REGISTRATION NO. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CONSECO, INC. INDIANA 35-1468632
Conseco Financing Trust VII Delaware 35-6653359
Conseco Financing Trust VIII Delaware Applied for
Conseco Financing Trust IX Delaware Applied for
Conseco Financing Trust X Delaware Applied for
(Exact name of the (State or other (I.R.S. Employer
Registrants as specified jurisdiction of Identification No.)
in their respective incorporation or
charters) organization)
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)
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John J. Sabl, Esquire
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)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the Registration Statement becomes effective.
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)
<PAGE>
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. [ ]
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<TABLE>
<CAPTION>
Calculation of Registration Fee
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<S> <C> <C> <C> <C>
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER UNIT (2)(3) PRICE (2)(3) FEE(3)(4)
- ----------------------------------------------------------------------------------------------------------------
Debt Securities of Conseco,
Inc. ...........................
Preferred Stock of Conseco, Inc.,
no par value(4).................
Depositary Shares of Conseco,
Inc.(4).........................
Common Stock of Conseco, Inc.,
no par value (4)................
Stock Purchase Units of Conseco,
Inc.(5).........................
Stock Purchase Contracts of
Conseco, Inc.(5)................
Warrants of Conseco, Inc. ........
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Preferred Securities of Conseco
Financing Trust VII.............
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Preferred Securities of Conseco
Financing Trust VIII............
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Preferred Securities of Conseco
Financing Trust IX..............
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Preferred Securities of Conseco
Financing Trust X...............
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Guarantees and back-up undertakings
of Conseco, Inc. in connection
with Preferred Securities of
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX and
Conseco Financing Trust X by
Conseco, Inc.(6)................
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Total............................. $3,155,000,000 100% $3,155,000,000 $877,090
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<FN>
(1) Such indeterminate number or amount of Debt Securities, Preferred Stock,
Depositary Shares, Common Stock, Stock Purchase Units, Stock Purchase Contracts,
Guarantees and Warrants of Conseco, Inc. and Preferred Securities of Conseco
Financing Trust VII, Conseco Financing Trust VIII, Conseco Financing Trust IX,
and Conseco Financing Trust X (the "Conseco Trusts") as may from time to time be
issued at indeterminate prices. Debt Securities of Conseco, Inc. may be issued
and sold to the Conseco Trusts, in which event such Debt Securities may later be
distributed to the holders of Preferred Securities of
<PAGE>
the Conseco Trusts upon a dissolution of any such Conseco Trust and the
distribution of the assets thereof. The amount registered is in United States
dollars or the equivalent thereof in any other currency, currency unit or units,
or composite currency or currencies.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate offering price of the Debt Securities,
Preferred Stock, Depositary Shares, Common Stock, Stock Purchase Units,
Stock Purchase Contracts, Warrants and Preferred Securities, and the
exercise price of any securities issuable upon exercise of Warrants
registered hereby, will not exceed $3,155,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) Also includes such indeterminate number of shares of Preferred Stock and
Common Stock as may be issued upon conversion of or exchange for any Debt
Securities or Preferred Stock that provide for conversion or exchange into
other securities. No separate consideration will be received for the
Preferred Stock or Common Stock issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock. Also consists of such indeterminate
number of shares of Common Stock to be issuable by Conseco, Inc. upon
settlement of the Stock Purchase Contracts of Conseco, Inc.
(5) Each Stock Purchase Unit of Conseco, Inc. is a unit that consists of (i) a
Stock Purchase Contract of Conseco, Inc. under which the holder, upon
settlement of such Stock Purchase Contract, will purchase an indeterminate
number of shares of Common Stock to be issuable by Conseco, Inc. and (ii)
initially a beneficial interest in Preferred Securities of a Conseco Trust
or debt obligations of third parties, including U.S. Treasury Securities,
pledged to secure the obligation of such holder to purchase such shares of
Common Stock. No separate consideration will be received for the Stock
Purchase Contracts.
(6) Includes the rights of holders of the Preferred Securities under the
Guarantees of Preferred Securities and back-up undertakings, consisting of
obligations of Conseco, Inc. to provide certain indemnities in respect of,
and pay and be responsible for, certain expenses, costs, liabilities and
debts of, as applicable, the Conseco Trusts as set forth in the Declaration
of Trust (including the obligation to pay expenses of the Conseco Trusts),
the Indenture and any applicable supplemental indentures thereto, and the
Debt Securities issued to the Conseco Trusts, in each case as further
described in the Registration Statement. No separate consideration will be
received for the Guarantees or any back-up undertakings.
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</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
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>
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 22, 1999
PROSPECTUS
$3,155,000,000
CONSECO, INC.
Debt Securities, Preferred Stock, Depositary Shares, Common Stock, Stock
Purchase Contracts, Stock Purchase Units and Warrants
CONSECO FINANCING TRUST VII
CONSECO FINANCING TRUST VIII
CONSECO FINANCING TRUST IX
CONSECO FINANCING TRUST X
Preferred Securities fully and unconditionally
guaranteed by Conseco, Inc.
----------------------------------------
We will provide the specific terms of the particular securities issued under
this prospectus in a prospectus supplement for each security. You should read
this prospectus and any supplement carefully before investing.
The amount of the securities issued under this prospectus will be limited to a
total of U.S. $3,155,000,000 or the equivalent amount if denominated in foreign
currencies.
Our common stock is listed on the New York Stock Exchange under the trading
symbol "CNC".
----------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy of accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _______ __ , 1999.
<PAGE>
TABLE OF CONTENTS
Page
About This Prospectus.....................................................3
Where You Can Find More Information.......................................3
The Securities We May Offer...............................................5
Conseco, Inc..............................................................6
The Conseco Trusts........................................................6
Use of Proceeds...........................................................7
Ratios of Earnings to Fixed Charges, Earnings to Fixed Charges and
Preferred Stock Dividends and Earnings to Fixed Charges,
Preferred Stock Dividends and Distributions on Company-Obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts................................................................8
Description of Debt Securities............................................9
Description of Capital Stock.............................................23
Description of Depositary Shares.........................................28
Description of Warrants..................................................32
Description of Preferred Securities of the Conseco Trusts................33
Description of Guarantees................................................36
Description of Stock Purchase Contracts and Stock Purchase Units.........40
Plan of Distribution.....................................................40
Special Note Regarding Forward-Looking Statements........................43
Legal Matters............................................................44
Experts..................................................................44
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ABOUT THIS PROSPECTUS
In this prospectus, Conseco, Inc. may be referred to as "Conseco" or
"we". This prospectus is part of a registration statement that we and Conseco
Financing Trust VII, Conseco Financing Trust VIII, Conseco Financing Trust IX
and Conseco Financing Trust X, referred to in this prospectus as the "Conseco
Trusts", filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of $3,155,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "WHERE YOU CAN FIND MORE INFORMATION."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
We and the Conseco Trusts have filed with the SEC a registration
statement under the Securities Act of 1933 to register the securities offered by
this prospectus. This prospectus constitutes only part of the registration
statement and does not contain all of the information in the registration
statement and its exhibits because parts of the registration statement are
allowed to be omitted by SEC rules. Statements in this prospectus or in any
prospectus supplement about documents filed as an exhibit to the registration
statement or otherwise filed with the SEC are only summary statements and may
not contain all the information that may be important to you. For further
information about Conseco, the Conseco Trusts and the securities offered under
this prospectus, you should read the registration statement, including its
exhibits and the documents incorporated into it by reference.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15 (d) of the Securities Exchange Act of 1934
until we sell all of the securities offered under this prospectus.
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
3
<PAGE>
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
and
3. The description of our common stock in the registration statements
filed by us with the SEC and any amendment or report filed for the purpose of
updating the description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address;
James W. Rosensteele, Senior Vice President, Corporate Communications
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Telephone: (317) 817-4418
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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<PAGE>
THE SECURITIES WE MAY OFFER
We may offer and sell from time to time, in one or more series,
o debt securities,
o preferred stock, which may be represented by depositary shares,
o common stock,
o stock purchase contracts to purchase shares of our common stock,
o stock purchase units, each representing ownership of a stock
purchase contract and preferred securities of one of the Conseco
Trusts or debt obligations of third parties, including U.S.
treasury securities, securing the holder's obligations to purchase
our common stock under the stock purchase contracts and
o warrants to purchase debt securities, preferred stock, common stock
or other securities or rights.
The Conseco Trusts may offer, from time to time, preferred securities
representing preferred undivided beneficial interests in the assets of a Conseco
Trust, referred to in this prospectus as "preferred securities". We will
guarantee the payment of periodic cash distributions on preferred securities out
of moneys held by each of the Conseco Trusts, and payments on liquidation,
redemption or otherwise with respect to the preferred securities to the extent
described in this prospectus or the applicable prospectus supplement. We will
directly or indirectly acquire common securities representing undivided
beneficial interests in the assets of each Conseco Trust, referred to in this
prospectus as "common securities". We may issue subordinated debt securities in
one or more series to a Conseco Trust as part of the investment of the proceeds
from the offering of preferred securities and common securities of the Conseco
Trust. The subordinated debt securities purchased by a Conseco Trust may be
subsequently distributed on a proportionate basis to holders of preferred
securities and common securities in connection with the dissolution of the
Conseco Trust.
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<PAGE>
CONSECO, INC.
We are a financial services holding company. We conduct and manage our
business through two operating segments, reflecting our major lines of business:
(1) insurance and fee-based operations and (2) finance operations. Our insurance
subsidiaries develop, market and administer supplemental health insurance,
annuity, individual life insurance, individual and group major medical insurance
and other insurance products. Our finance subsidiaries make, purchase, sell and
service consumer and commercial finance loans throughout the United States.
Since 1982, we have acquired 19 insurance groups. In 1998, we acquired Green
Tree Financial Corporation, which comprises our finance operations. Our
operating strategy is to grow our businesses by focusing our resources on
developing and expanding profitable products and strong distribution channels,
by actively managing assets to seek to achieve superior investment returns and
by controlling expenses.
Our principal executive offices are located at 11825 N. Pennsylvania
Street, Carmel, Indiana 46032. Our telephone number is (317) 817-6100.
THE CONSECO TRUSTS
Each of the Conseco Trusts is a statutory business trust formed under
Delaware law. Each Conseco Trust exists for the exclusive purposes of:
o issuing and selling the preferred securities and the common
securities;
o using the proceeds from the sale of the preferred securities and
common securities to acquire our subordinated debt securities; and
o engaging in only those other activities that are related to those
purposes.
All of the common securities will be directly or indirectly owned by
Conseco. The common securities will rank equally, and payments will be made
proportionally, with the preferred securities, except that, if an event of
default under the declaration of trust of the Conseco Trust has occurred and is
continuing, the rights of the holders of the common securities to payment of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the preferred securities. We will
directly or indirectly acquire common securities in an amount equal to at least
3% of the total capital of each Conseco Trust.
Unless otherwise specified in the applicable prospectus supplement,
each Conseco Trust has a term of up to 55 years but may terminate earlier, as
provided in the declaration of trust. Each Conseco Trust's business and affairs
will be conducted by the trustees appointed by us as the direct or indirect
holder of all of the common securities. We will be entitled to appoint, remove
or replace any of, or increase or reduce the number of, the trustees of each
Conseco Trust. The declaration of trust will set forth the duties and
obligations of the trustees. A majority of the trustees of each Conseco Trust
will be employees or officers of or persons who are affiliated with Conseco,
referred to as "regular trustees".
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<PAGE>
One trustee of each Conseco Trust will be an institution, referred to as the
"institutional trustee", that is not affiliated with Conseco and has a minimum
amount of combined capital and surplus of not less than $50,000,000, which will
act as property trustee and as indenture trustee for the purposes of compliance
with the provisions of Trust Indenture Act of 1939, under the terms of the
applicable prospectus supplement. In addition, unless the institutional trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one trustee of each Conseco Trust will
be an institution having a principal place of business in, or a natural person
resident of, the State of Delaware, referred to as the "Delaware trustee".
Conseco will pay all fees and expenses related to the Conseco Trust and the
offering of the preferred securities and the common securities.
Unless otherwise specified in the applicable prospectus supplement, the
institutional trustee for each Conseco Trust will be Harris Trust and Savings
Bank. Unless otherwise specified in the applicable prospectus supplement, the
Delaware trustee for each Conseco Trust will be First Union Trust Company,
National Association, and its address in the State of Delaware is One Rodney
Square, 920 King Street, Wilmington, Delaware 19801. The principal place of
business of each Conseco Trust is c/o Conseco, Inc., 11825 N. Pennsylvania
Street, Carmel, Indiana 46032; telephone (317) 817-6100.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying prospectus supplement,
we expect to use the net proceeds received by us from the sale of the securities
offered by this prospectus for general corporate purposes. The proceeds from the
sale of preferred securities by the Conseco Trusts will be invested in our
subordinated debt securities. Except as may otherwise be described in the
prospectus supplement relating to the preferred securities, we expect to use the
net proceeds from the sale of subordinated debt securities to the Conseco Trusts
for general corporate purposes. Any specific allocation of the proceeds to a
particular purpose that has been made at the date of any prospectus supplement
will be described in the prospectus supplement.
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<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES, EARNINGS TO FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
AND EARNINGS TO FIXED CHARGES, PREFERRED STOCK DIVIDENDS
AND DISTRIBUTIONS ON COMPANY-OBLIGATED MANDATORILY
REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY TRUSTS
Our ratios of earnings to fixed charges, earnings to fixed charges and
preferred stock dividends and earnings to fixed charges, preferred stock
dividends and distributions on company-obligated mandatorily redeemable
preferred securities of subsidiary trusts for each of the five years ended
December 31, 1998 and for the three months ended March 31, 1998 and 1999 are set
forth in the following table:
<TABLE>
<CAPTION>
Three months
Year ended December 31, ended March 31,
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1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
As reported.................................. 5.80x 4.94x 4.85x 5.55x 3.30x 4.82x 5.44x
Excluding interest expense on debt related
to finance receivables and other
investments (1)............................ 9.28x 7.36x 7.80x 13.00x 6.79x 10.83x 11.59x
Ratio of earnings to fixed charges, preferred
dividends and distributions on company-
obligated mandatorily redeemable
preferred securities of subsidiary trusts:
As reported................................ 4.48x 4.14x 3.74x 4.10x 2.47x 3.71x 3.84x
Excluding interest expense on debt related
to finance receivables and other
investments (1).......................... 6.14x 5.61x 5.11x 6.72x 3.68x 6.12x 5.83x
<FN>
- -------------------
(1) These ratios are included to assist the reader in analyzing the impact of
interest expense on debt related to finance receivables and other
investments (which is generally offset by interest earned on finance
receivables and other investments financed by such debt). The ratios are
not intended to, and do not, represent the following ratios prepared in
accordance with generally accepted accounting principles: the ratio of
earnings to fixed charges; and the ratio of earnings to fixed charges,
preferred dividends and distributions on company-obligated mandatorily
redeemable preferred securities of subsidiary trusts.
</FN>
</TABLE>
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
We may offer one or more series of debt securities that are either
senior debt securities or subordinated debt securities. Unless otherwise
specified in the applicable prospectus supplement, the debt securities will be
issued under the senior indenture or the subordinated indenture, in each case
between us and the trustee identified in the indenture, copies of which have
been filed as exhibits to the registration statement of which this prospectus
forms a part. Except for the subordination provisions of the subordinated
indenture, which do not exist in the senior indenture, the provisions of the
subordinated indenture are substantially identical in substance to the
provisions of the senior indenture that bear the same section numbers.
We have summarized below the material provisions of the indentures and
the debt securities, or indicated which material provisions will be described in
the applicable prospectus supplement. These descriptions are only summaries, and
you should refer to the indentures which describe completely the terms and
definitions summarized below and contain additional information regarding the
debt securities. All article and section references in this prospectus are to
articles and sections of the applicable indenture and whenever particular
sections or defined terms of the indentures are referred to in this prospectus
or in a prospectus supplement, the sections or defined terms are incorporated
into this prospectus or the prospectus supplement by reference.
The debt securities will be unsecured obligations of Conseco. The
indentures do not limit the aggregate amount of debt securities that we may
issue and do not limit the incurrence or issuance by us of other secured or
unsecured debt. The debt securities issued under the senior indenture will be
unsecured and will rank equally with all our other unsecured and unsubordinated
obligations. The debt securities issued under the subordinated indenture will be
subordinate and junior in right of payment, to the extent and in the manner set
forth in the subordinated indenture, to all our senior indebtedness. See "--
Subordination under the Subordinated Indenture."
The applicable prospectus supplement will describe the specific terms
of the series of debt securities being offered. The following terms may be
included:
o the title, designation and purchase price, of the debt securities;
o whether the debt securities are senior debt securities or
subordinated debt securities and whether the debt securities will
be issued under the senior indenture, the subordinated indenture or
another indenture described in the prospectus supplement;
o any limit upon the aggregate principal amount of the debt
securities;
o the date or dates on which the principal of and premium, if any, on
the debt securities will mature or the method of determining or
resetting the date or dates;
o the rate or rates, which may be fixed or variable, at which the
debt securities will bear interest, if any, or the method of
calculating or resetting the rate or rates;
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<PAGE>
o the date or dates from which interest, if any, will accrue or the
method by which the date or dates will be determined;
o the date or dates on which interest, if any, will be payable and
the record date or dates for payment of interest;
o the place or places where principal of, premium, if any, and
interest, if any, on the debt securities will be payable;
o our right, if any, to defer payment of interest on debt securities
and the maximum length of any permitted deferral period;
o 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 terms and conditions upon which, the debt securities
may be redeemed, in whole or in part, at our option;
o our obligation, if any, to redeem or purchase the debt securities
under any sinking fund or similar provisions or upon the happening
of a specified event and the period or periods within which, the
price or prices at which and the other terms and conditions upon
which, the debt securities will be redeemed or purchased, in whole
or in part, under these obligations;
o the authorized denominations of the debt securities;
o the currency or currency unit for which debt securities may be
purchased or in which debt securities may be denominated and/or the
currency or currencies, including currency unit or units, in which
principal of, premium, if any, and interest, if any, on the debt
securities will be payable and whether we or the holders of any
debt securities may elect to receive payments in respect of the
debt securities in a currency or currency unit other than that in
which the debt securities are stated to be payable;
o if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities which will
be payable upon declaration of the acceleration of the maturity of
the debt securities or the method by which that portion will be
determined;
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<PAGE>
o the person to whom any interest on any debt security will be
payable if other than the person in whose name the debt security is
registered on the applicable record date;
o any addition to, or modification or deletion of, any event of
default or any of our covenants specified in the indenture for the
debt securities;
o the application, if any, of defeasance or covenant defeasance
provisions to the debt securities;
o whether the debt securities are to be issued in whole or in part in
the form of one or more temporary or permanent global securities
and, if so, the identity of the depositary for the global security
or securities;
o any federal income tax considerations applicable to holders of the
debt securities; and
o any other special terms relating to the debt securities.
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will not be listed on any securities exchange. (Section 3.1.)
Unless otherwise specified in the applicable prospectus supplement,
debt securities will be issued in fully-registered form without coupons. Where
debt securities of any series are issued in bearer form and are payable to the
bearer of the security, the special restrictions and considerations, including
special offering restrictions and special federal income tax considerations,
applicable to the debt securities and to payment on and transfer and exchange of
the debt securities will be described in the applicable prospectus supplement.
Bearer debt securities will be transferable by delivery. (Section 3.5.)
Debt securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Federal income tax consequences and
special considerations applicable to these debt securities, or to debt
securities issued at par that are treated as having been issued at a discount,
will be described in the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one
or more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, or by reference to
commodity prices, equity indices or other factors, the restrictions, elections,
federal income tax considerations, specific terms and other information about
the issue of debt securities and the foreign currency or currency units or
commodity prices, equity indices or other factors will be set forth in the
applicable prospectus supplement. In general, holders of these series of debt
securities may receive a principal amount on any principal payment date, or a
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<PAGE>
payment of premium, if any, on any premium interest payment date or a payment of
interest on any interest payment date, that is greater than or less than the
amount of principal, premium, if any, or interest otherwise payable on the
payment dates, depending on the value on the payment dates of the applicable
currency, commodity, equity index or other factor.
Payment, Registration, Transfer and Exchange
Unless otherwise provided in the applicable prospectus supplement,
payments with respect to the debt securities will be made in the designated
currency at the office or agency maintained for that purpose that we may
designate from time to time, except that, at our option, interest payments, if
any, on debt securities in registered form may be made (1) by checks mailed to
the holders of debt securities entitled to receive these payments at their
registered addresses or (2) by wire transfer to an account maintained by the
person entitled to receive these payments as specified in the register
maintained to record the holders of the debt securities and transfer of debt
securities. (Sections 3.7(a) and 9.2.) Unless otherwise indicated in the
applicable prospectus supplement, payment of any installment of interest on debt
securities in registered form will be made to the person in whose name the debt
security is registered at the close of business on the regular record date for
payment of interest. (Section 3.7(a).)
Payment with respect to debt securities in bearer form will be made in
the currency and in the manner designated in the prospectus supplement, subject
to any applicable laws and regulations, at paying agencies outside the United
States that we may appoint from time to time. The paying agents outside the
United States initially appointed by us for a series of debt securities will be
named in the prospectus supplement. We may at any time designate additional
paying agents or rescind the designation of any paying agents, except that, if
debt securities of a series are issuable as registered securities, we will be
required to maintain at least one paying agent in each place, a "place of
payment", where payment of principal, premium, if any, and interest or other
payments on the securities are payable and, if debt securities of a series are
issuable as bearer securities, we will be required to maintain a paying agent in
a place of payment outside the United States where debt securities of the series
and any coupons may be presented and surrendered for payment. (Section 9.2.)
Unless otherwise provided in the applicable prospectus supplement, debt
securities in registered form will be transferable or exchangeable at the agency
maintained for this purpose that we will designate from time to time. (Sections
3.5 and 9.2.) Debt securities may be transferred or exchanged without service
charge, other than any tax or other governmental charge imposed in connection
with the transfer or exchange. (Section 3.5.)
Global Debt Securities
Unless otherwise specified in the applicable prospectus supplement, the
debt securities of a series may be issued in whole or in part in the form of one
or more global securities that will be deposited with the depositary or with a
nominee for the depositary identified in the applicable prospectus supplement.
In this event, one or more global securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding debt securities of the series to be represented by the global
security or securities. (Section 3.3.) Except as described in the applicable
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prospectus supplement, unless and until it is exchanged in whole or in part for
debt securities in definitive certificated form, a global security may not be
registered for transfer or exchange except as a whole by:
o the depositary for the global security to a nominee of the
depositary;
o a nominee of the depositary to the depositary or another nominee of
the depositary; or
o the depositary or any nominee to a successor depositary for the
series or a nominee of the successor depositary. (Section 3.5.)
The specific terms of the depositary arrangement for any portion of a
series of debt securities to be represented by a global security will be
described in the applicable prospectus supplement. Unless otherwise specified in
the applicable prospectus supplement, we expect that the following provisions
will apply to the depositary arrangements.
Ownership of beneficial interests in a global security will be limited
to persons that have accounts with the depositary or a nominee of the
depositary, referred to as "participants", or persons that may hold interests
through participants. Upon the issuance of any global security, and the deposit
of the global security with or on behalf of the depositary for the global
security, the depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the debt securities
represented by the global security to the accounts of participants. The accounts
to be credited will be designated by the underwriters or agents engaging in the
distribution of the debt securities or by us, if the debt securities are offered
and sold directly by us. Ownership of beneficial interests by participants in
the global security will be shown on, and the transfer of these beneficial
interests will be effected only through, records maintained by the depositary
for the global security or by its nominee. Ownership of beneficial interests in
a global security by persons that hold through participants will be shown on,
and the transfer of these beneficial interests within the participants will be
effected only through, records maintained by the participants. The laws of some
jurisdictions require that some purchasers of securities take physical delivery
of securities in certificated form. The limitations described above and these
laws may impair the ability to transfer beneficial interests in the global
security.
So long as the depositary for a global security, or its nominee, is the
registered owner of the global security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the debt securities
represented by the global security for all purposes under the applicable
indenture. Unless otherwise specified in the applicable prospectus supplement
and except as specified below, owners of beneficial interests in the global
security will not be entitled to have debt securities of the series represented
by the global security registered in their names, will not receive or be
entitled to receive physical delivery of debt securities of that series in
certificated form and will not be considered the holders of the debt securities
for any purposes under the relevant indenture. (Section 3.8.) Accordingly, each
person owning a beneficial interest in a global security must rely on the
procedures of the depositary and, if the person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the relevant indenture. The
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depositary may grant proxies and otherwise authorize participants to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action which a holder is entitled to give or take under the relevant
indenture. We understand that, under existing industry practices, if we request
any action of holders or if any owner of a beneficial interest in a global
security desires to give any notice or take any action which a holder is
entitled to give or take under the relevant indenture, the depositary would
authorize the participants to give the notice or take the action, and the
participants would authorize beneficial owners owning through the participants
to give the notice or take the action or would otherwise act upon the
instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable prospectus supplement,
payments of principal, premium, if any, and interest, if any, on debt securities
represented by a global security registered in the name of a depositary or its
nominee will be made to the depositary or its nominee, as the case may be, as
the registered owner of the global security. We expect that the depositary for
any debt securities represented by a global security, upon receipt of any
payment of principal, premium or interest, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the global security as shown on the records
of the depositary. We also expect that payments by participants to owners of
beneficial interests in a global security held through the participants will be
governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names," and will be the responsibility of the participants. Neither we nor the
trustees nor any agent of ours or the trustees will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial interests of a global security, or for maintaining, supervising or
reviewing any records relating to the beneficial interests. (Section 3.8.)
Unless otherwise specified in the applicable prospectus supplement, if
the depositary for any debt securities represented by a global security is at
any time unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 and a duly
registered successor depositary is not appointed by us within 90 days, we will
issue these debt securities in definitive certificated form in exchange for the
global security. In addition, we may at any time and in our sole discretion
determine not to have any of the debt securities of a series represented by one
or more global securities and, in that event, will issue debt securities of the
series in definitive certificated form in exchange for the global security or
securities representing the debt securities. (Section 3.5.)
The debt securities of a series may also be issued in whole or in part
in the form of one or more global securities issued as a bearer security that
will be deposited with a depositary, or with a nominee for the depositary,
identified in the applicable prospectus supplement. Bearer global securities may
be issued in temporary or permanent form. (Section 3.4.) The specific terms and
procedures, including the specific terms of the depositary arrangement, for any
portion of a series of debt securities to be represented by one or more bearer
global securities will be described in the applicable prospectus supplement.
Consolidation, Merger or Sale by Conseco
Unless otherwise specified in the applicable prospectus supplement, we
may not consolidate with or merge into any other corporation or sell our assets
substantially as an entirety, unless:
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o the corporation formed by the consolidation or into which we are
merged or the corporation which acquires our assets is organized in
the United States;
o the corporation formed by the consolidation or into which we are
merged or which acquires our assets substantially as an entirety
expressly assumes all of our obligations under each indenture;
o immediately after giving effect to the transaction, no default or
event of default under the applicable indenture has happened and is
continuing, and
o if, as a result of the transaction, our properties or assets would
become subject to an encumbrance which would not be permitted by
the terms of any series of debt securities, we or the successor
corporation, as the case may be, take the steps that are necessary
to secure the debt securities equally and ratably with all
indebtedness secured by that encumbrance.
Upon the consolidation, merger or sale, the successor corporation
formed by the consolidation, or into which we are merged or to which the sale is
made, will succeed to, and be substituted for us under each indenture. (Section
7.1.)
Events of Default, Notice and Rights on Default
Each indenture provides that, if an event of default occurs relating to
the debt securities of any series and is continuing, the trustee for the series
or the holders of 25% in aggregate principal amount of all of the outstanding
debt securities of that series, by written notice to us and to the trustee for
the series, if notice is given by the holders of debt securities, may declare
the principal of or, if the debt securities of that series provide for an amount
that is more or less than the principal amount of the debt securities to be due
and payable upon a declaration of maturity of the debt securities upon an event
of default, that portion of the principal amount specified in the prospectus
supplement, and accrued interest on all the debt securities of that series to be
due and payable; provided, for any debt securities issued under the subordinated
indenture, that the payment of principal and interest on the debt securities
will remain subordinated to the extent provided in the subordinated indenture.
(Section 5.2.)
Unless otherwise specified in the applicable prospectus supplement,
events of default for debt securities of any series are defined in each
indenture as being:
o default for 30 days in payment of any interest on any debt security
of that series or any coupon pertaining to the debt security or any
additional amount payable on debt securities of that series as
specified in the applicable prospectus supplement when due;
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o default in payment of principal, or premium, if any, at maturity or
on redemption or otherwise, or in the making of a mandatory sinking
fund payment on any debt securities of that series when due;
o default for 60 days after notice to us by the trustee for that
series, or by the holders of 25% in aggregate principal amount of
the debt securities of that series then outstanding, in the
performance of any other agreement in the debt securities of that
series, in the indenture or in any supplemental indenture or board
resolution referred to in the indenture under which the debt
securities of that series may have been issued;
o default resulting in acceleration of any of our other indebtedness
for borrowed money where the aggregate principal amount so
accelerated exceeds $25 million and the acceleration is not
rescinded or annulled within 30 days after the written notice of
the default to us by the trustee or to us and the trustee by the
holders of 25% in aggregate principal amount of the debt securities
of that series then outstanding, provided that the event of default
will be remedied, cured or waived if the default that resulted in
the acceleration of the other indebtedness is remedied, cured or
waived; and
o our bankruptcy, insolvency or reorganization. (Section 5.1.)
The definition of event of default in each indenture specifically
excludes a default under a secured debt under which the obligee has recourse,
exclusive of recourse for ancillary matters including environmental indemnities,
misapplication of funds and costs of enforcement, only to the collateral pledged
for repayment and where the fair market value of the collateral is 2% or less of
our total assets appearing on our most recently prepared consolidated balance
sheet as at the end of one of our fiscal quarters, prepared in accordance with
generally accepted accounting principles, at the time of the default.
Events of default for a specified series of debt securities may be
added to the indenture and, if so added, will be described in the applicable
prospectus supplement. (Sections 3.1 and 5.1(7).) Each indenture provides that
the trustee will, within 90 days after the occurrence of a default for the debt
securities of any series, give to the holders of the debt securities of that
series notice of all defaults known to it unless the default has been cured or
waived; provided that except in the case of a default in payment on the debt
securities of that series, the trustee may withhold the notice if and so long as
a committee of its officers determines that withholding the notice is in the
interests of the holders of the debt securities of that series. (Section 6.6.)
Each indenture provides that the holders of a majority in aggregate principal
amount of the debt securities of each series affected, with each series voting
as a class, may, subject to limited conditions, direct the time, method and
place of conducting any proceeding for any remedy available to the trustee for
the series, or exercising any trust or power conferred on the trustee. (Section
5.8.) Each indenture includes a covenant that we will file annually with the
trustee a certificate as to our compliance with all conditions and covenants of
the indenture. (Section 9.5.) The holders of a majority in aggregate principal
amount of any series of debt securities by notice to the trustee for the series
may
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waive, on behalf of the holders of all debt securities of the series, any past
default or event of default for that series and its consequences except a
default or event of default in the payment of the principal of, premium, if any,
or interest, if any, on any debt security, and except for an event of default
resulting from the breach of a covenant or provision of either indenture which,
under the applicable indenture, cannot be amended or modified without the
consent of the holders of each outstanding debt security of the series affected.
(Section 5.7.)
Option to Defer Interest Payments
If provided in the applicable prospectus supplement, we will have the
right at any time and from time to time during the term of the series of debt
securities to defer the payment of interest for the number of consecutive
interest payment periods specified in the applicable prospectus supplement,
subject to the terms, conditions and covenants, if any, specified in the
prospectus supplement, provided that the deferral period may not extend beyond
the stated maturity of the debt securities. Material United States federal
income tax consequences and special considerations applicable to these debt
securities will be described in the applicable prospectus supplement. Unless
otherwise specified in the applicable prospectus supplement, at the end of the
deferral period, we will pay all interest then accrued and unpaid together with
interest on accrued and unpaid interest compounded semiannually at the rate
specified for the debt securities to the extent permitted by applicable law;
provided, that during the deferral period we may not:
o declare or pay dividends on, make distributions regarding, or
redeem, purchase, acquire or make a liquidation payment regarding,
any of our capital stock, other than:
(1) purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations under any
employee or agent benefit plans or the satisfaction of our
obligations under any contract or security outstanding on the
date of the event requiring us to purchase capital stock,
(2) as a result of a reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital stock,
(3) the purchase of fractional interests in shares of our
capital stock in connection with the conversion or exchange
provisions of that capital stock or the security being
converted or exchanged,
(4) dividends or distributions in our capital stock, or rights
to acquire capital stock, or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock, or
(5) redemptions or repurchases of any rights outstanding under
a shareholder rights plan,
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o make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by us that
rank junior to the debt securities, and
o make any guarantee payments regarding the foregoing, other than
payments under our guarantee of the preferred securities or the
common securities.
Prior to the termination of any deferral period, we may further defer
payments of interest by extending the interest payment period; provided,
however, that, the deferral period, including all previous and further
extensions, may not extend beyond the maturity of the debt securities.
Upon the termination of any deferral period and the payment of all
amounts then due, we may commence a new deferral period, subject to the terms
set forth in this section. No interest during a deferral period, except at the
end of the deferral period, will be due and payable, but we may prepay at any
time all or any portion of the interest accrued during a deferral period. We
have no present intention of exercising our right to defer payments of interest
by extending the interest payment period on the debt securities. If the
institutional trustee is the sole holder of the debt securities, we will give
the regular trustees and the institutional trustee notice of our selection of a
deferral period one business day before the earlier of (1) the date
distributions on the preferred securities are payable or (2) the date the
regular trustees are required to give notice to the New York Stock Exchange, or
other applicable self-regulatory organization, or to holders of the preferred
securities of the record or payment date of the distribution. The regular
trustees will give notice of our selection of the deferral period to the holders
of the preferred securities. If the institutional trustee is not the sole holder
of the debt securities, we will give the holders of the debt securities notice
of our selection of a deferral period ten business days before the earlier of
(1) the interest payment date or (2) the date upon which we are required to give
notice to the New York Stock Exchange, or other applicable self-regulatory
organization, or to holders of the debt securities of the record or payment date
of the related interest payment.
Modification of the Indentures
Unless otherwise specified in the applicable prospectus supplement,
each indenture contains provisions permitting us and the trustee to enter into
one or more supplemental indentures without the consent of the holders of any of
the debt securities in order to:
o evidence the succession of another corporation to Conseco and the
assumption of our covenants by the successor;
o add to our covenants or surrender any of our rights or powers;
o add additional events of default for any series of debt securities;
o add or change any provisions to the extent necessary to permit or
facilitate the issuance of bearer securities;
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o change or eliminate any provision affecting only debt securities
not yet issued;
o provide for security for the debt securities;
o to establish the form or terms of debt securities;
o evidence and provide for successor trustees;
o if allowed without penalty under applicable laws and regulations,
permit payment in respect of bearer securities in the United
States;
o correct any defect or supplement any inconsistent provisions or to
make any other provisions concerning matters or questions arising
under the indenture, provided that the action does not adversely
affect the interests of any holder of debt securities of any
series; or
o cure any ambiguity or correct any mistake.
The subordinated indenture also permits us and the trustee to enter into
supplemental indentures to modify the subordination provisions contained in the
subordinated indenture except in a manner adverse to any outstanding debt
securities. (Section 8.1.)
Unless otherwise specified in the applicable prospectus supplement,
each indenture also contains provisions permitting us and the trustee, with the
consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities affected by a supplemental indenture, with the debt
securities of each series voting as a class, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
indenture or any supplemental indenture or modifying the rights of the holders
of debt securities of that series, except that, without the consent of the
holder of each debt security so affected, no supplemental indenture may:
o change the time for payment of principal or premium, if any, or
interest on any debt security;
o reduce the principal of, or any installment of principal of, or
premium, if any, or interest on any debt security, or change the
manner in which they are determined;
o reduce the amount of premium, if any, payable upon the redemption
of any debt security;
o reduce the amount of principal payable upon acceleration of the
maturity of any debt security providing for an amount more or less
than the principal amount of the debt security to be due and
payable upon a declaration of maturity upon an event of default;
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o change the currency or currency unit in which any debt security or
any premium or interest on the debt security is payable;
o impair the right to institute suit for the enforcement of any
payment on or regarding any debt security;
o reduce the percentage in principal amount of the outstanding debt
securities affected by the supplemental indenture the consent of
whose holders is required for amendment of the indenture or for
waiver of compliance with provisions of the indenture or for waiver
of defaults;
o change our obligation to maintain an office or agency in the places
and for the purposes specified in the indenture;
o modify the provisions relating to the subordination of outstanding
debt securities of any series in a manner adverse to the holders of
the debt securities; or
o modify the provisions relating to waiver of defaults or any of the
provisions set forth above. (Section 8.2.)
Subordination under the Subordinated Indenture
The subordinated indenture provides that any subordinated debt
securities issued under the subordinated indenture are subordinate and junior in
right of payment to the extent provided in the subordinated indenture (Section
12.1 of the subordinated indenture.) to our senior indebtedness, which is
defined as:
o all of our indebtedness, whether outstanding on the date of the
subordinated indenture or created after that date, incurred or
assumed, which is for money borrowed, or evidenced by a note or
similar instrument given in connection with the acquisition of any
business, properties or assets, including securities;
o any indebtedness of others of the kinds described in the preceding
bulletpoint for the payment of which we are is responsible or
liable as guarantor or otherwise; and
o amendments, renewals, extensions and refundings of any of that
indebtedness, unless in any instrument or instruments evidencing or
securing that indebtedness or under which the indebtedness is
outstanding.
Senior indebtedness will continue to be senior indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of the senior indebtedness or
extension or renewal of the senior indebtedness. Senior indebtedness does not
include:
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o any of our indebtedness to any of our subsidiaries;
o indebtedness incurred for the purchase of goods or materials or for
services obtained in the ordinary course of business; and
o any indebtedness which by its terms ranks equally with or
subordinate to the subordinated debt securities. (Section 12.2 of
the subordinated indenture.)
If (1) we default 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 (2) an event of default occurs for any senior indebtedness
permitting the holders of the senior indebtedness to accelerate the maturity of
the senior indebtedness and written notice of the event of default, requesting
that payments on subordinated debt securities cease, is given to us by the
holders of senior indebtedness, then unless and until the default in payment or
event of default is cured or waived or ceases to exist, no direct or indirect
payment, in cash, property or securities, by set-off or otherwise, will be made
or agreed to be made on account of the subordinated debt securities or interest
on the subordinated debt securities or with respect to any repayment,
redemption, retirement, purchase or other acquisition of subordinated debt
securities. (Section 12.4 of the subordinated indenture.)
In the event of:
o any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar
proceeding relating to us, our creditors or our property,
o any proceeding for the liquidation, dissolution or other winding-up
of Conseco, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings,
o any assignment by us for the benefit of our creditors, or
o any other marshaling of our assets,
then all senior indebtedness including, without limitation, interest accruing
after the commencement of the proceeding, assignment or marshaling of assets,
must first be paid in full before any payment or distribution, whether in cash,
securities or other property, is made by us on account of subordinated debt
securities. In that event, except as described in this paragraph, any payment or
distribution, which, but for the subordination provisions, would be payable or
deliverable with respect to subordinated debt securities, will 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
the holders until all senior indebtedness has been paid in full. (Section 12.3
of the subordinated indenture.) The payments or distributions described in the
previous sentence include those which may be payable or deliverable
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because of the payment of any other indebtedness of ours being subordinated to
the payment of subordinated debt securities. The payments or distributions
described in the first sentence of this paragraph do not include payments or
distributions of our securities or the securities of any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinate, at least to the extent provided in the subordination provisions
of the subordinated indenture for the indebtedness evidenced by subordinated
debt securities, to the payment of all senior indebtedness at the time
outstanding and to any securities issued with respect to the senior indebtedness
under the plan of reorganization or readjustment. No present or future holder of
any senior indebtedness will be prejudiced in the right to enforce subordination
of the indebtedness evidenced by subordinated debt securities by any act or
failure to act on our part. (Section 12.9 of the subordinated indenture.)
Senior indebtedness will be deemed to have been paid in full if the
holders of senior indebtedness will have received cash, securities or other
property equal to the amount of the senior indebtedness then outstanding. Upon
the payment in full of all senior indebtedness, the holders of subordinated debt
securities will be subrogated to all the rights of any holders of senior
indebtedness to receive any further payments or distributions applicable to the
senior indebtedness until all subordinated debt securities are paid in full. The
payments or distributions received by any holder of subordinated debt
securities, by reason of the subrogation, of cash, securities or other property
which otherwise would be paid or distributed to the holders of senior
indebtedness, will, as between us and our creditors other than the holders of
senior indebtedness, on the one hand, and the holders of subordinated debt
securities, on the other, be deemed to be a payment by us on account of senior
indebtedness, and not on account of subordinated debt securities. (Section 12.7
of the subordinated indenture.)
The subordinated indenture provides that the subordination provisions
described in this section, to the extent as they relate to any particular issue
of subordinated debt securities, may be changed before the issuance of the
subordinated debt securities. Any change of this nature would be described in
the applicable prospectus supplement relating to the subordinated debt
securities.
Defeasance and Covenant Defeasance
If indicated in the applicable prospectus supplement, we may elect
either to defease and be discharged from any and all obligations with respect to
the debt securities of or within any series, referred to as "defeasance", or to
be released from our obligations with respect to selected covenants applicable
to the debt securities of or within any series, referred to as "covenant
defeasance", upon the deposit with the appropriate trustee, in trust for that
purpose, of money and/or U.S. government obligations which through the payment
of principal and interest in accordance with their terms will provide money in
an amount sufficient, without reinvestment, to pay the principal of and any
premium or interest on the debt securities to maturity or redemption, as the
case may be, and any mandatory sinking fund or similar payments on the debt
securities. As a condition to defeasance or covenant defeasance, we must deliver
to the trustee an opinion of counsel to the effect that the holders of the debt
securities will not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts and in the same manner and at
the same times as would have been the case if the defeasance or covenant
defeasance had not occurred. The opinion of counsel, in the case of defeasance,
must refer to and be based upon a ruling of the Internal Revenue
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Service or a change in applicable federal income tax law occurring after the
date of the relevant indenture. (Article 4.) If indicated in the applicable
prospectus supplement, in addition to obligations of the United States or an
agency or instrumentality of the United States, government obligations may
include obligations of the government or an agency or instrumentality of the
government issuing the currency or currency unit in which debt securities of the
series are payable. (Section 3.1.)
In addition, in order for covenants contained in the subordinated
indenture to be discharged no event or condition may exist that, under
provisions described in "-- Subordination under the Subordinated Indenture"
above, would prevent us from making payments of principal of, and premium, if
any, and interest on subordinated debt securities at the date of the required
irrevocable deposit. (Section 4.6(j) of the subordinated indenture.)
We may exercise our defeasance option for the debt securities in spite
of our earlier exercise of our covenant defeasance option. If we exercise our
defeasance option, payment of the debt securities may not be accelerated because
of a default or an event of default. (Section 4.4.) If we exercise our covenant
defeasance option, payment of the debt securities may not be accelerated by
reason of a default or an event of default under the covenants to which the
covenant defeasance is applicable. However, if the acceleration occurs by reason
of another event of default, the realizable value at the acceleration date of
the money and government obligations in the defeasance trust could be less than
the principal and interest then due on the debt securities, because the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.
The Trustees
Unless otherwise specified in the applicable prospectus supplement,
Bank of New York will be the trustee under the senior indenture, and Harris
Trust and Savings Bank will be the trustee under the subordinated indenture. We
may also maintain banking and other commercial relationships with each of the
trustees and their affiliates in the ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock was 1,020,000,000 shares as of July 15,
1999, consisting of:
o 20,000,000 shares of preferred stock, of which none were
outstanding; and
o 1,000,000,000 shares of common stock, of which 326,733,135 shares
were outstanding.
In general, our authorized preferred stock is afforded preferences
regarding dividends and liquidation rights over our common stock. Our board of
directors is empowered, without approval of our
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shareholders, to cause the preferred stock to be issued in one or more series,
with the numbers of shares of each series and the rights, preferences and
limitations of each series to be determined by the board, including the dividend
rights, conversion rights, redemption rights and liquidation preferences, if
any, of any wholly unissued series of preferred stock, or of the entire class of
preferred stock if none of the shares have been issued, the number of shares
constituting each series and the terms and conditions of the issue of each
series. The following is a summary of the terms of our preferred stock and
common stock and provisions of our articles of incorporation, bylaws and
statutes that affect our preferred stock and common stock and is subject to the
actual provisions of the articles of incorporation, bylaws and these statutes.
Preferred Stock
The applicable prospectus supplement will describe the following terms
of any preferred stock offered pursuant to this prospectus, to the extent
applicable to the preferred stock:
o the specific designation, number of shares, seniority and purchase
price;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates on which any dividends
will be payable, or the method by which the rates or dates will be
determined;
o any voting rights;
o if other than the currency of the United States, the currency or
currencies, including composite currencies, in which the preferred
stock is denominated and/or in which payments will or may be
payable;
o the method by which amounts with respect to the preferred stock may
be calculated and any commodities, currencies or indices, or value,
rate or price, relevant to the calculation;
o whether the preferred stock is convertible or exchangeable and, if
so, the securities or rights into which the preferred stock is
convertible or exchangeable, which may include other preferred
stock, debt securities, common stock or other securities or rights
of Conseco, including rights to receive payment in cash or
securities based on the value, rate or price of one or more
specified commodities, currencies or indices, or a combination any
of these, and the terms and conditions upon which the conversions
or exchanges will be effected, including the initial conversion or
exchange prices or rates, the conversion or exchange period and any
other related provisions;
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o the place or places where dividends and other payments on the
preferred stock will be payable; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares", we may, at our
option, elect to offer depositary shares evidenced by depositary receipts, each
representing an interest, to be specified in the applicable prospectus
supplement for the particular series of the preferred stock, in a share of the
particular series of the preferred stock issued and deposited with a preferred
stock depositary. All shares of preferred stock offered by this prospectus, or
issuable upon conversion, exchange or exercise of securities, will, when issued,
be fully paid and non-assessable.
Common Stock
The prospectus supplement relating to an offering of common stock will
describe relevant terms, including the number of shares offered, the initial
offering price, market price and dividend information.
Dividends. Holders of common stock are entitled to receive dividends
and other distributions in cash, stock or property, when, as and if declared by
the board of directors out of our assets or funds legally available for payment
of dividends or other distributions and will share equally on a per share basis
in all dividends and other distributions, subject to the rights of holders of
preferred stock.
Voting Rights. At every meeting of shareholders, every holder of common
stock is entitled to one vote per share. Subject to any voting rights which may
be granted to holders of preferred stock, any action submitted to shareholders
is approved if the number of votes cast in favor of the action exceeds the
number of votes against, except where other provision is made by law and subject
to applicable quorum requirements.
Liquidation Rights. If there is any liquidation, dissolution or
winding-up of Conseco, whether voluntary or involuntary, the holders of common
stock are entitled to share equally in the assets available for distribution
after payment of all liabilities and provision for the liquidation preference of
any shares of preferred stock then outstanding.
The holders of common stock have no preemptive rights, cumulative
voting rights, subscription rights, or conversion rights and the common stock
may not be redeemed. The transfer agent and registrar for the common stock is
First Union National Bank. The common stock is traded on the New York Stock
Exchange under the symbol "CNC". All shares of common stock offered by this
prospectus, or issuable upon conversion, exchange or exercise of securities,
will, when issued, be fully paid and non-assessable.
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Provisions of Our Articles of Incorporation and By-laws
Some provisions of our articles of incorporation and bylaws may make it
more difficult to effect a change in control if our board of directors
determines that the change in control would not be in the best interests of our
shareholders. It could be argued, contrary to the belief of our board of
directors, that these provisions are not in the best interests of the
shareholders to the extent that they will have the effect of tending to
discourage possible takeover bids, which might be at prices that are higher than
the recent market prices for our common stock. The most important of those
provisions are described below.
Our articles of incorporation authorize the establishment in the bylaws
of a classified board of directors. The bylaws, in turn, provide that the
directors serve staggered three-year terms, with the members of only one class
being elected in any year.
A classified board of directors may increase the difficulty of removing
incumbent directors, providing the directors with enhanced ability to retain
their positions. A classified board of directors may also make it more difficult
for a third party to acquire control of Conseco by means of a proxy contest. In
addition, the classification may make it more difficult to replace a majority of
directors for business reasons unrelated to a change in control.
Our articles of incorporation provide that holders of our voting stock
will not be entitled to vote on some business transactions, defined to include,
among other things, some mergers, consolidations, sales, leases, transfers or
other dispositions of a substantial part of our assets, with related persons,
including persons beneficially owning more than 10% of our outstanding voting
stock, nor may the business combination transactions be effected, unless:
o the relevant business combination has been approved by two-thirds
of the continuing directors; or
o the aggregate amount of the cash and the fair value of any
consideration other than cash to be received by any holder of our
common stock or preferred stock in the business combination for
each share of common stock or preferred stock will be at least
equal to the highest per share price paid by the related person to
acquire any shares of common stock or preferred stock, as the case
may be, beneficially owned by the related person.
As discussed above, our preferred stock may be issued from time to time
in one or more series with the rights, preferences, limitations and restrictions
that may be determined by the board of directors. The issuance of preferred
stock could be used, under some circumstances, as a method of delaying or
preventing a change of control of Conseco and could have a detrimental effect on
the rights of holders of common stock, including loss of voting control.
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The provisions of our articles of incorporation regarding the
classified board of directors and business combination transactions may be
amended only with the affirmative approval of holders of at least 80% of our
outstanding voting stock.
Our bylaws may be amended by majority vote of the board of directors.
Provisions of Corporate and Insurance Laws
In addition to our articles of incorporation and bylaws, some
provisions of Indiana law may delay, deter or prevent a merger, tender offer or
other takeover attempt of Conseco.
Under the Indiana Business Corporation Law, a director may, in
considering the best interests of a corporation, consider the effects of any
action on shareholders, employees, suppliers and customers of the corporation,
on communities in which offices or other facilities of the corporation are
located, and any other factors the director considers pertinent.
The Indiana Business Corporation Law provides that no business
combination, defined to include some mergers, sales of assets, sales of 5% or
more of outstanding stock, loans, recapitalizations or liquidations or
dissolutions, involving a corporation and an interested shareholder, defined to
include any holder of 10% or more of the corporation's voting stock, may be
entered into unless it has been approved by the board of directors of the
corporation or:
o five years have expired since the acquisition of shares of the
corporation by the interested shareholder;
o all requirements of the corporation's articles of incorporation
relating to business combinations have been satisfied; and
o either (1) a majority of shareholders of the corporation, excluding
the interested shareholder, approve the business combination or (2)
all shareholders are paid fair value for their stock, as defined in
the statute.
However, this law does not restrict any offer to purchase all of a corporation's
shares.
The Indiana Business Corporation Law also provides that when a target
corporation, incorporated in Indiana and having its principal place of business,
principal office or substantial assets in Indiana, like Conseco, has a specified
threshold of ownership by Indiana residents, any acquisition which, together
with its previous holdings, gives the acquiror at least 20% of the target's
voting stock triggers a shareholder approval mechanism. If the acquiror files a
statutorily required disclosure statement, the target's management has 50 days
within which to hold a special meeting of shareholders at which all
disinterested shareholders of the target not affiliated with the acquiror or any
officer or inside director of the target consider and vote upon whether the
acquiror will have voting rights for the shares of the target held by it.
Without shareholder approval, the shares acquired by the acquiror have no voting
rights. If the acquiror fails to file the statutorily required disclosure
statement, the target can redeem the acquiror's
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shares at a price to be determined according to procedures devised by the
target. These provisions of the Indiana Business Corporation Law apply to
Indiana corporations, unless the corporation has elected otherwise, which we
have not done, in its articles of incorporation or bylaws.
In addition, the insurance laws and regulations of the jurisdictions in
which we or our insurance subsidiaries do business may impede or delay a
business combination involving us. State insurance holding company laws and
regulations applicable to us generally provide that no person may acquire
control of a company, and thus indirect control of its insurance subsidiaries,
unless the person has provided required information to, and the acquisition is
approved or not disapproved by, the appropriate insurance regulatory
authorities. Generally, any person acquiring beneficial ownership of 10% or more
of the common stock would be presumed to have acquired control, unless the
appropriate insurance regulatory authorities upon advance application determine
otherwise.
DESCRIPTION OF DEPOSITARY SHARES
The following sections summarize the material terms of a deposit
agreement which we may, at our option, elect to enter into, and of depositary
shares and depositary receipts which would be described in the deposit
agreement, and are qualified by, and are subject to, the form of deposit
agreement, if any, and form of depositary receipts, if any, relating to each
series of the preferred stock, as well as the articles of incorporation or any
required amendment to the articles of incorporation describing the applicable
series of preferred stock.
We may, at our option, elect to have shares of preferred stock be
represented by depositary shares. The shares of any series of the preferred
stock underlying the depositary shares will be deposited under a separate
deposit agreement to be entered into by us and a bank or trust company selected
by us as a preferred stock depositary. The prospectus supplement relating to a
series of depositary shares will set forth the name and address of the preferred
stock depositary. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, proportionately, to all the rights,
preferences and privileges of the preferred stock represented by the depositary
share, including dividend, voting, redemption, conversion, exchange and
liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
in accordance with the deposit agreement, each of which will represent the
fractional interest in the number of shares of a particular series of the
preferred stock described in the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary will distribute all cash dividends or
other cash distributions with respect to the series of preferred stock
represented by the depositary shares to the record holders of depositary
receipts in proportion, to the extent possible, to the number of depositary
shares owned by the holders. The depositary, however, will distribute only the
amount that can be distributed without attributing to any depositary share a
fraction of one cent, and any undistributed balance will be added to
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and treated as part of the next sum received by the depositary for distribution
to record holders of depositary receipts then outstanding.
If a distribution of property other than cash on the preferred stock
occurs, the preferred stock depositary will distribute the property to the
record holders of depositary receipts in proportion, to the extent possible, to
the number of depositary shares owned by the holders, unless the preferred stock
depositary determines, after consultation with us, that it is not feasible to
make the distribution, in which case the preferred stock depositary may, with
our approval, adopt a method it deems equitable and practicable for the purpose
of effecting the distribution, including a public or private sale of the
property, and distribution of the net proceeds from the sale to the holders.
The amount distributed to record holders of depositary receipts in any
of the cases described in this section will be reduced by any amount that we or
the preferred stock depositary are required to withhold on account of taxes.
Conversion and Exchange
If any series of preferred stock underlying the depositary shares is
subject to provisions relating to its conversion or exchange, as set forth in
the applicable prospectus supplement relating to that series, each record holder
of depositary receipts will have the right or obligation to convert or exchange
the depositary shares represented by the depositary receipts under their terms.
Redemption of Depositary Shares
If any series of preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the proceeds
received by the preferred stock depositary resulting from the redemption, in
whole or in part, of the preferred stock held by the preferred stock depositary.
Whenever we redeem preferred stock from the preferred stock depositary, the
preferred stock depositary will redeem as of the same redemption date a
proportionate number of depositary shares representing the shares of preferred
stock that were redeemed. If less than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or on a
proportionate basis as we may determine.
After the date fixed for redemption, the depositary shares so called
for redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price upon redemption. Any funds that we deposit with the preferred
stock depositary relating to depositary shares which are not redeemed by the
holders of the depositary shares will be returned to us after a period of two
years from the date the funds are deposited by us.
Voting
Upon receipt of notice of any meeting at which the holders of any
shares of preferred stock underlying the depositary shares are entitled to vote,
the preferred stock depositary will mail the information contained in the notice
to the record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date, which will be the same date as the
record date for the preferred
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stock, will be entitled to instruct the preferred stock depositary as to the
exercise of the voting rights pertaining to the number of shares of preferred
stock underlying the holder's depositary shares. The preferred stock depositary
will endeavor, to the extent practicable, to vote the number of shares of
preferred stock underlying the depositary shares in accordance with the holder's
instructions, and we will take all reasonable action that is deemed necessary by
the preferred stock depositary to enable the preferred stock depositary to do
so. Unless the preferred stock depositary receives specific written instructions
from holders of depositary receipts, it will abstain from voting any of the
preferred stock.
Record Date
Subject to the provisions of the deposit agreement, the preferred stock
depositary will fix a record date, which will be the same as the record date for
the preferred stock, for the determination of the holders of depositary receipts
that are entitled to receive a distribution, exercise voting rights or receive a
notice whenever:
o any cash dividend or other cash distribution becomes payable;
o any distribution other than cash is to be made;
o any rights, preferences or privileges will be offered relating to
the preferred stock;
o the preferred stock depositary receives notice of any meeting at
which holders of preferred stock are entitled to vote or of which
holders of preferred stock are entitled to notice; or
o the preferred stock depositary receives notice of the mandatory
conversion of, or any election on our part to call for redemption,
any preferred stock.
Withdrawal of Preferred Stock
Upon surrender of depositary receipts at the principal office of the
preferred stock depositary, upon payment of any unpaid amount due the preferred
stock depositary, and subject to the terms of the deposit agreement, the owner
of the depositary shares evidenced by the depositary receipts is entitled to
delivery of the number of whole shares of preferred stock and all money and
other property, if any, represented by the depositary shares. Partial shares of
preferred stock will not be issued. If the depositary receipts delivered by the
holder evidence a number of depositary shares in excess of the number of
depositary shares representing the number of whole shares of preferred stock to
be withdrawn, the preferred stock depositary will deliver to the holder at the
same time a new depositary receipt evidencing the excess number of depositary
shares. Holders of preferred stock that are withdrawn will not be entitled to
deposit the shares that have been withdrawn under the deposit agreement or to
receive depositary receipts.
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Amendment and Termination of the Deposit Agreement
The deposit agreement will provide that the form of depositary receipt
and any provision of the deposit agreement may at any time be amended by
agreement between us and the preferred stock depositary. However, any amendment
which imposes or increases any fees, taxes or other charges payable by the
holders of depositary receipts, other than taxes and other governmental charges,
fees and other expenses payable by the holders as stated under "Charges of
Preferred Stock Depositary", or which otherwise prejudices any substantial
existing right of holders of depositary receipts, will not take effect as to
outstanding depositary receipts until the expiration of 90 days after notice of
the amendment has been mailed to the record holders of outstanding depositary
receipts.
Whenever directed by us to do so, the preferred stock depositary will
terminate the deposit agreement by mailing notice of the termination to the
record holders of all depositary receipts then outstanding at least 30 days
before the date fixed in the notice for the termination. The preferred stock
depositary may likewise terminate the deposit agreement if at any time 45 days
have expired after the preferred stock depositary has delivered to us a written
notice of its election to resign and a successor depositary has not been
appointed and accepted its appointment. If any depositary receipts remain
outstanding after the date of termination, the preferred stock depositary will
discontinue the transfer of depositary receipts, will suspend the distribution
of dividends to the holders of depositary receipts, and will not give any
further notices, other than notice of the termination, or perform any further
acts under the deposit agreement except as provided below and except that the
preferred stock depositary will continue to collect dividends and any other
distributions on the preferred stock and deliver the preferred stock together
with the dividends and distributions and the net proceeds of any sales of
rights, preferences, privileges or other property, without liability for any
interest, in exchange for surrendered depositary receipts. At any time after the
expiration of two years from the date of termination, the preferred stock
depositary may sell the preferred stock then held by it at public or private
sales, at any place or places and upon terms as it deems proper, and may hold
the net proceeds of any sale, together with any money and other property then
held by it, without liability for any interest, for the benefit, on a
proportionate basis, of the holders of depositary receipts which have not been
surrendered.
Charges of Preferred Stock Depositary
We will pay all charges of the preferred stock depositary including
charges in connection with:
o the initial deposit of the preferred stock,
o the initial issuance of the depositary receipts,
o the distribution of information to the holders of depositary
receipts regarding matters on which holders of preferred stock are
entitled to vote,
o withdrawals of the preferred stock by the holders of depositary
receipts, or
o redemption or conversion of the preferred stock,
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except for taxes, including transfer taxes, if any, and other governmental
charges and the other charges that are expressly provided in the deposit
agreement to be at the expense of holders of depositary receipts or persons
depositing preferred stock.
Duties of Preferred Stock Depositary
The preferred stock depositary will make available for inspection by
holders of depositary receipts, at its corporate office and its office in New
York City, all reports and communications from us which are delivered to the
preferred stock depositary as the holder of preferred stock. Neither the
preferred stock depositary nor we will be liable if it is prevented or delayed
by law or any circumstance beyond its control in performing its obligations
under the deposit agreement. The obligations of the preferred stock depositary
under the deposit agreement are limited to performing its duties without
negligence or bad faith. Our obligations under the deposit agreement are limited
to performing our duties in good faith. Neither we nor the preferred stock
depositary is obligated to prosecute or defend any legal proceeding with respect
to any depositary shares or preferred stock unless satisfactory indemnity is
furnished. We and the preferred stock depositary are entitled to rely upon
advice of or information from counsel, accountants or other persons believed to
be competent and on documents believed to be genuine.
The preferred stock depositary may resign at any time or be removed by
us, effective upon the acceptance by its successor of its appointment; provided,
that if a successor preferred stock depositary has not been appointed or
accepted the appointment within 45 days after the preferred stock depositary has
delivered a notice of election to resign to us, the preferred stock depositary
may terminate the deposit agreement.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, preferred stock,
common stock or any combination of any of them, and these warrants may be issued
independently or together with any debt securities, preferred stock or common
stock and may be attached to or separate from these securities. Each series of
warrants will be issued under a separate warrant agreement to be entered into
between us and a warrant agent. The warrant agent will act solely as our agent
in connection with the warrants of each series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
warrants. Further terms of the warrants and the applicable warrant agreement
will be included in the applicable prospectus supplement.
The applicable prospectus supplement will describe the terms of any
warrants for which this prospectus is being delivered, including the following:
o the title of the warrants;
o the aggregate number of warrants;
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o the price or prices at which the warrants will be issued;
o the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
o the designation and terms of the securities, other than preferred
securities and common securities, purchasable upon exercise of the
warrants;
o the price at which and the currency or currencies, including
composite currencies, in which the securities, other than preferred
securities and common securities, purchasable upon exercise of the
warrants may be purchased;
o the date on which the right to exercise the warrants will commence
and the date on which this right will expire;
o whether the warrants will be issued in registered form or bearer
form;
o if applicable, the minimum or maximum amount of the warrants that
may be exercised at any one time;
o if applicable, the designation and terms of the securities, other
than preferred securities and common securities, with which the
warrants are issued and the number of warrants issued with each
security;
o if applicable, the date on and after which the warrants and the
related securities, other than preferred securities and common
securities, will be separately transferable;
o information about book-entry procedures, if any;
o if applicable, a discussion of applicable United States federal
income tax considerations; and
o any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
DESCRIPTION OF PREFERRED SECURITIES OF THE CONSECO TRUSTS
Each Conseco Trust may issue, from time to time, only one series of
preferred securities having terms described in the prospectus supplement. The
declaration of trust of each Conseco Trust authorizes the regular trustees of
the Conseco Trust to issue on behalf of the Conseco Trust one series of
preferred securities. Each declaration of trust will be qualified as an
indenture under the Trust Indenture Act. The
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institutional trustee, an independent trustee, will act as indenture trustee for
the preferred securities for purposes of compliance with the provisions of the
Trust Indenture Act. The preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights, maturity date or dates
and the other preferred, deferred or other special rights or restrictions as are
established by the regular trustees in accordance with the applicable
declaration of trust or as are set forth in the declaration of trust or made
part of the declaration of trust by the Trust Indenture Act. The prospectus
supplement relating to the preferred securities of a Conseco Trust will set
forth the specific terms of the preferred securities, including, to the extent
applicable:
o the distinctive designation of the preferred securities;
o the number of preferred securities issued by the Conseco Trust;
o the annual distribution rate, or method of determining the rate,
for preferred securities issued by the Conseco Trust and the date
or dates upon which distributions will be payable; provided,
however, that distributions on the preferred securities will,
subject to any deferral provisions and any provisions for payment
of defaulted distributions, be payable on a quarterly basis to
holders of the preferred securities as of a record date in each
quarter during which the preferred securities are outstanding and
any provisions relating to the resetting or adjustment of the
distribution rate;
o any right of the Conseco Trust to defer quarterly distributions on
the preferred securities as a result of an interest deferral right
exercised by us on the subordinated debt securities held by the
Conseco Trust;
o whether distributions on preferred securities will be cumulative,
and, in the case of preferred securities having cumulative
distribution rights, the date or dates or method of determining the
date or dates from which distributions on preferred securities will
be cumulative;
o the amount or amounts which will be paid out of the assets of the
Conseco Trust to the holders of preferred securities upon voluntary
or involuntary dissolution, winding-up or termination of the
Conseco Trust;
o the obligation or option, if any, of the Conseco Trust to purchase
or redeem preferred securities and the price or prices at which,
the period or periods within which and the terms and conditions
upon which preferred securities will be purchased or redeemed, in
whole or in part, under this obligation or option with the
redemption price or formula for determining the redemption price to
be specified in the applicable prospectus supplement;
o the voting rights, if any, of preferred securities in addition to
those required by law, including the number of votes per preferred
security and any requirement for the
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approval by the holders of preferred securities as a condition to
specified action or amendments to the declaration of trust;
o the terms and conditions, if any, upon which subordinated debt
securities held by the Conseco Trust may be distributed to holders
of preferred securities; and
o any other relevant terms, rights, preferences, privileges,
limitations or restrictions of preferred securities consistent with
the declaration of trust or applicable law.
All preferred securities offered by the prospectus will be guaranteed by us to
the extent set forth below under "Description of Guarantees." The guarantee
issued by us to each Conseco Trust, when taken together with our back-up
undertakings, consisting of our obligations under each declaration of trust,
including the obligation to pay expenses of each Conseco Trust, the applicable
indenture and any applicable supplemental indentures and the subordinated debt
securities issued to any Conseco Trust will provide a full and unconditional
guarantee by us of amounts due on the preferred securities issued by each
Conseco Trust. The payment terms of the preferred securities will be the same as
the subordinated debt securities issued to the applicable Conseco Trust by us.
Each declaration of trust authorizes the regular trustees to issue on
behalf of the applicable trust one series of common securities having terms,
including distributions, redemption, voting and liquidation rights, and
restrictions that are established by the regular trustees in accordance with the
declaration of trust or that are otherwise set forth in the declaration of
trust. The terms of the common securities issued by each Conseco Trust will be
substantially identical to the terms of the preferred securities issued by the
Conseco Trust, and the common securities will rank equally, and payments will be
made on the common securities on a proportionate basis, with the preferred
securities except that, if an event of default under the declaration of trust
has occurred and is continuing, the rights of the holders of the common
securities to payment of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the preferred
securities. The common securities will also carry the right to vote and to
appoint, remove or replace any of the trustees of the Conseco Trust. We will own
directly or indirectly all of the common securities of each Conseco Trust.
The financial statements of any Conseco Trust that issues preferred
securities will be reflected in our consolidated financial statements with the
preferred securities shown as company-obligated mandatorily-redeemable preferred
securities of a subsidiary trust under minority interest in consolidated
subsidiaries. We will include in a footnote to our audited financial statements,
statements that the applicable Conseco Trust is wholly-owned by us and that the
sole asset of the Conseco Trust is the subordinated debt securities, indicating
the principal amount, interest rate and maturity date of the subordinated debt
securities.
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DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the guarantees
that will be executed and delivered by us for the benefit of the holders, from
time to time, of preferred securities. Each guarantee will be qualified as an
indenture under the Trust Indenture Act. Unless otherwise specified in the
applicable prospectus supplement, Harris Trust and Savings Bank will act as the
preferred securities guarantee trustee. The terms of each guarantee will be set
forth in the guarantee and will include the terms made part of the guarantee by
the Trust Indenture Act. The following is a summary of the material terms of the
guarantees. You should refer to the provisions of the form of guarantee, a copy
of which has been filed as an exhibit to the registration statement of which
this prospectus is a part, and the Trust Indenture Act. Each guarantee will be
held by the preferred securities guarantee trustee for the benefit of the
holders of the preferred securities of the applicable Conseco Trust.
Unless otherwise specified in the applicable prospectus supplement, we
will agree, to the extent set forth in each guarantee, to pay in full to the
holders of the preferred securities, the payments and distributions to be made
with respect to the preferred securities, except to the extent paid by the
applicable Conseco Trust, as and when due, regardless of any defense, right of
set-off or counterclaim which the Conseco Trust may have or assert. The
following payments or distributions with respect to the preferred securities, to
the extent not paid by the Conseco Trust, will be subject to the guarantee,
without duplication:
o any accrued and unpaid distributions that are required to be paid
on the preferred securities, to the extent the Conseco Trust has
funds available to make the payment;
o the redemption price, to the extent the Conseco Trust has funds
available to make the payment, for any preferred securities called
for redemption by the Conseco Trust; and
o upon a voluntary or involuntary dissolution, winding-up or
termination of the Conseco Trust, other than in connection with the
distribution of subordinated debt securities to the holders of
preferred securities or the redemption of all of the preferred
securities upon maturity or redemption of the subordinated debt
securities, the lesser of (1) the sum of the liquidation amount and
all accrued and unpaid distributions on the preferred securities to
the date of payment, to the extent the Conseco Trust has funds
available to make the payment or (2) the amount of assets of the
Conseco Trust remaining for distribution to holders of the
preferred securities in liquidation of the Conseco Trust.
Our obligation to make a guarantee payment may be satisfied by our direct
payment of the required amounts to the holders of preferred securities or by
causing the applicable Conseco Trust to pay the amounts to the holders.
Each guarantee will not apply to any payment of distributions except to
the extent the applicable
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Conseco Trust has funds available to make the payment. If we do not make
interest or principal payments on the subordinated debt securities purchased by
the Conseco Trust, the Conseco Trust will not pay distributions on the preferred
securities issued by the Conseco Trust and will not have funds available to make
the payment.
We have also agreed to guarantee the obligations of each Conseco Trust
with respect to the common securities issued by the Conseco Trust to the same
extent as the guarantee with respect to the preferred securities, except that,
if an event of default under the subordinated indenture has occurred and is
continuing, holders of preferred securities guaranteed by us will have priority
over holders of the common securities guaranteed by us with respect to
distributions and payments on liquidation, redemption or otherwise.
Covenants of Conseco
Unless otherwise specified in the applicable prospectus supplement, in
each guarantee of the payment obligations of a Conseco Trust with respect to
preferred securities, we will covenant that, so long as any preferred securities
issued by the Conseco Trust remain outstanding, if there has occurred any event
of default under the guarantee or under the declaration of trust of the Conseco
Trust, then we will not:
o declare or pay any dividend on, make any other distributions on, or
redeem, purchase, acquire or make a liquidation payment regarding,
any of our capital stock, except:
(1) purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations under any
employee or agent benefit plans or the satisfaction of our
obligations under any contract or security outstanding on the
date of the event requiring us to purchase our capital stock;
(2) as a result of a reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital stock;
(3) the purchase of fractional interests in shares of our
capital stock in connection with the conversion or exchange
provisions of our capital stock or the security being converted
or exchanged;
(4) dividends or distributions in our capital stock, or rights
to acquire our capital stock, or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock; or
(5) redemptions or repurchases of any rights outstanding under
a shareholder rights plan;
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o make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by us which
rank junior to the subordinated debt securities issued to the
applicable Conseco Trust; and
o make any guarantee payments regarding the foregoing, other than
under a guarantee of the payment obligations of a Conseco Trust
with respect to preferred securities.
Modification of the Guarantees; Assignment
Except for any changes that do not adversely affect the rights of
holders of preferred securities, in which case no consent of the holders will be
required, each guarantee of the payment obligations of a Conseco Trust with
respect to preferred securities may be amended only with the prior approval of
the holders of at least a majority in liquidation amount of the outstanding
preferred securities of the Conseco Trust. The manner of obtaining any approval
of holders of the preferred securities will be set forth in accompanying
prospectus supplement. All guarantees and agreements contained in a guarantee of
the obligations of a Conseco Trust with respect to preferred securities will
bind the successors, assigns, receivers, trustees and representatives of Conseco
and will inure to the benefit of the holders of the preferred securities of the
applicable Conseco Trust then outstanding.
Events of Default
An event of default under a preferred securities guarantee will occur
upon our failure to perform any of our payment or other obligations under the
guarantee. The holders of a majority in liquidation amount of the preferred
securities to which the preferred securities guarantee relates have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the preferred securities guarantee trustee with respect to the
guarantee or to direct the exercise of any trust or power conferred upon the
preferred securities guarantee trustee under the guarantee.
If the preferred securities guarantee trustee fails to enforce the
guarantee, any record holder of preferred securities to which the guarantee
relates may institute a legal proceeding directly against us to enforce the
preferred securities guarantee trustee's rights under the guarantee without
first instituting a legal proceeding against the applicable Conseco Trust, the
preferred securities guarantee trustee or any other person or entity. If we have
failed to make a guarantee payment under a guarantee, a record holder of
preferred securities to which the guarantee relates may directly institute a
proceeding against us for enforcement of the guarantee for the payment to the
record holder of the preferred securities to which the guarantee relates of the
principal of or interest on the applicable subordinated debt securities on or
after the respective due dates specified in the subordinated debt securities,
and the amount of the payment will be based on the holder's proportionate share
of the amount due and owing on all of the preferred securities to which the
guarantee relates. We have waived any right or remedy to require that any action
be brought first against the applicable Conseco Trust or any other person or
entity before proceeding directly against us. The record holder in the case of
the issuance of one or more global preferred securities certificates will be The
Depository Trust Company, or its nominee, acting at the direction of the
beneficial owners of the preferred securities.
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We will be required to provide annually to the preferred securities
guarantee trustee a statement as to the performance of our obligations under
each outstanding preferred securities guarantee and as to any default in our
performance.
Information Concerning the Preferred Securities Guarantee Trustee
The preferred securities guarantee trustee, before the occurrence of a
default under a preferred securities guarantee, undertakes to perform only the
duties that are specifically set forth in the guarantee and, after a default
under a guarantee, will exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to this
provision, the preferred securities guarantee trustee is under no obligation to
exercise any of the powers vested in it by a preferred securities guarantee at
the request of any holder of preferred securities to which the guarantee relates
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred by the preferred securities guarantee trustee
in exercising any of its powers.
Termination
Each preferred securities guarantee will terminate as to the preferred
securities issued by the applicable Conseco Trust upon full payment of the
redemption price of all preferred securities of the Conseco Trust, upon
distribution of the subordinated debt securities held by the Conseco Trust to
the holders of all of the preferred securities of the Conseco Trust or upon full
payment of the amounts payable in accordance with the declaration of trust of
the Conseco Trust upon liquidation of the Conseco Trust. Each 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 issued by the
applicable Conseco Trust must restore payment of any sums paid under the
preferred securities or the preferred securities guarantee.
Status of the Guarantees
The preferred stock guarantees will constitute our unsecured
obligations and will rank:
o subordinate and junior in right of payment to all of our other
liabilities, including the subordinated debt securities, except
those liabilities made equivalent or subordinate by their terms;
o equivalently with the most senior preferred or preference stock now
or hereafter issued by us and with any guarantee now or hereafter
entered into by us in respect of any preferred or preference stock
of any of our affiliates; and
o senior to our common stock.
The terms of the preferred securities provide that each holder of preferred
securities by acceptance of the preferred securities agrees to the subordination
provisions and other terms of our guarantee relating to the preferred
securities.
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Each preferred securities guarantee will constitute a guarantee of
payment and not of collection. This means that the guaranteed party may
institute a legal proceeding directly against us to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity.
Governing Law
The preferred securities guarantees will be governed by and construed
in accordance with the law of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, shares of common
stock, preferred stock or depositary shares at a future date or dates or, in any
case, a number or dollar amount to be determined by a specified formula or some
other means. The consideration for the common stock, preferred stock or
depositary shares may be fixed at the time the stock purchase contracts are
issued or may be determined by reference to a specific formula set forth in the
stock purchase contracts. The stock purchase contracts may be issued separately
or as a part of stock purchase units consisting of a stock purchase contract and
our debt securities, preferred securities issued by a Conseco Trust or debt
obligations of third parties, including U.S. Treasury securities, securing the
holders' obligations to purchase the common stock, preferred stock or depositary
shares under the stock purchase contracts. We may be required under the stock
purchase contracts to make periodic payments to the holders of the stock
purchase units or by the stock purchase units to make periodic payments to the
holders of the stock purchase units, and these payments may be unsecured or
prefunded on some basis. The stock purchase contracts may require holders to
secure their obligations under those contracts in a specified manner. The
applicable prospectus supplement will describe the terms of any stock purchase
contracts or stock purchase units.
PLAN OF DISTRIBUTION
We and/or any Conseco Trust may sell any of the securities being
offered by this prospectus in any one or more of the following ways from time to
time:
o through agents;
o to or through underwriters;
o through dealers; or
o directly to purchasers.
The prospectus supplement for the securities will set forth the terms
of the offering of the securities, including the name or names of any
underwriters, dealers or agents; the purchase price of the securities and the
proceeds to us and/or a Conseco Trust from the sale; any underwriting discounts
and
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commissions or agency fees and other items constituting underwriters' or agents'
compensation; any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchange on which the
securities may be listed. Any initial public offering price, discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The distribution of the securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices.
Offers to purchase securities may be solicited by agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named, and any
commissions payable by us and/or the applicable Conseco Trust to the agent will
be set forth, in the applicable prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any agent will be acting on a reasonable
best efforts basis for the period of its appointment. Any agent may be deemed to
be an underwriter, as that term is defined in the Securities Act of 1933, of the
securities so offered and sold.
If securities are sold by means of an underwritten offering, we and/or
the applicable Conseco Trust will execute an underwriting agreement with an
underwriter or underwriters at the time an agreement for the sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and dealers, if any,
will be set forth in the prospectus supplement which will be used by the
underwriters to make resales of the securities in respect of which this
prospectus is delivered to the public. We and/or the applicable Conseco Trust
may also agree with an underwriter or underwriters to enter into an underwriting
agreement or conduct an underwritten offering, in each case, at some future
date. If underwriters are utilized in the sale of the securities with respect to
which this prospectus is delivered, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriter at the time of sale.
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing underwriters.
If any underwriter or underwriters are utilized in the sale of the securities,
unless otherwise indicated in the prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
specific conditions and that the underwriters for a sale of securities will be
obligated to purchase all of the securities of a series if any are purchased.
If a dealer is utilized in the sales of the securities with respect to
which this prospectus is delivered, we and/or the applicable Conseco Trust will
sell the securities to the dealer as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale. Any dealer may be deemed to be an underwriter, as the term is
defined in the Securities Act of 1933, of the securities so offered and sold.
The name of the dealer and the terms of the transaction will be set forth in the
prospectus supplement relating to the sale of securities.
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Offers to purchase securities may be solicited directly by us and/or
the applicable Conseco Trust and the sale of securities may be made by us and/or
the applicable Conseco Trust directly to institutional investors or others, who
may be deemed to be underwriters within the meaning of the Securities Act of
1933 for any resale of securities. The terms of any sales will be described in
the prospectus supplement relating to the sale of securities.
Agents, underwriters and dealers may be entitled under relevant
agreements to indemnification or contribution by us and/or the applicable
Conseco Trust against specified liabilities, including liabilities under the
Securities Act of 1933.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, us and our subsidiaries in the
ordinary course of business.
Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment under their terms, the
occurrence of specified events, or otherwise, by one or more remarketing firms,
acting as principals for their own accounts or as agents for us and/or the
applicable Conseco Trust. Any remarketing firm will be identified and the terms
of its agreement, if any, with its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as the term is defined in the Securities Act of 1933, in
connection with the securities remarketed by the remarketing firms. Remarketing
firms may be entitled under agreements which may be entered into with us and/or
the applicable Conseco Trust to indemnification or contribution by us and/or the
applicable Conseco Trust against specified civil liabilities, including
liabilities under the Securities Act of 1933, and may be customers of, engage in
transactions with or perform services for us and our subsidiaries in the
ordinary course of business.
If so indicated in the applicable prospectus supplement, we and/or the
applicable Conseco Trust may authorize agents, underwriters or dealers to
solicit offers by specified types of institutions to purchase securities from us
and/or the applicable Conseco Trust at the public offering prices set forth in
the applicable prospectus supplement under delayed delivery contracts providing
for payment and delivery on a specified date or dates in the future. A
commission indicated in the applicable prospectus supplement will be paid to
underwriters, dealers and agents soliciting purchases of securities under the
delayed delivery contracts accepted by us and/or the applicable Conseco Trust.
No dealer, salesman or other individual has been authorized to give any
information or to make any representations not contained in this prospectus, any
accompanying prospectus supplement or the documents incorporated or deemed
incorporated into this prospectus by reference. If given or made, the
information or representations must not be relied upon as having been authorized
by us or any underwriter, dealer or agent. This prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, any securities other
than the registered securities to which it relates, or an offer to sell or a
solicitation of an offer to buy those securities to which it relates, in any
jurisdiction where, or to any person to whom, it is unlawful to make the offer
or solicitation. Neither the delivery of this prospectus or any prospectus
supplement nor any sale made under this prospectus should, under any
circumstances,
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create any implication that there has not been any change in the facts set forth
in this prospectus or in our affairs since the date of this prospectus.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements, trend analyses and other information contained in this
prospectus, any prospectus supplement or any document incorporated into this
prospectus by reference relative to markets for the our products and trends in
our operations or financial results, as well as other statements including words
like "anticipate," "believe," "plan," "estimate," "expect," "intend," "should,"
"could," "goal," "target," and other similar expressions, constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to known and unknown risks,
uncertainties and other factors which may cause actual results to be materially
different from those contemplated by the forward-looking statements. These
factors include, among other things:
o general economic conditions and other factors, including prevailing
interest rate levels, stock and credit market performance and
health care inflation, which may affect, among other things, our
ability to sell our products, make loans and access capital
resources and the costs associated therewith, the market value of
our investments, the lapse rate and profitability of our policies
and the level of defaults and prepayments of loans we make;
o our ability to achieve anticipated synergies and levels of
operational efficiencies;
o customer response to new products, distribution channels and
marketing initiatives;
o mortality, morbidity, usage of health care services and other
factors which may affect the profitability of our insurance
products;
o changes in the federal income tax laws and regulations which may
affect the relative tax advantages of some of our products;
o increasing competition in the sale of insurance and annuities and
in the finance business;
o regulatory changes or actions, including those relating to
regulation of financial services affecting, among other things,
bank sales and underwriting of insurance products, regulation of
the sale, underwriting and pricing of insurance products, and
health care regulation affecting our health insurance products;
o the availability and terms of future acquisitions;
o our ability and the ability of our vendors and other external
parties to achieve year 2000 readiness for significant systems and
operations on a timely basis; and
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o the risk factors or uncertainties listed from time to time in any
prospectus supplement or any document incorporated into this
prospectus by reference.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, the
legal validity of securities, other than the preferred securities, will be
passed upon for us by John J. Sabl, our Executive Vice President and General
Counsel. Mr. Sabl is a full-time employee and owns shares and holds options to
purchase shares of our common stock. Matters of Delaware law relating to the
validity of the preferred securities will be passed upon for the Conseco Trusts
by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware
counsel to the Conseco Trusts.
EXPERTS
The consolidated financial statements of Conseco at December 31, 1998
and 1997, and for each of the three years in the period ended December 31, 1998,
which are incorporated by reference in this prospectus, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report thereon, which as to the years 1997 and 1996, insofar as the financial
statements relate to Green Tree Financial Corporation, is based on the report of
KPMG LLP, independent auditors. The financial statements referred to above are
incorporated herein by reference in reliance upon these reports given upon the
authority of the firms as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee.............. $877,090
New York Stock Exchange listing fees............................. *
Legal fees and expenses.......................................... *
Accounting fees and engraving expense ........................... *
Printing expenses ............................................... *
Trustee's fees and expenses...................................... *
Rating agencies' fees............................................ *
Miscellaneous.................................................... *
---------
Total...................................................... $ *
=========
*To be supplied by amendment.
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 Bylaws of Conseco provide 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, if (a) such person is wholly
successful with respect to such action, suit or proceeding or (b) if such person
is determined to have acted in good faith, in what he or she reasonably believed
to be the best interests of Conseco or at least not opposed to its best
interests and, in addition, with respect to any criminal claim, is determined to
have had reasonable cause to believe that his or her conduct was lawful or had
no reasonable cause to believe that his or her conduct was unlawful. 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 and amounts paid in settlement. If such person was not wholly
successful, the determination of entitlement to indemnification shall be made by
one of the following methods, such method to be selected by the Board of
Directors: (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who are not and have not been parties to the claim; (b)
by the majority vote of a committee duly designated by the Board of Directors,
consisting solely of two or more directors who are not and have not been parties
to the claim; and (c) by special legal counsel.
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The above discussion of Conseco's Bylaws and the Indiana Business
Corporation Law is not intended to be exhaustive and is qualified in its
entirety by such Bylaws and the Indiana Business Corporation Law.
Conseco has purchased director and officer liability insurance which would
provide coverage against certain liabilities, including liabilities under the
securities laws.
The Declaration of Trust for each of Conseco Financing Trust VII, Conseco
Financing Trust VIII, Conseco Financing Trust IX and Conseco Financing Trust X
(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 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
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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
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
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
Conseco's Annual Report on Form 10-K for the year ended
December 31, 1997, and are incorporated herein by this
reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. were filed with
the Commission as Exhibit 3.2 to its Report on Form 10-Q for
the quarter ended June 30, 1998, and are incorporated herein
by this reference.
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4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and Bank of New York as successor in
interest to LTCB Trust Company, as Trustee, pursuant to
which the Senior Debt Securities are to be issued.*
4.2 Subordinated Indenture, dated as of July 21, 1999, between
Conseco, Inc. and Harris Trust and Savings Bank, as Trustee,
pursuant to which the Subordinated Debentures are to be
issued.
4.3 Form of Deposit Agreement will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.4 Certificate of Trust of Conseco Financing Trust VII is
incorporated herein by reference to Exhibit 4.10 to the
Registration Statement on Form S-3 of the Registrant (No.
333- 27803).
4.5 Declaration of Trust of Conseco Financing Trust VII is
incorporated herein by reference to Exhibit 4.11 to the
Registration Statement on Form S-3 of the Registrant (No.
333- 27803).
4.6 Certificate of Trust of Conseco Financing Trust VIII.
4.7 Declaration of Trust of Conseco Financing Trust VIII.
4.8 Certificate of Trust of Conseco Financing Trust IX.
4.9 Declaration of Trust of Conseco Financing Trust IX.
4.10 Certificate of Trust of Conseco Financing Trust X.
4.11 Declaration of Trust of Conseco Financing Trust X.
4.12 Form of Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit 4.10 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991).
4.13 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc. is incorporated by reference to Exhibit 4.11 to
Amendment No. 1 to the Registration Statement on Form S-3 of
Conseco (No. 333-14991)
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 will be filed as an exhibit
subsequently included or incorporated by reference herein.
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 Supplemental Indenture is incorporated by reference
to Exhibit 4.16 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991).
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).
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5.1 Opinion of John J. Sabl.
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 John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of PricewaterhouseCoopers LLP with respect to
the financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG LLP with respect to the financial statements
of Green Tree Financial Corporation
24.1 Powers of Attorney from Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Lawrence M. Coss, Ngaire E. Cuneo, David R.
Decatur, M. Phil Hathaway, Donald F. Gongaware, James D.
Massey, Dennis E. Murray, Sr., John M. Mutz, and Robert S.
Nickoloff are included on the signature pages of this
Registration Statement.
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Bank of New York, 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 Harris Trust and
Savings Bank, as Trustee under the Subordinated Indenture
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of _____________________
_________, as Trustee under the Declaration of Trust of
Conseco Financing Trust VII, the Declaration of Trust of
Conseco Financing Trust VIII, the Declaration of Trust of
Conseco Financing Trust IX, and the Declaration of Trust of
Conseco Financing Trust X.**
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of ____________________
_________, as Trustee of the Preferred Securities Guarantees
for the benefit of the holders of Preferred Securities of
Conseco Financing Trust VII, Conseco Financing Trust VIII
and Conseco Financing Trust IX, and Conseco Financing Trust
X.**
* Incorporated herein by reference to the corresponding exhibit to Amendment
No. 1 to the Registration Statement on Form S-3 of Conseco (No. 33-53095).
** To be filed by amendment.
II-5
<PAGE>
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) 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 with or furnished to the Commission 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
II-6
<PAGE>
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) 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.
(d) 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.
(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.
II-7
<PAGE>
(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.
II-8
<PAGE>
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 Registration
Statement to be signed on its behalf by the undersigned, there unto duly
authorized, in the City of Carmel, State of Indiana, on July 22, 1999.
CONSECO, INC.
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick,
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears below
hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either of
whom may act without the joinder of the other, as his or her attorney-in-fact to
sign on his or her behalf individually and in the capacity stated below and to
file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Stephen C. Hilbert Director, Chairman of the Board, July 22, 1999
- --------------------------- President and Chief Executive Officer
Stephen C. Hilbert (Principal Executive Officer
/s/ Rollin M. Dick Director, Executive Vice President July 22, 1999
- --------------------------- and Chief Financial Officer
Rollin M. Dick (Principal Financial Officer
/s/ James S. Adams Senior Vice President, Chief July 22, 1999
- --------------------------- Accounting Officer and Treasurer
James S. Adams (Principal Accounting Office)
/s/ Lawrence M. Coss Director July 22, 1999
- ---------------------------
Lawrence M. Coss
/s/ Ngaire E. Cuneo Director July 22, 1999
- ---------------------------
Ngaire E. Cuneo
/s/ David R. Decatur Director July 22, 1999
- ---------------------------
David R. Decatur
/s/ M. Phil Hathaway Director July 22, 1999
- ---------------------------
M. Phil Hathaway
/s/ Donald F. Gongaware Director July 22, 1999
- ---------------------------
Donald F. Gongaware
/s/ James D. Massey Director July 22, 1999
- ---------------------------
James D. Massey
/s/ Dennis E. Murray, Sr. Director July 22, 1999
- ---------------------------
Dennis E. Murray, Sr.
/s/ John M. Mutz Director July 22, 1999
- ---------------------------
John M. Mutz
/s/ Robert S. Nickoloff Director July 22, 1999
- ---------------------------
Robert S. Nickoloff
</TABLE>
II-10
<PAGE>
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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on July 22, 1999.
CONSECO FINANCING TRUST VII
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VIII 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 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on July 22, 1999.
CONSECO FINANCING TRUST VIII
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust IX 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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on July 22, 1999.
CONSECO FINANCING TRUST IX
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust X 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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on July 22, 1999.
CONSECO FINANCING TRUST X
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-14
<PAGE>
EXHIBIT INDEX
TO REGISTRATION STATEMENT
ON FORM S-3
CONSECO, INC.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
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).
1.1 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
Conseco's Annual Report on Form 10-K for the year ended
December 31, 1997, and are incorporated herein by this
reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. were filed with
the Commission as Exhibit 3.2 to its Report on Form 10-Q for
the quarter ended June 30, 1998, and are incorporated herein
by this reference.
4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and Bank of New York, as successor in
interest to LTCB Trust Company, as Trustee, pursuant to
which the Senior Debt Securities are to be issued.*
4.2 Subordinated Indenture, dated as of July 21,1999, between
Conseco, Inc. and Harris Trust and Savings Bank, pursuant to
which the Subordinated Debentures are to be issued.
4.3 Form of Deposit Agreement will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.4 Certificate of Trust of Conseco Financing Trust VII is
incorporated herein by reference to Exhibit 4.10 to the
Registration Statement on Form S-3 of the Registrant (No.
333-27803).
4.5 Declaration of Trust of Conseco Financing Trust VII is
incorporated herein by reference to Exhibit 4.11 to the
Registration Statement on Form S-3 of the Registrant (No.
333-27803).
4.6 Certificate of Trust of Conseco Financing Trust VIII.
4.7 Declaration of Trust of Conseco Financing Trust VIII.
4.8 Certificate of Trust of Conseco Financing Trust IX.
4.9 Declaration of Trust of Conseco Financing Trust IX.
4.10 Certificate of Trust of Conseco Financing Trust X.
II-15
<PAGE>
4.11 Declaration of Trust of Conseco Financing Trust X.
4.12 Form of Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit 4.10 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991).
4.13 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc. is incorporated by reference to Exhibit 4.11 to
Amendment No. 1 to the Registration Statement on Form S-3 of
Conseco (No. 333-14991)
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 will be filed as an exhibit
subsequently included or incorporated by reference herein.
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 Supplemental Indenture is incorporated by reference
to Exhibit 4.16 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991).
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).
5.1 Opinion of John J. Sabl
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 John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of PricewaterhouseCoopers LLP with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG LLP with respect to the financial statements
of Green Tree Financial Corporation
24.1 Powers of Attorney from Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Lawrence M. Coss, Ngaire E. Cuneo, David R.
Decatur, M. Phil Hathaway, Donald F. Gongaware, James D.
Massey, Dennis E. Murray, Sr., John M. Mutz, and Robert S.
Nickoloff are included on the signature pages of this
Registration Statement.
II-16
<PAGE>
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Bank Of New York, 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 Harris Trust and
Savings Bank, as Trustee under the Subordinated Indenture.
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of _____________________
_________, as Trustee under the Declaration of Trust of
Conseco Financing Trust VII, the Declaration of Trust of
Conseco Financing Trust VIII, the Declaration of Trust of
Conseco Financing Trust IX, and the Declaration of Trust of
Conseco Financing Trust X.**
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of ____________________
_________, as Trustee of the Preferred Securities Guarantees
for the benefit of the holders of Preferred Securities of
Conseco Financing Trust VII, Conseco Financing Trust VIII,
Conseco Financing Trust IX, and Conseco Financing Trust X.**
* Incorporated herein by reference to the corresponding exhibit to Amendment
No.1 to the Registration Statement on Form S-3 of Conseco (No. 33-53095).
** To be filed by amendment.
II-17
- --------------------------------------------------------------------------------
CONSECO, INC.
to
HARRIS TRUST AND SAVINGS BANK, Trustee
SUBORDINATED INDENTURE
-----------------------------
Dated as of July 21, 1999
-----------------------------
Providing for Issuance of Subordinated
Debt Securities in Series
- --------------------------------------------------------------------------------
<PAGE>
{Reconciliation and tie between Subordinated Indenture, dated as of July 21,
1999, and the Trust Indenture Act of 1939, as amended.
TRUST INDENTURE ACT SUBORDINATED
OF 1939 SECTION INDENTURE SECTION
310 (a) (1).................................. 6.12
(a) (2).................................. 6.12
(a) (3).................................. TIA
(a) (4).................................. Not applicable
(a) (5).................................. TIA
(b)...................................... 6.10; 6.11 (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)...................................... 9.5; 9.6; TIA
(b)...................................... Not Applicable
(c) (1).................................. 1.2
(c) (2).................................. 1.2
(c) (3).................................. Not Applicable
(d)...................................... Not Applicable
(e)...................................... 1.2
(f)...................................... TIA
315 (a)...................................... 6.1
(b)...................................... 6.6
(c)...................................... 6.1
(d) (1).................................. TIA
(d) (2).................................. TIA
(d) (3).................................. TIA
(e)...................................... TIA
<PAGE>
316 (a) (last sentence)...................... 1.1
(a) (1)(A)............................... 5.2; 5.8
(a) (1)(B)............................... 5.7
(b)...................................... 5.9; 5.10
(c)...................................... TIA
317 (a) (1).................................. 5.3; 5.5
(a) (2).................................. 5.4
(b)...................................... 9.3
318 (a)...................................... 1.11
(b)...................................... TIA
(c)...................................... 1.11; TIA
- -----------------------
This reconciliation and tie section does not constitute part
of the Subordinated Indenture.}
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 Definitions and other Provisions of
General Application....................................... 1
1.1. Definitions............................................... 1
1.2. Compliance Certificates and Opinions...................... 13
1.3. Form-of Documents Delivered to Trustee.................... 14
1.4. Acts of Holders........................................... 15
1.5. Notices, etc., to Trustee and Company..................... 18
1.6. Notice-to Holders; Waiver................................. 19
1.7. Headings and Table of Contents............................ 20
1.8. Successor and Assigns..................................... 20
1.9. Separability.............................................. 20
1.10. Benefits of Indenture..................................... 20
1.11. Governing Law............................................. 20
1.12. Legal Holidays............................................ 21
ARTICLE 2 Security Forms............................................ 21
2.1. Forms Generally........................................... 21
2.2. Form of Trustee's Certificate of
Authentication............................................ 22
2.3. Securities in Global Form................................. 23
2.4. Form of Legend for Securities in
Global Form............................................... 24
ARTICLE 3 The Securities............................................ 24
3.1. Amount Unlimited; Issuable in Series...................... 24
3.2. Denominations............................................. 30
3.3. Execution, Authentication, Delivery and
Dating.................................................... 31
3.4. Temporary Securities...................................... 35
3.5. Registration, Transfer and Exchange....................... 36
3.6. Replacement Securities.................................... 42
3.7. Payment of Interest; Interest Rights
Preserved................................................. 43
3.8. Persons Deemed Owners..................................... 46
3.9. Cancellation.............................................. 47
3.10. Computation of Interest................................... 47
3.11. CUSIP Numbers............................................. 47
3.12. Currency and Manner of Payment in Respect
of Securities............................................. 48
3.13. Appointment and Resignation of Exchange
Rate Agent................................................ 54
3.14. Agreed Tax Treatment...................................... 56
i
<PAGE>
PAGE
ARTICLE 4 Satisfaction, Discharge and Defeasance.................... 56
4.1. Termination of Company's Obligations
Under the Indenture....................................... 56
4.2. Application of Trust Funds................................ 58
4.3. Applicability of Defeasance
Provisions; Company's Option to Effect
Defeasance or Covenant Defeasance......................... 58
4.4. Defeasance and Discharge.................................. 59
4.5. Covenant Defeasance....................................... 60
4.6. Conditions to Defeasance or Covenants
Defeasance................................................ 60
4.7. Deposited Money and Government Obligations
to Be Held in Trust....................................... 64
4.8. Repayment to Company...................................... 65
4.9. Indemnity for Government Obligations...................... 65
4.10. Reinstatement............................................. 65
ARTICLE 5 Defaults and Remedies..................................... 66
5.1. Events of Default......................................... 66
5.2. Acceleration; Rescission and Annulment.................... 69
5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee................................ 70
5.4. Trustee May File Proofs of Claim.......................... 71
5.5. Trustee May Enforce Claims Without
Possession of Securities.................................. 71
5.6. Delay or Omission Not Waiver.............................. 72
5.7. Waiver of Past Defaults................................... 72
5.8. Control by Majority....................................... 72
5.9. Limitation on Suits by Holders............................ 72
5.10. Rights of Holders to receive Payment...................... 74
5.11. Application of Money Collected............................ 74
5.12. Restoration of Rights and Remedies........................ 76
5.13. Rights and Remedies Cumulative............................ 76
5.14. Waiver of Usury, Stay or Extension
Laws...................................................... 76
5.15. Undertaking for Costs..................................... 77
ARTICLE 6 The Trustee............................................... 77
6.1. Certain Duties and Responsibilities of
the Trustee............................................... 77
6.2. Rights of Trustee......................................... 77
<PAGE>
6.3. Trustee May Hold Securities............................... 79
6.4. Money Held-in Trust....................................... 81
6.5. Trustee's Disclaimer...................................... 81
6.6. Notice of Defaults........................................ 81
6.7. Reports by Trustee to Holders............................. 81
ii
<PAGE>
PAGE
6.8. Securityholder Lists...................................... 82
6.9. Compensation and Indemnity................................ 82
6.10. Replacement of Trustee.................................... 83
6.11. Acceptance of Appointment by Successor.................... 85
6.12. Eligibility; Disqualification............................. 88
6.13. Merger, Conversion, Consolidation or
Succession to Business.................................... 88
6.14. Appointment of Authenticating Agent....................... 88
ARTICLE 7 Consolidation, Merger or Sale by the
Company................................................... 91
7.1. Consolidation, Merger or Sale of Assets
Permitted................................................. 91
ARTICLE 8 Supplemental Indentures................................... 92
8.1. Supplemental Indentures Without
Consent of Holders........................................ 92
8.2. Supplemental Indentures With Consent
of Holders................................................ 94
8.3. Compliance with Trust Indenture Act....................... 95
8.4. Execution of Supplemental Indentures...................... 95
8.5. Effect of Supplemental Indentures......................... 96
8.6. Reference in Securities to Supplemental
Indentures................................................ 96
ARTICLE 9 Covenants................................................. 97
9.1. Payment of Principal, Premium if any,
and Interest.............................................. 97
9.2. Maintenance of Office or Agency........................... 97
9.3. Money for Securities Payments to be
Held in Trust; Unclaimed Money............................ 99
9.4. Corporate Existence....................................... 101
<PAGE>
9.5. Reports by the Company.................................... 101
9.6. Annual Review Certificate; Notice of
Defaults or Events of Default............................. 103
9.7. Books of Record and Account............................... 103
ARTICLE 10 Redemption................................................ 105
10.1. Applicability of Article.................................. 105
10.2. Election to Redeem; Notice to Trustee..................... 105
10.3. Selection of Securities to Be Redeemed.................... 105
10.4. Notice of Redemption...................................... 106
10.5. Deposit of Redemption Price............................... 107
10.6. Securities Payable on Redemption Date..................... 108
10.7. Securities Redeemed in Part............................... 109
ARTICLE 11 Sinking Funds............................................. 110
11.1. Applicability of Article.................................. 110
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PAGE
11.2. Satisfaction of Sinking Fund Payments
with Securities............................................ 110
11.3. Redemption of Securities for Sinking
Fund....................................................... 112
ARTICLE 12 Subordination.............................................. 112
12.1. Agreement to Subordinate................................... 112
12.2. Certain Definitions........................................ 112
12.3. Liquidation; Dissolution; Bankruptcy;
Etc ...................................................... 114
12.4. Default on Senior Indebtedness............................. 116
12.5. When Distribution Must Be Paid Over........................ 116
12.6. Notice by Company.......................................... 118
12.7. Subrogation................................................ 118
12.8. Relative Rights............................................ 118
12.9. Subordination May Not Be Impaired by
Company.................................................... 120
12.10. Distribution............................................... 120
12.11. Rights of Trustee and Paying Agent......................... 120
12.12. Authorization to Effect Subordination...................... 122
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SUBORDINATED INDENTURE, dated as of July 21, 1999, from Conseco, Inc.,
an Indiana corporation (the "Company"), to Harris Trust and Savings Bank,
Trustee, a national banking corporation (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
<PAGE>
(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.
"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.
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"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 ave 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 office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 777 Main Street,
Hartford, Connecticut 06115, Attention: Corporate Trust Administration.
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"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,
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(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 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 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
5
<PAGE>
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
6
<PAGE>
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 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;
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(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
8
<PAGE>
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;
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
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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.
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"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 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.
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"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.
"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 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
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Columbia), its territories, its possessions and other areas subject to its
jurisdiction.
"U.S. PERSON" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust, the income of which is subject to
United States federal income taxation regardless of its source.
(b) The following terms shall have the meanings specified in the
Sections referred to opposite such term below:
TERM SECTION
---- -------
"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)
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.
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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;
(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
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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 acknowledgements 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 individual
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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
16
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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.
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(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 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) 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 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
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(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,
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in the opinion of 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
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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 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
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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:
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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. 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
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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:
(1) the title 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
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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
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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 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;
(7) 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;
(8) 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;
(9) 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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(10) 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;
(11) 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;
(12) 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;
(13) 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);
(14) if other than as provided in Section 3.7, the Person to
whom, any interest on any Registered Security of the series
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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;
(15) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events
as may be specified;
(16) 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;
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(17) 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);
(18) 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 which Bearer Securities of a series may be
exchanged for Registered Securities of the same series and vice versa;
(19) 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;
(20) the forms of the Securities and coupons, if any, of the
series;
(21) 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;
(22) if other than the Trustee, the identity of the Registrar
and any Paying Agent;
(23) the designation of the initial Exchange Rate Agent, if
any;
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(24) 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
(25) 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.
Section 3.2. DENOMINATIONS. Unless otherwise provided as contemplated
by Section 3.1 any Registered Securities of a series
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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
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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 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
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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
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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
governing the respective duties and rights of such Depository 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.
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.
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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.
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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 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.
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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
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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 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
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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)(23)
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,
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(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 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
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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.
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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 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
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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.
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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 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, 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
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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
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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.
(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
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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
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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.
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)
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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.
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(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 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
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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,
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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:
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
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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
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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.
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
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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.
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(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 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
acknowledging satisfaction and discharge of this
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Indenture with respect to such Securities and any coupons appertaining thereto
when
(1) either
(A) all 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
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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 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
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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,
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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 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:
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(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
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material agreement or instrument to which the Company is a party or by
which it is bound.
(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 Officer's
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.
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(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).
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(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 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 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
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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)
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of the Holders of such Securities to receive such payment from the money so held
in trust.
ARTICLE 5
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):
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(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 60 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) a default under any mortgage, agreement, indenture or
instrument under which there may be issued, or by which there may be
secured, guaranteed or evidenced any Debt of the Company (including
this Indenture) whether such Debt now exists or shall hereafter be
created, in an aggregate principal amount then outstanding of
$25,000,000 or more, which default (a) shall constitute a failure to
pay any portion of the principal of such Debt when due and payable
after the expiration of any applicable grace period with respect
thereto or (b) shall result in such Debt becoming or being declared due
and payable prior to the date on which it would otherwise become due
and payable, and such acceleration shall not be rescinded or annulled,
or such Debt shall not be paid in full within a period of 30 days after
there has been given, by registered or certified mail, to the Company
by the
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Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of that
series a written notice specifying such event of default and requiring
the Company to cause such acceleration to be rescinded or annulled or
to pay in full such Debt and stating that such notice is a "Notice of
Default" hereunder; (it being understood however, that the Trustee
shall not be deemed to have knowledge of such default under such
agreement or instrument unless either (A) a Responsible Officer of the
Trustee shall have actual knowledge of such default or (B) a
Responsible Officer of the Trustee shall have received written notice
thereof from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such agreement or other
instrument); PROVIDED, HOWEVER, that if such default under such
agreement or instrument is remedied or cured by the Company or waived
by the holders of such indebtedness, then the Event of Default
hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the
part of either the Trustee or any of such Holders; PROVIDED, FURTHER,
that the foregoing shall not apply to any secured Debt under which the
obligee has recourse (exclusive of recourse for ancillary matters such
as environmental indemnities, misapplication of funds, costs of
enforcement and the like) only to the collateral pledged for repayment
so long as the fair market value of such collateral does not exceed 2%
of Total Assets at the time of the default;
(5) 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;
(6) 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
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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
(7) 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.
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
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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
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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 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
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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
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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;
(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;
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(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:
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FIRST: to the Trustee for amounts due under Section 6.9;
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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.
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
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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
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proper party or parties. The Trustee need not investigate any fact or
matter stated in the document.
(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
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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
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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.
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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.
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 90 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; and PROVIDED, FURTHER,
that in the case of any Default of the character specified in Section 5.1(3)
with respect to Securities of such series, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof.
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
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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 and the Trustee shall
cooperate in
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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.
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:
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(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 court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
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(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
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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 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
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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 qualified and eligible
under the Trust Indenture Act.
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(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
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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 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
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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
By ________________________
as Authenticating Agent
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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 Officer's 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
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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.
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
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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
(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
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(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).
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
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;
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(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
(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.
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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
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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.
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
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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
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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 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 of this Indenture or for any other
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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
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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:
(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
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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
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(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
accountants not less frequently than annually. The Company shall prepare its
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financial statements in accordance with generally accepted accounting
principles.
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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, 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
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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.
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;
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(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.
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
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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
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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 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
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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, 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
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specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
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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. 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.
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
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(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.
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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
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
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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.
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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
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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.
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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 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
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Indebtedness to receive distributions and payments otherwise payable to
Holders.
If the Company fails because of this Article 12 to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
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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 contemplated elsewhere in this Article 12 or impair the
claims of, or payments to, the Trustee under or pursuant to Section 6.9 hereof.
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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.
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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.
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: /s/ Rollin M. Dick
-------------------------
Rollin M. Dick, Executive
Vice President and Chief
Financial Officer
{Seal}
Attest:
/s/ John J. Sabl
- -----------------------------------------
John J. Sabl, Secretary
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-------------------------
Name: J. Bartolini
Title: Vice President
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CERTIFICATE OF TRUST
The undersigned, the trustees of Conseco Financing Trust VIII, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Conseco Financing Trust VIII."
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
First Union Trust Company, National Association
Corporate Trust Administration
One Rodney Square
920 King Street
Wilmington, DE 19801
3. This Certificate of Trust shall be effective as of the date of
filing with the office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust as of the date written below.
Dated: July 22, 1999
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Stephen Kaba
-----------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
-----------------------------------
Rollin M. Dick, Trustee
/s/ Stephen C. Hilbert
-----------------------------------
Stephen C. Hilbert, Trustee
--------------------------------------------------------------
DECLARATION OF TRUST
OF
CONSECO FINANCING TRUST VIII
Dated as of July 22, 1999
---------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.1
Definitions.................................................... 1
ARTICLE II ORGANIZATION
SECTION 2.1
Name........................................................... 3
SECTION 2.2
Office......................................................... 4
SECTION 2.3
Purpose........................................................ 4
SECTION 2.4
Authority...................................................... 4
SECTION 2.5
Title to Property of the Trust................................. 4
SECTION 2.6
Powers of the Trustee.......................................... 4
SECTION 2.7
Filing of Certificate of Trust................................. 5
SECTION 2.8
Duration of Trust.............................................. 5
SECTION 2.9
Responsibilities of the Sponsor................................ 6
SECTION 2.10
Declaration Binding on Securities Holders...................... 6
ARTICLE III TRUSTEES
SECTION 3.1
Trustees....................................................... 6
SECTION 3.2
Regular Trustees............................................... 7
SECTION 3.3
Delaware Trustee............................................... 7
SECTION 3.4
Property Trustee............................................... 7
SECTION 3.5
Not Responsible for Recitals or Sufficiency of Declaration..... 8
i
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ARTICLE IV LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1
Exculpation.................................................... 8
SECTION 4.2
Fiduciary Duty................................................. 8
SECTION 4.3
Indemnification................................................ 9
SECTION 4.4
Outside Businesses............................................ 12
ARTICLE V AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1
Amendments.................................................... 12
SECTION 5.2
Termination of Trust.......................................... 12
SECTION 5.3
Governing Law................................................. 13
SECTION 5.4
Headings...................................................... 13
SECTION 5.5
Successors and Assigns........................................ 13
SECTION 5.6
Partial Enforceability........................................ 13
SECTION 5.7
Counterparts.................................................. 14
ii
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DECLARATION OF TRUST OF CONSECO FINANCING TRUST VIII
DECLARATION OF TRUST ("Declaration") dated and effective as of
July 22, 1999 by the undersigned Trustees (together with all other persons from
time to time duly appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), Conseco, Inc., an Indiana
corporation, as trust sponsor (the "Sponsor"), and by the holders, from time to
time, of undivided beneficial interests in the Trust to be issued pursuant to
this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Business Trust Act (as hereinafter defined);
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial interests in the assets of
the Trust and to invest the proceeds thereof in certain Debentures of the
Debenture Issuer (as those terms are hereinafter defined) and, except as
otherwise limited herein, to engage in only those other activities necessary,
appropriate, convenient or incidental thereto.
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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 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 I
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;
(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 of Trust as
modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Declaration to Articles and
Sections are to Articles and Sections of this
Declaration unless otherwise specified; and
(e) 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.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by 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.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing a common
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"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 employee or agent of the Trust or its Affiliates.
"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. in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued under
the Indenture by the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means, Harris Trust and Savings Bank, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
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"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture dated as of July , 1999 entered
into among Conseco, Inc. and Harris Trust and Savings Bank, as trustee and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"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.
"Preferred Security" means a security representing a preferred
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Conseco, Inc. in its capacity as sponsor of the
Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Conseco Financing
Trust VIII." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
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SECTION 2.2 Office.
The address of the principal office of the Trust is c/o General
Counsel, 11825 North Pennsylvania Street, Carmel, Indiana 46032. At any time,
the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited 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.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In
dealing with the Regular Trustees acting on behalf of the Trust, no person shall
be required to inquire into the authority of the Regular Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Regular Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustee.
The Regular Trustees shall have the exclusive power 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 the
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any amendments thereto
in relation to the Preferred Securities;
(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 Preferred Securities in any State in
which the Sponsor has determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange 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 an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and provide for reasonable compensation for such services;
(d) to incur expenses which are necessary, appropriate,
convenient or incidental to carry out any of the purposes of this Declaration;
and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in the
form attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
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SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issuance and sale 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) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities 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) to prepare for filing by the Trust 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) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the class of
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided, further, that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
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person, is an entity which has its principal place of business in the State of
Delaware and meets any other requirements imposed by applicable law (the
"Delaware Trustee"); provided, further, that there shall be at least one trustee
who is an employee or officer of, or is affiliated with the Sponsor (a "Regular
Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be: Rollin M. Dick and Stephen
C. Hilbert.
(a) Except as expressly set forth in this Declaration, 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, 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 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by at least a
majority 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 which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be: First Union Trust Company,
National Association.
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust, of the Sponsor or of the Regular Trustees except such acts as the
Delaware Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Property Trustee") meeting
the requirements of an eligible trustee of the Trust Indenture Act of 1939, as
amended, by the execution of an
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amendment to this Declaration executed by the Regular Trustees, the Sponsor, the
Property Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
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
representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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; and
(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 4.2 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, are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person;
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises between
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,
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; and
(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 4.3 Indemnification.
(a) 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
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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.
(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 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 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.
(ii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(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 4.3(a) shall be paid by the Sponsor 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 he is not entitled to be indemnified by the
Sponsor as authorized in this Section 4.3(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor 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
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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, counsel or the Common Security Holder at the time such
determination is made, such Company Indemnified 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 his 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 4.3(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 stockholders 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 4.3(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 4.3(a) is in effect.
Any repeal or modification of this Section 4.3(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 Sponsor would
have the power to indemnify him against such liability under the provisions of
this Section 4.3 (a)
(vii) For purposes of this Section 4.3(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 4.3(a) with respect to the resulting or surviving entity as he
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 4.3(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 heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Delaware
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Trustee (each of the Persons in (i) through (iii) 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 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 obligation
to indemnify as set forth in this Section 4.3(b) shall survive the termination
of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware 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 may act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment effects
the rights, powers, duties, obligation or immunities of the Delaware Trustee,
the amendment shall also be approved by the Delaware Trustee.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
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(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 or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 5.4 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 5.5 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 5.6 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.
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SECTION 5.7 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 have caused these presents
to be executed as of the day and year first above written.
CONSECO, INC., as sponsor and
Debenture Issuer
By: /s/ Rollin M. Dick
-----------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as
Delaware Trustee
By: /s/ Stephen Kaba
-----------------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
-----------------------------------------
Rollin M. Dick, as Regular Trustee
/s/ Stephen C. Hilbert
-----------------------------------------
Stephen C. Hilbert, as Regular Trustee
15
CERTIFICATE OF TRUST
The undersigned, the trustees of Conseco Financing Trust IX, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Conseco Financing Trust IX."
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
First Union Trust Company, National Association
Corporate Trust Administration
One Rodney Square
920 King Street
Wilmington, DE 19801
3. This Certificate of Trust shall be effective as of the date of
filing with the office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust as of the date written below.
Dated: July 22, 1999
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Stephen Kaba
-------------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
-----------------------------------
Rollin M. Dick, Trustee
/s/ Stephen C. Hilbert
-----------------------------------
Stephen C. Hilbert, Trustee
---------------------------------------------------------------
DECLARATION OF TRUST
OF
CONSECO FINANCING TRUST IX
Dated as of July 22, 1999
---------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.1
Definitions................................................... 1
ARTICLE II ORGANIZATION
SECTION 2.1
Name.......................................................... 3
SECTION 2.2
Office........................................................ 3
SECTION 2.3
Purpose....................................................... 3
SECTION 2.4
Authority..................................................... 4
SECTION 2.5
Title to Property of the Trust................................ 4
SECTION 2.6
Powers of the Trustee......................................... 4
SECTION 2.7
Filing of Certificate of Trust................................ 5
SECTION 2.8
Duration of Trust............................................. 5
SECTION 2.9
Responsibilities of the Sponsor............................... 5
SECTION 2.10
Declaration Binding on Securities Holders..................... 6
ARTICLE III TRUSTEES
SECTION 3.1
Trustees...................................................... 6
SECTION 3.2
Regular Trustees.............................................. 6
SECTION 3.3
Delaware Trustee.............................................. 7
SECTION 3.4
Property Trustee.............................................. 7
SECTION 3.5
Not Responsible for Recitals or Sufficiency of Declaration.... 7
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ARTICLE IV LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 4.1
Exculpation................................................... 7
SECTION 4.2
Fiduciary Duty................................................ 8
SECTION 4.3
Indemnification............................................... 9
SECTION 4.4
Outside Businesses........................................... 11
ARTICLE V AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1
Amendments................................................... 11
SECTION 5.2
Termination of Trust......................................... 12
SECTION 5.3
Governing Law................................................ 12
SECTION 5.4
Headings..................................................... 12
SECTION 5.5
Successors and Assigns....................................... 12
SECTION 5.6
Partial Enforceability....................................... 12
SECTION 5.7
Counterparts................................................. 13
ii
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DECLARATION OF TRUST OF CONSECO FINANCING TRUST IX
DECLARATION OF TRUST ("Declaration") dated and effective as of
July 22, 1999 by the undersigned Trustees (together with all other persons from
time to time duly appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), Conseco, Inc., an Indiana
corporation, as trust sponsor (the "Sponsor"), and by the holders, from time to
time, of undivided beneficial interests in the Trust to be issued pursuant to
this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Business Trust Act (as hereinafter defined);
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial interests in the assets of
the Trust and to invest the proceeds thereof in certain Debentures of the
Debenture Issuer (as those terms are hereinafter defined) and, except as
otherwise limited herein, to engage in only those other activities necessary,
appropriate, convenient or incidental thereto.
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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 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 I
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;
(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 of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
(e) a reference to the singular includes the plural and vice
versa.
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"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by 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.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing a common
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"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 employee or agent of the Trust or its Affiliates.
"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. in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued under
the Indenture by the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means, Harris Trust and Savings Bank, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
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"Indenture" means the indenture dated as of July , 1999 entered
into among Conseco, Inc. and Harris Trust and Savings Bank, as trustee and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"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.
"Preferred Security" means a security representing a preferred
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Conseco, Inc. in its capacity as sponsor of the
Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Conseco Financing
Trust IX." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o General
Counsel, 11825 North Pennsylvania Street, Carmel, Indiana 46032. At any time,
the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary,
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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.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In
dealing with the Regular Trustees acting on behalf of the Trust, no person shall
be required to inquire into the authority of the Regular Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Regular Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustee.
The Regular Trustees shall have the exclusive power 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 the
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any amendments thereto
in relation to the Preferred Securities;
(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 Preferred Securities in any State in
which the Sponsor has determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market for listing upon notice of issuance of
any Preferred Securities;
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(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 an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and provide for reasonable compensation for such services;
(d) to incur expenses which are necessary, appropriate,
convenient or incidental to carry out any of the purposes of this Declaration;
and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in the
form attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issuance and sale 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) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities 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) to prepare for filing by the Trust 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;
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(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the class of
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided, further, that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware and meets any other requirements imposed by applicable law (the
"Delaware Trustee"); provided, further, that there shall be at least one trustee
who is an employee or officer of, or is affiliated with the Sponsor (a "Regular
Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be: Rollin M. Dick and Stephen
C. Hilbert.
(a) Except as expressly set forth in this Declaration, 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, 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 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by at least a
majority 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 which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 2.6.
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SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be: First Union Trust Company,
National Association.
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust, of the Sponsor or of the Regular Trustees except such acts as the
Delaware Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Property Trustee") meeting
the requirements of an eligible trustee of the Trust Indenture Act of 1939, as
amended, by the execution of an amendment to this Declaration executed by the
Regular Trustees, the Sponsor, the Property Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
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
representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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; and
(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
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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 4.2 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, 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
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,
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; and
(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.
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SECTION 4.3 Indemnification.
(a) 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.
(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 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 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.
(ii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(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
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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 4.3(a) shall be paid by the Sponsor 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 he is not entitled to be indemnified by the
Sponsor as authorized in this Section 4.3(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor 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,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified 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 his 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 4.3(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 stockholders 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 4.3(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 4.3(a) is in effect.
Any repeal or modification of this Section 4.3(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 Sponsor would
have the power to indemnify him against such liability under the provisions of
this Section 4.3 (a)
(vii) For purposes of this Section 4.3(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 4.3(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
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(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(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 heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Delaware Trustee (each of the Persons in (i) through
(iii) 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 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 obligation to indemnify as set forth in this Section 4.3(b) shall
survive the termination of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware 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 may act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment effects
the rights, powers, duties, obligation or immunities of the Delaware Trustee,
the amendment shall also be approved by the Delaware Trustee.
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SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(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 or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 5.4 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 5.5 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 5.6 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.
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SECTION 5.7 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 have caused these presents to
be executed as of the day and year first above written.
CONSECO, INC., as sponsor and
Debenture Issuer
By: /s/ Rollin M. Dick
--------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as
Delaware Trustee
By: /s/ Stephen Kaba
--------------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
--------------------------------------
Rollin M. Dick, as Regular Trustee
/s/ Stephen C. Hilbert
--------------------------------------
Stephen C. Hilbert, as Regular Trustee
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CERTIFICATE OF TRUST
The undersigned, the trustees of Conseco Financing Trust X, desiring to
form a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Conseco Financing Trust X."
2. The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as
follows:
First Union Trust Company, National Association
Corporate Trust Administration
One Rodney Square
920 King Street
Wilmington, DE 19801
3. This Certificate of Trust shall be effective as of the date of
filing with the office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust as of the date written below.
Dated: July 22, 1999
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Stephen Kaba
-------------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
-----------------------------------
Rollin M. Dick, Trustee
/s/ Stephen C. Hilbert
-----------------------------------
Stephen C. Hilbert, Trustee
---------------------------------------------------------------
DECLARATION OF TRUST
OF
CONSECO FINANCING TRUST X
Dated as of July 22, 1999
---------------------------------------------------------------
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.1
Definitions................................................... 1
ARTICLE II ORGANIZATION
SECTION 2.1
Name.......................................................... 3
SECTION 2.2
Office........................................................ 3
SECTION 2.3
Purpose....................................................... 3
SECTION 2.4
Authority..................................................... 4
SECTION 2.5
Title to Property of the Trust................................ 4
SECTION 2.6
Powers of the Trustee......................................... 4
SECTION 2.7
Filing of Certificate of Trust................................ 5
SECTION 2.8
Duration of Trust............................................. 5
SECTION 2.9
Responsibilities of the Sponsor............................... 5
SECTION 2.10
Declaration Binding on Securities Holders..................... 6
ARTICLE III TRUSTEES
SECTION 3.1
Trustees...................................................... 6
SECTION 3.2
Regular Trustees.............................................. 6
SECTION 3.3
Delaware Trustee.............................................. 7
SECTION 3.4
Property Trustee.............................................. 7
SECTION 3.5
Not Responsible for Recitals or Sufficiency of Declaration.... 7
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ARTICLE IV LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 4.1
Exculpation................................................... 7
SECTION 4.2
Fiduciary Duty................................................ 8
SECTION 4.3
Indemnification............................................... 9
SECTION 4.4
Outside Businesses........................................... 11
ARTICLE V AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1
Amendments................................................... 11
SECTION 5.2
Termination of Trust......................................... 12
SECTION 5.3
Governing Law................................................ 12
SECTION 5.4
Headings..................................................... 12
SECTION 5.5
Successors and Assigns....................................... 12
SECTION 5.6
Partial Enforceability....................................... 12
SECTION 5.7
Counterparts................................................. 13
ii
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DECLARATION OF TRUST OF CONSECO FINANCING TRUST X
DECLARATION OF TRUST ("Declaration") dated and effective as of
July 22, 1999 by the undersigned Trustees (together with all other persons from
time to time duly appointed and serving as trustees in accordance with the
provisions of this Declaration, the "Trustees"), Conseco, Inc., an Indiana
corporation, as trust sponsor (the "Sponsor"), and by the holders, from time to
time, of undivided beneficial interests in the Trust to be issued pursuant to
this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Business Trust Act (as hereinafter defined);
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial interests in the assets of
the Trust and to invest the proceeds thereof in certain Debentures of the
Debenture Issuer (as those terms are hereinafter defined) and, except as
otherwise limited herein, to engage in only those other activities necessary,
appropriate, convenient or incidental thereto.
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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 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 I
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;
(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 of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless
otherwise specified; and
(e) a reference to the singular includes the plural and vice
versa.
<PAGE>
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by 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.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing a common
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"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 employee or agent of the Trust or its Affiliates.
"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. in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued under
the Indenture by the Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means, Harris Trust and Savings Bank, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
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"Indenture" means the indenture dated as of July , 1999 entered
into among Conseco, Inc. and Harris Trust and Savings Bank, as trustee and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"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.
"Preferred Security" means a security representing a preferred
undivided beneficial interest in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Conseco, Inc. in its capacity as sponsor of the
Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Conseco Financing
Trust X." The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o General
Counsel, 11825 North Pennsylvania Street, Carmel, Indiana 46032. At any time,
the Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary,
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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.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, 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. In
dealing with the Regular Trustees acting on behalf of the Trust, no person shall
be required to inquire into the authority of the Regular Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Regular Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustee.
The Regular Trustees shall have the exclusive power 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 the
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any amendments thereto
in relation to the Preferred Securities;
(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 Preferred Securities in any State in
which the Sponsor has determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market for listing upon notice of issuance of
any Preferred Securities;
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(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 an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants and provide for reasonable compensation for such services;
(d) to incur expenses which are necessary, appropriate,
convenient or incidental to carry out any of the purposes of this Declaration;
and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in the
form attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issuance and sale 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) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities 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) to prepare for filing by the Trust 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;
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(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the class of
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
SECTION 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein 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.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two (2);
provided, further, that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware and meets any other requirements imposed by applicable law (the
"Delaware Trustee"); provided, further, that there shall be at least one trustee
who is an employee or officer of, or is affiliated with the Sponsor (a "Regular
Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be: Rollin M. Dick and Stephen
C. Hilbert.
(a) Except as expressly set forth in this Declaration, 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, 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 2.6 provided, that, the registration statement referred to in Section
2.6(b)(i), including any amendments thereto, shall be signed by at least a
majority 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 which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 2.6.
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SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be: First Union Trust Company,
National Association.
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of ss. 3807 of
the Business Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust, of the Sponsor or of the Regular Trustees except such acts as the
Delaware Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.
SECTION 3.4 Property Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Property Trustee") meeting
the requirements of an eligible trustee of the Trust Indenture Act of 1939, as
amended, by the execution of an amendment to this Declaration executed by the
Regular Trustees, the Sponsor, the Property Trustee and the Delaware Trustee.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
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
representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 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; and
(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
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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 4.2 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, 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
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,
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; and
(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.
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SECTION 4.3 Indemnification.
(a) 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.
(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 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 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.
(ii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 4.3(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 4.3(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
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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 4.3(a) shall be paid by the Sponsor 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 he is not entitled to be indemnified by the
Sponsor as authorized in this Section 4.3(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor 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,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified 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 his 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 4.3(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 stockholders 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 4.3(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 4.3(a) is in effect.
Any repeal or modification of this Section 4.3(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 Sponsor would
have the power to indemnify him against such liability under the provisions of
this Section 4.3 (a)
(vii) For purposes of this Section 4.3(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 4.3(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
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(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 4.3(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 heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Delaware Trustee (each of the Persons in (i) through
(iii) 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 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 obligation to indemnify as set forth in this Section 4.3(b) shall
survive the termination of this Declaration.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware 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 or the Delaware 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 and the
Delaware 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 and the Delaware 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 may act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment effects
the rights, powers, duties, obligation or immunities of the Delaware Trustee,
the amendment shall also be approved by the Delaware Trustee.
11
<PAGE>
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(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 or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 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 5.4 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 5.5 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 5.6 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.
12
<PAGE>
SECTION 5.7 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.
13
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed as of the day and year first above written.
CONSECO, INC., as sponsor and
Debenture Issuer
By: /s/ Rollin M. Dick
--------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as
Delaware Trustee
By: /s/ Stephen Kaba
--------------------------------
Name: Stephen Kaba
Title: Vice President
/s/ Rollin M. Dick
--------------------------------------
Rollin M. Dick, as Regular Trustee
/s/ Stephen C. Hilbert
---------------------------------------
Stephen C. Hilbert, as Regular Trustee
14
July 22, 1999
Board of Directors
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Re: Registration Statement on Form S-3
Gentlemen and Madam:
I am Executive Vice President, General Counsel and Secretary of Conseco, Inc.
(the "Corporation"). At your request, I have examined or caused to be examined
the above-referenced Registration Statement on Form S-3 ( the "Registration
Statement") of 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 VII, Conseco Financing Trust VIII, Conseco Financing Trust IX
and Conseco Financing Trust X, 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 Bank of New York, 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 Harris Bank and Trust
Company, as Trustee.
In rendering this opinion, I, or attorneys under my supervision (together
referred to herein as "we"), have examined 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 we 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.
<PAGE>
Board of Directors
July 22, 1999
Page 2
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 Officer's 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, 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 such 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).
<PAGE>
Board of Directors
July 22, 1999
Page 3
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).
<PAGE>
Board of Directors
July 22, 1999
Page 4
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 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/ John. J. Sabl
- -------------------------------
John J. Sabl
Executive Vice President,
General Counsel and Secretary
July 22, 1999
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
c/o Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Re: Conseco Financing Trust VII, Conseco Financing Trust VIII,
Conseco Financing Trust IX, and Conseco Financing Trust X
Ladies and Gentlemen:
We have acted as special Delaware counsel for Conseco, Inc., an
Indiana corporation (the "Company"), Conseco Financing Trust VII, a Delaware
business trust ("Trust VII") Conseco Financing Trust VIII, a Delaware business
trust ("Trust VIII"), Conseco Financing Trust IX, a Delaware business trust
("Trust IX") and Conseco Financing Trust X, a Delaware business trust ("Trust
X") (Trust VII, Trust VIII, Trust IX and Trust X 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:
(a) The Certificate of Trust of Trust VII, dated May 21, 1997, as
filed with the Secretary of State on May 23, 1997;
(b) The Certificate of Trust of Trust VIII, dated July 22, 1999, as
filed with the Secretary of State on July 22, 1999;
(c) The Certificate of Trust of Trust IX, dated July 22, 1999, as
filed with the Secretary of State on July 22, 1999;
<PAGE>
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
July 22, 1999
Page 2
(d) The Certificate of Trust of Trust X, dated July 22, 1999, as
filed with the Secretary of State on July 22, 1999;
(e) The Declaration of Trust of Trust VII, dated as of May 21, 1997
between the Company and the trustees of Trust VII named therein;
(f) The Declaration of Trust of Trust VIII, dated as of July 22,
1999 between the Company and the trustees of Trust VIII named therein;
(g) The Declaration of Trust of Trust IX, dated as of July 22, 1999
between the Company and the trustees of Trust IX named therein;
(h) The Declaration of Trust of Trust X, dated as of July 22, 1999
between the Company and the trustees of Trust X named therein;
(i) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus (the "Prospectus"), relating to the
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 July 22, 1999;
(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
(k) A Certificate of Good Standing for each of the Trusts, dated
July 22, 1999, obtained from the Secretary of State.
<PAGE>
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
July 22, 1999
Page 3
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
<PAGE>
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
July 22, 1999
Page 4
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.
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.
<PAGE>
Conseco Financing Trust VII
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
July 22, 1999
Page 5
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.
<PAGE>
<TABLE>
<CAPTION>
CONSECO, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts
(Dollars in millions)
Three Months Ended
Year Ended December 31, March 31,
---------------------------------------------------- --------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pretax income from operations:
Net income.................................... $ 330.5 $ 470.9 $ 452.2 $ 866.4 $ 467.1 $ 214.6 $ 297.1
Add income tax expense........................ 231.2 240.7 302.2 560.1 445.6 170.2 180.2
Add extraordinary charge on
extinguishment of debt...................... 4.0 2.1 26.5 6.9 42.6 16.4 -
Add minority interest......................... 59.0 109.0 34.9 52.3 90.4 19.4 30.2
Less equity in undistributed
earnings of CCP Insurance, Inc.............. (23.8) - - - - - -
Less equity in undistributed
earnings of Western National Corp........... (37.2) - - - - - -
------ -------- -------- -------- -------- -------- ------
Pretax income from operations........... 563.7 822.7 815.8 1,485.7 1,045.7 420.6 507.5
------ -------- -------- -------- -------- -------- ------
Add fixed charges:
Interest expense on corporate debt,
including amortization..................... 59.3 119.4 108.1 109.4 165.4 39.0 44.1
Interest expense on finance debt.............. 41.6 57.3 70.1 160.9 209.8 48.5 54.7
Interest expense on investment borrowings..... 7.7 22.2 22.0 42.0 65.3 18.9 11.8
Other ....................................... .9 1.0 .9 .7 .5 .1 .1
Portion of rental(1).......................... 7.9 8.9 10.9 13.7 14.6 3.7 3.7
------ -------- -------- -------- -------- -------- ------
Fixed charges............................. 117.4 208.8 212.0 326.7 455.6 110.2 114.4
------ -------- -------- -------- -------- -------- ------
Adjusted earnings......................... $681.1 $1,031.5 $1,027.8 $1,812.4 $1,501.3 $ 530.8 $621.9
====== ======== ======== ======== ======== ======== ======
Ratio of earnings to fixed charges...... 5.80X 4.94X 4.85X 5.55X 3.30X 4.82X 5.44X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
excluding interest expense on debt
related to finance receivables and
other investments..................... 9.28X 7.36X 7.80X 13.00X 6.79X 10.83X 11.59X
===== ===== ===== ====== ===== ====== ======
Fixed charges................................. $117.4 $ 208.8 $ 212.0 $ 326.7 $ 455.6 $110.2 $114.4
Add dividends on preferred stock, including
dividends on preferred stock of subsidiaries
(divided by the rate of income before
minority interest and extraordinary
charge to pretax income).................... 34.8 40.3 57.6 40.4 13.6 3.4 .9
Add distributions on Company-obligated
mandatorily redeemable preferred securities
of subsidiary trusts........................ - - 5.5 75.4 139.1 29.5 46.5
------ -------- -------- -------- -------- --------- ------
Fixed charges............................. $152.2 $ 249.1 $ 275.1 $ 442.5 $ 608.3 $ 143.1 $161.8
====== ======== ======== ======== ======== ======== ======
Adjusted earnings......................... $681.1 $1,031.5 $1,027.8 $1,812.4 $1,501.3 $ 530.8 $621.9
====== ======== ======== ======== ======== ======== ======
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities
of subsidiary trusts.................. 4.48X 4.14X 3.74X 4.10X 2.47X 3.71X 3.84X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts, excluding interest
expense on debt related to finance
receivables and other investments..... 6.14X 5.61X 5.11X 6.72X 3.68X 6.12X 5.83X
===== ===== ===== ===== ===== ===== =====
<FN>
(1) Interest portion of rental is assumed to be 33 percent.
</FN>
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Conseco, Inc. on Form S-3 (File No. 333-00000), of our report dated March 30,
1999 on our audits of the consolidated financial statements and financial
statement schedules of Conseco, Inc. and subsidiaries as of December 31, 1998
and 1997, and for the years ended December 31, 1998, 1997 and 1996, included in
the Annual Report on Form 10-K, which as to the years 1997 and 1996, insofar as
such financial statements relate to Green Tree Financial Corporation, is based
on the report of KPMG LLP, independent auditors. We also consent to the
reference to our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Indianapolis, Indiana
July 22, 1999
Exhibit 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Conseco, Inc.:
We consent to the incorporation by reference in the Registration Statement for
the registration of $3,155,000,000 of securities on Form S-3 of Conseco, Inc. of
our report dated January 27, 1998, relating to the consolidated balance sheet of
Green Tree Financial Corporation and subsidiaries as of December 31, 1997, and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the two-year period ended December 31, 1997, not
separately presented in or incorporated by reference in the Annual Report on
Form 10-K of Conseco, Inc. for the year ended December 31, 1998, and to the
reference to our firm under the heading "EXPERTS" in the Registration Statement.
Our report refers to the Company's adoption of the Financial Accounting
Standards Board's Statement No. 125 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," in 1997.
/s/ KPMG LLP
-------------------------
KPMG LLP
Minneapolis, Minnesota
July 22, 1999
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CONSECO, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-1468632
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(Address of principal executive offices) (Zip code)
-------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, 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 20th day of July, 1999.
THE BANK OF NEW YORK
By: /s/ MICHELE L. RUSSO
-------------------------------
Name: MICHELE. L. RUSSO
Title: ASSISTANT TREASURER
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic
Subsidiaries, a member of the Federal Reserve System, at the close of business
March 31, 1999, published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin......... $4,508,742
Interest-bearing balances.................................. 4,425,071
Securities:
Held-to-maturity securities................................ 836,304
Available-for-sale securities.............................. 4,047,851
Federal funds sold and Securities purchased under
agreements to resell....................................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income................................................... 39,349,679
LESS: Allowance for loan and
lease losses............................................. 603,025
LESS: Allocated transfer risk
reserve.................................................. 15,906
Loans and leases, net of unearned income, allowance, and
reserve.................................................. 38,730,748
Trading Assets................................................ 1,571,372
Premises and fixed assets (including capitalized leases)...... 685,674
Other real estate owned....................................... 10,331
Investments in unconsolidated subsidiaries and associated
companies.................................................. 182,449
Customers' liability to this bank on acceptances outstanding.. 1,184,822
Intangible assets............................................. 1,129,636
Other assets.................................................. 2,632,309
Total assets.................................................. $61,688,578
LIABILITIES
Deposits:
In domestic offices........................................ $25,731,036
Noninterest-bearing - 10,252,589
Interest-bearing - 15,478,447
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 18,756,302
Noninterest-bearing - 111,386
Interest-bearing - 18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase................................... 3,276,362
Demand notes issued to the U.S.Treasury....................... 230,671
Trading liabilities........................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less................ 1,154,502
With remaining maturity of more than one year through
three years............................................. 465
With remaining maturity of more than three years........... 31,080
Bank's liability on acceptances executed and outstanding...... 1,185,364
Subordinated notes and debentures............................. 1,308,000
Other liabilities............................................. 2,743,590
Total liabilities............................................. 55,971,865
EQUITY CAPITAL
Common stock.................................................. 1,135,284
Surplus....................................................... 764,443
Undivided profits and capital reserves........................ 3,807,697
Net unrealized holding gains (losses) on available-for-sale
securities................................................. 44,106
Cumulative foreign currency translation adjustments........... (34,817)
Total equity capital.......................................... 5,716,713
Total liabilities and equity capital.......................... $61,688,578
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Directors
- ---------
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO, INC.
(Obligor)
INDIANA 35-1468632
(State of Incorporation) (I.R.S. Employer Identification No.)
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE>
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.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; 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.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation, File
No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, 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 20th day of July, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of March 31, 1999, as published in accordance with a
call made by the State Banking Authority and by the Federal Reserve Bank of the
Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on March 31, 1999, a state banking institution organized and operating
under the banking laws of this State and a member of the Federal Reserve System.
Published in accordance with a call made by the Commissioner of Banks and Trust
Companies of the State of Illinois and by the Federal Reserve Bank of this
District.
Bank's Transit Number 71000288
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository institutions:
Non-interest bearing balances and currency
and coin........................................... $1,237,336
Interest bearing balances............................ $137,061
Securities:........................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,455,837
Federal funds sold and securities purchased under agreements
to resell $87,250
Loans and lease financing receivables:
Loans and leases, net of unearned income $9,500,293
LESS: Allowance for loan and lease losses $109,979
----------
Loans and leases, net of unearned income,
allowance and reserve
(item 4.a minus 4.b)................................. $9,390,314
Assets held in trading accounts.................................... $161,168
Premises and fixed assets (including capitalized leases)........... $255,438
Other real estate owned............................................ $243
Investments in unconsolidated subsidiaries and associated
companies........................................................ $75
Customer's liability to this bank on acceptances outstanding....... $40,869
Intangible assets.................................................. $254,549
Other assets....................................................... $1,183,465
----------
TOTAL ASSETS $18,203,605
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices........................................... $9,099,851
Non-interest bearing...................... $2,743,074
Interest bearing.......................... $6,356,777
In foreign offices, Edge and Agreement subsidiaries,
and IBF's................................................... $1,822,400
Non-interest bearing...................... $26,371
Interest bearing.......................... $1,796,029
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to
repurchase....................................................... $3,354,582
Trading Liabilities................................................ $96,517
Other borrowed money:
a. With remaining maturity of one year or less.................... $1,681,346
b. With remaining maturity of more than one year.................. $0
Bank's liability on acceptances executed and outstanding........... $40,869
Subordinated notes and debentures.................................. $225,000
Other liabilities.................................................. $390,234
------------
TOTAL LIABILITIES $16,890,799
============
EQUITY CAPITAL
Common stock....................................................... $100,000
Surplus............................................................ $608,510
a. Undivided profits and capital reserves......................... $616,084
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... ($11,788)
-----------
TOTAL EQUITY CAPITAL $ 1,312,806
===========
Total liabilities, limited-life preferred stock, and equity
capital.......................................................... $18,203,605
===========
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
4/30/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
---------
EDWARD W. LYMAN,
ALAN G. McNALLY,
JAMES J. GLASSER
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