarketing has occurred, each Holder of Debentures, who
holds such Debentures on the day immediately following the Purchase Contract
Settlement Date, shall have the right (the "Put Option") on or after the
Business Day immediately following the Purchase Contract Settlement Date, upon
at least Three Business Days' prior notice, to require the Company to repurchase
such Holder's Debentures on March , 2001 (the "Put Option Exercise Date"),
either in whole or in part, at a repayment price per Debenture equal to $50,
plus accrued and unpaid interest, if any, thereon to the date of payment
including deferred interest, if any (the "Debenture Repayment Price"). Upon such
repurchase by the Company, the Trust shall use the proceeds from such repayment
to redeem the Preferred Securities of such Holder having an aggregate stated
liquidation amount equal to the aggregate principal amount of the Debentures so
repurchased plus any accrued and unpaid distributions with respect to the
Preferred Securities so redeemed.
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on the Put
Option Exercise Date, the Company must receive on or prior to the 5:00 p.m. New
York City time on the third Business Day immediately preceding the Put Option
Exercise Date, at the Corporate Trust Office in the City of Chicago, Illinois,
the Debentures to be repurchased with the form entitled "Option to Elect
Repayment" on the reverse of or otherwise accompanying such Debentures duly
completed. Any such notice received by the Trustee shall be irrevocable. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of the Debentures for repayment shall be determined by the Company,
whose determination shall be final and binding.
(b) Payment of the Debentures Repayment Price to Holders of
Debentures shall be made through the Trustee, subject to the Trustee's receipt
of payment from the Company in accordance with the terms of the Inden ture
either through the Trustee or the Company acting as Paying Agent, no later than
12:00 noon, New York City time, on the Put Option Exercise Date, and to such
account as may be designated by such Holders. If the Trustee holds immediately
available funds sufficient to pay the Debentures Repayment Price of the
Debentures presented for repayment (or, if the Company is acting as Paying Agent
or the Institutional Trustee has received the Debentures Repayment Price), then,
immediately prior to the close of business on the Business Day immediately
preceding the Put Option Exercise Date, such Debentures will cease to be
outstanding and interest thereon will cease to accrue, whether or not such
Debentures have been received by the Company, and all other rights of the Holder
in respect of the Debentures, including the Holder's right to require the
Company to repay such Debentures, shall terminate and lapse (other than the
right to receive the Debentures Repayment Price upon delivery of such debentures
but without interest on such Debentures Repayment Price). Neither the
Institutional Trustee nor the Company will be required to register or cease to
be registered the transfer of any Debentures for which repayment has been
elected.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right at any time, and from time to time,
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not extending, in
the aggregate, beyond the Maturity Date of the Debentures (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable. To the extent permitted by applicable law,
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interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon
at the rate of % until February 15, 2001, and at the Reset Rate thereafter
compounded quarterly for each quarter of the Extended Interest Payment Period
("Compounded Interest"). At the end of the Extended Interest Payment Period, the
Company shall pay all interest accrued and unpaid on the Debentures, including
any expenses and taxes of the Trust set forth in Section 5.1 hereof and
Compounded Interest (together, "Deferred Interest") that shall be payable to the
Holders of the Debentures in whose names the Debentures are registered in the
Security Register on the first record date after the end of the Extended
Interest Payment Period; provided, however, that during any such Extended
Interest Payment Period, (a) the Company shall not declare or pay dividends or
make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or repurchases
of any rights outstanding under a shareholder rights plan), (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company that rank
junior to the Debentures, and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than payments pursuant to the
Guarantee or the Common Securities Guarantee). Prior to the termination of any
Extended Interest Payment Period, the Company may further extend such period,
provided that such period together with all such previous and further extensions
thereof shall not extend beyond the Maturity Date of the Debentures. Upon the
termination of any Extended Interest Payment Period and the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company, at its option, may prepay on any Interest Payment Date
all or any portion of the interest accrued during the then elapsed portion of an
Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extended Interest Payment
Period one Business Day before the earlier of (i) the next succeeding date on
which Distributions on the Trust Securities issued by the Trust are payable, or
(ii) the date the Trust is required to give notice of the record date, or the
date such Distributions are payable, to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, or (ii) there shall have occurred any Event
of Default, as defined in the Indenture, then (a) the Company shall not declare
or pay
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dividends or make any distribution with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock and (v) redemptions or
repurchases of any rights), (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank junior to the Debentures, and
(c) the Company shall not make any guarantee payments with respect to the
foregoing (other than payments pursuant to the Guarantee or the Common
Securities Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.9 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the offering,
sale and issuance of the Trust Securities (including commissions to the
underwriters in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of the Trust, including without limitation, costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee pursuant to this Section
5.2, the Company shall pay to the Trustee all amounts accrued to the date of
such termination, removal or resignation. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the Institutional Trustee,
as the case may be, pursuant to Section 5.6 of the Declaration, the Company
shall pay to the Delaware Trustee or the Institutional Trustee, as the case may
be, all amounts accrued to the date of such termination, removal or resignation.
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ARTICLE VI
NOTICE
SECTION 6.1. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article VI. Notwithstanding any of the
provisions of the Base Indenture and this First Supplemental Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of the Base Indenture,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor and before the receipt of any such
written notice, the Trustee, subject to the provisions of the Base Indenture,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Article VI at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
The Trustee, subject to the provisions of the Base Indenture, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Company, as the case may be (or a trustee on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Clearing Agency or a nominee of the
Clearing Agency. This Debenture is exchangeable for Debentures registered in the
name of a person other than the Clearing Agency or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Clearing
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Agency to a nominee of the Clearing Agency or by a nominee of the Clearing
Agency to the Clearing Agency or another nominee of the Clearing Agency) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No.
-------------------------------
$
---------------------------------
CUSIP No.
-------------------------
CONSECO, INC.
% JUNIOR SUBORDINATED DEBENTURE
DUE FEBRUARY 16, 2003
CONSECO, INC., a corporation (the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________, the First National Bank of
Chicago, as Institutional Trustee for Conseco Financing Trust IV, the principal
sum of Dollars ($ ) on February 16, 2003 (such date is hereinafter referred to
as the "Stated Maturity"), and to pay interest on said principal sum from
December ___, 1997, or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
February 16, May 16, August 16 and November 16 of each year, commencing on
February 16, 1998, initially at the rate of % per annum until February 15, 2001,
and at the Reset Rate thereafter until the principal hereof shall have become
due and payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the rate of % until
February 15, 2001, and at the Reset Date thereafter, compounded quarterly. The
interest rate will be reset on the third business day preceding February 16,
2001 to the Reset Rate (as determined by the Reset Agent). The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year consisting of twelve 30-day months. In the event that any date on
which interest is payable on this Debenture is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment 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 Debenture (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the regular record
date for such interest installment which in the case of a Global Debenture shall
be the close of business on the business day next preceding such Interest
Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES ARE
NO LONGER REPRESENTED BY A GLOBAL Debenture -- the Company shall have the right
to select record dates, which shall be more than fifteen Business Days but less
than 60 Business Days prior to the Interest Payment Date.] Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holders on such regular record date and may be paid to
the Person in whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee
11
<PAGE> 15
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of this Debenture is the Institutional Trustee or the Collateral
Agent, the payment of the principal of (and premium, if any) and interest on
this Debenture will be made at such place and to such account as may be
designated in writing by the Institutional Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
CONSECO, INC.
By:
-----------------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
12
<PAGE> 16
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
Dated
----------------------
- ---------------------------
as Trustee
By
------------------------
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of December , 1997 (the "Base Indenture"), duly
executed and delivered between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee") (as supplemented by a First Supplemental
Indenture, dated December , 1997), (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Securities is limited in aggregate principal amount as specified in said First
Supplemental Indenture.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at a Redemption Price per
Debenture equal to the Redemption Amount plus accrued and unpaid interest
thereon, including Compounded Interest and expenses and taxes of the Trust (each
as defined herein), if any, to the Tax Event Redemption Date. The Redemption
Price shall be paid to each Holder of the Debenture by the Company, no later
than 12:00 noon, New York City time, on the Tax Event Redemption Date, by check
or wire transfer in immediately available funds, at such place and to such
account as may be designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing has occurred, the Holder of this Debenture, who
holds this Debentures, on or after the Business Day immediately following the
Purchase contract Settlement Date, shall have the right to require the Company
to repurchase this Debenture on March ___, 2001 (the "Put Option Exercise
Date"), either in whole or in part, at an amount per Debenture equal to $50,
plus accrued and unpaid interest, including Deferred Interest, if any (the
"Debenture Repurchase Price"). Upon such repurchase by the Company the Trust
shall use simultaneously the proceeds from such repurchase to redeem in cash the
Preferred Securities of such Holder having an aggregate stated liquidation
amount equal to the aggregate principal amount of the Debentures so repurchased
plus accrued and unpaid distributions, including Deferred Interest if any. In
order for the Debentures to be so repurchased, the Company must receive, on or
prior to 11:00 am New York Time on the third Business Day immediately preceding
the Put Option Exercise Date, at the Corporate Trust Office in the City of
Chicago, Illinois the Debentures to be repurchased with the form entitled
"Option to Elect Repayment" on the reverse of or otherwise accompanying such
Debentures duly
13
<PAGE> 17
completed. All questions as to the validity, eligibility (including time of
receipt) and acceptance of the Debentures for repurchase shall be determined by
the Company, whose determination shall be final and binding. Any such notice
shall be irrevocable. The payment of the Debentures Repayment Price in respect
of such Debentures shall be made, either through the Trustee or the Company
acting as Paying Agent, no later than 12:00 noon, New York City time, on the Put
Option Exercise Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying the rights of the Holders of the Debentures; provided,
however, that, among other things, no such supplemental indenture shall (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon (subject to the Company's right to defer such
payments in the manner set forth herein), or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected, or (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive a Default or Event of Default with respect to such
series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange for or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as the Company is not in default in the payment of interest on the
Debenture, the Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures for a period not extending, in the aggregate, beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"). At the end of an
Extended Interest Payment Period, the Company shall pay all interest then
accrued and unpaid (together with the interest thereon at the rate of ___% until
February 15, 2001 and at the Reset Rate thereafter to the extent that payment of
such interest is enforceable under applicable law). In the event that the
Company exercises this right, then (a) the Company shall not declare or pay
dividends or make any distribution with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
purchases of any rights outstanding under a shareholder rights plan), (b) the
Company shall not make any payment of interest,
14
<PAGE> 18
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank junior to the Debentures, and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than payments pursuant to the Guarantee or the Common Securities
Guarantee). Prior to the termination of any such Extended Interest Payment
Period, the Company may further extend the interest payment period; provided,
that such Extended Interest Payment Period, together with all such previous and
further extensions thereof, may not extend beyond the Maturity Date of the
Debenture. At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any additional amount
then due, the Company may commence a new Extended Interest Payment Period,
subject to the above requirements.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City of
Chicago and State of Illinois accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture, the
Company, the Trustee, any Paying Agent and the Security Registrar may deem and
treat the registered holder hereof as the absolute owner hereof (whether or not
this Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving payment of or on account of the principal hereof and premium, if
any, and interest due hereon and for all other purposes, and neither the Company
nor the Trustee nor any Paying Agent nor any Security Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest
on this Debenture, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
shareholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
The Indenture imposes certain limitations on the ability of the Company to,
among other things, merge or consolidate with any other Person or sell, assign,
transfer or lease all or substantially all of its properties or assets. All such
covenants and limitations are subject to a number of important qualifications
and exceptions. The Company must report periodically to the Trustee on
compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form without
coupons in denominations of $50 and any integral multiple thereof. This Global
Debenture is exchangeable for Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. Debentures of this series so
issued are issuable only in registered form without coupons in denominations of
$50 and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Debentures of this series so issued
are exchangeable for a like aggregate principal amount of Debentures of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
15
<PAGE> 19
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of may, upon execution of
this First Supplemental Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
its Chairman, its Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Ratification of Indenture.
The Indenture as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 9.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 9.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 9.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 9.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
16
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
CONSECO, INC.,
as Issuer
By:
----------------------------------------
Name:
Title:
Attest:
By:
-------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
----------------------------------------
Name:
Title:
Attest:
By:
-------------------------------
17
<PAGE> 1
EXHIBIT 4.20
================================================================================
CONSECO, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
--------------------
FORM OF PURCHASE CONTRACT AGREEMENT
--------------------
DATED AS OF DECEMBER __, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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----
<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Applications . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.3. Form of Documents Delivered to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.4. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.7. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.9. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.10. Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
i
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Section 1.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1.14. Inspection of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II
Certificate Forms . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.1. Forms of Certificates Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.2. Form of Agent's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
The Securities . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.1. Title and Terms; Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.2. Rights and Obligations Evidenced by the Certificates . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.3. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.4. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.5. Registration; Registration of
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.6. Book-Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.7. Notices to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.8. Appointment of Successor Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.9. Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
ii
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Section 3.11. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.13. Substitution of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.14. Reestablishment of Income PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.15. Transfer of Collateral upon
Occurrence of Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.16. No Consent to Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IV
The Preferred Securities . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.1. Payment of Distribution; Rights to Distributions Preserved; Distribution Rate Reset; Notice . . . . 37
Section 4.2. Notice and Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.3. Distribution of Debentures; Tax Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE V
The Purchase Contracts . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.1. Purchase of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.2. Contract Adjustment Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.3. Deferral of Payment Dates For
Contract Adjustment Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.4. Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
iii
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Section 5.5. Issuance of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.7. Notice of Adjustments and Certain Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.8. Termination Event; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VI
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment Payments and to Purchase Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.2. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE VII
The Agent . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.1. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
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<TABLE>
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Section 7.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.4. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.5. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.6. Money Held in Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.8. Corporate Agent Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.9. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.10. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7.11. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . 74
Section 7.12. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . . . . . 75
Section 7.13. No Obligations of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE VIII
Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.1. Supplemental Agreements Without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
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Section 8.2. Supplemental Agreements with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.3. Execution of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.4. Effect of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.5. Reference to Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . . . . . . . . . . . . . 80
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions . . . . 80
Section 9.2. Rights and Duties of Successor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.3. Opinion of Counsel to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE X
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 10.1. Performance Under Purchase Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 10.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 10.3. Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.4. Covenants as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.5. Statements of Officers of the Company as to Default . . . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
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<PAGE> 8
PURCHASE CONTRACT AGREEMENT, dated as of December __, 1997, between
Conseco, Inc., an Indiana corporation (the "Company"), and The First National
Bank of Chicago, a national banking association, acting as purchase contract
agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and nouns
and pronouns of the masculine gender include the feminine and neuter genders
<PAGE> 9
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Authorized Newspaper; (iv) Indenture, (v) Investment Company
Event; (vi) Liquidation Distribution; (vii) Preferred Securities Guarantee;
(viii) Primary Treasury Dealer; (ix) Quotation Agent; (x) Redemption Amount;
(xi) Redemption Price; (xii) Reset Agent; (xiii) Reset Announcement Date; (xiv)
Reset Rate; (xv) Reset Spread; (xvi) Tax Event; (xvii) Tax Event Redemption;
(xviii) Tax Event Redemption Date; (xix) Two-Year Benchmark Treasury; (xx)
Treasury Portfolio; and (xxi) Treasury Portfolio Purchase Price; and
(e) the following terms have the meanings given to them in this
Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate"has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph
of this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall mean
such Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
2
<PAGE> 10
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York City (in the State of New
York) are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
3
<PAGE> 11
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, no par value, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the fee payable by the Company in
respect of each Purchase Contract, equal to ____% per annum of the Stated
Amount (provided that if such percentage is 0%, then no such payment shall be
payable by the Company), computed on the basis of a 360 day year of twelve 30
day months, plus any Deferred Contract Adjustment Payments accrued pursuant to
Section 5.2.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division, except that for purposes of Section 10.2, such term shall
mean the office or agency of the Agent in the Borough of Manhattan, the City of
New York, which office at the date hereof is located at 14 Wall Street, Eighth
Floor, New York, NY 10005.
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
4
<PAGE> 12
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the ____% Junior Subordinated Debentures due February 16, 2003, to be issued
under the Indenture as of the date hereof.
"Declaration" means the Amended and Restated Declaration of Trust of
Conseco Financing Trust IV, dated December __, 1997, among the Company, as the
sponsor, the trustees named therein and the holders from time to time of
individual beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
5
<PAGE> 13
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities or the Applicable Ownership
Interest, as the case may be, as collateral to secure a holder's obligations
under a Purchase Contract, the collective rights and obligations of a holder of
a Growth PRIDES Certificate in respect of such Treasury Securities, subject in
each case to the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Security or an
Applicable Ownership Interest, as the case may be, subject in each case to the
Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
6
<PAGE> 14
"Indenture Trustee" means The First National Bank of Chicago, a
national banking association, as trustee under the Indenture, or any successor
thereto.
"Institutional Trustee" means The First National Bank of Chicago, as
institutional trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate
and who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES
and (B) Income PRIDES for which the Stated Amount of the related
Preferred Security or the principal amount of the related Applicable
Ownership Interest, or a Liquidation Distribution in respect of such
Preferred Security, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
7
<PAGE> 15
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other than any such Certificate
in respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced
by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have
been pledged in good faith may be regarded as Outstanding Securities if the
pledgee establishes to the satisfaction of the Agent the pledgee's right so to
act with respect to such Income PRIDES or Growth PRIDES and that the pledgee is
not the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing February 16, 1998.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities, the Treasury Securities or the Treasury Portfolio, in each case
constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its
own behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
8
<PAGE> 16
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Growth PRIDES evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Income PRIDES evidenced thereby; and, for the purposes of this
definition, any Income PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Income PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Income PRIDES Certificate.
"Preferred Securities" means the ____% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the
Holder Contract Adjustment Payments, if any, on the terms and subject to the
conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
9
<PAGE> 17
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment Payments
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, a day
selected by the Company which shall be more than one Business Day but less than
60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated December
__, 1997 by and between the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Underwriting Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
10
<PAGE> 18
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such
judgment, decree or order shall have been entered within 60 days prior to the
Purchase Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (ii) a judgment, decree
or court order for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, shall have been entered, and,
unless such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree or order
shall have continued undischarged and unstayed for a period of 60 days, or
(iii) at any time on or prior to the Purchase Contract Settlement Date the
Company shall file a petition for relief under the Bankruptcy Code, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization or liquidation under the
Bankruptcy Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury Securities (Cusip
Number 912820 A20) which are the principal strip of the 7 3/4% U.S. Treasury
Securities which mature on February 15, 2001.
11
<PAGE> 19
"Trust" means Conseco Financing Trust IV, a statutory business trust
formed under the laws of the State of Delaware, or any successor thereto by
merger or consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated
December __, 1997 between the Company, the Trust, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Credit Suisse First Boston Corporation,
PaineWebber Incorporated, SBC Warburg Dillon Read Inc., Furman Selz LLP, and
Sands Brothers & Co., Ltd.
"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and, if requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary
to enable such
12
<PAGE> 20
individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representa- tions with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when
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such instrument or instruments are delivered to the Agent and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income
PRIDES Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or taken
by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of the Outstanding Income PRIDES and the Outstanding
Growth PRIDES, as the case may be, on such record date, and no other Holders,
shall be entitled to take the relevant action with respect to the Income PRIDES
or the Growth PRIDES, as the case may be, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such record date. Nothing
in this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding Securities on
the date such action is taken. Promptly after any record date is set pursuant
to this paragraph,
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the Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to
the Agent in writing and to each Holder of Securities in the manner set forth
in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid, to
the Agent at One First National Plaza Suite 0126, Chicago, IL 60670-
0126, Attention: Corporate Trust Services Division, or at any other
address previously furnished in writing by the Agent to the Holders
and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid, to
the Company at Conseco, Inc., 11825 N. Pennsylvania Street, Carmel,
Indiana 46032, Attention: Corporate Secretary, or at any other address
previously furnished in writing to the Agent by the Company; or
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(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed, first-class
postage prepaid, addressed to the Collateral Agent at The Chase
Manhattan Bank, 450 West 33rd Street, 15FL, NY, NY 10001, Attention:
Corporate Trust Trustee Administration, or at any other address
previously furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed
to the Institutional Trustee at One First National Plaza Suite 0126,
Chicago, IL 60670-0126, Attention: Corporate Trust Services Division,
or at any other address previously furnished in writing by the
Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless other- wise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at One First National Plaza Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Services Division, or at any
other address previously furnished in writing by the Indenture Trustee
to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be
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<PAGE> 24
filed with the Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Agent
shall constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders
from time to time shall be beneficiaries of this Agreement and shall be bound
by all of the terms and conditions hereof and of the Securities evidenced by
their Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
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Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, provided that no interest shall accrue
or be payable by the Company or any Holder for the period from and after any
such Payment Date, except that, if such next succeeding Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such
Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately preceding Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
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ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase
Contract forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Income PRIDES are listed or
any depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Income PRIDES Certificates, as evidenced
by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Growth PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined by
the officers of the Company executing such Growth PRIDES Certificates, as
evidenced by their execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
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Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING
AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of
Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 11,500,000 except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
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The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security with a stated liquidation amount equal to the Stated Amount or an
Applicable Ownership Interest, as the case may be, subject to the Pledge of
such Preferred Security or Applicable Ownership Interest, as the case may be,
by such Holder pursuant to the Pledge Agreement, and the rights and obligations
of the Holder thereof and the Company under one Purchase Contract. The Agent
as attorney-in-fact for, and on behalf of, each Holder of Income PRIDES shall
pledge, pursuant to the Pledge Agreement, the Preferred Security or Applicable
Ownership Interest, as the case may be, forming a part of such Holder's Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Preferred
Security or Applicable Ownership Interest, as the case may be, for the benefit
of the Company, to secure the obligation of the Holder under the Purchase
Contracts to purchase the Common Stock of the Company. Prior to the purchase
of shares of Common Stock under the Purchase Contracts, such Purchase Contracts
shall not entitle the Holders of Income PRIDES Certificates to any of the
rights of a holder of shares of Common Stock, including, without limitation,
the right to vote or receive any dividends or other payments or to consent or
to receive notice as stockholders in respect of the meetings of stockholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000 or Applicable
Ownership Interest, as the case may be, subject to the Pledge of such Treasury
Security or Applicable Ownership Interest, as the case may be, by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the Holder
thereof and the Company under one Purchase Contract. Prior to the purchase, if
any, of shares of Common Stock under the Purchase Contracts, such Growth PRIDES
Certificates shall not entitle the Holders of Growth PRIDES Certificates to any
of the rights of a holder of shares of
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Common Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as stockholders
in respect of the meetings of stockholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as
stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery
and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on
behalf of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
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No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of
any securities exchange on which the Income PRIDES or Growth PRIDES are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, one or more definitive Certificates of like tenor
and denominations and evidencing a like number of Income PRIDES or Growth
PRIDES, as the case may be, as the temporary Certificate or Certificates so
surrendered. Until so exchanged, the temporary Certificates shall in all
respects evidence the same benefits and the same obligations with respect to
the Income PRIDES or Growth PRIDES, as the case may be, evidenced thereby as
definitive Certificates.
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Section 3.5. Registration; Registration of Transfer
and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the Growth PRIDES
Certificates following Collateral Substitutions and transfers of Growth PRIDES
Certificates (the Agent, in such capacity, the "Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the Holder, and deliver the Certificates which the Holder making the exchange
is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent duly executed, by the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the
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Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates, other than any exchanges pursuant to Sections 3.6 and 8.5 not
involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Income PRIDES, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate Stated Amount of the Preferred Securities or the Treasury Portfolio,
as applicable, evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless
and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the payment of
Contract
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<PAGE> 33
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing Agency
will make book entry transfers among Clearing Agency Participants and receive
and transmit payments of Contract Adjustment Payments to such Clearing Agency
Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in its
sole discretion, appoint a successor Clearing Agency with respect to the
Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-
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Entry Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Clearing Agency. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and shall
be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate, evidencing the same number of Income PRIDES or Growth PRIDES, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity as may be required by them to hold each of them
and any agent of any of them harmless, then, in the absence of notice to the
Company or the Agent that such Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Income PRIDES or Growth PRIDES, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate, or (ii) if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the Preferred
Securities, the Treasury Portfolio or the Treasury Securities, as the case may
be, evidenced
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thereby, in each case subject to the applicable conditions and in accordance
with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the Agent,
may treat the Person in whose name such Certificate is registered as the owner
of the Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of
receiving distributions on the Preferred Securities or on the maturing
quarterly interest strips of the Treasury Portfolio, as applicable, receiving
payments of Contract Adjustment Payments, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any distributions on the
Preferred Securities or the Contract Adjustment Payments payable in respect of
the Purchase Contracts constituting a part of the Income PRIDES or Growth
PRIDES evidenced thereby shall be overdue and notwith- standing any notice to
the contrary, and neither the Company nor the Agent, nor any agent of the
Company or the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or
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the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities, the Treasury Portfolio or Treasury Securities, as the case may be,
after the occurrence of a Termination Event or pursuant to an Early Settlement,
or upon the registration of a transfer or exchange of a Security, or a
Collateral Substitution or the re-establishment of an Income PRIDES shall, if
surrendered to any Person other than the Agent, be delivered to the Agent and,
if not already cancelled, shall be promptly cancelled by it. The Company may
at any time deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall,
upon Issuer Order, be promptly cancelled by the Agent. No Certificates shall
be authenticated, executed on behalf of the Holder and delivered in lieu of or
in exchange for any Certificates cancelled as provided in this Section, except
as expressly permitted by this Agreement. All cancelled Certificates held by
the Agent shall be destroyed by the Agent unless otherwise directed by Issuer
Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Substitution of Securities.
A Holder may separate the Preferred Securities or the Treasury
Portfolio, as applicable, from the related Purchase Contracts in respect of an
Income PRIDES by substituting for such Preferred Securities or Treasury
Portfolio, as the case may be, Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of such Preferred Securities or the
aggregate principal amount of such Treasury Portfolio, as applicable (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the Preferred
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Securities and on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the Treasury Portfolio, in
each case by (a) depositing with the Collateral Agent Treasury Securities
having an aggregate principal amount equal to the aggregate Stated Amount of
the Preferred Securities comprising part of such Income PRIDES or the aggregate
principal amount of such Treasury Portfolio comprising part of such Income
PRIDES, as the case may be, and (b) transferring the related Income PRIDES to
the Agent accompanied by a notice to the Agent, substantially in the form of
Exhibit D hereto, stating that the Holder has transferred the relevant amount
of Treasury Securities to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the Preferred Securities or the
Treasury Portfolio, as the case may be, underlying such Income PRIDES,
whereupon the Agent shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit C hereto. Upon receipt of the
Treasury Securities described in clause (a) above and the instruction described
in clause (b) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, Preferred
Securities or the Treasury Portfolio, as the case may be, having a
corresponding aggregate Stated Amount or principal amount, as the case may be,
from the Pledge, free and clear of the Company's security interest therein, and
upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Preferred Securities or the Treasury
Portfolio, as the case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Security or the Applicable
Ownership Interest, as the case may be, from the related Purchase Contract and
to substitute Treasury Securities for such Preferred Securities or Treasury
Portfolio, as the case may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Income PRIDES if Preferred Securities are being substituted by
Treasury Securities,
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or (ii) only in integral multiples of 8,000 Income PRIDES if Applicable
Ownership Interests are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book- entry transfer of the Income PRIDES
or fails to deliver an Income PRIDES Certificate(s) to the Agent after
depositing Treasury Securities with the Collateral Agent, the Preferred
Security or the Applicable Ownership Interest, as the case may be, constituting
a part of such Income PRIDES, and any distributions on such Preferred Security
or the Applicable Ownership Interest, as the case may be, shall be held in the
name of the Agent or its nominee in trust for the benefit of such Holder, until
such Income PRIDES is so transferred or the Income PRIDES Certificate is so
delivered, as the case may be, or, with respect to an Income PRIDES
Certificate, such Holder provides evidence satisfactory to the Company and the
Agent that such Income PRIDES Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Preferred Security or the
Applicable Ownership Interest, as the case may be, and Purchase Contract
comprising such Income PRIDES may be acquired, and may be transferred and
exchanged, only as an Income PRIDES.
Section 3.14. Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may recreate Income PRIDES at any time (i)
on or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has not occurred, and (ii)
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has occurred, in each case
by (a) depositing with the Collateral Agent Preferred Securities or the
Treasury Portfolio, as the case may be, having an aggregate Stated Amount in
the case of the Preferred Securities or an aggregate principal amount in the
case of the Treasury Portfolio equal to the aggregate principal amount of the
Treasury Securities comprising part of the Growth PRIDES and (b) transferring
the related Growth PRIDES to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Preferred Securities or the Treasury
Portfolio, as the case may be, to the Collateral Agent and requesting that the
Agent
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instruct the Collateral Agent to release the Treasury Securities underlying
such Growth PRIDES, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit C hereto. Upon
receipt of the Preferred Securities or the Treasury Portfolio, as the case may
be, described in clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will effect the release of the Treasury Securities having a corresponding
aggregate principal amount from the Pledge to the Agent free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may reestablish Income PRIDES in integral
multiples of 20 Growth PRIDES for 20 Income PRIDES if a Tax Event Redemption
has not occurred, and in integral multiples of 8,000 Growth PRIDES for 8,000
Income PRIDES if a Tax Event Redemption has occurred.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence
of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Securities, the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying the Income PRIDES and the Growth
PRIDES pursuant to the terms of the Pledge Agreement, the Agent shall request
transfer instructions with respect to such Preferred Securities or the Treasury
Portfolio or Treasury Securities, as
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the case may be, from each Holder by written request mailed to such Holder at
its address as it appears in the Income PRIDES Register or the Growth PRIDES
Register, as the case may be. Upon book-entry transfer of the Income PRIDES or
Growth PRIDES or delivery of an Income PRIDES Certificate or Growth PRIDES
Certificate to the Agent with such transfer instructions, the Agent shall
transfer the Preferred Securities, the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Income PRIDES or Growth PRIDES,
as the case may be, to such Holder by book-entry transfer, or other appropriate
procedures, in accordance with such instructions. In the event a Holder of
Income PRIDES or Growth PRIDES fails to effect such transfer or delivery, the
Preferred Securities, the Treasury Portfolio or Treasury Securities, as the
case may be, underlying such Income PRIDES or Growth PRIDES, as the case may
be, and any distri- butions thereon, shall be held in the name of the Agent or
its nominee in trust for the benefit of such Holder, until such Income PRIDES
or Growth PRIDES are transferred or the Income PRIDES Certificate or Growth
PRIDES Certificate is surrendered or such Holder provides satisfactory evidence
that such Income PRIDES Certificate or Growth PRIDES Certif- icate has been
destroyed, lost or stolen, together with any indemnity that may be required by
the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Preferred Security or on the Applicable
Ownership Interest, as the case may be, which is paid on any Payment Date
shall, subject to
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receipt thereof by the Agent from the Collateral Agent as provided by the terms
of the Pledge Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES Certificates) of which
such Preferred Security or the Applicable Ownership Interest, as the case may
be, is a part is registered at the close of business on the Record Date for
such Payment Date.
Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and to accrue distributions, which were
carried by the Preferred Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on a Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Preferred Securities or on the Applicable Ownership Interest, as the case may
be, underlying such Income PRIDES otherwise payable on such Payment Date shall
be payable on such Payment Date notwithstanding such Cash Settlement or Early
Settlement or Collateral Substitution, and such distri- butions shall, subject
to receipt thereof by the Agent, be payable to the Person in whose name the
Income PRIDES Certificate (or one or more Predecessor Income PRIDES
Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding sentence,
in the case of any Income PRIDES with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on the Business Day
immediately preceding the Purchase Contract Settlement Date or an Early
Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, distributions on the related Preferred
Securities or on the Applicable Ownership Interest, as the case may be, that
would otherwise be payable after the Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of such Income
PRIDES; provided, however, that to the extent that such Holder continues to
hold the separated Preferred Securities that formerly comprised a part of such
Holder's Income PRIDES, such Holder shall be entitled to receive the
distributions on such separated Preferred Securities.
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The applicable Coupon Rate on the Preferred Securities on and after
the Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Preferred Securities Holders will be notified of such Reset Spread
and Two-Year Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Preferred Securities if published in an
Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants
holding Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
Holders of Income PRIDES a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Holder on the
record date set by the Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Preferred
Securities entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Preferred Securities underlying
their Income PRIDES and (c) stating the manner in which such instructions may
be given. Upon the written request of the Holders of Income PRIDES on such
record date, the Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests,
the maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of
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specific instructions from the Holder of an Income PRIDES, the Agent shall
abstain from voting the Preferred Security underlying such Income PRIDES. The
Trust shall covenant in the Declaration to take all action which may be deemed
necessary by the Agent in order to enable the Agent to vote such Preferred
Securities or to cause such Preferred Securities to be voted.
Section 4.3. Distribution of Debentures; Tax Event
Redemption
Upon the occurrence of an Investment Company Event or a liquidation of
the Trust in accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and underlying the Preferred Securities
equal to the aggregate Stated Amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, the Debentures will be substituted for the Pledged
Preferred Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligations of each Holder
of an Income PRIDES to purchase the Common Stock of the Company under the
Purchase Contracts constituting a part of such Income PRIDES. Following the
occurrence of an Investment Company Event or a liquidation of the Trust, the
Holders and the Collateral Agent shall have such security interests, rights and
obligations with respect to the Debentures as the Holders and the Collateral
Agent had in respect of the Preferred Securities subject to the Pledge thereof
as provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Preferred Securities shall be deemed to be a reference
to such Debentures. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the liquidation of the Trust
and the substitution of Debentures for Preferred Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principle Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged
Preferred Securities. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply an amount equal to the Redemption
Amount of such Redemption Price to purchase on behalf of the Holders of Income
PRIDES the Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Income PRIDES.
The Treasury Portfolio will be substituted for the Pledged Preferred
Securities, and will be held by the Collateral
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Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of an Income PRIDES to purchase the Common Stock of
the Company under the Purchase Contract constituting a part of such Income
PRIDES. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V, and VI of the Pledge Agreement, and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio. The Company may cause to be made in any Income PRIDES Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the liquidation of the Trust and
the substitution of the Treasury Portfolio for Preferred Securities or
Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $____
(the "Threshold Appreciation Price"), ____ shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price, but is greater than $____, the number of shares of Common
Stock equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to $____, ____ shares of
Common Stock per Purchase Contract, in each case subject to adjustment as
provided in Section 5.6 (and in each case rounded upward or downward to the
nearest
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1/10,000th of a share). As provided in Section 5.10, no fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the
execution of Certificates on behalf of such Holder), agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Contracts, and consents to the provisions hereof,
irrevocably authorizes the Agent as its attorney-in-fact to enter into and
perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Preferred Securities,
the Treasury Portfolio or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of the Holder of
such Security under the Purchase Contract may be enforced without regard to any
other rights or obligations. Each Holder of an Income PRIDES or a Growth
PRIDES, by its acceptance thereof, further covenants and agrees, that, to the
extent and in the manner provided in Section 5.4 and the Pledge Agreement, but
subject to
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the terms thereof, payments in respect of the Stated Amount of the Preferred
Securities or the Proceeds of the Treasury Securities or the Treasury Portfolio
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall
be released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
In the event that the Contract Adjustment Payments constitute a
component of Income PRIDES or Growth PRIDES, subject to Section 5.3 herein, the
Company shall pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in whose name a
Certificate (or one or more Predecessor Certificates) is registered at the
close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the office of the Agent in The
City of New York maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Income PRIDES Register or Growth PRIDES Register.
Upon the occurrence of a Termination Event, Contract Adjustment
Payments shall cease to accrue in respect of any period from and after the date
of such Termination Event (unless the Company defaults in the payment of
accrued Contract Adjustment Payments). The Company's obligations to pay any
accrued Contract Adjustment Payments shall be deemed to be fulfilled if the
Company deposits with the Agent funds necessary to pay accrued Contract
Adjustment Payments, in trust with irrevocable instructions and authorization
that such funds shall be delivered to the Holders.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or
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the re-establishment of an Income PRIDES) any other Certificate shall carry the
rights to Contract Adjustment Payments accrued and unpaid, and to accrue
Contract Adjustment Payments, which were carried by the Purchase Contracts
underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such Contract Adjustment Payments
shall be paid to the Person in whose name the Certificate evidencing such
Security (or one or more Predecessor Certificates) is registered at the close
of business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Adjustment Payments that would otherwise be
payable after the Early Settlement Date with respect to such Purchase Contract
shall not be payable.
The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to all
liabilities of the Company (other than the Guarantee with which they rank pari
passu).
Section 5.3. Deferral of Payment Dates For Contract
Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than one Business Day prior to
such Record Date. Any Contract Adjustment Payments so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of ____% per annum
(computed on the basis of 360 day year of twelve 30 day months), compounding on
each succeeding Payment Date, until paid in full
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(such deferred installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, being referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments shall be due on the next succeeding Payment Date except to
the extent that payment is deferred pursuant to this Section. No Contract
Adjustment Payments may be deferred to a date that is after the Purchase
Contract Settlement Date or, with respect to any particular Purchase Contract,
Early Settlement thereof. If the Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date in lieu of a cash payment a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate) equal to
(x) the aggregate amount of Deferred Contract Adjustment Payments payable to
such Holder divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
re-purchases of any rights outstanding under a shareholder rights plan).
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No fractional shares of Common Stock will be issued by the Company
with respect to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Adjustment Payments,
the Holder will be entitled to receive an amount in cash as provided in Section
5.10.
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder
settles the underlying Purchase Contract either through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section 5.9,
each Holder of an Income PRIDES must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash
("Cash Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to a Purchase Contract. Such notice shall be made on or
prior to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date. The Agent shall promptly
notify the Collateral Agent of the receipt of such a notice from a Holder
intending to make a Cash Settlement.
(ii) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay
the Purchase Price to the Collateral Agent prior to 11:00 a.m., New
York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent
in respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, the Holder shall be deemed to have consented
to the disposition of the pledged Preferred Securities pursuant to the
Remarketing as described in paragraph (b) below. If a Holder of an
Income PRIDES does notify the Agent as provided in paragraph (a)(i)
above of its intention to pay the
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Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, the Preferred Securities of such a Holder
will not be remarketed but instead the Collateral Agent, for the
benefit of the Company, will exercise its rights as a secured party
with respect to such Preferred Securities, including those rights
specified in paragraph (c) below.
(b) In order to dispose of the Preferred Securities of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage a
nationally recognized investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Preferred Securities. In order to
facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York
City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent of the aggregate number of
Preferred Securities to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing
such Preferred Securities to the Remarketing Agent. Upon receipt of such
notice from the Agent and such Preferred Securities from the Collateral Agent,
the Remarketing Agent will, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, use its reasonable efforts to remarket such
Preferred Securities on such date at a price of approximately 100.5% (but not
less than 100%) of the aggregate stated liquidation amount of such Preferred
Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the remarketing fee
("Remarketing Fee") an amount not exceeding 25 basis points (.25%) from any
amount of such proceeds in excess of the aggregate stated liquidation amount of
the remarketed Preferred Securities, if any, the Remarketing Agent will remit
the entire amount of the proceeds from such remarketing to the Collateral
Agent. Such portion of the proceeds, equal to the aggregate stated liquidation
amount of such Preferred Securities, will automatically be applied by the
Collateral Agent, in accordance with the Pledge Agreement to satisfy in full
such Income PRIDES holders' obligations to pay the Purchase Price for the
Common Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date. Any proceeds in excess of those required to pay the Purchase
Price and the Remarketing Fee will be remitted to the Agent for payment to the
Holders of the related Income PRIDES. Income PRIDES Holders whose Preferred
Securities are so remarketed will not otherwise be responsible for the payment
of any Remarketing Fee in connection therewith. If, in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related Preferred
Securities of such Holders of Income PRIDES at a price not less then 100% of
the aggregate stated liquidation amount of such Preferred Securities plus
accrued and unpaid distributions
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(including deferred distributions), if any, the remarketing will be deemed to
have failed (a "Failed Remarketing") and in accordance with the terms of the
Pledge Agreement the Collateral Agent for the benefit of the Company will
exercise its rights as a secured party with respect to such Preferred
Securities, including those actions specified in paragraph (c) below; provided,
that if upon a Failed Remarketing the Collateral Agent exercises such rights
for the benefit of the Company with respect to such Preferred Securities, any
accrued and unpaid distributions (including any deferred distributions) on such
Preferred Securities will become payable by the Company to the Agent for
payment to the Beneficial Owner of the Income PRIDES to which such Preferred
Securities relates. Such payment will be made by the Company on or prior to 11
a.m. New York City time on the Purchase Contract Settlement Date in lawful
money of the United States by [certified or cashiers' check or] wire transfer
in immediately available funds payable to or upon the order of the Agent. The
Company will cause a notice of such Failed Remarketing to be published on the
Second Business Day immediately preceding the Purchase Contract Settlement Date
in a daily newspaper in the English language of general circulation in The City
of New York, which is expected to be The Wall Street Journal.
(c) With respect to any Preferred Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as required
in (a)(ii) above, or with respect to Preferred Securities which are subject to
a Failed Remarketing, the Collateral Agent for the benefit of the Company
reserves all of its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (h) below, may, among other things, (i) retain
the Preferred Securities in full satisfaction of the Holders obligations under
the Purchase Contracts or (ii) sell the Preferred Securities in one or more
public or private sales.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) settles the underlying Purchase Contract either
through the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9, each Holder of a Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract on or prior to 5:00 p.m., New York City time, on the second
Business Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) who has so notified the Agent of its
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intention to make a Cash Settlement in accordance with paragraph
(d)(i) above is required to pay the Purchase Price to the Collateral
Agent prior to 11:00 a.m., New York City time, on the Business Day
immediately preced- ing the Purchase Contract Settlement Date in
lawful money of the United States by [certified or cashiers' check or]
wire transfer, in each case in immediately available funds payable to
or upon the order of the Company. Any cash received by the Collateral
Agent will be invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in a accordance
with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings
from the investment in such Permitted Investments will be distributed
to the Agent when received for payment to the Holder.
(iii) If a Holder of a Growth PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (d)(i) above, or if a Holder of an Income PRIDES (if a Tax
Event Redemption has occurred) does notify the Agent as provided in
paragraph (d)(i) above its intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph (d)(ii)
above, then upon the maturity of the Pledged Treasury Securities or
Treasury Portfolio, as the case may be, held by the Collateral Agent
on the Business Day immediately prior to the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities or
Treasury Portfolio, as the case may be, received by the Collateral
Agent will be invested promptly in overnight Permitted Investments.
On the Purchase Contract Settlement Date an amount equal to the
Purchase Price will be remitted to the Company as payment thereof
without receiving any instructions from the Holder. In the event the
sum of the proceeds from the related Pledged Treasury Securities or
Treasury Portfolio, as the case may be, and the investment earnings
earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral
Agent will distribute such excess to the Agent for the benefit of the
Holder of the related Growth PRIDES or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the office of the Agent in The City of New
York maintained for that purpose or, at the option of the Holder, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Register.
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(f) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Purchase Contract Agent in the manner
described herein, the Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Securities or the Pledged Treasury Portfolio, as the case may
be, or the Pledged Treasury Securities underlying the relevant Security to be
released from the Pledge by the Collateral Agent free and clear of any security
interest of the Company and transferred to the Agent for delivery to the Holder
thereof or its designee as soon as practicable and (ii) subject to the receipt
thereof from the Collateral Agent, the Agent shall, by book-entry transfer, or
other appropriate procedures, in accordance with instructions provided by the
Holder thereof, transfer the Pledged Preferred Securities or the Treasury
Portfolio, as the case may be, or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold the
Pledged Preferred Securities or the Treasury Portfolio, as the case may be, or
the Pledged Treasury Securities, and any distribution thereon, in the name of
the Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the proceeds of any Collateral Pledged to secure the obligations of the Holders
and in no event will Holders be liable for any deficiency between the proceeds
of Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date, on the Purchase Contract Settlement Date,
upon its receipt of payment in full of the Purchase Price for the shares of
Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article and subject to Section 5.6(b), the Company shall issue and deposit
with the Agent, for the benefit of the Holders of the Outstanding Securities,
one or more certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions with respect thereto, being
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<PAGE> 54
hereinafter referred to as the "Purchase Contract Settlement Fund") to which
the Holders are entitled hereunder. Subject to the foregoing, upon surrender
of a Certificate to the Agent on or after the Purchase Contract Settlement
Date, together with settlement instructions thereon duly completed and
executed, the Holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as
provided in Section 5.10 and any dividends or distributions with respect to
such shares constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall
forthwith be cancelled. Such shares shall be registered in the name of the
Holder or the Holder's designee as specified in the settlement instructions
provided by the Holder to the Agent. If any shares of Common Stock issued in
respect of a Purchase Contract are to be registered to a Person other than the
Person in whose name the Certificate evidencing such Purchase Contract is
registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate in effect
at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at time outstanding shall
not include shares held in the treasury of the Company but shall include any
shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common
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Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders entitled
to receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the trea-
sury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to
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become effective immediately after the opening of business on the day following
the day upon which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be adjusted so that the same shall equal
the rate determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Agent) of the portion of the
assets or evidences of indebtedness so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price per share
of the Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In any
case in which this paragraph (4) is applicable, paragraph (2) of this Section
shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (II) the aggregate amount of any
other distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this paragraph (5) or paragraph (6)
of this Section has been made and (III) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of the distribution described in clause
(I) above and in respect of which no adjustment pursuant to this paragraph (5)
or paragraph (6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times
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the number of shares of Common Stock outstanding on such date, then, and in
each such case, immediately after the close of business on such date for
determination, the Settlement Rate shall be increased so that the same shall
equal the rate determined by dividing the Settlement Rate in effect immediately
prior to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share
of the Common Stock on such date for determination. [Any purchases of Common
Stock by the Company or its subsidiaries conducted through open market
purchases or through privately negotiated purchases shall not be included for
purposes of calculating the amount of cash distributed pursuant to clauses (I),
(II) and (III) above, unless such purchases constituted a tender offer.]
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made, exceeds 15%
of the product of the Current Market Price per share of the Common Stock as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of shares
of Common Stock outstanding
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(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction
(i) the numerator of which shall be equal to (A) the product of (I) the Current
Market Price per share of the Common Stock on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the transactions described in clauses (I),
(II) and (III) above (assuming in the case of clause (I) the acceptance, up to
any maximum specified in the terms of the tender or exchange offer, of
Purchased Shares), and (ii) the denominator of which shall be equal to the
product of (A) the Current Market Price per share of the Common Stock as of the
Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares"). [Any purchases of Common Stock by the Company or its
subsidiaries conducted through open market purchases or through privately
negotiated purchases shall not be included for purposes of calculating the
amount of cash distributed pursuant to clauses (I), (II) and (III) above,
unless such purchases constituted a tender offer.]
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination"
within the meaning of paragraph (4) of this Section), and (b) a subdivision,
split or combination, as the case may be, of the number of shares of Common
Stock outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which such
subdivision, split or combination becomes effective" within the meaning of
paragraph (3) of this Section).
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(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the 5 consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day
before the "ex date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "ex date", when
used with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require
an increase or decrease of at least one percent therein; provided, however,
that any adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. If an adjustment is made to the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of Settlement Rate
in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any event treated
as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in which the Company
is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to
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another Person of the property of the Company as an entirety or substantially
as an entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or (iv)
any liquidation, dissolution or winding up of the Company other than as a
result of or after the occurrence of a Termination Event (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to provide that
each Holder of Securities will receive on the Purchase Contract Settlement Date
with respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of
Common Stock issuable on account of each Purchase Contract if the Purchase
Contract Settlement Date had occurred immediately prior to such Reorganization
Event assuming such Holder of Common Stock is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be (any
such Person, a "Constituent Person"), or an Affiliate of a Constituent Person
to the extent such Reorganization Event provides for different treatment of
common Stock held by Affiliates of the Company and non-affiliates and such
Holder failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event (provided that if the kind or amount of securities, cash
and other property receivable upon such Reorganization Event is not the same
for each share of Common Stock held immediately prior to such Reorganization
Event by other than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-electing
share"), then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). In the event
of such a Reorganization Event, the Person formed by such consolidation, merger
or exchange or the Person which acquires the assets of the Company or, in the
event of a liquidation or dissolution of the Company, the Company or a
liquidating trust created in connection therewith, shall execute and deliver to
the Agent an agreement supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this Section 5.6. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
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Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the Agent an
Officer's Certificate setting forth the Settlement Rate, the method
of calculation thereof in reasonable detail, and the facts requiring
such adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide a written notice
to the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting forth the
adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, which may at the
time be issued or delivered with respect to any Purchase Contract; and the
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or Deferred Contract Adjustment Payments, if the Company
shall have such obligation, and the rights and obligations of Holders to
purchase Common Stock, shall immediately and automatically terminate, without
the necessity of any notice or
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action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon and
after the occurrence of a Termination Event, the Securities shall thereafter
represent the right to receive the Preferred Securities or the Treasury
Portfolio, as the case may be, forming a part of such Securities in the case of
Income PRIDES, or Treasury Securities in the case of Growth PRIDES, in
accordance with the provisions of Section 4.3 of the Pledge Agreement. Upon
the occurrence of a Termination Event, the Company shall promptly but in no
event later than two Business Days thereafter give written notice to the Agent,
the Collateral Agent and to the Holders, at their addresses as they appear in
the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities, having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof, may be settled early ("Early Settlement") in the case of
Income PRIDES (unless a Tax Event Redemption has occurred) on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
as provided herein; provided however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income PRIDES
Purchase Contracts, underlying Income PRIDES may be settled early, on or prior
to the second Business Day immediately preceding the Purchase Contract
Settlement Date, but only in an aggregate amount of $400,000 or in an integral
multiple thereof. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and accompanied by payment (payable to the Company in immediately available
funds in an amount (the "Early Settlement Amount") equal to (i) the product of
(A) the Stated Amount times (B) the number of Purchase Contracts with respect
to which the Holder has elected to effect Early Settlement plus (ii) if such
delivery is made with respect to any Purchase Contracts during the period from
the close of business on any Record Date next preceding any Payment Date to the
opening of business on such Payment Date, an amount equal to the sum of (x) the
Contract Adjustment Payments, if any, payable on such Payment Date with respect
to such Purchase Contracts plus (y) in the case of Income PRIDES Certificate,
the distributions on the related Preferred Securities payable on such Payment
Date. Except as provided in the immediately preceding sentence and subject to
the second to last paragraph of Section 5.2, no payment or
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adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract
or on account of any dividends on the Common Stock issued upon such Early
Settlement. If the foregoing requirements are first satisfied with respect to
Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New York
City time, on a Business Day, such day shall be the "Early Settlement Date"
with respect to such Securities and if such requirements are first satisfied
after 5:00 p.m., New York City time, on a Business Day or on a day that is not
a Business Day, the "Early Settlement Date" with respect to such Securities
shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled
to receive, ____ shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate");
provided, however, that upon the Early Settlement of the Purchase Contracts,
the Holder of such related Securities will forfeit the right to receive any
Deferred Contract Adjustment Payments. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 5.9, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Office a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Preferred Securities or Treasury Portfolio, in
the case of Income PRIDES, or the related Treasury Securities, in the case of
Growth PRIDES, to be released from the Pledge by the Collateral Agent and
transferred, in each case to the Agent for delivery to the Holder thereof or
its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and the Preferred
Securities, Treasury Portfolio or Treasury Securities, as the case may be, from
the Collateral Agent, as applicable, the Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable form of Election
to Settle Early on the reverse of the Certificate evidencing the related
Securities, (i) transfer to the Holder the Preferred Securities, Treasury
Portfolio or Treasury Securities, as the case may be, forming
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a part of such Securities, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
(f) Holders may settle Securities early only in integral multiples
of 20 Income PRIDES or 20 GROWTH PRIDES; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, Holders of Income PRIDES may settle such Income PRIDES only
in integral multiples of 8,000 Income PRIDES.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered
for settlement at one time by the same Holder, the number of full shares of
Common Stock which shall be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered. Instead of any fractional share of Common Stock
which would otherwise be deliverable upon settlement of any Purchase Contracts
on the Purchase Contract Settlement Date or upon Early Settlement, the Company,
through the Agent, shall make a cash payment in respect of such fractional
interest in an amount equal to the value of such fractional shares times the
Applicable Market Value. The Company shall provide the Agent from time to time
with sufficient funds to permit the Agent to make all cash payments required by
this Section 5.10 in a timely manner.
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Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Purchase Contract or any issuance
of a share of Common Stock in a name other than that of the registered Holder
of a Certificate surrendered in respect of the Purchase Contracts evidenced
thereby, other than in the name of the Agent, as custodian for such Holder, and
the Company shall not be required to issue or deliver such share certificates
or Certificates unless or until the Person or Persons requesting the transfer
or issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall constitute a
component of Income PRIDES or Growth PRIDES, the Holder of any Income PRIDES or
Growth PRIDES shall have the right, which is absolute and unconditional
(subject to the right of the Company to defer payment thereof pursuant to
Section 5.3, the prepayment of Contract Adjustment Payments pursuant to Section
5.9(a) and to the forfeiture of any Deferred Contract Adjustment Payments upon
Early Settlement pursuant to Section 5.9(b) or upon the occurrence of a
Termination Event), to receive payment of each in- stallment of the Contract
Adjustment Payments with respect to the Purchase Contract constituting a part
of such Security on the respective Payment Date for such Security and to
purchase Common Stock pursuant to such Purchase Contract and, in each such
case, to institute suit for the enforcement of any such payment and right to
purchase Common Stock, and such rights shall not be impaired without the
consent of such Holder.
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Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Agreement, or
in any suit against the Agent for any action taken, suffered or omitted by it
as Agent, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable
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attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Agent, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% of the Outstanding Securities, or to any suit instituted by any
Holder for the enforcement of distributions on any Preferred Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on or after the
respective Payment Date therefor in respect of any Security held by such
Holder, or for enforcement of the right to purchase shares of Common Stock
under the Purchase Contracts constituting part of any Security held by such
Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Agent or the Holders, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part, the
Agent may, with respect to the Securities, conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Agent and conforming to the requirements
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of this Agreement, but in the case of any certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Agent, the Agent shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts;
and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if adequate indemnity is not
provided to it.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
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(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
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Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Company and the Agent assumes no responsibility for
their accuracy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase
Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the
Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
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(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
a Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
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(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Securities delivered to the Agent and
the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage
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prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Agent and the
address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers, agencies and
duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Agent all the
rights, powers and trusts of the retiring Agent and shall duly assign, transfer
and deliver to such successor Agent all property and money held by such
retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation
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to such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Agent shall, within five Business Days after the receipt
of such application, afford such applicants access to the information preserved
at the time by the Agent in accordance with Section 7.12(a).
(c) Every Holder agrees with the Company and the Agent that none
of the Company, the Agent nor any agent of any of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 7.12(b), regardless of
the source from which such information was derived.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article Five hereof.
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Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by applicable
tax laws, regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Securities. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received
from the Company with respect to the application of such requirements to
particular payments or Holders or in other particular circumstances, and may
for purposes of this Agreement rely on any such direction in accordance with
the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent
of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
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<PAGE> 76
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, to cure any
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or to make any other
provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the
interests of the Holders.
Section 8.2. Supplemental Agreements with Consent
of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one Class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute
69
<PAGE> 77
the Treasury Securities for the Pledge Preferred Securities or the
rights of holders of Growth PRIDES to substitute Preferred Securities
for the Pledged Treasury Securities) or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the rights
in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payments is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected
class of Holder as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 7.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental
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<PAGE> 78
agreement which affects the Agent's own rights, duties or immunities under this
Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as
to conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent in
exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially
all of its properties and assets to any Person or group of affiliated Persons
in one transaction or a series of related transactions, unless (i) either the
Company shall be the continuing corporation, or the successor (if other than
the Company) shall be a corporation organized and existing under the laws of
the United States of America or a State thereof or the District of Columbia and
such corporation shall expressly assume all the obligations of the Company
under the Purchase Contracts, this Agreement and the Pledge Agreement
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<PAGE> 79
by one or more supplemental agreements in form reasonably satisfactory to the
Agent and the Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, assignment, transfer, lease or conveyance, be in
default in the performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed,
and may issue either in its own name or in the name of Conseco, Inc., any or
all of the Certificates evidencing Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Agent; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on behalf of the
Holders and deliver any Certificates which previously shall have been signed
and delivered by the officers of the Company to the Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Agent for
that purpose. All the Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued
as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the
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provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer
of Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of
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<PAGE> 81
New York for such purposes. The Company will give prompt written notice to the
Agent of any such designation or rescission and of any change in the location
of any such other office or agency. The Company hereby designates as the place
of payment for the Securities the Corporate Trust Office and appoints the Agent
at its Corporate Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
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<PAGE> 82
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CONSECO, INC.
By:
----------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
----------------------------
Name:
Title:
<PAGE> 83
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) 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 such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
No. _____ Cusip No. ______
Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one
_____% Trust Originated Preferred Security (the "Preferred Security") of
Conseco Financing Trust IV, a Delaware statutory business trust (the "Trust"),
having a liquidation amount of $50, subject to the Pledge of such Preferred
Security by such Holder pursuant to the Pledge Agreement or (b) upon the
occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement
Date, the Applicable Ownership Interest in
<PAGE> 84
the Treasury Portfolio, subject to the Pledge of such Applicable Ownership
Interest in the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Conseco, Inc., an Indiana corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
Treasury Portfolio, as the case may be, constituting part of each Income PRIDES
evidenced hereby have been pledged to the Collateral Agent, for the benefit of
the Company, to secure the obligations of the Holder under the Purchase
Contract comprising a portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount
of or principal amount of, as the case may be, or cash distributions on, any
Pledged Preferred Securities (as defined in the Pledge Agreement) or the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the Treasury Portfolio, as the case
may be, and (B) any payments of the Stated Amount or principal amount, as the
case may be, with respect to any Preferred Securities or the Treasury
Portfolio, as the case may be, that have been released from the Pledge pursuant
to the Pledge Agreement, to the Agent to the account designated by the Agent,
no later than 2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the Stated Amount or
principal amount, as the case may be, of any Pledged Preferred Securities or
the Treasury Portfolio, as the case may be, to the Company on the relevant
Payment Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Income PRIDES of which such Pledged Preferred Securities or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming
a part of such Income PRIDES. Distributions on any Preferred Security or the
Treasury Portfolio, as the case may be, forming part of an Income PRIDES
evidenced hereby which are payable quarterly in arrears on February 16, May 16,
August 16 and November 16 each year, commencing February 16, 1998 (a "Payment
Date"), shall, subject to receipt thereof by the Agent from the Collateral
Agent, be paid to the Person in whose name this Income PRIDES Certificate
A-2
<PAGE> 85
(or a Predecessor Income PRIDES Certificate) is registered at the close of
business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on February 16,
2001 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Common Stock, no par value ("Common
Stock"), of the Company, equal to the Settlement Rate, unless on or prior to
the Purchase Contract Settlement Date there shall have occurred a Termination
Event with respect to the Income PRIDES of which such Purchase Contract is a
part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "Purchase Price") for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the Stated
Amount or principal amount, as the case may be, of the Pledged Preferred
Securities or Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the Income PRIDES of
which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to _____% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months,
subject to deferral at the option of the Company as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof; provided,
however, that if such percentage is 0%, then no such payment shall be payable
by the Company. Such Contract Adjustment Payments shall be payable to the
Person in whose name this Income PRIDES Certificate (or a Predecessor Income
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
Distributions on the Preferred Securities or Treasury Portfolio, as
the case may be, and Contract Adjustment Payments, if any, will be payable at
the office of the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
A-3
<PAGE> 86
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-4
<PAGE> 87
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
CONSECO, INC.
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but solely as
Attorney-in-Fact of such Holder
By:
----------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract Agent
By:
----------------------------
Authorized Officer
A-5
<PAGE> 88
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of December , 1997 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part. The "Settlement Rate" is equal to (a)
if the Applicable Market Value (as defined below) is equal to or greater than
$_____ (the "Threshold Appreciation Price"), ______ shares of Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $_____, the number of shares
of Common Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Amount is less than or
equal to $____, ____ shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract Agreement. No
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The
A-6
<PAGE> 89
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, or an Early Settlement or from the
proceeds of a remarketing of the related Preferred Securities of such holders.
A Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m. New York
City time on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, to make an effective Cash Settlement or an Early Settlement,
shall pay the Purchase Price for the shares of Common Stock to be issued under
the related Purchase Contract from the Proceeds of the sale of the related
Preferred Securities held by the Collateral Agent. Such sale will be made by
the Remarketing Agent pursuant to the terms of the Remarketing Agreement and
the Remarketing Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. If, as provided in the
Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Preferred Securities related to this
Income PRIDES certificate, any accrued and unpaid distributions (including
deferred distri- butions) on the Preferred Securities will become payable by
the Company to the holder of this Income PRIDES Certificate in the manner
provided for in the Purchase Contract Agreement.
A-7
<PAGE> 90
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and the obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Income PRIDES Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the Treasury Portfolio forming
a part of each Income PRIDES, or the Liquidation Distribution received in
respect of such Pledged Preferred Security, from the Pledge. An Income PRIDES
shall thereafter represent the right to receive the Preferred Security or the
Treasury Portfolio forming a part of such Income PRIDES, or the Liquidation
Distribution received in respect of such Preferred Security, and any accrued
Contract Adjustment Payments on the Purchase Contract forming a part of such
Income PRIDES in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement. Contract Adjustment Payments shall cease to accrue
in respect of any period from and after the date of a Termination Event.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders
of Preferred Securities are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Preferred Securities, the Agent
shall, as soon as practicable thereafter, mail to the Income PRIDES holders a
notice (a) containing such information as is contained in the notice or
solicitation, (b) stating that each Income PRIDES holder on the record date set
by the Agent therefor (which, to the extent possible, shall be the same date as
the record date for determining the holders of Preferred Securities entitled to
vote) shall be entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Preferred Securities constituting a part of such
holder's Income PRIDES and (c) stating the manner in which such instructions
may be given. Upon the written request of the Income PRIDES Holders on such
record date, the Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests,
the maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Preferred
Security evidenced by such Income PRIDES.
A-8
<PAGE> 91
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase
Contracts constituting a part of such Income PRIDES. Following the liquidation
of the Trust, the Holders and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Debentures as the
Holders and the Collateral Agent had in respect of the Pledged Preferred
Securities, and any reference in the Purchase Contract Agreement or Pledge
Agreement to the Preferred Securities shall be deemed to be a reference to the
Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged
Preferred Securities. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent for the benefit of the Company will apply an
amount equal to the Redemption Amount of such Redemption Price to purchase, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI, of the Pledge Agreement and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form
and only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Income PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract
A-9
<PAGE> 92
Agreement. No service charge shall be required for any such registration of
transfer or exchange, but the Company and the Agent may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. A holder who elects to substitute a Treasury Security
for Preferred Securities or the Treasury Portfolio, thereby creating Growth
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long
as the Purchase Contract underlying an Income PRIDES remains in effect, such
Income PRIDES shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Income PRIDES in respect of the Preferred
Security or the Applicable Ownership Interest, as the case may be, and Purchase
Contract constituting such Income PRIDES may be transferred and exchanged only
as an Income PRIDES. The holder of an Income PRIDES may substitute for the
Pledged Preferred Securities or the Treasury Portfolio securing its obligation
under the related Purchase Contract Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of the Pledged Preferred
Securities or principal amount of the Treasury Portfolio in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, the Security for which such Pledged
Treasury Securities secures the holder's obligation under the Purchase Contract
shall be referred to as a "Growth PRIDES." A Holder may make such Collateral
Substitution only in integral multiples of 20 Income PRIDES for 20 Growth
PRIDES; provided, however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, a Holder may
make such Collateral Substitutions only in integral multiples of 8,000 Income
PRIDES for 8,000 Growth PRIDES. Such Collateral Substitution may cause the
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, the aggregate principal amount outstanding under this Income
PRIDES Certificate shall not exceed $_____. All such adjustments to the
aggregate principal amount of this Income PRIDES Certificate shall be duly
recorded by placing an appropriate notation on the Schedule attached hereto.
A Holder of a Growth PRIDES may recreate Income PRIDES by delivering
to the Collateral Agent Preferred Securities or a Treasury Portfolio with a
Stated Amount or principal amount equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing
A-10
<PAGE> 93
such Purchase Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments, if any, will be
payable at the office of the Agent in The City of New York or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of ___%
per annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments, if any, accrued thereon, are referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date in lieu of a cash payment, a number of
shares of Common Stock, equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Income PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to
A-11
<PAGE> 94
purchase capital stock of the Company, (ii) as a result of a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan).
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities or the Treasury
Portfolio, as the case may be, from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, Holders may early settle Income PRIDES only in integral
multiples of 8,000 Income PRIDES. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Income PRIDES Certificate, the Holder of this Income PRIDES Certificate shall
deliver this Income PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to
A-12
<PAGE> 95
which the Holder has elected to effect Early Settlement, plus (ii) if such
delivery is made with respect to any Purchase Contracts during the period from
the close of business on any Record Date for any Payment Date to the opening of
business on such Payment Date, an amount equal to the sum of (x) the Contract
Adjustment Payments, if any, payable on such Payment Date with respect to such
Purchase Contracts plus from the period from, but not including the Early
Settlement Date, to the Payment Date (y) the distributions with respect to the
related Pledged Preferred Securities payable on such Payment Date from the
period from, but not including the Early Settlement Date, to the Payment Date.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Securities or Treasury Portfolio underlying
such Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of a Income
PRIDES as to which Early Settlement is effected equal to the Early Settlement
Rate; provided however, that upon the Early Settlement of the Purchase
Contracts, the Holder thereof will forfeit the right to receive any Deferred
Contract Adjustment Payments, if any, on such Purchase Contracts. The Early
Settlement Rate shall initially be equal to _____ shares of Common Stock and
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Income PRIDES Certificate. The Company covenants and agrees, and the Holder,
by its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on his behalf as
A-13
<PAGE> 96
its attorney-in-fact, and consents to the Pledge of the Preferred Securities or
the Treasury Portfolio, as the case may be, underlying this Income PRIDES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the Stated Amount of the Pledged Preferred Securities, or the
principal amount of the Treasury Portfolio, on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the
purpose of receiving payments of distributions payable quarterly on the
Preferred Securities, receiving payments of Contract Adjustment Payments, if
any, and any Deferred Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice
to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-14
<PAGE> 97
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
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
-----------------------------------------------------------
- --------------------------------------------------------------------------------
Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- --------------------------------------------------------------------------------
of Assignee the within Income PRIDES Certificates and all rights
- --------------------------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- --------------------------------------------------------------------------------
attorney to transfer said Income PRIDES Certificates on the books of Conseco,
Inc. with full power of substitution in the premises.
Dated:
----------------- ------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Income
PRIDES Certifi- cates in every
particular, without alteration
or enlargement or any change
whatsoever.
A-15
<PAGE> 98
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
Dated:
----------------- ------------------------------
Signature
[Signature guarantee
(if assigned to another person)]
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name and address of Registered Holder:
- -------------------------------- ------------------------------
Name Name
- -------------------------------- ------------------------------
Address Address
- -------------------------------- ------------------------------
- -------------------------------- ------------------------------
- -------------------------------- ------------------------------
A-16
<PAGE> 99
Social Security or other
Taxpayer Identification
Number, if any -----------------------------
A-17
<PAGE> 100
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income
PRIDES Certificate specified below. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Income PRIDES Certificate representing any
Income PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. Pledged
Preferred Securities or the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
----------------- ------------------------------
Signature
A-18
<PAGE> 101
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Income PRIDES Certificates
are to be registered in the name
of and delivered to and Pledged
Preferred Securities, or the
Treasury Portfolio, as the case
may be, are to be transferred to
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of Registered Holder:
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Address Address
Social Security or other
Taxpayer Identification
Number, if any ------------------------------
A-19
<PAGE> 102
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
- ------------------------------
- ------------------------------
- ------------------------------
A-20
<PAGE> 103
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OF DECREASED IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
<TABLE>
<CAPTION>
Principal Amount of
this Global
Amount of Amount of Certificate Signature of autho-
decrease in Principal increase in Principal following such de- rized officer of
Amount of the Global Amount of the Global crease or Trustee or
Date Certificate Certificate increase Securities Custodian
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-21
<PAGE> 104
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) 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 such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
No. ____
Number of Growth PRIDES _____ Cusip No. ________
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/20 undivided beneficial ownership interest, of a
Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under One
Purchase Contract with Conseco, Inc., an Indiana corporation (the "Company").
All capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on February
16, 2001 (the "Purchase Contract
<PAGE> 105
Settlement Date"), at a price equal to $50 (the "Stated Amount"), a number of
shares of Common stock, no par value per share ("Common Stock"), of the Company
equal to the Settlement Rate, unless on or prior to the Purchase Contract
Settlement Date there shall have occurred a Termination Event with respect to
the Growth PRIDES of which such Purchase Contract is a part, all as provided in
the Purchase Contract Agreement and more fully described on the reverse hereof.
The purchase price for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby will be paid by application of the Proceeds
from the Treasury Securities pledged to secure the obligations under such
Purchase Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to ____% per annum of the Stated Amount, computed on the basis of the actual
number of days elapsed in a year of 360 day year of twelve 30 day months, as
the case may be, subject to deferral at the option of the Company as provided
in the Purchase Contract Agreement and more fully described on the reverse
hereof; provided, that, the Company shall not make Contract Adjustment Payments
if Contract Adjustment Payments do not constitute a portion of the Income
PRIDES or Growth PRIDES. Such Contract Adjustment Payments, if any, shall be
payable to the Person in whose name this Growth PRIDES Certificate (or a
Predecessor Growth PRIDES Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
<PAGE> 106
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
CONSECO, INC.
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely as
Attorney-in-Fact of such Holder
By:
--------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO, as Purchase Contract Agent
By:
--------------------------------
Authorized Officer
<PAGE> 107
(Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of December __, 1997 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (including its
successors thereunder, herein called the "Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $____ (the "Threshold Appreciation Price"),
____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $____,
the number of shares of Common Stock per Purchase Contract equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Amount is less than or equal to $____, _____ shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day"
B-4
<PAGE> 108
means a day on which the Common Stock (A) is not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase
Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and the obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Growth PRIDES Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES. A Growth PRIDES shall thereafter represent the right to receive any
accrued Contract Adjustment Payments on the Purchase Contract forming a part of
such Growth PRIDES in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Contract Adjustment Payments, if any,
shall cease to accrue in respect of any period from and after the date of a
Termination Event.
The Growth PRIDES Certificates are issuable only in registered form
and only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Growth PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Preferred Securities or the Treasury Portfolio, as the case may be,
for a Treasury Security, thereby recreating Income PRIDES, shall be responsible
for any fees or expenses associated therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying a
Growth PRIDES remains in effect, such Growth PRIDES shall not be separable into
its constituent
B-5
<PAGE> 109
parts, and the rights and obligations of the Holder of such Growth PRIDES in
respect of the Treasury Security and the Purchase Contract constituting such
Growth PRIDES may be transferred and exchanged only as a Growth PRIDES. The
Holder of a Growth PRIDES may substitute for the Pledged Treasury Securities
securing its obligations under the related Purchase Contract Preferred
Securities or the Treasury Portfolio, as the case may be, with an aggregate
Stated Amount or principal amount, as the case may be, equal to the aggregate
principal amount of the Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Holder's Security shall be referred to as an
"Income PRIDES." Such substitution may cause the aggregate principal amount of
this Certificate to be increased or decreased; provided, however, the aggregate
principal amount outstanding under this Growth PRIDES Certificate shall not
exceed $______. All such adjustments to the aggregate principal amount of this
Growth PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of an Income PRIDES may recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount or principal amount, as
the case may be, of the Pledged Preferred Securities or the Treasury Portfolio,
as the case may be, in exchange for the release of such Pledged Preferred
Securities or the Treasury Portfolio, as the case may be, in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. Any
such recreation of a Growth PRIDES may be effected only in multiples of 20
Income PRIDES for 20 Growth PRIDES; provided, however, if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, a Holder may make such Collateral Substitution in integral
multiples of 8,000 Income PRIDES for 8,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Growth PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of ____%
per annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments
B-6
<PAGE> 110
of Contract Adjustment Payments together with the additional Contract
Adjustment Payments accrued thereon, are referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Purchase Contract Agreement. No Contract
Adjustment Payments may be deferred to a date that is after the Purchase
Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Growth PRIDES Certificate will receive on
the Purchase Contract Settlement Date in lieu of a cash payment, a number of
Shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Growth PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of the Company's capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder rights
plan).
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Growth PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
B-7
<PAGE> 111
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Growth PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall
deliver this Growth PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement, plus (ii)
if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date for any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments, if any, payable, if any, on such Payment Date with respect
to such Purchase Contracts from the period from, but not including the Early
Settlement Date, to the Payment Date. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive, a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Growth PRIDES as to which Early Settlement is effected equal to _____
shares of Common Stock per Purchase Contract (the "Early Settlement Rate");
provided however, that upon the Early Settlement of the Purchase Contracts, the
Holder thereof will forfeit the right to receive any Deferred Contract
Adjustment Payments on such Purchase Contracts. The Early Settlement Rate
shall initially be equal to _______ shares of Common Stock per Growth PRIDES
and shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Growth PRIDES Certificate. The Company covenants and agrees, and the Holder,
by his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy
B-8
<PAGE> 112
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform its obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement.
The Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities, receiving
payments of Contract Adjustment Payments, if any, and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-9
<PAGE> 113
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
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
-----------------------------------------------------------
- --------------------------------------------------------------------------------
Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- --------------------------------------------------------------------------------
of Assignee the within Growth PRIDES Certificates and all rights
- --------------------------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- --------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of Conseco,
Inc. with full power of substitution in the premises.
Dated:
-------------------- ------------------------------
Signature
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Growth PRIDES Certificates in
every particular, without
alteration or enlargement or
any change whatsoever.
B-10
<PAGE> 114
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
Dated:
-------------------- ------------------------------
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of Registered Holder:
- ----------------------------- ------------------------------
Name Name
- ----------------------------- ------------------------------
Address Address
- ----------------------------- ------------------------------
- ----------------------------- ------------------------------
Social Security or other
Taxpayer Identification
Number, if any ------------------------------
B-11
<PAGE> 115
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth
PRIDES Certificate specified below. The option to effect Early Settlement may
be exercised only with respect to Purchase Contracts underlying Growth PRIDES
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and deliv- ered, together with a check in payment for any fractional share
and any Growth PRIDES Certificate representing any Growth PRIDES evidenced
hereby as to which Early Settlement of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Treasury Securities
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:
-------------------- ------------------------------
Signature
B-12
<PAGE> 116
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Growth PRIDES Certifi-
cates are to be registered
in the name of and delivered
to and Pledged Treasury
Securities are to be
transferred to a Person
other than the Holder, please
print such Person's name and address:
Please print name and address of Registered Holder:
- ----------------------------- ------------------------------
Name Name
- ----------------------------- ------------------------------
Address Address
- ----------------------------- ------------------------------
- ----------------------------- ------------------------------
Social Security or other
Taxpayer Identification
Number, if any
- ------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
B-13
<PAGE> 117
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
<TABLE>
<CAPTION>
Principal Amount of
this Global
Amount of Amount of Certificate Signature of autho-
decrease in Principal increase in Principal following such rized officer of
Amount of the Global Amount of the Global decrease or Trustee or
Date Certificate Certificate increase Securities Custodian
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-14
<PAGE> 118
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
[CHASE ]
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of Conseco, Inc. (the "Company"), and
Conseco Financing Trust IV
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of December __, 1997, among the Company, yourselves,
as Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in- fact for the holders of [Income PRIDES] [Growth PRIDES] from time
to time, that the holder of securities listed below (the "Holder") has elected
to substitute [$_____ aggregate [principal amount] of Treasury Securities]
[$_______ Stated Amount of Preferred Securities or principal amount of the
Treasury Portfolio, as the case may be,] in exchange for the [Pledged Preferred
Securities or the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the Treasury Portfolio, as the case may
be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of such
[Pledged Treasury Securities] [Pledged Preferred Securities or the Treasury
Portfolio, as the case may be], and upon the payment by such Holder of any
applicable fees, to release the [Preferred Securities or the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Date:
-------------------- --------------
By:
-------------------------------
Name:
Title:
<PAGE> 119
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the Treasury Portfolio, as the
case may be,] for the [Pledged Preferred Securities or the Treasury Portfolio,
as the case may be,] [Pledged Treasury Securities]:
- ----------------------------- ------------------------------
Name Name
- ----------------------------- ------------------------------
Address Address
- ----------------------------- ------------------------------
- ----------------------------- ------------------------------
C-2
<PAGE> 120
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
[ ]
Attention:
Re: FELINE PRIDES of Conseco, Inc. (the "Company"), and
Conseco Financing Trust IV
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities or the Treasury
Portfolio, as the case may be,] in exchange for the [Pledged Preferred
Securities or the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated December __, 1997, between you, the Company and the
Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Preferred Securities or the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES].
Dated:
-------------------- --------------------------------------
Signature
Please print name and address of Registered Holder:
- ----------------------------- ------------------------------
Name Name
- ----------------------------- ------------------------------
Address Address
- ----------------------------- ------------------------------
- ----------------------------- ------------------------------
<PAGE> 121
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 6363
Chicago, IL. 60670
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Conseco, Inc. (the "Company"), and
Conseco Financing Trust IV
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
December , 1997 among the Company, yourselves, as Purchase Contract Agent
and as Attorney-in-Fact for the Holders of the Purchase Contracts, that such
Holder has elected to pay to the Collateral Agent, on or prior to 11:00 a.m.
New York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date, (in lawful money of the United States by [certified
or cashiers check or] wire transfer, in each case in immediately available
funds), $_________ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase Contract on
the Purchase Contract Settlement Date. The undersigned Holder hereby instructs
you to notify promptly the Collateral Agent of the undersigned Holders election
to make such cash settlement with respect to the Purchase Contracts related to
such Holder's [Income PRIDES] [Growth PRIDES].
Dated:
-------------------- --------------------------------------
Signature
Please print name and address of Registered Holder:
- ----------------------------- ------------------------------
Name Social Security or other
Taxpayer Identification
Number, any
- -----------------------------
Address
- -----------------------------
<PAGE> 1
EXHIBIT 4.21
CONSECO, INC.,
THE FIRST NATIONAL BANK OF CHICAGO
AND
THE CHASE MANHATTAN BANK
FORM OF PLEDGE AGREEMENT
Dated as of December __, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection . . . . . . . . . . . . . . . . . 7
Section 2.1. The Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Control and Perfection . . . . . . . . . . . . . . . . . . . . 9
Section 3. Distributions on Pledged Collateral . . . . . . . . . . . . . . . 10
Section 4. Substitution, Release, Repledge and Settlement of Preferred
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.1. Substitution of Preferred Securities and the Establishment of
Growth PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.2. Pledge of Preferred Securities and Re-establishment of Income
PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.3. Termination Event . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.4. Cash Settlement . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.5. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.6. Application of Proceeds Settlement. . . . . . . . . . . . . . 16
Section 5. Voting Rights -- Preferred Securities . . . . . . . . . . . . . . 18
Section 6. Rights and Remedies; Distribution of the Debentures; Tax Event
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.1. Rights and Remedies of the Collateral Agent . . . . . . . . . . 19
Section 6.2. Distribution of the Debentures; Tax Event Redemption . . . . . 20
Section 6.3. Substitutions. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7. Representation and Warranties; Covenants . . . . . . . . . . . . 22
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 7.1. Representations and Warranties . . . . . . . . . . . . . . . . 22
Section 7.2. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8. The Collateral Agent . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.1. Appointment, Powers and Immunities . . . . . . . . . . . . . . 23
Section 8.2. Instructions of the Company . . . . . . . . . . . . . . . . . . 25
Section 8.3. Reliance by Collateral Agent . . . . . . . . . . . . . . . . . 25
Section 8.4. Rights in Other Capacities . . . . . . . . . . . . . . . . . . 25
Section 8.5. Non-Reliance on Collateral Agent . . . . . . . . . . . . . . . 26
Section 8.6. Compensation and Indemnity . . . . . . . . . . . . . . . . . . 26
Section 8.7. Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.8. Resignation of Collateral Agent . . . . . . . . . . . . . . . . 27
Section 8.9. Right to Appoint Agent or Advisor . . . . . . . . . . . . . . . 28
Section 8.10. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.11. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.1. Amendment Without Consent of Holders . . . . . . . . . . . . . 29
Section 9.2. Amendment with Consent of Holders . . . . . . . . . . . . . . . 30
Section 9.3. Execution of Amendments . . . . . . . . . . . . . . . . . . . . 30
Section 9.4. Effect of Amendments . . . . . . . . . . . . . . . . . . . . . 31
Section 9.5. Reference to Amendments . . . . . . . . . . . . . . . . . . . . 31
Section 10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.1. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 32
Section 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.7. Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.8. Security Interest Absolute . . . . . . . . . . . . . . . . . . 33
</TABLE>
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
iii
<PAGE> 5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December __, 1997 (this "Agreement"),
among Conseco, Inc., an Indiana corporation (the "Company"), The Chase
Manhattan Bank, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent") and in its capacity as a "securities interme-
diary" as defined in Section 8-102(a)(14) of the Code (as defined herein) (in
such capacity, together with its successors in such capacity, the "Securities
Intermediary"), and The First National Bank of Chicago, not individually but
solely as purchase contract agent and as attorney-in-fact of the Holders (as
defined in the Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its successors in
such capacity, the "Purchase Contract Agent") under the Purchase Contract
Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant
to which there may be issued up to 11,500,000 FELINE PRIDES (the "Securities").
Each Security, at issuance, consists of a unit (the "Income PRIDES")
comprised of (a) one stock purchase contract (the "Purchase Contract") under
which (i) the Holder will purchase from the Company on February 16, 2001, for
an amount equal to the Stated Amount, a number of shares of Common Stock equal
to the Settlement Rate, and (ii) the Company will pay the Holder Contract
Adjustment Payments, if any, and (b) either beneficial ownership of a ____%
Trust Originated Preferred Security (a "Preferred Security") issued by Conseco
Financing Trust IV (the "Trust"), having a liquidation amount equal to $50 (the
"Stated Amount") and maturing on February 16, 2003 or upon the occurrence of a
Tax Event Redemption, the Applicable Ownership Interest.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably autho-
<PAGE> 6
rized the Purchase Contract Agent, as attorney-in-fact of such Holders, among
other things, to execute and deliver this Agreement on behalf of such Holders
and to grant the pledge provided hereby of the Preferred Securities and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge the Preferred Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Common Stock,
(vii) Contract Adjustment Payments, (viii) Debentures, (ix) Early
Settlement, (x) Early Settlement Amount, (xi) Early Settlement Date,
(xii) Failed Remarketing, (xiii) Holders, (xiv) Opinion of Counsel, (xv)
Outstanding Securities, (xvi) Purchase Contract, (xvii) Purchase
Contract Settlement Date, (xviii) Purchase Price, (xix) Remarketing
Agent, (xx) Remarketing Agreement, (xxi) Remarketing Underwriting
Agreement, (xxii) Settlement Rate, (xxiii) Termination Event, and (xxiv)
Underwriting Agreement; and
2
<PAGE> 7
(d) the following terms have the meanings assigned to them in the
Declaration: (i) Applicable Ownership Interest (ii) Applicable
Principal Amount, (iii) Institutional Trustee, (iv) Investment Company
Event,(v) Primary Treasury Dealer, (vi) Quotation Agent, (vii)
Redemption Amount, (viii) Redemption Price, (ix) Tax Event, (x) Tax
Event Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, (xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State
of New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number _____) maintained
at The Chase Manhattan Bank in the name "The First National Bank of Chicago, as
Purchase Contract Agent on behalf of the holders of certain securities of
Conseco Financing Trust IV, Collateral Account subject to the security interest
of The Chase Manhattan Bank, as Collateral Agent, for the benefit of Conseco,
Inc., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
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"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Debenture Trustee" means the First National Bank of Chicago, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of December __, 1997, among the Company as sponsor, the
trustees named therein and the holders from time to time of undivided
beneficial interests in the assets of the Trust.
"Growth PRIDES" means a Purchase Contract with respect to which Treasury
Securities have been substituted for Preferred Securities or the Treasury
Portfolio, as the case may be, as collateral to secure the Holder's obligations
under such Purchase Contract.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, means The Depository Trust Company (or its
nominee) as the registered holder of an Income PRIDES or a Growth PRIDES, as
the case may be.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with an original maturity of
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<PAGE> 9
365 days or less of any Person that is fully and unconditionally guaranteed by
a bank referred to in clause (ii); (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States
Government; (v) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has
a rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services or at least equal to "P-1" by Moody's Investors Service, Inc.;
and (vi) investments in money market funds registered under the Investment
Company Act of 1940, as amended, rated in the highest applicable rating
category by S&P or Moody's.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, collection or disposition of the Collateral or any proceeds
thereof.
"Purchase Contract" has the meaning specified in the Recitals.
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"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this instrument.
"Security Entitlement" has the meaning set forth in Section 8-102(a)(17)
of the Code.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which cannot
be delivered by book-entry or which the parties agree are to be
delivered in physical form, delivery in appropriate physical form
to the recipient accompanied by any duly executed instruments of
transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the
recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as
defined
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in Section 8-102(a)(14) of the Code) to (i) credit a "securities
entitlement" (as defined in Section 8-102(a)(17) of the Code)
with respect to such securities to a "securities account" (as
defined in Section 8-501(a) of the Code) maintained by or on
behalf of the recipient; (ii) to issue a confirmation to the
recipient with respect to such credit and (iii) to make
appropriate notations in its books to reflect the security
interest of the recipient in such securities.
"Treasury Security" means a zero-coupon U.S. Treasury Security (Cusip
Number 91280 A20) which are the principal strips of the 7 3/4% U.S. Treasury
Securities which mature on February 15, 2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in (i) all of the
right, title and interest of such Holders (a) in the Preferred Securities
constituting a part of the securities and all Proceeds thereof and any Treasury
Securities delivered in exchange for such Preferred Securities in accordance
with Section 4 hereof, in each case that have been Transferred to or received
by the Collateral Agent and not released by the Collateral Agent to such
Holders under the provisions of this Agreement (the "Collateral"); (b) in
payments made by Holders pursuant to Section 4.4; (c) in the Collateral Account
and all securities, financial assets and other property credited thereto and
all security entitlements related thereto; (d) in any Debentures delivered to
the Collateral Agent upon the occurrence of
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an Investment Company Event or a liquidation of the Trust as provided in
Section 6.2(e); in any Treasury Portfolio, purchased on behalf of a Holder of
Income PRIDES by the Collateral Agent upon the occurrence of a Tax Event
Redemption as provided in Section 6.2 and (f) all proceeds of the foregoing.
Prior to or concurrently with the execution and delivery of this Agreement, the
Purchase Contract Agent, on behalf of the initial Holders of the Income PRIDES,
shall cause the Preferred Securities comprising a part of the Income PRIDES to
be delivered to the Collateral Agent for the benefit of the Company by
physically delivering such securities to the Collateral Agent endorsed in blank
and the Collateral Agent delivering such scurries to the Securities
Intermediary and causing the Securities Intermediary to credit the Collateral
Account with such securities and send the Collateral Agent a confirmation of
the deposit of such securities. In the event a Holder of Income PRIDES so
elects, such Holder may Transfer Treasury Securities to the Collateral Agent
for the benefit of the Company in exchange for the release by the Collateral
Agent on behalf of the Company of Preferred Securities or Treasury Portfolio,
as the case may be, with an aggregate principal amount equal to the aggregate
principal amount of Treasury Securities so Transferred, to the Purchase
Contract Agent on behalf of such Holder. Treasury Securities and Treasury
Portfolio, as applicable, shall be Transferred to the Collateral Account
maintained by the Collateral Agent at the Securities Intermediary by book-entry
transfer to the Collateral Account in accordance with the TRADES Regulations
and other applicable law and by the notation by the Securities Intermediary on
its books that a Security Entitlement with respect to such Treasury Securities
or Treasury Portfolio, has been credited to the Collateral Account. For
purposes of perfecting the Pledge under applicable law, including, to the
extent applicable, the TRADES Regulations of the Uniform Commercial Code as
adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the Agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Preferred
Securities (including Debentures that are pledged pursuant to Section 6.2
hereof) or Treasury Securities subject to the Pledge, excluding any Preferred
Securities (including Debentures that are pledged pursuant to Section 6.2
hereof) or Treasury Securities released from the Pledge as provided in Sec-
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tion 4 hereof, are hereinafter referred to as "Pledged Preferred Securities" or
the "Pledged Treasury Securities," respectively. Subject to the Pledge and the
provisions of Section 2.2 hereof, the Holders from time to time shall have full
beneficial ownership of the Collateral. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Preferred Securities or any other securities held
in physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release
securities as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Preferred Security prior to the termination of this Agreement. If it becomes
necessary for the Collateral Agent and the Securities Intermediary to
relinquish physical possession of a certificate in order to release a portion
of the Preferred Securities evidenced thereby from the Pledge, each of the
Collateral Agent shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Preferred Securities remaining subject
to the Pledge hereunder registered to it or endorsed in blank within fifteen
days of the date it relinquished possession. The Collateral Agent shall
promptly notify the Company of its failure to obtain possession of any such
replacement certificate as required hereby.
Section 2.2. Control and Perfection. In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase
Contract Agent or any of the Holders), and the Securities Intermediary agrees,
to comply with and follow any instructions and entitlement orders (as defined
in Section 8-102(a)(8) of the Code) that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral Account, the
Collateral credited thereto and any security entitlements with respect to any
thereof. Such
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instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver
or otherwise dispose of the Preferred Securities, the Treasury Securities and
any security entitlements with respect thereto and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company. The Holders
from time to time acting through the Purchase Contract Agent hereby further
authorize and direct the Collateral Agent, as Agent of the Company, to itself
issue instructions and entitlement orders, and to otherwise take action, with
respect to the Collateral Account, the Collateral credited thereto and any
security entitlements with respect to any thereof, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the further consent
of the Purchase Contract Agent or any of the Holders. The Collateral Agent
shall be the Agent of the Company and shall act as directed in writing by the
Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the
Purchase Contract Agent is the registered owner of the Pledged Preferred
Securities it shall receive all payments thereon. If the Pledged Preferred
Securities are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount of or, if applicable,
principal amount of, or cash distributions on, any Pledged Preferred Securities
or the Treasury Portfolio, as the case may be, and all payments of the
principal of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable hereunder shall be
paid by the Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with respect to
Pledged Preferred Securities or the Treasury Portfolio, as the case may
be, and (B) any payments of the Stated Amount or, if applicable,
principal amount with respect to any Preferred Securities that have been
released from the Pledge pursuant to Section 4.3 hereof, to the Purchase
Contract Agent, for the benefit of the relevant Holders of Securities,
to the account designated by
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the Purchase Contract Agent for such purpose, no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of or, if
applicable, principal amount of any Pledged Preferred Securities or the
Treasury Portfolio, as the case may be, or the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement
Date in accordance with the procedure set forth in Section 4.6(a) or
4.6(b) hereof, in full satisfaction of the respective obligations of the
Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall
be applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, principal amount on account of any Preferred Security that, at the
time of such payment, is a Pledged Preferred Security, (or the Treasury
Portfolio, as the case may be), or a Holder of a Growth PRIDES shall receive
any payments of principal on account of any Treasury Securities that, at the
time of such payment, are Pledged Treasury Securities, the Pur-
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chase Contract Agent or such Holder shall hold the same as trustee of an
express trust for the benefit of the Company (and promptly deliver the same
over to the Company) for application to the obligations of the Holders under
the related Purchase Contracts, and the Holders shall acquire no right, title
or interest in any such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement of Preferred
Securities.
Section 4.1. Substitution of Preferred Securities and the Establishment
of Growth PRIDES. At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax Event
Redemption has occurred), a Holder of Income PRIDES shall have the right to
substitute Treasury Securities for the Pledged Preferred Securities securing
such Holder's obligations under the Purchase Contract(s) comprising a part of
its Income PRIDES in integral multiples of 20 Income PRIDES by (a) Transferring
to the Collateral Agent Treasury Securities having a Value equal to the Stated
Amount of the Pledged Preferred Securities to be released and (b) delivering
the related Income PRIDES to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the Purchase Contract
Agent stating that such Holder has Transferred Treasury Securities to the
Collateral Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting that the
Purchase Contract Agent instruct the Collateral Agent to release from the
Pledge the Pledged Preferred Securities related to such Income PRIDES. The
Purchase Contract Agent shall instruct the Collateral Agent in the form
provided in Exhibit A; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income
PRIDES, Holders of Income PRIDES may make such substitution only in integral
multiples of 8,000 Income PRIDES at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date. Upon receipt
of Treasury Securities from a Holder of Income PRIDES and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Preferred Securities or the Treasury Portfolio, as the case may be,
and shall promptly Transfer such Preferred Securities or the Treasury
Portfolio, as the case
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may be, free and clear of any lien, pledge or security interest created hereby,
to the Purchase Contract Agent.
Section 4.2. Pledge of Preferred Securities and Re-establishment of
Income PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts and Preferred
Securities in integral multiples of 20 Income PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to the Stated Amount
of the Pledged Treasury Securities to be released and (b) delivering the
related Growth PRIDES to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Preferred Securities to the Collateral
Agent pursuant to clause (a) above and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Growth PRIDES. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in Exhibit A;
provided, however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Growth PRIDES
may make such substitution only in integral multiples of 8,000 Growth PRIDES,
at any time on or prior to the Business Day immediately preceding the Purchase
Contract Settlement Date. Upon receipt of the Preferred Securities or the
Treasury Portfolio, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the
Treasury Securities and shall promptly Transfer such Treasury Securities, free
and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there
has occurred a Termination Event, the Collateral Agent shall release all
Collateral from the Pledge and shall promptly Transfer any Pledged Preferred
Securities and Pledged Treasury Securities to the Purchase Contract Agent for
the benefit of the Holders of the Income PRIDES and the Growth
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PRIDES, respectively, free and clear of any lien, pledge or security interest
or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities or of the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3, the Purchase Contract Agent shall (i) use its
best efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a result
of the Company's being the debtor in such a bankruptcy case, the Collateral
Agent will not be prohibited from releasing or Transferring the Collateral as
provided in this Section 4.3, and shall deliver such opinion to the Collateral
Agent within ten days after the occurrence of such Termination Event, and if
(y) the Purchase Contract Agent shall be unable to obtain such opinion within
ten days after the occurrence of such Termination Event or (z) the Collateral
Agent shall continue, after delivery of such opinion, to refuse to effectuate
the release and Transfer of all Pledged Preferred Securities or of the Pledged
Treasury Securities, as the case may be, as provided in this Section 4.3, then
the Purchase Contract Agent shall within fifteen days after the occurrence of
such Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Preferred Securities or of the Pledged Treasury Securities, as the case
may be, as provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within ten days
after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the Collateral
Agent of (i) a notice from the Purchase Contract Agent promptly after the
receipt by the Purchase Contract Agent of such notice that a Holder of an
Income PRIDES or Growth PRIDES has elected, in accordance with the procedures
specified in Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement,
respectively, to settle its Purchase Contract with cash and (ii) payment by
such Holder on or prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the
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Purchase Contract Settlement Date in lawful money of the United States by
[certified or cashiers' check or] wire transfer in immediately available funds
payable to or upon the order of the Company, then the Collateral Agent shall,
upon the written direction of the Purchase Contract Agent, promptly invest any
Cash received from a Holder in connection with a Cash Settlement in Permitted
Investments.
(b) If a Holder of an Income PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph 5.4(a)(i) of
the Purchase Contract Agreement, such failure shall constitute an event of
default under the Purchase Contract Agreement and hereunder, and the Holder
shall be deemed to have consented to the disposition of the pledged Preferred
Securities pursuant to the remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement which is incorporated herein by reference. If a
Holder of an Income PRIDES does notify the Agent as provided in paragraph
5.4(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.4(a)(ii) of the Purchase Contract Agreement, the Preferred Securities of such
a Holder will not be remarketed but instead the Collateral Agent for the
benefit of the Company will exercise its rights as a secured party with respect
to such Preferred Securities at the direction of the Company. In addition, in
the event of a Failed Remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement, such failed Remarketing shall constitute an event
of default hereunder by such Holder and the Collateral Agent for the benefit of
the Company will also exercise its rights as a secured party with respect to
such Preferred Securities.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with paragraph 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of an Income PRIDES does notify the Agent as provided in paragraph
(d)(i) of the Purchase Contract Agreement of its intention to pay the Purchase
Price in cash, but fails to make such payment as required by paragraph
5.4(d)(ii) of the Purchase Contract Agreement, then upon the maturity of any
Pledged Treasury Securities or the Treasury Portfolio, if any, held by the
Collateral Agent
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on the Business Day immediately preceding the Purchase Contract Settlement
Date, the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Purchase Contract Agent, be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price will
be remitted to the Company as payment thereof. In the event the sum of the
proceeds from the related Pledged Treasury Securities or the Treasury
Portfolio, as the case may be, and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the Purchase Con-
tracts being settled thereby, the Collateral Agent will distribute such excess
to the Purchase Contract Agent for the benefit of the Holder of the related
Growth PRIDES or Income PRIDES when received.
Section 4.5. Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities
have elected to effect Early Settlement of their respective obligations under
the Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities or the Applicable
Ownership Interest in the case of a Holder of Income PRIDES or (b) Pledged
Treasury Securities in the case of a Holder of Growth PRIDES, as the case may
be, with a principal amount equal to the product of (i) the Stated Amount times
(ii) the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement and shall Transfer all such Pledged
Preferred Securities or the Applicable Ownership Interest or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of the Holders.
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Section 4.6. Application of Proceeds Settlement. (a) In the event a
Holder of Income PRIDES has not elected to make an effective Cash Settlement by
notifying the Purchase Contract Agent in the manner provided for in paragraph
5.4(a)(i) in the Purchase Contract Agreement or has not made an Early
Settlement of the Purchase Contract(s) underlying its Income PRIDES, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of the related
Pledged Preferred Securities. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, without any instruction from such Holder of Income
PRIDES, present the related Preferred Securities to the Remarketing Agent for
remarketing. Upon receiving such Preferred Securities, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement and the Remarketing
Underwriting Agreement, will use its reasonable efforts to remarket such
Preferred Securities on such date at a price not less than approximately 100.5%
of the aggregate Stated Amount of such Preferred Securities, plus accrued and
unpaid distributions (including deferred distributions), if any, thereon.
After deducting as the Remarketing Fee an amount not exceeding 25 basis points
(.25%) from any amount of such Proceeds in excess of the aggregate Stated
Amount, plus such accrued and unpaid distributions (including deferred
distributions) of the remarketed Preferred Securities, the Remarketing Agent
will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral
Agent shall apply that portion of the Proceeds from such remarketing equal to
the aggregate Stated Amount, plus such accrued and unpaid distributions
(including deferred distributions) of such Preferred Securities to satisfy in
full the obligations of such Holders of Income PRIDES to pay the Purchase Price
to purchase the Common Stock under the related Purchase Contracts. The
remaining portion of such Proceeds, if any, shall be distributed by the
Collateral Agent to the Purchase Contract Agent for payment to the Holders.
If, the Remarketing Agent advises the Collateral Agent in writing that it
cannot remarket the related Preferred Securities of such Holders of Income
PRIDES at a price not less than 100% of the aggregate Stated Amount of such
Preferred Securities plus any accrued and unpaid distributions (including
deferred distributions), thus
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resulting in a Failed Remarketing and an event of default under the Purchase
Contract Agreement and hereunder, the Collateral Agent, for the benefit of the
Company will dispose of the Preferred Securities in accordance with applicable
law and satisfy in full, from such disposition, such Holder's obligation to pay
the Purchase Price for the Common Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s) underlying its Growth PRIDES or Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral
Agent shall, at the written direction of the Purchase Contract Agent, invest
the Cash proceeds of the maturing Pledged Treasury Securities or the Treasury
Portfolio, as the case may be, in overnight Permitted Investments. Without
receiving any instruction from any such Holder of Growth PRIDES or Income
PRIDES, the Collateral Agent shall apply the Proceeds of the related Pledged
Treasury Securities or Treasury Portfolio to the settlement of such Purchase
Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the
investment in overnight Permitted Investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall distribute such excess, when received, to the Purchase Contract
Agent for the benefit of the Holder.
Section 5. Voting Rights -- Preferred Securities. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Preferred Securities or any
part thereof for any purpose not inconsistent with the terms of this Agreement
and in accordance with the terms of the Purchase Contract Agreement; provided,
that the Purchase Contract Agent shall not exercise or, as the case may be,
shall not refrain from exercising such right
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if, in the judgment of the Company, such action would impair or otherwise have
a material adverse effect on the value of all or any of the Pledged Preferred
Securities; and provided, further, that the Purchase Contract Agent shall give
the Company and the Collateral Agent at least five days' prior written notice
of the manner in which it intends to exercise, or its reasons for refraining
from exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Preferred Securities, including notice
of any meeting at which holders of Preferred Securities are entitled to vote or
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Collateral Agent shall use reasonable efforts to send promptly
to the Purchase Contract Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Preferred
Securities (in form and substance satisfactory to the Collateral Agent) as are
prepared by the Purchase Contract Agent with respect to the Pledged Preferred
Securities.
Section 6. Rights and Remedies; Distribution of the Debentures; Tax
Event Redemption
Section 6.1. Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or
otherwise available at law or in equity, after an event of default hereunder
the Collateral Agent shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code as in
effect in the State of New York (the "Code") (whether or not the Code is in
effect in the jurisdiction where the rights and remedies are asserted) and the
TRADES Regulations and such additional rights and remedies to which a secured
party is entitled under the laws in effect in any jurisdiction where any rights
and remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable
law, (i) retention of the Preferred Securities or other Collateral in full
satisfaction of the Holders obligations under the Purchase Contracts or (ii)
sale of the Preferred Securities or other Collateral in one or more public or
private sales.
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(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities and such obligations of such Holder, any and all of the
rights and remedies available to a secured party under the Code and the TRADES
Regulations after default by a debtor, and as otherwise granted herein or under
any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
if applicable, the principal amount of, or cash distributions on, the Pledged
Preferred Securities, or (ii) the principal of the Pledged Treasury Securities,
subject, in each case, to the provisions of Section 3, and as otherwise granted
herein.
(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the Holder of a Growth PRIDES, agrees that, from time
to time, upon the written request of the Collateral Agent, the Purchase
Contract Agent or such Holder shall execute and deliver such further documents
and do such other acts and things as the Collateral Agent may reasonably
request in order to maintain the Pledge, and the perfection and priority
thereof, and to confirm the rights of the Collateral Agent hereunder. The
Purchase Contract Agent shall have no liability to any Holder for executing any
documents or taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent failure to
act or its own willful misconduct.
Section 6.2. Distribution of the Debentures; Tax Event Redemption.
Upon the occurrence of an Investment Company Event or a liquidation of the
Trust, a principal amount of the Debentures constituting the assets of the
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<PAGE> 25
Trust and underlying the Preferred Securities equal to the aggregated Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for the Pledged Preferred Securities. In the event the
Collateral Agent receives such Debentures in respect of Pledged Preferred
Securities upon the occurrence of an Investment Company Event or liquidation of
the Trust, the Collateral Agent shall Transfer the Debentures to the Collateral
Account in the manner specified herein for Pledged Preferred Securities to
secure the obligations of the Holders of Income PRIDES to purchase the
Company's Common Stock under the related Purchase Contracts. Thereafter, the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Debentures as it had in respect of the Pledged Preferred
Securities as provided in Articles II, III, IV, V and VI hereof.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Institutional Trustee or upon
a dissolution of the Trust and the distribution of the related Debentures, the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Preferred Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Redemption
Amount of such Redemption Price to purchase from the Quotation Agent for the
benefit of the Company, the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of Income PRIDES. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account in the manner specified herein for Pledged
Preferred Securities to secure the obligation of each Holder of an Income
PRIDES to purchase Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES, in substitution for the Preferred
Securities. Thereafter the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as it
had in
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respect of the Preferred Security or Debentures, as the case may be, as
provided in Articles II, III, IV, V, and VI, and any reference herein to the
Preferred Securities or the Debentures shall be deemed to be reference to such
Treasury Portfolio.
Section 6.3. Substitutions. Whenever a holder has the right to
substitute Treasury Securities, Preferred Securities or Treasury Portfolio, as
the case may be, for Collateral held by the Collateral Agent, such substitution
shall not constitute a novation of the security interest created hereby.
Section 7. Representation and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form,
is the sole holder of such Collateral and is the sole
beneficial owner of, or has the right to Transfer, the
Collateral it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the
security interest and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first
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priority security interest therein (assuming that any cen-
tral clearing operation or any Intermediary or other
entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of
it hereunder and under applicable law for perfection of
that interest and assuming the establishment and exercise
of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the
creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or
violate any provision of any existing law or regulation
applicable to it or of any mortgage, charge, pledge,
indenture, contract or undertaking to which it is a party
or which is binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long
as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any
mortgage, charge, lien, pledge or any other security
interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will
sell or otherwise dispose (or attempt to dispose) of the
Collateral or any part of it except for the beneficial
interest therein, subject to
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the pledge hereunder, transferred in connection with the
Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder; (c) shall not be re-
quired to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and (e) shall
not be required to advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, any securities or other
property deposited hereunder. Subject to the foregoing, during the term of
this Agreement, the Collateral Agent shall take all
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reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, the Collateral Agent and Securities Intermediary
in its individual capacity hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the Securities
Intermediary and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent
and the Securities Intermediary. As to any matters not expressly provided for
by this Agreement, the Collateral Agent and the Securities Intermediary shall
in all cases be fully protected in acting, or in refraining from
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acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Securities (and any
of their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, and the Collateral Agent and its affiliates may accept fees
and other consideration from the Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any
Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent shall not have any duty or
responsibility to provide the Company with any credit or other information
concerning the affairs, financial condition or business of the Purchase
Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent or the
Securities Intermediary or any of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to
pay the Collateral Agent from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent and the
Securities Intermediary for, and
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to hold each of them harmless from and against, any loss, liability or
reasonable out-of-pocket expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the reasonable out-of-pocket costs and expenses (including reasonable
fees and expenses of counsel) of defending itself against any claim or
liability in connection with the exercise or performance of such powers and
duties.
Section 8.7. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, after
prompt notice to the Company and the Purchase Contract Agent, at its sole
option, to refuse to comply with any and all claims, demands or instructions
with respect to such property or funds so long as such dispute or conflict
shall continue, and the Collateral Agent shall not be or become liable in any
way to any of the parties hereto for its failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims
or demands shall have been finally determined by a court of competent
jurisdiction or settled by agreement between the conflicting parties as
evidenced in a writing, satisfactory to the Collateral Agent or (ii) the
Collateral Agent shall have received security or an indemnity satisfactory to
the Collateral Agent sufficient to save the Collateral Agent harmless from and
against any and all loss, liability or reasonable out-of-pocket expense which
the Collateral Agent may incur by reason of its acting. The Collateral Agent
may in addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Collateral Agent shall not be
required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor
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Collateral Agent as provided below, (a) the Collateral Agent may resign at any
time by giving notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the Collateral Agent may be
removed at any time by the Company and (c) if the Collateral Agent fails to
perform any of its material obligations hereunder in any material respect for a
period of not less than 20 days after receiving written notice of such failure
by the Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract Agent. The Purchase
Contract Agent shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the immediately preceding sentence.
Upon any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. The
Collateral Agent shall be a bank which has an office in New York, New York with
a combined capital and surplus of at least $750,000,000. Upon the acceptance
of any appointment as Collateral Agent hereunder by a successor Collateral
Agent, such successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take all appropriate
action to transfer any money and property held by it hereunder (including the
Collateral) to such successor Collateral Agent. The retiring Collateral Agent
shall, upon such succession, be discharged from its duties and obligations as
Collateral Agent hereunder. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this Section 8 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as the Collateral Agent.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of
its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good
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faith. The appointment of agents pursuant to this Section 8.9 shall be subject
to prior consent of the Company, which consent shall not be unreasonably
withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
Section 8.11. Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence or willful misconduct on the
part of the Collateral Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral
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Agent, Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent and the Collateral Agent may amend
this Agreement for the purpose of modifying in any manner the provisions of
this Agreement or the rights of the Holders in respect of the Securities;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the
Treasury Securities for the Trust Preferred Securities or the rights of
Holders of Growth PRIDES to substitute Trust Preferred Securities for
the Treasury Securities), impair the right of the Holder of any Security
to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
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It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with respect
to the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the Collateral
Agent or any of its agents to exercise,
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and no course of dealing with respect to, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise by the Collateral Agent or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent and the Holders from time to time
acting through the Purchase Contract Agent, as their attorney-in-fact, in
connection with the establishment and maintenance of the Collateral Account.
The Company, the Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as their attorney-in-
fact, hereby submit to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or, as to any party, at such other address as shall
be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed
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to have been duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have ratified
the agreements of, and the grant of the Pledge hereunder by, the Purchase
Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of
the Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms
of this Agreement; (b) all reasonable costs and expenses of the Collateral
Agent (including, without limitation, reasonable fees and expenses of counsel)
in connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
33
<PAGE> 38
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred
to herein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any security interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
34
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CONSECO, INC.
By:
-------------------------------
Name:
Title:
Address for Notices:
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: Chief Financial Officer
Telecopy: (317)817-6327
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent and as attor-
ney-in-fact of the Holders from time to time
of the Securities
By:
-------------------------------
Name:
Title:
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust
Administration
Telecopy: (312)407-1708
<PAGE> 40
THE CHASE MANHATTAN BANK,
as Collateral Agent and as Securities
Intermediary
By:
-------------------------------
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001-2697
Attention: Corporate Trust Admin-
istration Department
Telecopy: (212)946-8160
<PAGE> 41
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001-2697
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of Conseco, Inc. (the "Company"), and
Conseco Financing Trust IV
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of ______ __, 1997, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, and ourselves, as Purchase Contract
Agent and as attorney-in-fact for the holders of [Income PRIDES] [Growth
PRIDES] from time to time, that the holder of securities listed below (the
"Holder") has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred Securities] [a
principal amount of the Treasury Portfolio] in exchange for an equal Value of
[Pledged Preferred Securities or the Treasury Portfolio] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the Treasury Portfolio] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Preferred Securities or the Treasury Portfolio],
to release the [Preferred Securities or the Treasury Portfolio] [Treasury
Securities] related to such [Income PRIDES or the Treasury Portfolio] [Growth
PRIDES] to us in accordance with the Holder's instructions. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:
------------- -------------------------
By:
----------------------
Name:
Title:
<PAGE> 42
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the Treasury Portfolio] for the
[Pledged Preferred Securities or the Treasury Portfolio] [Pledged Treasury
Securities]:
- --------------------------- ---------------------------
Name Social Security or other Tax-
- --------------------------- payer
Address Identification Number, if any
- ---------------------------
- ---------------------------
<PAGE> 43
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Administration
Telecopy: (312)407-1708
Re: FELINE PRIDES of Conseco, Inc. (the "Company"), and
Conseco Financing Trust IV
The undersigned Holder hereby notifies you that it has delivered
to ________________, as Collateral Agent, $_______ aggregate principal amount
of [Treasury Securities] [Preferred Securities or the Treasury Portfolio] in
exchange for an equal Value of [Pledged Preferred Securities or the Treasury
Portfolio] [Pledged Treasury Securities] held by the Collateral Agent (the
"Pledge Agreement"), in accordance with Section 4.1 of the Pledge Agreement,
dated ________ __, 1997, between you, the Company and the Collateral Agent.
The undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities] related to
such [Income PRIDES] [Growth PRIDES]. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Dated:
------------- -------------------------
Signature
Please print name and address of Registered Holder:
- ------------------------- -------------------------
Name Social Security or other
Taxpayer Identification
- ------------------------- Number, if any
Address
- -------------------------
- -------------------------
- -------------------------
<PAGE> 1
EXHIBIT 4.22
FORM OF REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of December ____, 1997 (the
"Remarketing Agreement") by and between Conseco, Inc., an Indiana corporation
("Conseco" or the "Company"), Conseco Financing Trust IV, a Delaware statutory
business trust (the "Trust"), The First National Bank of Chicago, a national
banking association, not individually but solely as Purchase Contract Agent and
as attorney-in-fact of the holders of Purchase Contracts (each as defined in
the Purchase Contract Agreement (as defined herein)), and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue an aggregate Stated Amount
$____ of its FELINE PRIDES (the "FELINE PRIDES") under the Purchase Contract
Agreement, dated as of December ___, 1997, by and between the Purchase Contract
Agent and the Company (the "Purchase Contract Agreement"); and
WHEREAS, the Trust will issue concurrently in connection with
the issuance of the FELINE PRIDES ____% Trust Originated Preferred Securities
(the "Preferred Securities") in an aggregate stated liquidation amount of
$____, under the Amended and Restated Declaration of Trust, dated as of
December __, 1997, by and among the Company, the Regular Trustees, the Delaware
Trustee and the Institutional Trustee (the "Declaration"); and
WHEREAS, each FELINE PRIDES will initially consist of a unit
(referred to as an "Income PRIDES") with a Stated Amount of $50 comprised of
(a) a Purchase Contract under which (i) the holder is required to purchase from
the Company, for an amount in cash equal to the Stated Amount, newly issued
Common Stock of the Company on the Purchase Contract Settlement Date, and (ii)
the Company will pay Contract Adjustment Payments, if any, and (b) beneficial
ownership in one Preferred Security; and
WHEREAS, the sole assets of the Trust, $____ aggregate
principal amount of ____% Junior Subordinated Debentures (the "Debentures") of
the Company will be purchased by the Trust from the Company with the proceeds
of the sale of the Preferred Securities and the proceeds of the sale of the
common securities of the Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities"); and
WHEREAS, the Preferred Securities (or upon a dissolution of
the Trust and the distribution of the Debentures as described in the
Declaration, such Debentures) will be pledged pursuant to the Pledge Agreement
(the "Pledge Agreement"), dated as of December ____, 1997, by and between the
Company, the Collateral Agent and the Purchase Contract Agent, to secure an
Income PRIDES holder's obligations under the related Purchase Contract on the
Purchase Contract Settlement Date; and
WHEREAS, the Preferred Securities or the Debentures, as the
case may be, of such Income PRIDES holders who have elected not to settle the
Purchase Contracts related to their Income PRIDES from the proceeds of a Cash
Settlement and who have not early settled their
<PAGE> 2
Purchase Contracts, will be remarketed by the Remarketing Agent on the third
Business Day immediately preceding the Purchase Contract Settlement Date; and
WHEREAS, the applicable distribution rate on the Preferred
Securities (and, thus, the interest rate on the Debentures) that remain
outstanding on and after the Purchase Contract Settlement Date will be reset on
the third Business Day immediately preceding the Purchase Contract Settlement
Date, to the Reset Rate to be determined by the Reset Agent as the rate that
such Preferred Securities (and, thus the Debentures) should bear in order to
have an approximate market value of 100.5% of the aggregate stated liquidation
amount of the Preferred Securities or the aggregate principal amount of the
Debentures on the third Business Day immediately preceding the Purchase
Contract Settlement Date, provided that in the determination of such Reset
Rate, the Company may limit the Reset Spread (a component of the Reset Rate) to
be no higher than 200 basis points (2%); and
WHEREAS, the Company has requested Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as
the Reset Agent and as the Remarketing Agent, and as such to perform the
services described herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and
conditions expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement shall have the meanings assigned to them in the
Purchase Contract Agreement or, if not therein stated, the Declaration or the
Pledge Agreement.
Section 2. Appointment and Obligations of Remarketing Agent.
The Company hereby appoints Merrill Lynch and Merrill Lynch hereby accepts such
appointment, (i) as the Reset Agent to determine in consultation with the
Company, in the manner provided for in the Declaration with respect to the
Trust Securities and the Indenture with respect to the Debentures, the Reset
Rate, that in the opinion of the Reset Agent, will, when applied to the Trust
Securities (and, thus, the Debentures), enable a Trust Security (and, thus, a
Debenture), to have an approximate market value of no less than 100.5% of the
aggregate stated liquidation amount in the case of such Trust Security and the
aggregate principal amount in the case of such Debenture, and (ii) as the
exclusive Remarketing Agent to remarket the Preferred Securities, provided that
the Company may limit such Reset Rate to be no higher than the rate on the
Two-Year Benchmark Treasury plus 200 basis points (2%), as the case may be, of
such Income PRIDES holders who have not early settled the related Purchase
Contracts and have failed to notify the Purchase Contract Agent, on or prior to
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, of their intention to settle the related Purchase Contracts through Cash
Settlement, for settlement on the Purchase Contract Settlement Date, pursuant
to the Remarketing Underwriting Agreement with the Company, the Trust, the
Purchase Contract Agent and/or the Collateral Agent, substantially in the form
attached hereto as Exhibit A (with such changes as the Company, the Purchase
Contract Agent and/or the Collateral Agent and the Remarketing Agent may agree
upon). Pursuant to the Remarketing Underwriting Agreement, the Remarketing
Agent, either as the sole remarketing
2
<PAGE> 3
underwriter or as the representative of a syndicate including the Remarketing
Agent and one or more other remarketing underwriters designated by the
Remarketing Agent, will agree, subject to the terms and conditions set forth
therein, that the Remarketing Agent and any such other remarketing underwriters
will purchase severally the Preferred Securities or the Debentures, as the case
may be, to be sold by the holder or holders of Income PRIDES on the third
Business Day immediately preceding the Purchase Contract Settlement Date and
use their reasonable efforts to remarket such Preferred Securities or the
Debentures, as the case may be, (such purchase and remarketing being
hereinafter referred to as the "Remarketing"), at a price not less than 100.5%
of such Preferred Securities aggregate stated liquidation amount plus any
accrued and unpaid distributions (including any deferred distributions) and in
the case of Debentures, at a price not less than 100.5% of such Debentures
aggregate principal amount plus any accrued and unpaid interests (including any
deferred interests). Notwithstanding the preceding sentence, the Remarketing
Agent shall not remarket any Preferred Securities or Debentures, as the case
may be, for a price less than 100% of the aggregate stated liquidation amount
or aggregate principal amount of such Preferred Securities or Debentures,
respectively, plus accumulated and unpaid distributions or accrued and unpaid
interest, as the case may be. The proceeds of such remarketing shall be paid
to Collateral Agent in accordance with Section 4.6 of the Pledge Agreement and
Section 5.4 of the Purchase Contract Agreement (each of which Sections are
incorporated herein by reference).
Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as Remarketing Fee an amount not exceeding 25
basis points (.25%), from any amount received in connection with such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount of such remarketed Preferred Securities or Debentures, as the
case may be. In addition, the Reset Agent shall receive from the Company a
reasonable and customary fee as the Reset Agent Fee (the "Reset Agent Fee");
provided, however, that if the Remarketing Agent shall also act as the Reset
Agent, then the Reset Agent shall not be entitled to receive any such Reset
Agent Fee. Payment of such Reset Agent Fee shall be made by the Company on
the third Business Day immediately preceding the Purchase Contract Settlement
Date in immediately available funds or, upon the instructions of the Reset
Agent by certified or official bank check or checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing Agent.
(a) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent in its capacity hereunder by giving
notice prior to 3:00 p.m., New York City time, on the eleventh Business Day
immediately prior to the Purchase Contract Settlement Date. Any such
replacement shall become effective upon the Company's appointment of a
successor to perform the services that would otherwise be performed hereunder
by the Remarketing Agent and/or the Reset Agent. Upon providing such notice,
the Company shall use all reasonable efforts to appoint such a successor and to
enter into a remarketing agreement with such successor as soon as reasonably
practicable.
(b) Merrill Lynch may resign at any time and be discharged
from its duties and obligations hereunder as the Remarketing Agent and/or as
the Reset Agent by giving notice prior to 3:00 p.m., New York City time, on the
eleventh Business Day immediately prior to the Purchase Contract Settlement
Date. Any such resignation shall become effective upon the Company's
appointment of a successor to perform the services that would otherwise be
performed hereunder by the Remarketing Agent and/or the Reset Agent. Upon
receiving notice from the Remarketing Agent
3
<PAGE> 4
and/or the Reset Agent that it wishes to resign hereunder, the Company shall
appoint such a successor and enter into a remarketing agreement with it as soon
as reasonably practicable.
Section 5. Dealing in the Securities. The Remarketing
Agent, when acting hereunder or under the Remarketing Underwriting Agreement or
acting in its individual or any other capacity, may, to the extent permitted by
law, buy, sell, hold or deal in any of the Preferred Securities or Debentures,
as the case may be. With respect to any Preferred Securities or Debentures, as
the case may be, owned by it, the Remarketing Agent may exercise any vote or
join in any action with like effect as if it did not act in any capacity
hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required (in the opinion
of counsel for either the Remarketing Agent or the Company) by applicable law,
regula- tions or interpretations in effect at the time of such Remarketing, the
Company shall use its reasonable efforts to have a registration statement
relating the Preferred Securities effective under the Securities Act of 1933 by
the third Business Day immediately preceding the Purchase Contract Settlement
Date, shall furnish a current prospectus to be used in such Remarketing by the
remarketing underwriter or underwriters under the Remarketing Underwriting
Agreement, and shall pay all expenses relating thereto.
Section 7. Conditions to the Remarketing Agent's
Obligations. (a) The obligations of the Remarketing Agent and any other
remarketing underwriters to purchase and remarket the Preferred Securities or
the Debentures, as the case may be, shall be subject to the terms and
conditions of the Remarketing Underwriting Agreement.
(b) If at any time during the term of this Agreement, any
Indenture Event of Default or Declaration Event of Default, or event that with
the passage of time or the giving of notice or both would become an Indenture
Event of Default or Declaration Event of Default, has occurred and is
continuing under the Indenture or the Declaration, then the obligations and
duties of the Remarketing Agent under this Agreement shall be suspended until
such default or event has been cured. The Company will cause the Indenture
Trustee and the Institutional Trustee to give the Remarketing Agent notice of
all such defaults and events of which the Trustee is aware.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Agent on the effective date of
its replacement pursuant to Section 4(a) hereof or its resignation pursuant to
Section 4(b) hereof. Notwithstanding any such termination, the obligations set
forth in Section 3 hereof shall survive and remain in full force and effect
until all amounts payable under said Section 3 shall have been paid in full.
Section 9. Remarketing Agent's Performance; Duty of Care.
The duties and obligations of the Remarketing Agent hereunder shall be
determined solely by the express provisions of this Agreement and the
Remarketing Underwriting Agreement.
Section 10. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
4
<PAGE> 5
Section 11. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof and except as otherwise provided
herein, this Agreement shall remain in full force and effect from the date
hereof until the first day thereafter on which no Preferred Securities are
outstanding.
Section 12. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or delegated to any
other person without the prior written consent of Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent. The rights and obligations of
Merrill Lynch as the Remarketing Agent and/or as the Reset Agent hereunder may
not be assigned or delegated to any other person without the prior written
consent of the Company. This Agreement shall inure to the benefit of and be
binding upon the Company and Merrill Lynch as the Remarketing Agent and/or as
the Reset Agent and their respective successors and assigns. The terms
"successors" and "assigns" shall not include any purchaser of Securities merely
because of such purchase.
Section 13. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be
used in the interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
Section 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 16. Amendments. This Agreement may be amended by any
instrument in writing signed by the parties hereto.
Section 17. Notices. Unless otherwise specified, any
notices, requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed
in writing. All written notices and confirmations of notices by
telecommunication shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid. All such notices, requests, consents or other communications
shall be addressed as follows: if to the Company, to Conseco, Inc., 11825 N.
Pennsylvania Street, Carmel, Indiana 46032, Attention: John J. Sabl, Esq.,
Executive Vice President, Secretary and General Counsel; if to the Remarketing
Agent or Reset Agent (if Merrill Lynch & Co. is the Remarketing Agent or the
Reset Agent), to c/o Merrill Lynch & Co. at Merrill Lynch World Headquarters,
World Financial Center, North Tower, New York, New York 10281, Attention:
Douglas Squires, Managing Director, with a copy to Skadden, Arps, Slate Meagher
& Flom LLP, 919 Third Avenue, New York, New York 10022, Attention: John Osborn;
if to the
5
<PAGE> 6
Collateral Agent, to Global Trust Service, 450 West 33rd Street, 15th Floor,
New York, New York 10001-2697, Attention: Larry O'Brien, Senior Trust Officer
and Account Manager; and if to the Purchase Contract Agent, to Global Corporate
Trust Service, One North State Street, 9th Floor, Chicago, Illinois 60602, or
to such other address as any of the above shall specify to the other in
writing.
6
<PAGE> 7
IN WITNESS WHEREOF, each of the Company and the Remarketing
Agent has caused this Agreement to be executed in its name and on its behalf by
one of its duly authorized officers as of the date first above written.
CONSECO, INC.
By:
-------------------------------
Name:
Title:
CONSECO FINANCING TRUST IV
By:
-------------------------------
Name:
Title:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE FENNER &
SMITH INCORPORATED
CONFIRMED AND ACCEPTED:
By:
-------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------
Name:
Title:
7
<PAGE> 8
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING UNDERWRITING AGREEMENT
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner, & Smith
Incorporated (the "Remarketing Underwriter") hereby agrees to purchase the
securities (the "Securities") as set forth in Schedule I hereto, that have been
tendered by the holders of the Income PRIDES for sale on February ____, 2001.
1. Definitions. Capitalized terms used and not defined in
this Agreement shall have the meanings assigned to them in the purchase
contract agreement (the "Purchase Contract Agreement"), the pledge agreement
(the "Pledge Agreement"), the underwriting agreement (the Underwriting
Agreement"), the amended and restated declaration of trust (the "Declaration")
and the indenture (the "Indenture"), each as identified in Schedule I hereto.
2. Registration Statement and Prospectus. If required (in the
opinion of counsel to either the Remarketing Underwriter or the Company) by
applicable law, the Company and the Trust have filed with the Securities and
Exchange Commission, and there has become effective, a registration statement
on Form S-3 (the file number of which is set forth in Schedule I hereto),
including a prospectus, relating to the Securities. Such registration
statement, as amended to the date of this Agreement, is hereinafter referred to
as the "Registration Statement", the prospectus included in the Registration
Statement is hereinafter referred to as the "Basic Prospectus" and the Basic
Prospectus, as amended or supplemented to the date of this Agreement to relate
to the Securities and to the remarketing of the Securities, is hereinafter
referred to as the "Final Prospectus" (including in each case all documents
incorporated by reference).
3. Provisions Incorporated by Reference.
(a) Subject to Section 3(b), the provisions of the following
sections of the Underwriting Agreement shall be incorporated in their entirety
into this Agreement and made applicable to the obligations of the Remarketing
Underwriter, except as explicitly amended hereby: Sections 1, 3, 4, 5, 6 and
7.
(b) With respect to the provisions of the Underwriting
Agreement incorporated herein, for the purposes hereof, (i) all references
therein to the "Underwriter" or "Underwriters" or the "Representative" or
"Representatives", as the case may be, shall be deemed to refer to the
Remarketing Underwriter; (ii) all references therein to the "Securities" which
are the subject thereof shall be deemed to refer to the Securities as defined
herein; (iii) all references therein to the "Closing Date" shall be deemed to
refer to the Remarketing Closing Date specified in Schedule I hereto (the
"Remarketing Closing Date"); (iv) all references therein to the "Registration
Statement" the "Basic Prospectus" and the "Final Prospectus" shall be deemed to
refer to the Registration Statement, the Basic Prospectus and the Final
Prospectus, respectively, as defined herein; (v) reference to the Company in
Section 3(i) thereof is stricken and replaced with the phrase "the registered
holder"; (vi) reference to "Income Prides" and "Shares" in Section 3(m) thereof
is stricken and replaced with either the words "Preferred Securities" or
"Debentures", as applicable; (vii) Sections 3(k), 3(n), 3(p) and 3(q)
<PAGE> 9
thereof are stricken in their entirety; (viii) Sections 5(b)(1)(xiii) and
5(b)(2) (iv), (v), (vi), (vii) and (xi) thereof are stricken in their entirety;
(ix) Sections 5(b)(5) and 5(b)(8) are stricken in their entirety; and (xi)
Section 5(j) thereof is stricken in its entirety.
4. Purchase and Sale; Remarketing [Underwriting] Fee. Subject
to the terms and conditions and in reliance upon the representations and
warranties herein set forth or incorporated herein, the Remarketing Underwriter
agrees to purchase from the [registered holder or holders thereof] in the
manner specified in Section 5 hereof, the principal amount of Securities set
forth [in Schedule I] hereto at a purchase price not less than 100% of such
Securities, aggregate stated liquidation amount or aggregate principal amount,
as the case may be, plus any accrued and unpaid distributions or interest, as
applicable, thereon. In connection therewith, the [registered holder or
holders thereof] agree, in the manner specified in Section 5 hereof, to pay to
the Remarketing Underwriter a Remarketing [underwriting] Fee equal to an amount
not exceeding 25 basis points (.25%), from any amount received in connection
from such Remarketing in excess of the aggregate stated liquidation amount or
aggregate principal amount, as the case may be, of the Securities.
5. Delivery and Payment. Delivery of payment for the
remarketed Securities and payment of the Remarketing [Underwriting] Fee shall
be made on the Remarketing Closing Date at the location and time specified in
Schedule I hereto (or such later date not later than five business days after
such date as the Remarketing representatives shall designate), which date and
time may be postponed by agreement between the Remarketing Underwriter, the
Company, the Trust and the [registered holder or holders thereof]. Delivery of
the remarketed Securities and payment of the Remarketing [Underwriting] Fee
shall be made to the Remarketing Underwriter [to or upon the order of the
[registered holder or holders of the Remarketed Securities] by certified or
official bank check or checks drawn on or by a New York Clearing House bank and
payable in immediately available funds] [in immediately available funds by wire
transfer to an account or accounts designated by the [Company] [Trustee]
[registered holder or holders of the remarketed Securities]] or, if the
remarketed Securities are represented by a Global Security, by any method of
transfer agreed upon by the Remarketing Underwriter and the Depositary for the
Securities under the Declaration or Indenture, as applicable.
[It is understood that any registered holder or, if the Securities are
represented by a Global Security, any beneficial owner, that has an account at
the Remarketing Underwriter and tenders its Securities through such account
will not be required to pay any fee or commission to the Remarketing
Underwriter.]
If the Securities are not represented by a Global Security,
certificates for the Securities shall be registered in such names and
denominations as the Remarking Representatives may request not less than three
full business days in advance of the Remarketing Closing Date, and the Company,
the Trust and the [registered holder or holders thereof] agree to have such
certificates available for inspection, packaging and checking by the
Remarketing Underwriter in New York, New York not later than 1:00 p.m. on the
Business Day prior to the Remarketing Closing Date.
6. Additional Conditions to the Remarketing Underwriters'
Obligations. This Agreement shall be subject to termination in the absolute
discretion of the Remarketing Underwriter, by notice given to the Company, the
Trust and the [registered holder or holders thereof] prior to delivery of and
payment for the Securities, if following the date hereof and prior to such time
there
A-2
<PAGE> 10
shall have occurred a material adverse change in the condition, financial or
otherwise, or in the earnings, affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising from
transactions in the ordinary course of business, or (ii) there shall have
occurred any decrease in the rating assigned to the Securities or any
securities of the Company or the financial condition 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 Regulation, and
(iii) no such organization shall have publicly announced that it has under
surveillance or review its rating of the Securities or any securities of the
Company or the financial condition of the Company.
7. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed
in writing. All written notices and confirmations of notices by
telecommunication shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid. All such notices, requests, consents or other communications
shall be addressed as follows: if to the Company, to Conseco, Inc., 11825 N.
Pennsylvania Street, Carmel, Indiana 46032, Attention: John J. Sabl, Esq.,
Executive Vice President, Secretary and General Counsel; if to the Remarketing
Agent or Reset Agent, to c/o Merrill Lynch & Co. at Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New York 10281,
Attention: Douglas Squires, Managing Director, with a copy to Skadden, Arps,
Slate Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022,
Attention: John Osborn; if to the Collateral Agent, to Global Trust Service,
450 West 33rd Street, 15th Floor, New York, New York 10001-2697, Attention:
Larry O'Brien, Senior Trust Officer and Account Manager; and if to the Purchase
Contract Agent, to Global Corporate Trust Service, One North State Street, 9th
Floor, Chicago, Illinois 60602, or to such other address as any of the above
shall specify to the other in writing.
A-3
<PAGE> 11
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Remarketing Underwriters.
Very truly yours,
CONSECO, INC.
By:
-------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
By:
--------------------------------
Authorized Signatory
THE CHASE MANHATTAN BANK
By:
--------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By :
--------------------------------
Name:
Title:
A-4
<PAGE> 12
SCHEDULE I
Purchase Contract Agreement, dated as of
December ____, 1997 by and between Conseco, Inc., an Indiana corporation, and
The First National Bank of Chicago, a national banking association
Pledge Agreement dated as of December ____, 1997
by and between Conseco, Inc., an Indiana corporation, The First National Bank
of Chicago, a national banking association, and The Chase Manhattan Bank, a
New York banking corporation
Amended and Restated Declaration of Trust dated as
of December ____, 1997 of Conseco Financing Trust IV, a Delaware business
trust
Subordinated Indenture dated as of December ____,
1997 by and between Conseco, Inc., an Indiana corporation, and The First
National Bank of Chicago, a national banking association
First Supplemental Indenture, dated as of December ____,
1997 by and between Conseco, Inc., an Indiana corporation, and The First
National Bank of Chicago, a national banking association
Registration Statement No. 333-40423
Title of Securities: ______% Trust Originated Preferred
Securities of Conseco Financing Trust IV
Principal Amount of Securities: $
Remarketing [Underwriting] Fee: % ($ )
Remarketing Closing Date, Time and Location:
A-5
<PAGE> 1
EXHIBIT 4.23
FORM OF COMMON SECURITIES GUARANTEE AGREEMENT
Conseco Financing Trust IV
Dated as of December , 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I.
DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II.
POWERS, DUTIES AND RIGHTS OF
COMMON GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1. Powers and Duties of the Common Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Certain Rights of Common Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III.
COMMON GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.1. Common Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.2. Appointment, Removal and Resignation of Common
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV.
GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.2. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.4. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.7. Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE V.
LIMITATION OF TRANSACTIONS; RANKING . . . . . . . . . . . . . . . . . . . 16
SECTION 5.1. Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2. Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI.
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII.
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.1. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.1. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.4. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
ii
<PAGE> 4
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"),
dated as of December , 1997, is executed and delivered by Conseco, Inc., an
Indiana corporation (the "Guarantor"), and The First National Bank of Chicago,
as trustee (the "Common Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of Conseco Financing Trust IV, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of December , 1997, among the trustees
of the Issuer named therein, the Guarantor, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof _________ preferred securities, having an
aggregate liquidation amount of $________, designated the _% Trust Originated
Preferred Securities (the "Preferred Securities") and ______ common securities,
having an aggregate liquidation amount of $_________, designated the __% Trust
Originated Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Preferred Securities Guarantee") in substantially
identical terms to this Common Securities Guarantee for the benefit of the
holders of the Preferred Securities (as defined herein), except that if an
Event of Default (as defined in the Indenture), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under this Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under the
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
1
<PAGE> 5
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation. In this Common
Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Common Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Common Securities
Guarantee has the same meaning throughout;
(c) all references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common Securities
Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Common Securities Guarantee, unless otherwise defined
in this Common Securities Guarantee or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than Saturday, Sunday or
any day on which banking institutions in New York City in the State of New York
are authorized or required by any applicable law to close.
2
<PAGE> 6
"Common Guarantee Trustee" means The First National Bank of
Chicago until a Successor Common Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Common Securities
Guarantee and thereafter means each such Successor Common Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Common
Guarantee Trustee at which the corporate trust business of the Common Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at The First
National Bank of Chicago, Global Corporate Trust Service, One North State
Street, 9th Floor, Chicago, IL 60602, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of
Common Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the __% Junior Subordinated Debentures
due February 16, 2003, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Common Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Common Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Repayment Price") to the extent
the Issuer has funds available therefor, with respect to any Common Securities
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Common
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Common
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b)
3
<PAGE> 7
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
hereunder are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments under the Preferred Securities Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Common Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Common
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Common Guarantee Trustee, any
Affiliate of the Common Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Common Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of
December , 1997, among the Guarantor (the "Debenture Issuer") and The First
National Bank of Chicago, as trustee, and any indenture supplemental thereto
pursuant to which certain subordinated debt securities of the Debenture Issuer
are to be issued to the Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Common
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Common Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Common Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition relating
thereto;
4
<PAGE> 8
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Common
Guarantee Trustee, any officer within the Corporate Trust Office of the Common
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Common Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Common Guarantee Trustee" means a successor Common
Guarantee Trustee possessing the qualifications to act as Common Guarantee
Trustee under Section 3.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
5
<PAGE> 9
ARTICLE II.
POWERS, DUTIES AND RIGHTS OF
COMMON GUARANTEE TRUSTEE
SECTION 2.1. Powers and Duties of the Common Guarantee
Trustee. (a) This Common Securities Guarantee shall be held by the Common
Guarantee Trustee for the benefit of the Holders of the Common Securities, and
the Common Guarantee Trustee shall not transfer this Common Securities
Guarantee to any Person except a Holder of Common Securities exercising his or
her rights pursuant to Section 4.4(b) or to a Successor Common Guarantee
Trustee on acceptance by such Successor Common Guarantee Trustee of its
appointment to act as Successor Common Guarantee Trustee. The right, title and
interest of the Common Guarantee Trustee shall automatically vest in any
Successor Common Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Common Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Common Guarantee Trustee has occurred and is continuing, the
Common Guarantee Trustee shall enforce this Common Securities Guarantee for the
benefit of the Holders of the Common Securities.
(c) The Common Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Common Securities Guarantee, and no implied covenants shall
be read into this Common Securities Guarantee against the Common Guarantee
Trustee. In case an Event of Default has occurred and is actually known to a
Responsible Officer of the Common Guarantee Trustee, the Common Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Common Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Common Securities Guarantee shall be
construed to relieve the Common Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
6
<PAGE> 10
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Common
Guarantee Trustee shall be determined solely by the express
provisions of this Common Securities Guarantee, and the Common
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Common Securities Guarantee, and no implied
covenants or obligations shall be read into this Common
Securities Guarantee against the Common Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Common Guarantee Trustee, the Common Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Common Guarantee
Trustee and conforming to the requirements of this Common
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Common Guarantee Trustee, the
Common Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Common Securities Guarantee;
(ii) the Common Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Common Guarantee Trustee, unless it shall be proved that the Common
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Common Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Common Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Common Guarantee Trustee, or exercising any trust or
power conferred upon the Common Guarantee Trustee under this Common
Securities Guarantee; and
7
<PAGE> 11
(iv) no provision of this Common Securities Guarantee shall
require the Common Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers,
if the Common Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Common Securities
Guarantee or indemnity, reasonably satisfactory to the Common
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 2.2. Certain Rights of Common Guarantee Trustee. (a)
Subject to the provisions of Section 2.1:
(i) The Common Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Common Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Common
Securities Guarantee, the Common Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Common Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Common Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Common Guarantee Trustee may consult with competent
legal counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in
8
<PAGE> 12
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Common Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Common Securities Guarantee from any court of
competent jurisdiction.
(vi) The Common Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Common Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Common Guarantee
Trustee such security and indemnity, reasonably satisfactory to the
Common Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Common Guarantee
Trustee's agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Common
Guarantee Trustee; provided that, nothing contained in this Section
2.2(a)(vi) shall be taken to relieve the Common Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Common Securities
Guarantee.
(vii) The Common Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Common Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Common Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Common Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Common Guarantee Trustee or its
agents hereunder shall bind the Holders of the Common Securities, and
the signature of the Common Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No
third party shall be required to
9
<PAGE> 13
inquire as to the authority of the Common Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
Common Securities Guarantee, both of which shall be conclusively
evidenced by the Common Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Common Securities
Guarantee the Common Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Common Guarantee Trustee (i)
may request instructions from the Holders of a Majority in liquidation
amount of the Common Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on
or acting in accordance with such instructions.
(b) No provision of this Common Securities Guarantee
shall be deemed to impose any duty or obligation on the Common Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Common Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Common Guarantee Trustee shall be construed to be a duty.
SECTION 2.3. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Common Guarantee Trustee does not assume
any responsibility for their correctness. The Common Guarantee Trustee makes
no representation as to the validity or sufficiency of this Common Securities
Guarantee.
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<PAGE> 14
ARTICLE III.
COMMON GUARANTEE TRUSTEE
SECTION 3.1. Common Guarantee Trustee; Eligibility. (a)
There shall at all times be a Common Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above, then,
for the purposes of this Section 3.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Common Guarantee Trustee shall cease
to be eligible to so act under Section 3.1(a), the Common Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
3.2 (c).
(c) If the Common Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Common Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 3.2. Appointment, Removal and Resignation of Common
Guarantee Trustees. (a) Subject to Section 3.2(b), the Common Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Common Guarantee Trustee shall not be removed in
accordance with Section 3.2(a) until a Successor Common Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Common Guarantee Trustee and delivered to the Guarantor.
11
<PAGE> 15
(c) The Common Guarantee Trustee appointed to office shall
hold office until a Successor Common Guarantee Trustee shall have been
appointed or until its removal or resignation. The Common Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Common Guarantee Trustee and delivered to
the Guarantor, which resignation shall not take effect until a Successor Common
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Common Guarantee Trustee and
delivered to the Guarantor and the resigning Common Guarantee Trustee.
(d) If no Successor Common Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 3.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Common Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Common Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Common Guarantee Trustee.
(e) No Common Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Common Guarantee Trustee.
(f) Upon termination of this Common Securities Guarantee or
removal or resignation of the Common Guarantee Trustee pursuant to this Section
3.2, the Guarantor shall pay to the Common Guarantee Trustee all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE IV.
GUARANTEE
SECTION 4.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
12
<PAGE> 16
SECTION 4.2. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Common Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 4.3. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Common Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Repayment Price, Liquidation
Distribution or any other sums payable under the terms of the Common Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Common Securities (other than an
extension of time for payment of Distributions, Repayment Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer or
any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
13
<PAGE> 17
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 4.4. Rights of Holders. (a) The Holders of a
Majority in liquidation amount of the Common Securities have the right to
direct the time, method and place of conducting of any proceeding for any
remedy available to the Common Guarantee Trustee in respect of this Common
Securities Guarantee or exercising any trust or power conferred upon the Common
Guarantee Trustee under this Common Securities Guarantee.
(b) If the Common Guarantee Trustee fails to enforce this
Common Securities Guarantee, any Holder of Common Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Common Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a holder of Common Securities may directly institute a proceeding
against the Guarantor for enforcement of the Common Security Guarantee for such
payment. The Guarantor waives any right or remedy to require that any action on
this Common Securities Guarantee be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
SECTION 4.5. Guarantee of Payment. This Common Securities
Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders of Common Securities against the Issuer
in respect of any amounts paid to such Holders by the Guarantor under this
Common Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Common Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this
14
<PAGE> 18
Common Securities Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
SECTION 4.7. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Common Securities, and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Common Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 4.3 hereof.
ARTICLE V.
LIMITATION OF TRANSACTIONS; RANKING
SECTION 5.1. Limitation of Transactions. So long as any
Common Securities remain outstanding, if there shall have occurred an Event of
Default or an event of default under the Declaration, then (a) the Guarantor
shall not declare or pay dividends or make distributions with respect to, or
redeem, purchase or acquire or make a liquidation payment with respect to, any
of its capital stock (other than (i) purchases or acquisitions of capital stock
of the Guarantor in connection with the satisfaction by the Guarantor of its
obligations under any employee or Agent benefit plans or the satisfaction by
the Guarantor of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Guarantor to purchase
capital stock of the Guarantor, (ii) as a result of a reclassification of its
capital stock or the exchange or conversion of one class or series of its
capital stock for another class or series of its capital stock, (iii) the
purchase of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or purchases of any rights outstanding under a shareholder rights
plan), (b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Guarantor that rank junior to such Debentures to the extent appropriate
notice has been given to the holders thereof effectively blocking such payment
or to the extent the failure to make any such payment is otherwise authorized
under the agreements governing such debt securities, and (c) the Guarantor
shall not make any guarantee payments with respect to the foregoing other than
pursuant to the Preferred Securities Guarantee
15
<PAGE> 19
or the Common Securities Guarantee to the extent appropriate notice has been
given to the beneficiaries thereof effectively blocking such payment or to the
extent the failure to make any such payment is otherwise authorized under the
agreements governing such guarantee payments.
SECTION 5.2. Ranking. This Common Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all Senior Indebtedness as such
term is defined in the Indenture (ii) pari passu with the Preferred Securities
Guarantee, the Debentures and with all unsecured trade creditors of the Company
and any other liabilities or obligations that may be pari passu by their terms
and (iii) senior to the Guarantor's common stock, the most senior preferred or
preference stock now or hereafter issued, from time to time, by the Guarantor
and to any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any affiliate of the Guarantor.
If an Event of Default has occurred and is continuing under
the Declaration, the rights of the Holders of the Common Securities to receive
Guarantee Payments under this Common Securities Guarantee shall be subordinated
to the rights of the holders of the Preferred Securities to receive payment of
all amounts due and owing under the terms of the Preferred Securities
Guarantee.
ARTICLE VI.
TERMINATION
SECTION 6.1. Termination. This Common Securities Guarantee
shall terminate upon (i) full payment of the Repayment Price of all Common
Securities, (ii) upon the distribution of the Debentures to the Holders of all
of the Common Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
16
<PAGE> 20
ARTICLE VII.
INDEMNIFICATION
SECTION 7.1. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Common Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Common Securities Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Common Securities might
properly be paid.
SECTION 7.2. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of negligence or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
reasonable expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or pro-
17
<PAGE> 21
ceeding upon receipt by the Guarantor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
7.2(a).
(c) The obligation to indemnify as set forth in this Section
7.2 shall survive the termination of the Common Securities Guarantee.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns. All guarantees and
agreements contained in this Common Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Common Securities then
outstanding.
SECTION 8.2. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Common Securities Guarantee may only be amended
with the prior approval of the Holders of at least a Majority in liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all the outstanding Common
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 8.3. Notices. All notices provided for in this
Common Securities Guarantee shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by registered
or certified mail, as follows:
(a) if given to the Common Guarantee Trustee, at the Common
Guarantee Trustee's mailing address set forth below (or such other address as
the Common Guarantee Trustee may give notice of to the Holders of the Common
Securities):
18
<PAGE> 22
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Global Corporate Trust Services
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Common Securities):
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: Secretary
(c) If given to any Holder of Common Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Common Securities Guarantee is
solely for the benefit of the Holders of the Common Securities and, subject to
Section 2.1(a), is not separately transferable from the Common Securities.
SECTION 8.5. Governing Law. THIS COMMON SECURITIES GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
19
<PAGE> 23
THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
CONSECO, INC., as Guarantor
By:
-----------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Common Guarantee Trustee
By:
-----------------------
Name:
Title:
20
<PAGE> 1
EXHIBIT 5.1
December 4, 1997
Board of Directors
Conseco, Inc.
11825 North Pennsylvania Street
Carmel, IN 46032
RE: Registration Statement on Form S-3 (No. 333-40423)
Lady and Gentlemen:
I am Senior Vice President, Legal of Conseco Services, LLC. At your
request, I have examined or caused to be examined the Registration Statement on
Form S-3 (the "Registration Statement") of Conseco, Inc. (the "Corporation")
with respect to unsecured senior debt securities (the "Senior Debt Securities"),
unsecured subordinated debt securities (the "Subordinated Debt Securities")
shares of preferred stock, without par value (the "Preferred Stock"), shares of
common stock, without par value (the "Common Stock") stock purchase units, stock
purchase contracts and warrants to purchase Senior Debt Securities, Subordinated
Debt Securities, Preferred Stock or Common Stock or any combination thereof, as
shall be designated by the Corporation at the time of the offering (the
"Warrants") in amounts, at prices and on terms to be determined at the time of
the offering. The Registration Statement also relates to the guarantees by the
Corporation of preferred securities of Conseco Financing Trust IV, Conseco
Financing Trust V, Conseco Financing Trust VI and Conseco Financing Trust VII,
pursuant to guarantee agreements to be entered into by the Corporation (the
"Preferred Securities Guarantee Agreements"). Unless otherwise specified in the
applicable prospectus supplement, the Senior Debt Securities will be issued
under the Senior Indenture (the "Senior Indenture") between the Corporation and
LTCB Trust Company as Trustee. Unless otherwise specified in the applicable
prospectus supplement, the Subordinated Debt Securities will be issued under the
Subordinated Indenture (the "Subordinated Indenture") between the Corporation
and The First National Bank of Chicago as Trustee in the form to be filed as an
exhibit to the Registration Statement.
In rendering this opinion, I, or attorneys under my supervision (together
referred to herein as "we"), have examined and relied upon a copy of the
Registration Statement. We have also examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
statements of government officials and other instruments, and have examined such
questions of law and have satisfied ourselves as to such matters of fact, as
have considered relevant and necessary as a basis for this opinion. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
examination.
Based on the foregoing, and subject to the qualifications and limitations
hereinafter set forth, I am of the opinion that:
1. When (i) the Registration Statement, as finally amended (including
any necessary post-effective amendments), shall have become effective under
the Securities Act of 1933, as amended (the "Securities Act") and the
Senior Indenture, including any necessary supplemental indenture, shall
have been duly qualified under the Trust Indenture Act of 1939, as amended;
(ii) a prospectus supplement with respect to such series of Senior Debt
Securities shall have been filed with the Commission in compliance with the
Securities Act and the rules and regulations thereunder; (iii) a Board
Resolution or Officers' Certificate within the meaning of the Senior
Indenture shall have been duly issued, or supplemental indenture entered
into, in accordance with the Senior Indenture detailing the establishment
of such series of Senior Debt Securities; and (iv) such series of Senior
Debt Securities shall have been duly executed and authenticated and shall
have been duly delivered to the purchasers thereof against payment of the
agreed consideration therefor, each such series of Senior Debt Securities
will be legally issued and binding obligations of the Corporation (except
as may be limited by applicable bankruptcy,
<PAGE> 2
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).
2. When (i) the Registration Statement, as finally amended (including
any necessary post-effective amendments), shall have become effective under
the Securities Act and the Subordinated Indenture, including any necessary
supplemental indenture, shall have been duly qualified under the Trust
Indenture Act of 1939, as amended; (ii) a prospectus supplement with
respect to such series of Subordinated Debt Securities shall have been
filed with the Commission in compliance with the Securities Act and the
rules and regulations thereunder; (iii) a Board Resolution or Officers'
Certificate within the meaning of the Subordinated Indenture shall have
been duly issued, or supplemental indenture entered into, in accordance
with the Subordinated Indenture detailing the establishment of such series
of Subordinated Debt Securities; and (iv) such series of Subordinated Debt
Securities shall have been duly executed and authenticated and shall have
been duly delivered to the purchasers thereof against payment of the agreed
consideration therefor, each series of Subordinated Debt Securities will be
legally issued and binding obligations of the Corporation (except as 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).
3. When the Common Stock has been duly issued and the consideration
therefor has been received by the Corporation, the Common Stock will be
legally issued, fully paid and nonassessable.
4. When (i) the Board of Directors of the Corporation or a duly
authorized committee thereof has duly adopted resolutions specifying the
terms and conditions of the applicable series of Preferred Stock; (ii) the
Corporation has filed with the Indiana Secretary of State articles of
amendment with respect to such series of Preferred Stock; and (iii) such
series of Preferred Stock has been duly issued and the consideration
therefor has been received by the Corporation, such series of Preferred
Stock will be legally issued, fully paid and nonassessable.
5. When the terms of the stock purchase contracts have been duly
established by the Board of Directors of the Corporation or any duly
authorized committee thereof or authorized officer of the Corporation and
when the stock purchase contracts have been duly executed and delivered and
sold in the form and manner contemplated in the Registration Statement and
any prospectus supplement thereto, such stock purchase contracts (whether
issued separately or as part of a stock purchase unit) will be legally
binding obligations of the Corporation (except as 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).
6. When (i) the Warrant Agreement relating to the Warrants (the
"Warrant Agreement") has been duly executed and delivered; (ii) the terms
of the Warrants and of their issuance and sale have been duly established
in conformity with the Warrant Agreement relating to such Warrants so as
not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Corporation and so as to
comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Corporation;
and (iii) the Warrants have been duly executed and countersigned in
accordance with the Warrant Agreement relating to such Warrants, and issued
and sold in the form and manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, such Warrants will be
legally issued and binding obligations of the Corporation (except as 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).
7. When a Preferred Securities Guarantee has been duly executed and
delivered by the Corporation and such preferred guarantee trustee, such
Preferred Securities Guarantee will constitute the legal and
<PAGE> 3
binding obligation of the Corporation (except as 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).
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the sale of the securities to be
registered pursuant to the Registration Statement. Without limiting the
generality of the foregoing, I express no opinion in connection with the matters
contemplated by the Registration Statement, and no opinion may be implied or
inferred, except as expressly set forth herein.
This opinion is limited to the laws of the State of Indiana and of the
United States of America to the extent applicable. If any of the securities
included in the Registration Statement are governed by the laws of a state other
than Indiana, I have assumed for purposes of this opinion that the laws of such
other state are the same as those of the State of Indiana.
I hereby consent to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and to all references to me in the Registration Statement
or the Prospectus included therein.
Very truly yours,
/S/ KARL W. KINDIG
Karl W. Kindig
Senior Vice President, Legal
<PAGE> 1
EXHIBIT 5.2
December 5, 1997
Conseco Financing Trust IV
Conseco Financing Trust V
Conseco Financing Trust VI
Conseco Financing Trust VII
c/o Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Re: Conseco Financing Trust IV, Conseco Financing Trust V, Conseco
Financing Trust VI, and Conseco Financing Trust VII
Ladies and Gentlemen:
We have acted as special Delaware counsel for Conseco, Inc., an
Indiana corporation (the "Company"), Conseco Financing Trust IV, a Delaware
business trust ("Trust IV"), Conseco Financing Trust V, a Delaware business
trust ("Trust V"), Conseco Financing Trust VI, a Delaware business trust
("Trust VI") and Conseco financing Trust VII, a Delaware business trust ("Trust
VII")(Trust IV, Trust V, Trust VI and Trust VII are hereinafter collectively
referred to as the "Trusts" and sometimes hereinafter individually referred to
as a "Trust"), in connection with the matters set forth herein. At your request,
this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
<PAGE> 2
Conseco Financing Trust IV
Conseco Financing Trust V
Conseco Financing Trust VI
Conseco Financing Trust VII
December 5, 1997
Page 2
(a) The Certificate of Trust of Trust IV, dated May 21, 1997 as filed
with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on May 23, 1997;
(b) The Certificate of Trust of Trust V, dated May 21, 1997, as filed
with the Secretary of State on May 23, 1997;
(c) The Certificate of Trust of Trust VI, dated May 21, 1997, as filed
with the Secretary of State on May 23, 1997;
(d) The Certificate of Trust of Trust VII, dated May 21, 1997, as filed
with the Secretary of State on May 23, 1997;
(e) The Declaration of Trust of Trust IV, dated as of May 21, 1997
between the Company and the trustees of Trust IV named therein;
(f) The Declaration of Trust of Trust V, dated as of May 21, 1997
between the Company and the trustees of Trust V named therein;
(g) The Declaration of Trust of Trust VI, dated as of May 21, 1997
between the Company and the trustees of Trust VI named therein;
(h) The Declaration of Trust of Trust VII, dated as of May 21, 1997
between the Company and the trustees of Trust VII named therein;
(i) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3 and preliminary prospectus and a prospectus
supplement with respect to FELINE PRIDES units (the "Prospectus"), initially
consisting of a purchase contract and Preferred Securities of the Trusts
representing preferred undivided beneficial interests in the assets of the
Trusts (each, a "Preferred Security" and collectively, the "Preferred
Securities"), filed by the Company and the Trusts with the Securities and
Exchange Commission on November 24, 1997;
(j) A form of Amended and Restated Declaration of Trust for each of
the Trusts, to be entered into between the Company, the trustees of the Trust
named therein, and the holders, from time to time, of the undivided beneficial
interests in the assets of such Trust (including the exhibits and Annex I
thereto) (collectively, the "Declarations" and individually, a "Declaration"),
attached as an exhibit to the Registration Statement; and
<PAGE> 3
Conseco Financing Trust IV
Conseco Financing Trust V
Conseco Financing Trust VI
Conseco Financing Trust VII
December 5, 1997
Page 3
(k) A Certificate of Good Standing for each of the Trusts, dated
December 5, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declarations.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (k) above. In particular,
we have not reviewed any document (other than the documents listed in
paragraphs (a) through (k) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent
with the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each of the
Declarations constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the applicable Trust, and that the Declarations
and the Certificates of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its organization or formation, (iii) the legal capacity
of natural persons who are parties to the documents examined by us, (iv) that
each of the parties to the documents examined by us has the power and authority
to execute and deliver, and to perform its obligations under such documents,
(v) the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trusts (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for such Preferred Security, in accordance with the Declarations and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Declarations
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
<PAGE> 4
Conseco Financing Trust IV
Conseco Financing Trust V
Conseco Financing Trust VI
Conseco Financing Trust VII
December 5, 1997
Page 4
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders thereunder
which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly
existing in good standing as a business trust under the Business Trust Act.
2. The Preferred Securities of each Trust will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the
applicable Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Preferred
Security Holders may be obligated to make payments as set forth in the
Declarations.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other person for any purpose.
Very truly yours,
/s/ RICHARDS, LAYTON & FINGER, P.A.
CDK
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Conseco, Inc. on Form S-3 (File No. 333-40423), of our reports dated March
14, 1997 on our audits of the consolidated financial statements and financial
statement schedules of Conseco, Inc. and subsidiaries as of December 31, 1996
and 1995, and for the years ended December 31, 1996, 1995 and 1994, included in
the Annual Report on Form 10-K. We also consent to the reference to our firm
under the caption "Experts."
/S/ COOPERS & LYBRAND L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
December 5, 1997
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- --------------------------------------------------------------------------------
LTCB TRUST COMPANY
- --------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
New York State 13-3191890
- --------------------------------------------------------------------------------
(Jurisdiction of incorporation or (I.R.S. Employer Identification
organization if not a U.S. national bank Number)
165 Broadway New York, N.Y. 10006
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
LTCB Trust Company 165 Broadway New York, N.Y. 10006
Corporate Trust Administration 47th Floor
Attn: Barbara Bevelaqua, Vice President (212) 335-4901
Lisa Karisen, Assistant Vice President (212) 335-4899
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
- --------------------------------------------------------------------------------
CONSECO, INC.
- --------------------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
INDIANA 35-146632
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11825 N. Pennsylvania Street
Carmel, Indiana 46032
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Senior Debt Securities
- --------------------------------------------------------------------------------
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
a) Name and address of each examining or supervising authority to which it is
subject:
Superintendent of Banks Federal Reserve Bank of New York (District 2)
State of New York 33 Liberty Street
Albany, New York New York, N.Y. 10045
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers:
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each affiliation:
The obligor is not an affiliate of the trustee.
ITEM 16. LIST OF EXHIBITS
Exhibit I
A copy of the authorization certificate of LTCB Trust Company as well
as supplemental and related documents now in effect, which contain the
authority to commence business and a grant of powers to said LTCB
Trust Company to exercise corporate trust powers.**
Exhibit II
A copy of the existing By-Laws of LTCB Trust Company.
Exhibit III
The consent of the trustee as required by Section 321(b) of the Act.
Exhibit IV
A copy of the latest published report of condition of the trust issued
as at September 30, 1997
** Exhibit I is herein incorporated by reference to the Exhibit bearing the
identical number in Item 16 of the Form T-1 of LTCB Trust Company, filed as
Exhibit 21.5 to the Registration Statement on Form S-1 of ALHC Merger
Corporation, filed with the Securities and Exchange Commission on September 12,
1994 (Registration No. 33-81858).
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, LTCB Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York, and State of New York, on the 4th day of December 1997.
LTCB Trust Company
By: Barbara Bevelaqua
-------------------------
Barbara Bevelaqua
Vice President
<PAGE> 4
EXHIBIT II
BY-LAWS
OF
LTCB TRUST COMPANY
AS ADOPTED BY INCORPORATORS
ON OCTOBER 7, 1983,
AND SINCE AMENDED THROUGH AND
INCLUDING APRIL 25, 1997
ARTICLE 1.
Stockholders
Section 1. Place of Meetings of Stockholders. Meetings of stockholders shall be
held at the office of The Long-Term Credit Bank of Japan, Limited in the City of
New York, State of New York, provided, however, that the Board of Directors in
its discretion may fix any other location in the City of New York.
Section 2. Annual Meetings of Stockholders. A meeting of stockholders shall be
held annually for the election of Directors and the transaction of other
business at such time within the first three calendar months of each year as may
from time to time be designated by the Board of Directors.
Section 3. Special Meetings of Stockholders. Special meetings of the
stockholders may be called by the Board of Directors, the President, an
Executive Vice President or the Secretary upon the written request of a majority
of the Board of Directors or upon the written request of the holders of not less
than 50 per cent of all outstanding shares entitled to vote on the action
proposed to be taken. Such call and written request shall state the purpose or
purposes of the proposed meeting.
Section 4. Notice of Meetings of Stockholders. Written notice of every meeting
of stockholders shall be signed by the President, an Executive Vice President or
the Secretary and state the place, date and hour of the meeting and unless it is
the annual meeting indicate that it is being issued by or at the direction of
the person or persons calling the meeting and state the purpose or purposes for
which the meeting is called.
A copy of the notice of any meeting shall be given, personally or
by mail at least 15 business days before the date of the meeting, to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed given when deposited in the United States mail, with postage thereon
prepaid, directed to the stockholder at his address as it appears on the record
of stockholders, or at any other address upon his written request for mailing
filed with the Secretary.
Section 5. Quorum of Stockholders. The holders of a majority of the shares
entitled to vote thereat shall constitute a quorum at a meeting of stockholders
for the transaction of any business. When a quorum is once present to organize a
meeting, it is not broken by the subsequent withdrawal of any stockholders.
Section 6. Adjourned Meeting. The stockholders present at a meeting of
stockholders may adjourn the meeting despite the absence of a quorum. When a
meeting is adjourned to another time or place, it shall not be necessary to give
any notice of the adjourned meeting if the time and place to which the meeting
is adjourned are announced at the meeting at which the adjournment is taken, and
at the adjourned meeting any business may be transacted that might have been
transacted on the original date of the meeting.
Section 7. Presiding Officer. The Chairman shall preside at all meetings of
stockholders, except that in his absence or disability, the President or an
Executive Vice President shall preside in his place.
Section 8. Proxies. Every stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the stockholder
executing it, except in those cases where an irrevocable proxy is provided by
law. No Director, officer, or employee of the Trust Company shall act as proxy.
Section 9. Inspectors at Stockholders' Meetings. The Board of Directors, in
advance of any stockholders' meeting, may appoint one or more inspectors to act
at the meeting or any adjournment thereof. If inspectors are not so appointed,
the person presiding at a stockholders' meeting, may, and on the request of any
stockholder entitled to vote thereat shall, appoint inspectors. In case any
person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors shall determine the number of shares
<PAGE> 5
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the results, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders.
On request of the person presiding at the meeting or any stockholder entitled to
vote thereat, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and execute a certificate of any fact
found by them. Any report or certificate made by them shall be prima facie
evidence of the facts stated and of the vote as certified by them. No Director,
officer or employee of the Trust Company shall act as inspector.
Section 10. Qualification of Voters. Every stockholder of record shall be
entitled at every meeting of stockholders to one vote for every share standing
in his name on the record of stockholders.
Section 11. Vote of Stockholders. Directors shall, except as otherwise required
by law, be elected by a plurality of the votes cast at a meeting of stockholders
by the holders of shares entitled to vote in the election. Any other corporate
action by vote of the stockholders shall, except as otherwise required by law,
be authorized by a majority of the votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon.
Section 12. Written Consent of Stockholders Without a Meeting. Any stockholder
action required or permitted to be taken by vote may be taken on written consent
in substitution for and as the equivalent of any meeting of stockholders herein
provided for. Any such consent shall set forth the action so taken, and be
signed by the holders of all outstanding shares entitled to vote thereon.
ARTICLE 2.
Directors
Section 1. Board of Directors. The affairs of the Trust Company shall be
managed by its Board of Directors.
Section 2. Qualifications of Directors. Each Director shall be at least 18 years
of age, and shall fulfill the other statutory requirements for serving as such
Director. Subject to applicable law, at least one-half of the Directors shall be
officers of the majority stockholder (if any) of the Trust Company; and, if
necessary to enable such officers to serve as Directors, application shall be
made to the New York Superintendent of Banks to exercise his discretion to
permit as Directors of the Trust Company not more than one-half of the total
number thereof to serve as such, although such Directors are not citizens of the
United States or citizens or residents of this state or a contiguous state.
Section 3. Number of Directors. The Board of Directors shall be composed of not
less than seven nor more than thirty members. The number of the Directors shall
be fixed at any time within the maximum and minimum limits by the Board of
Directors.
Section 4. Election and Term of Directors. At each annual meeting of
stockholders, the stockholders shall elect Directors to hold office until the
next annual meeting. Each Director shall hold office until the expiration of the
term for which he is elected, and until his successor has been elected and
qualified.
Section 5. Vacancies and Newly Created Directorships. All vacancies in the
office of Director, including newly created directorships resulting from an
increase in the number of Directors, shall be filled by election by the
stockholders except as hereinafter provided. Vacancies not exceeding one-third
of the entire Board may be filled by affirmative vote of the majority of the
Directors then in office, and the Directors so elected shall hold office for the
balance of the unexpired term; or when the number of Directors required is nine
or more, two vacancies may, with the consent of the New York Superintendent of
Banks, be left unfilled until the next annual election, and when the number of
Directors required is more than five and less than nine, one vacancy may, with
the Superintendent's consent, be left unfilled until the next annual election.
Every vacancy, including newly created but unfilled directorships resulting from
an increase in the number of Directors, in the office of Director and each
reduction in the number of Directors shall be reported to the Superintendent
within ten days after such vacancy occurs or such reduction is effected. Each
election by the Board to fill any such vacancy shall be likewise reported
together with the name, address and occupation of the person so elected.
Section 6. Removal of Directors. Any or all of the Directors may be removed
for cause by vote of the stockholders or Directors, or with or without cause by
a vote of the stockholders.
Section 7. Quorum of Directors. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business or of any specified
item of business.
Section 8. Action by the Board. The vote of the majority of the Directors
present at a meeting of the Board of Directors at the time of the vote, if a
quorum is present at such time, shall, except as otherwise provided by law, be
the act of the Board of Directors.
<PAGE> 6
Section 9. Place and Time of Meetings of the Board; Notice; Adjournment. The
first meeting of each newly elected Board of Directors shall be held immediately
following the annual meeting of stockholders and at the place thereof. The Board
of Directors shall hold a regular meeting at the office of The Long-Term Credit
Bank of Japan, Limited in the City of New York, State of New York without notice
on the third Friday of each month at 2:00 p.m. Should the day appointed for a
regular meeting not be a business day, the meeting shall be held at the same
time on the next business day.
The Board of Directors in its discretion may fix any other location
or any other time for the holding of regular meetings upon notice to the
Directors. Special meetings of the Board may be called by the President, an
Executive Vice President or the Secretary upon the request of at least two
Directors. Notice of a special meeting shall be given to each Director. The
notice shall state the place, date and hour of the meeting and indicate that it
is being issued by or at the direction of the person or persons calling the
meeting. The notice shall be given personally (including by telephone) or by
mail not less than 3 business days before the date of meeting, to each Director.
If mailed, such notice shall be deemed given when deposited in the United States
mail, with postage thereon prepaid, directed to the Director at his address, or
at any other address upon his written request for mailing filed with the
Secretary. The notice need not specify the purpose of any special meeting of the
Board.
A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of any
adjournment of a meeting of the Board to another time and place shall be given
to the Directors who were not present at the time of the adjournment and, unless
such time and place are announced at the meeting, to the other Directors.
Section 10. Presiding Officer. The Chairman shall preside at all meetings of the
Board of Directors, except that in his absence or disability, the President or
an Executive Vice President shall preside in his place. The Chairman shall be
elected as such by said Board at its Annual Meeting. He shall serve as Chairman
until the next Annual Meeting of said Board and until his successor is elected
and qualified, but he shall not be an officer of the Trust Company and shall
have only such powers and duties, in addition to those of a Director, as are
specifically set forth in these By-Laws. He shall be an ex officio member of all
Committees of the Board, except the Examining and Audit Committee.
Section 11. Compensation of Directors. Such compensation shall be paid to
Directors for attendance at meetings of the Board of Directors and of any
Committee of said Board, and such additional annual compensation shall be paid
to Directors regardless of attendance, as shall be determined by the Board of
Directors by resolution from time to time.
Section 12. Attendance at Meetings. Any one or more Directors may participate in
a meeting of the Board of Directors or any Committee of said Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
Section 13. Committees of the Board. The Board of Directors shall appoint a
Committee of at least three of its members to examine fully once in each
calendar year the books, papers and affairs of the Trust Company and such other
matters as may be required byss.122 of the Banking Law of the State of New York.
The Committee may employ such assistance in making such examinations as the
Committee may deem necessary.
A report in writing of any examination so made, sworn to by the
Directors making the same, shall be presented to the Board of Directors at their
next regular meeting after the completion of such examination and placed on file
in the Trust Company and a duplicate thereof filed in the Office of the New York
Superintendent of Banks. Such report shall contain the matters required
underss.123 of the Banking Law of the State of New York.
The Board of Directors may appoint from time to time other
Committees of one or more Directors for such purposes and with such powers as
the Board may determine.
The President shall have the power to designate another Director to
serve on any standing Committee during the absence or inability to serve of any
member thereof.
ARTICLE 3.
Officers
Section 1. Number. The officers of the Trust Company, each of whom shall be
elected or appointed by the Board of Directors, shall be a President, one or
more Vice Presidents, one or more Assistant Vice Presidents, a Secretary, a
Treasurer, and such other officer or officers, if any, as the Board of Directors
may deem appropriate or desirable, including, at the option of the Board of
Directors, one or more Executive Vice Presidents and/or one or more Senior Vice
Presidents. Each reference to Vice Presidents elsewhere in these By-Laws,
including without limitation the extent of and limitations on the powers and
duties of Vice Presidents, shall also pertain and be fully applicable to any
<PAGE> 7
person holding the office of Senior Vice President. Any two or more offices may
be held by the same person, except the offices of President and Secretary.
Section 2. Election, Term of Office and General Duties. The officers to be
elected or appointed by the Board of Directors shall be elected or appointed
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the stockholders.
Each officer shall hold office until the first meeting of the Board
of Directors following the next annual meeting of stockholders, and until his
successor has been elected or appointed and qualified.
Participation in major policymaking functions of the Trust Company
by officers, when acting in their capacity as such, shall be limited to the
President and the Executive Vice Presidents.
Section 3. Removal. Any officers elected or appointed by the Board of Directors
may be removed by the Board of Directors with or without cause, but such removal
without cause shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 4. Vacancies. A vacancy in any office because of resignation, removal or
otherwise, may be filled by the Board of Directors, or, under its authority, by
the President or an Executive Vice President, for the unexpired portion of the
term.
Section 5. President. The President shall have general supervision of the
policies and operations of the Trust Company and shall also be the chief
executive officer of the Trust Company. He shall be an ex officio member of all
Committees of the Board, except the Examining and Audit Committee. He shall have
the powers and shall perform the duties pertaining generally to the office of
the President, and shall have the powers and duties conferred or imposed upon
the President by law, by these By-Laws, or by the Board of Directors.
Section 6. Absence or Disability. In the absence or disability of the President,
the Executive Vice Presidents, in the order of seniority of their elections as
such, shall act in his place and assume his duties.
Section 7. Executive Vice Presidents, Vice Presidents and Other Officers. Each
Executive Vice President, each Vice President, each Assistant Vice President,
and each other officer deemed appropriate or desirable by the Board of
Directors, shall have such powers and duties as may be assigned by the Board of
Directors from time to time; and, under authority of the Board of Directors, the
President or an Executive Vice President shall have authority to appoint and
dismiss employees and to prescribe their duties and, to the extent not
inconsistent with these By-Laws, the duties of officers.
Section 8. Secretary. The Secretary shall: (1) keep the minutes of the
proceedings of the stockholders, Board of Directors, and Examining and Audit
Committee and other committees, if any, in one or more books provided for that
purpose; (2) see that all notices are duly given in accordance with the
provisions of these By-Laws; (3) be custodian of the corporate records and of
the seal of the Trust Company; (4) file each written request by a stockholder or
Director that notices to him be mailed to some address other than his address as
it appears on the records of the Trust Company; (5) sign with the President or
an Executive Vice President, certificates representing shares of the Trust
Company; (6) have general charge of the record of stockholders of the Trust
Company; and (7) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or the Board of Directors.
Section 9. Treasurer. The Treasurer shall: (1) have charge and custody of and be
responsible for all funds and securities of the Trust Company, receive and give
receipts for moneys due and payable to the Trust Company from any source
whatsoever, and deposit all such moneys in the name of the Trust Company in
banks, trust companies, or other depositaries; (2) have charge and custody of
and be responsible for the keeping of correct and complete books and records of
account of the Trust Company; (3) have the duty, unless specifically assigned to
another officer by the Board of Directors, to prepare and submit to the Board of
Directors the monthly report required by ss.121 of the Banking Law of the State
of New York; and (4) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the President or the Board of Directors.
Section 10. Fiduciary Instruments and Documents. All instruments in behalf of
the Trust Company as trustee, depositary, agent or in any other fiduciary
capacity, including agreements, indentures, mortgages, deeds, conveyances,
satisfactions, discharges, releases, contracts, assignments, participation
certificates of interest in mortgages, transfers, powers of attorney, proxies,
petitions, proofs of claim, assignments and transfers of any shares of stock,
bonds or other securities, and all other documents and writings in connection
with any fiduciary capacity, may be executed by the President, an Executive Vice
President, any Vice President or any Assistant Vice President; or any other
officer, if thereunto authorized by the President or an Executive Vice
President; or any other person thereunto authorized by the Board of Directors,
the President or an Executive Vice President. Any officer or person authorized
to execute any such instrument, document or writing is also authorized to affix
the seal of the Trust Company thereto and to cause the same to be attested by
the Secretary or the Treasurer. This is in addition to and not in substitution
<PAGE> 8
for the manner of execution of any instruments elsewhere provided for in these
By-Laws.
Section 11. Contracts and Instruments. All contracts, checks, drafts, and other
commitments and instruments of the Trust Company, all guaranties of signatures
on assignments of stocks and other documents and all assignments or other papers
necessary or proper for the sale, assignment or transfer of stocks, registered
bonds or other securities or any other personal property or rights therein
standing in the name of and owned by the Trust Company in its own right, or held
by it as security, shall be executed by one of the following officers: the
President, an Executive Vice President, any Vice President, any Assistant Vice
President, or another officer or person authorized by the Board of Directors,
the President or an Executive Vice President to sign on behalf of the Trust
Company.
Section 12. Powers of Attorney. All powers of attorney and all authorizations to
representatives or agents of the Trust Company shall be executed by the
President, an Executive Vice President, or a Vice President who is thereunto
designated by the President or an Executive Vice President. Any such power of
attorney or authorization may, however, be executed by another officer or
officers, or person or persons, who may be specifically authorized to execute
the same by the Board of Directors, the President or an Executive Vice
President.
Section 13. Bonding of Officers and Employees; Other Insurance. Each officer and
employee handling moneys, funds, property or valuables, if so required by the
Board of Directors, shall give a bond with security to be approved by the Board,
conditioned for the honest discharge of his duties as such officer or employee.
Such bonds may be in individual, schedule or blanket form and the premiums
therefor shall be paid by the Trust Company. The purchase of and payment for
such bonds shall be in addition to, and not exclusive of, such other insurance
coverage of whatever nature as the Trust Company shall or may obtain for the
proper conduct and protection of its business, property, operations and
personnel.
Section 14. Compensation of Officers. The Board of Directors shall from time to
time fix the compensation, if any, of the President and Executive Vice
Presidents; and those officers shall fix the compensation of the other officers
and the employees of the Trust Company.
ARTICLE 4.
Certificates Representing Shares; Record of Stockholders;
Transfer of Shares
Section 1. Certificates Representing Shares. The shares of the Trust Company
shall be represented by certificates which shall be in such form as shall be
determined by the Board of Directors, subject to applicable law. All such
certificates shall be consecutively numbered. Such certificates shall be signed
by the President or an Executive Vice President and by the Secretary, and may be
sealed with the seal of the Trust Company or a facsimile thereof. In case any
officer who has signed shall have ceased to be such officer before such
certificate is issued, it may be issued by the Trust Company with the same
effect as if he were such officer at the date of issue. Each certificate shall
state upon the face thereof: (1) that the Trust Company is formed under the laws
of New York; (2) the name of the person or persons to whom issued; (3) the
number and class of shares; and (4) the par value of each share represented by
such certificate.
Section 2. Record of Stockholders. The Trust Company shall keep at its office a
record containing the names and addresses of all stockholders, the number and
class of shares held by each, and the dates when they respectively became the
owners of record thereof. The Trust Company shall be protected in treating the
persons in whose names shares stand on the record of stockholders as the owners
thereof for all purposes.
Section 3. Transfer of Shares. Upon surrender to the Trust Company of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, such shares shall be
transferred on the record of the stockholders of the Trust Company, but only by
action of the President or an Executive Vice President.
ARTICLE 5.
Fiscal Year
The fiscal year of the Trust Company shall be determined by resolution of the
Board of Directors.
ARTICLE 6.
Dividends
The Board of Directors may from time to time declare, and the Trust Company may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by applicable law, including without limitation ss.ss.110
and 112 of the Banking Law of the State of New York, or comparable provisions of
law hereafter in effect.
<PAGE> 9
ARTICLE 7.
Corporate Seal
Section 1. Impression. The following is an impression of the seal adopted by
the Board of Directors of the Trust Company:
<PAGE> 10
Section 2. Officers' Authority. All of the officers of the Trust Company shall
have authority to affix the corporate seal to documents.
ARTICLE 8.
Miscellaneous Provisions
Section 1. Records. The Organization Certificate, the By-Laws and the
proceedings of all meetings of the stockholders, the Board of Directors, and any
Committee of the Board, shall be recorded in appropriate minute books. The
minutes of each such meeting shall be signed by the Secretary or other officer
appointed to act as Secretary of the meeting.
Section 2. Business Hours. The business hours of the Trust Company's office
shall be from 9 a.m. to 3 p.m. daily except Saturdays, Sundays, and days or
parts of days recognized as legal holidays by the laws of this State on which
the Federal Reserve Bank of New York is not open for the conduct of its normal
business.
Section 3. Indemnification. Directors, officers and agents of the Trust Company
shall be entitled to indemnification from the Trust Company, for the defense of
any civil or criminal action or proceeding, or appeal therein, brought against
them by reason of their being, or having been, such Directors, officers or
agents, to the fullest extent consistent with applicable law, including without
limitation Title 7 of Article 15 of the Banking Law of the State of New York, or
comparable provisions of law hereafter in effect.
The Trust Company shall not be required to provide any such
indemnification to any Director, officer or agent in any such action or
proceeding, or appeal therein, arising out of services rendered by any such
person to any person, firm or association, or any corporation other than the
Trust Company, unless such services were rendered by such Director, officer or
agent at the specific written request of the Trust Company made by the Trust
Company in the manner provided by the Board of Directors.
Expenses incurred in defending a civil or criminal action or
proceeding may be paid by the Trust Company in advance of the final disposition
of such action or proceeding if authorized as provided by applicable law or
allowed by order of a court of competent jurisdiction. All such expenses so
advanced by the Trust Company shall be repaid in case the person receiving such
advancement or allowance is ultimately found not to be entitled to
indemnification or, where indemnification is granted, to the extent the expenses
so advanced by the Trust Company or allowed by the court exceed the
indemnification to which he is entitled.
The rights of indemnification provided for in this Section 3 shall
inure to the benefit of the heirs, executors, administrators and assigns of each
person indemnified and shall not, except as required by applicable law, be
deemed exclusive of any contractual or other legal rights to which he or they
may be entitled.
The Trust Company may, but need not, purchase insurance for the
purpose of indemnifying its Directors, officers or agents, for the purpose of
indemnifying itself for any obligation which it incurs as a result of its
indemnification of Directors, officers or agents, or for both purposes. Such
insurance may, but need not, be for the benefit of all Directors, officers or
agents.
A person is an "agent" under, and any action taken by him is
subject to the provisions of, this Section 3, only when the person is neither a
Director, officer nor employee of the Trust Company but his action has been
taken in good faith on behalf of the Trust Company pursuant to, and within the
scope of, actual authority duly conferred on him by the Trust Company.
ARTICLE 9.
Emergencies
Section 1. Emergencies. In the event of an emergency declared by the President
of the United States or the person performing his functions, the officers and
employees of the Trust Company will continue to conduct the affairs of the Trust
Company under such guidance from the Directors as may be available, except as to
matters which by statute require specific approval of the Board of Directors and
subject to conformance with any governmental directives during the emergency.
Section 2. Offices. The business of the Trust Company shall be conducted at its
office located at 165 Broadway, New York, New York, 10006 and any other legally
authorized location which may be leased or acquired by the Trust Company to
carry on its business. During an emergency resulting in any authorized place of
business of the Trust Company being unable to function, the business ordinarily
conducted at such location shall be relocated elsewhere in such suitable
<PAGE> 11
quarters, in addition to or in lieu of the locations heretofore mentioned, as
may be designated by the Board of Directors or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board of Directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of the Trust Company. Any temporarily relocated place of business of
the Trust Company shall be returned to its legally authorized location as soon
as practicable and such temporary place of business shall then be discontinued.
ARTICLE 10.
Inspection and Amendments
Section 1. Inspection. A copy of the By-Laws, with all amendments to date shall,
at all times, be kept at the principal office of the Trust Company and shall be
open for inspection by all stockholders during business hours.
Section 2. Amendments. Except as may otherwise be required by law, these By-Laws
may be changed or amended (1) by a vote of a majority of the Directors for the
time being, at any regular or special meeting of the Board, or (2) by vote of
the stockholders at any meeting of the stockholders.
* * *
Certified a true copy
this 1st day of May, 1997.
/s/ Sam Angione
-------------------------
Sam Angione
Executive Vice President and
Secretary
<PAGE> 12
EXHIBIT III
AUTHORIZATION AND CONSENT OF LTCB TRUST COMPANY
REQUIRED BY SECTION 321(b) OF THE ACT
LTCB Trust Company hereby authorizes and consents that any reports,
records, or other available information in the possession of the Board
of Governors of the Federal Reserve System, the New York Federal
Reserve Board, the New York State Banking Department and the Federal
Deposit Insurance Corporation be furnished by such authorities to the
Securities and Exchange Commission (SEC) upon request therefore,
in connection with the SEC's acting upon form T-1 and Exhibits filed
with it by LTCB Trust Company to establish its eligibility and
qualification under the Trust Indenture Act of 1939 (as amended by the
Trust Indenture Reform Act of 1990) to be designated as trustee under
the indenture to be executed in connection with the issuance by
Conseco, Inc. of it's Senior Medium Term Notes, Series A
12/4/97 /s/ Barbara Bevelaqua
----------------- ---------------------
Dated Barbara Bevelaqua
Vice President
<PAGE> 13
EXHIBIT IV
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1997 - SEPTEMBER 30, 1997
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE
BASIS IN THOUSANDS OF DOLLARS.
SCHEDULE RI-INCOME STATEMENT
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest Income:
a. Interest and fee income on loans:
(1) In domestic offices: RIAD
----
(a) Loans secured by real estate 4011 6.858 1.a.1.a
(b) Loans to depository institutions 4019 0 1.a.1.b
(c) Loans to finance agricultural production and other loans to farmers 4024 0 1.a.1.c
(d) Commercial and industrial loans 4012 49,237 1.a.1.d
(e) Acceptances of other banks 4028 0 1.a.1.e
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans 4054 0 1.a.1.f.1
(2) Other 4055 0 1.a.1.f.2
(g) Loans to foreign governments and official institutions 4056 0 1.a.1.g
(h) Obligations (other than securities and leases) of states and political subdivisions
in the U.S.:
(1) Taxable obligations 4503 0 1.a.1.h.1
(2) Tax-exempt obligations 4504 0 1.a.1.h.2
(i) All other loans in domestic offices 4058 649 1.a.1.1
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4059 61 1.a.2
b. Income from lease financing receivables:
(1) Taxable leases 4505 1,029 1.b.1
(2) Tax-exempt leases 4307 0 1.b.2
Interest income on balances due from depository Institutions: (1)
(1) In domestic offices 4105 3 1.c.1
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4106 0 1.c.2
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations 4027 5,183 1.d.1
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities 4506 0 1.d.2.a
(b) Tax-exempt securities 4507 58 1.d.2.b
(3) Other domestic debt securities 3657 448 1.d.3
(4) Foreign debt securities 3858 0 1.d.4
(5) Equity securities (including investments in mutual funds) 3859 451 1.d.5
e. Interest income from trading assets 4069 0 1.e
</TABLE>
- --------------
(1) Includes interest income on time certificates of deposits not held for
trading.
<PAGE> 14
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest Income (continued)
f. Interest income on federal funds sold and securities purchased under RIAD Year-to-Date
agreements to resell 4020 756 1.f
g. Total interest income (sum of items 1.a through 1.f) 4107 64,731 1.g
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) 4508 0 2.a.1.a
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) 4509 0 2.a.1.b.1
(2) Other savings deposits 4511 0 2.a.1.b.2
(3) Time deposits of $100,000 or more A517 13,688 2.a.1.b.3
(4) Time deposits of less than $100,000 A518 3 2.a.1.b.4
(2) Interest on deposits in foreign offices, Edge and agreement
subsidiaries, and IBFs 4172 19,567 2.a.2
b. Expenses of federal funds purchased
and securities sold under
agreements to repurchase 4180 236 2.b
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and on other borrowed money 4185 9,710 2.c
d. Not applicable
e. Interest on subordinated notes and debentures 4200 2,273 2.e
f. Total interest expense (sum of items 2.a through 2.e) 4073 45,477 RIAD 2.f
3. Net interest income (item 1.g minus 2.f) 4074 19,254 3.
4. Provisions:
a. Provision for loan and lease losses 4230 1,500 4.a
b. Provision for allocated transfer risk 4243 0 4.b
Noninterest income: RIAD
a. Income from fiduciary activities 4070 4,249 5.a
b. Service charges on deposit accounts in domestic offices 4080 0 5.b
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) A220 0 5.c
d. - e. Not applicable
f. Other noninterest income:
(1) Other fee income 5407 2,508 5.f.1
(2) All other noninterest income* 5408 75 RIAD 5.f.2
g. Total noninterest income (sum of items 5.a through 5.f) 4079 6,832 5.g
6. a. Realized gains (losses) on held-to-maturity securities 3521 0 6.a
b. Realized gains (losses) on available-for-sale securities 3196 178 6.b
7. Noninterest expense: RIAD
a. Salaries and employee benefits 4135 3,323 7.a
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) 4217 2,902 7.b
c. Other noninterest expense* 4092 5,248 RIAD 7.c
d. Total noninterest expense (sum of items 7.a through 7.c) 4093 11,473 7.d
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) 4301 13,291 8.
9. Applicable income taxes (on item 8) 4302 6,352 9.
10. Income (loss) before extraordinary items and other adjustments (item 8 minus 9) 4300 6,939 10.
11. Extraordinary items and other adjustments, net of income taxes* 4320 0 11
12. Net income (loss) (sum of items 10 and 11) 4340 6,939 12.
</TABLE>
- ------------------------
* Describe on Schedule RI-E - Explanations.
<PAGE> 15
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEMORANDA
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after RIAD Year-to Date
August 7, 1986, that is not deductible for federal income tax purposes 4513 0 M.1
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8) 8431 0 M.2
3. - 4. Not applicable
5. Number of full-time equivalent employees on payroll at end of current period (round to Number
nearest whole number) 4150 49 M.5
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push CCYY/MM/DD
accounting this calendar year, report the date of the bank's acquisition 9106 M.7
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c):
a. Interest rate exposures 8757 0 M.8.a
b. Foreign exchange exposures 8758 0 M.8.b
c. Equity security and index exposures 8759 0 M.8.c
d. Commodity and other exposures 8760 0 M.8.d
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income 8761 0 M.9.a
b. Net (increase) decrease to interest expense 8762 (4,019) M.9.b
c. Other (noninterest) allocations 8763 0 M.9.c
10. Credit losses on off-balance sheet derivatives (see instructions) A251 0 M.10
11. Does the reporting bank have a Subchapter S election in effect for Yes/No
federal income tax purposes for the current tax year? A530 NO M.11
-- Deferred portion of total applicable income taxes included in Schedule RI,
items 9 and 11 (to be reported with the December Report of Income) 4772 N/A M.12
</TABLE>
- ------------
(1) For example, a bank acquired on June 1, 1997, would report 1997/06/01
* Describe on Schedule RI-E - Explanations.
<PAGE> 16
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC - BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency and coin (1) 0081 4,343 1.a
b. Interest-bearing balances (2) 0071 100 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 1,005 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 126,262 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 242,100 3
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule RC-C) 2122 974,086 4.a
b. LESS: Allowance for loan and lease losses 3123 18,688 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases, net of unearned income, RCFD
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 955,398 4.d
5. Trading assets (from Schedule RC-D) 3545 0 5.
6. Premises and fixed assets (including capitalized leases) 2145 1,608 6.
7. Other real estate owned (from Schedule RC-M) 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 0 9.
10. Intangible assets (from Schedule RC-M) 2143 0 10.
11. Other assets (from Schedule RC-F) 2160 18,486 11.
12. Total assets (sum of items 1 through 11) 2170 1,349,302 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 17
SCHEDULE RC - CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E. RCON
part I) RCON 2200 550,811 13.a
(1) Noninterest-bearing (1) 6831 238,856 13.a.1
(2) Interest-bearing 6836 311,955 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E. RCFN
part II) RCFN 2200 400,000 13.b
(1) Noninterest-bearing 6631 0 13.b1
(2) Interest-bearing 6636 400,000 RCFD 13.b2
14. Federal funds purchased and securities sold under agreements to repurchase 2800 0 14
RCON
15. a. Demand notes issued to the U.S. Treasury 2840 0 15.a
RCFD
b. Trading liabilities (from Schedule RC-D) 3548 0 15.b
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332 12,000 16.a
b. With a remaining maturity of more than one year through three years A547 0 16.b
c. With a remaining maturity of more than three years A548 132,874 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 0 18
19. Subordinated notes and debentures(2) 3200 50,000 19
20. Other liabilities (from Schedule RC-(3) 2930 61,520 20
21. Total liabilities (sum of items 13 through 20) 2948 1,207,205 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838 0 23
24. Common Stock 3230 52,250 24
25. Surplus (exclude all surplus related to preferred stock) 3839 52,750 25
26. a. Undivided profits and capital reserves 3632 36,357 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434 740 26.b
27. Cumulative foreign currency translation adjustments 3284 0 27
28. Total equity capital (sum of items 23 through 27) 3210 142,097 28
29. Total liabilities and equity capital (sum of items 21 and 28) 3300 1,349,302 29
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external RCFD NUMBER
auditors as of any date during 1996 6274 N/A M.1
</TABLE>
1= Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the bank's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
- --------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits. Includes limited-life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
--------------------
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
------------------------------------------------------
(Name, address and telephone number of agent for service)
Conseco, Inc.
-------------
(Exact name of obligors as specified in their trust agreements)
Indiana 36-1468632
------------------------------ --------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11825 Pennsylvania St.
Carmel, Indiana 46032
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Subordinated Debt Securities
Guarantee of Preferred Securities of Conseco Financing Trust IV
Guarantee of Preferred Securities of Conseco Financing Trust V
Guarantee of Preferred Securities of Conseco Financing Trust VI
Guarantee of Preferred Securities of Conseco Financing Trust VII
-------------------------------
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws of
the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of
Illinois, on the 24th day of November, 1997.
The First National Bank of Chicago,
Trustee
By /s/STEVEN M. WAGNER
--------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of ITT Corporation, filed with the Securities and Exchange Commission on
October 15, 1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 24, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of (i) the Subordinated Indenture
of Conseco, Inc. to The First National Bank of Chicago, as Trustee, relating to
the Subordinated Debt Securities of Conseco, Inc., (ii) the Preferred
Securities Guarantee Agreement of the Preferred Securities of Conseco
Financing Trust IV, (iii) the Preferred Securities Guarantee Agreement of the
Preferred Securities of Conseco Financing Trust V, (iv) the Preferred
Securities Guarantee Agreement of the Preferred Securities of Conseco Financing
Trust VI, and (v) the Preferred Securities Guarantee Agreement of the
Preferred Securities of Conseco Financing Trust VII, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/STEVEN M. WAGNER
----------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business
day of the quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,415,563 1.a.
b. Interest-bearing balances(2).................................... 0071 7,049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)..............................................................RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses.......................RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,930,216 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)........................... 2170 54,837,423 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1)..................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing........................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................. RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing........................................ RCFN 6631 330,030 13.b.1
(2) Interest-bearing........................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:.................................................... RCFD 2800 3,827,159 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)........................ RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less..................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years... A547 265,393 16.b
c. With a remaining maturity of more than three years............ A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)............................ RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20).................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... RCFD 3838 0 23
24. Common stock...................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves......................... RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments............... RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................. RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28)..... RCFD 3300 54,837,423 29
</TABLE>
Memorandum
<TABLE>
<CAPTION>
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996................................RCFD 6724 N/A M.1.
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____
THE FIRST NATIONAL BANK OF CHICAGO
----------------------------------
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
--------------
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
- ------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
------------------------------------------------------
(Name, address and telephone number of agent for service)
Conseco Financing Trust IV
---------------------------
(Exact name of obligors as specified in their trust agreements)
Delaware Applied For
------------------------------ --------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11825 Pennsylvania St.
Carmel, Indiana 46032
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Preferred Securities of Conseco Financing Trust IV
--------------------------------------------------
(Title of Indenture Securities)
1
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of
this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws of
the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of
Illinois, on the 24th day of November, 1997.
The First National Bank of Chicago,
Trustee
By /s/STEVEN M. WAGNER
----------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of ITT Corporation, filed with the Securities and Exchange Commission on
October 15, 1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 24, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration
of Trust of Conseco Financing Trust IV, Dated as of December __, 1997,
the undersigned, in accordance with Section 321(b) of the Trust Indenture
Act of 1939, as amended, hereby consents that the reports of examinations
of the undersigned, made by Federal or State authorities authorized to
make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/STEVEN M. WAGNER
------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business
day of the quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,415,563 1.a.
b. Interest-bearing balances(2).................................... 0071 7,049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)..............................................................RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses.......................RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,930,216 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)........................... 2170 54,837,423 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1)..................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing........................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................. RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing........................................ RCFN 6631 330,030 13.b.1
(2) Interest-bearing........................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:.................................................... RCFD 2800 3,827,159 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)........................ RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less..................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years... A547 265,393 16.b
c. With a remaining maturity of more than three years............ A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)............................ RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20).................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... RCFD 3838 0 23
24. Common stock...................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves......................... RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments............... RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................. RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28)..... RCFD 3300 54,837,423 29
</TABLE>
<TABLE>
<CAPTION>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996................................RCFD 6724 N/A M.1.
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
EXHIBIT 25.4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_____
THE FIRST NATIONAL BANK OF CHICAGO
---------------------------------------------------
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
---------------------
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
--------------------------------------------------------
(Name, address and telephone number of agent for service)
Conseco Financing Trust V
---------------------------------------------------------------
(Exact name of obligors as specified in their trust agreements)
Delaware Applied For
------------------------------- ---------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11825 Pennsylvania St.
Carmel, Indiana 46032
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Preferred Securities of Conseco Financing Trust V
-------------------------------------------------
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of
this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws of
the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of
Illinois, on the 24th day of November, 1997.
The First National Bank of Chicago,
Trustee
By /s/STEVEN M. WAGNER
------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of ITT Corporation, filed with the Securities and Exchange Commission on
October 15, 1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 24, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration
of Trust of Conseco Financing Trust V, Dated as of December __, 1997,
the undersigned, in accordance with Section 321(b) of the Trust Indenture
Act of 1939, as amended, hereby consents that the reports of examinations
of the undersigned, made by Federal or State authorities authorized to
make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/STEVEN M. WAGNER
-----------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business
day of the quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,415,563 1.a.
b. Interest-bearing balances(2).................................... 0071 7,049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)..............................................................RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses.......................RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,930,216 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)........................... 2170 54,837,423 12.
</TABLE>
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1)..................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing........................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................. RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing........................................ RCFN 6631 330,030 13.b.1
(2) Interest-bearing........................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:.................................................... RCFD 2800 3,827,159 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)........................ RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less..................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years... A547 265,393 16.b
c. With a remaining maturity of more than three years............ A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)............................ RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20).................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... RCFD 3838 0 23
24. Common stock...................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves......................... RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments............... RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................. RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28)..... RCFD 3300 54,837,423 29
</TABLE>
<TABLE>
<CAPTION>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996................................RCFD 6724 N/A M.1.
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
EXHIBIT 25.5
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)____
THE FIRST NATIONAL BANK OF CHICAGO
---------------------------------------------------
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
---------------------
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
---------------------------------------------------------
(Name, address and telephone number of agent for service)
Conseco Financing Trust VI
---------------------------------------------------------------
(Exact name of obligors as specified in their trust agreements)
Delaware Applied For
---------- ---------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11825 Pennsylvania St.
Carmel, Indiana 46032
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Preferred Securities of Conseco Financing Trust VI
--------------------------------------------------
(Title of Indenture Securities)
1
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of
this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws of
the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of
Illinois, on the 24th day of November, 1997.
The First National Bank of Chicago,
Trustee
By /s/ STEVEN M. WAGNER
-------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of ITT Corporation, filed with the Securities and Exchange Commission on
October 15, 1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 24, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration
of Trust of Conseco Financing Trust VI, Dated as of December __, 1997,
the undersigned, in accordance with Section 321(b) of the Trust Indenture
Act of 1939, as amended, hereby consents that the reports of examinations
of the undersigned, made by Federal or State authorities authorized to
make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/STEVEN M. WAGNER
---------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business
day of the quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,415,563 1.a.
b. Interest-bearing balances(2).................................... 0071 7,049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)..............................................................RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses.......................RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,930,216 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)........................... 2170 54,837,423 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1)..................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing........................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................. RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing........................................ RCFN 6631 330,030 13.b.1
(2) Interest-bearing........................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:.................................................... RCFD 2800 3,827,159 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)........................ RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less..................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years... A547 265,393 16.b
c. With a remaining maturity of more than three years............ A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)............................ RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20).................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... RCFD 3838 0 23
24. Common stock...................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves......................... RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments............... RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................. RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28)..... RCFD 3300 54,837,423 29
</TABLE>
<TABLE>
<S> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996................................RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
EXHIBIT 25.6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_____
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
---------------------
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
- ------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
-------------------------------------------------------
(Name, address and telephone number of agent for service)
Conseco Financing Trust VII
-------------------------------------------------------------
(Exact name of obligors as specified in their trust agreements)
Delaware Applied For
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11825 Pennsylvania St.
Carmel, Indiana 46032
-------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Preferred Securities of Conseco Financing Trust VII
---------------------------------------------------
(Title of Indenture Securities)
1
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of
this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, The First National Bank of Chicago,
a national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of
Illinois, on the 24th day of November, 1997.
The First National Bank of Chicago,
Trustee
By /s/ STEVEN M. WAGNER
-------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of ITT Corporation, filed with the Securities and Exchange Commission on
October 15, 1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 24, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Declaration
of Trust of Conseco Financing Trust VII, Dated as of December __, 1997,
the undersigned, in accordance with Section 321(b) of the Trust Indenture
Act of 1939, as amended, hereby consents that the reports of examinations
of the undersigned, made by Federal or State authorities authorized to
make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ STEVEN M. WAGNER
-------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1997
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business
day of the quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,415,563 1.a.
b. Interest-bearing balances(2).................................... 0071 7,049,275 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 4,455,173 2.b.
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,604,233 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)..............................................................RCFD 2122 24,185,099 4.a.
b. LESS: Allowance for loan and lease losses.......................RCFD 3123 423,419 4.b.
c. LESS: Allocated transfer risk reserve...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 23,761,680 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,930,216 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 705,704 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 7,960 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 64,504 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 562,251 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 283,716 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,997,778 11.
12. Total assets (sum of items 1 through 11)........................... 2170 54,837,423 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................... RCON 2200 21,852,164 13.a
(1) Noninterest-bearing(1)..................................... RCON 6631 9,474,510 13.a.1
(2) Interest-bearing........................................... RCON 6636 12,377,654 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................. RCFN 2200 13,756,280 13.b.
(1) Noninterest bearing........................................ RCFN 6631 330,030 13.b.1
(2) Interest-bearing........................................... RCFN 6636 13,426,250 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:.................................................... RCFD 2800 3,827,159 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 40,307 15.a
b. Trading Liabilities(from Schedule RC-D)........................ RCFD 3548 4,985,577 15.b
16. Other borrowed money:
a. With original maturity of one year or less..................... RCFD 2332 2,337,018 16.a
b. With original maturity of than one year through three years... A547 265,393 16.b
c. With a remaining maturity of more than three years............ A548 322,175 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... RCFD 2920 562,251 18
19. Subordinated notes and debentures (2)............................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)............................ RCFD 2930 929,875 20
21. Total liabilities (sum of items 13 through 20).................... RCFD 2948 50,618,199 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... RCFD 3838 0 23
24. Common stock...................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock).......... RCFD 3839 2,948,616 25
26. a. Undivided profits and capital reserves......................... RCFD 3632 1,059,214 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... RCFD 8434 12,788 26.b.
27. Cumulative foreign currency translation adjustments............... RCFD 3284 (2,252) 27
28. Total equity capital (sum of items 23 through 27)................. RCFD 3210 4,219,224 28
29. Total liabilities and equity capital (sum of items 21 and 28)..... RCFD 3300 54,837,423 29
</TABLE>
<TABLE>
<CAPTION>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1996................................RCFD 6724 N/A M.1.
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
