3,800,000 Shares
CONSECO, INC.
(an Indiana corporation)
Preferred Redeemable Increased Dividend Equity
Securities(SM), 7% PRIDES(SM), Convertible Preferred Stock
(Stated Liquidation Value $61.125 Per Share)
PURCHASE AGREEMENT
January 17, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX XXXXXXXX INC
As Representatives of the several Underwriters
c/x Xxxxxxx Xxxxx & Co.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Conseco, Inc., an Indiana corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), Xxxx Xxxxxx Xxxxxxxx Inc. ("Xxxx Xxxxxx") and
Xxxxxxx Xxxxxxxx Inc, as representatives (in such capacity, collectively, the
"Representatives") of the several Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10), with respect to the sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of shares of Preferred Redeemable Increased
Dividend Equity Securities, 7% PRIDES, Convertible Preferred Stock, stated
liquidation value $61.125 per share (the "PRIDES"), set forth in Schedule A, and
with respect to the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 570,000 additional shares of PRIDES to cover over-allotments, in
each case except as may otherwise be provided in the Pricing Agreement, as
hereinafter defined. The aforesaid 3,800,000 shares of PRIDES (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
570,000 shares of PRIDES
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subject to the over-allotment option described in
Section 2(b) hereof (the "Option Securities") are collectively referred to
herein as the "Securities".
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Company and the Representatives, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Securities
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-53095) and
pre-effective amendment nos. 1, 2, 3 and 4 thereto covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses, and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and the Company has filed such post-effective amendments thereto as may be
required prior to the execution of the Pricing Agreement. Such registration
statement, as so amended, has been declared effective by the Commission. Such
registration statement, as so amended, including the exhibits and schedules
thereto, if any, and the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the prospectus supplement relating to the offering of the
Securities, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Securities, are collectively referred
to herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Pricing Agreement; provided, further, that if the Company files a
registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to include
the Rule 462(b) Registration Statement; and provided,
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further, that if the Company elects to rely upon Rule 434 of the 1933 Act
Regulations, then all references to "Prospectus" shall be deemed to include the
final or preliminary prospectus and the applicable term sheet or abbreviated
term sheet (the "Term Sheet"), as the case may be, in the form first furnished
to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Purchase Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the registration
statement became effective and any prospectus that omitted, as applicable, the
Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form of prospectus filed with the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations, that was used after such
effectiveness and prior to the execution and delivery of the applicable Pricing
Agreement. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
Section 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to each Underwriter, as of the
date hereof and as of the date of the Pricing Agreement (such later date being
hereinafter referred to as the "Representation Date"), that:
(i) The Company meets the requirements for use of Form S- 3
under the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act, and at the time
of effectiveness and at the Representation Date, the Registration Statement and
any Rule 462(b)
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Registration Statement and the Prospectus conformed and will conform in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a material
fact and did not and will not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Prospectus, at the time the Registration Statement became effective (unless
the term "Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at the
time the Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) and at the Representation
Date and at the Closing Time referred to in Section 2, did not and will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to
statements contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, and in conformity with, information furnished to
the Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus pursuant to Item 12
of Form S-3 under the 1933 Act, at the time they were or hereafter are filed or
last amended, as the case may be, with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act, and the rules
and regulations of the Commission thereunder (the "1934 Act Regulations"), and
at the time of filing or as of the time of any subsequent amendment, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were or are made, not
misleading; and any additional documents deemed to be incorporated by reference
in the Registration Statement or the Prospectus will, if and when they are filed
with the Commission, or when amended, as appropriate, comply in all material
respects with the requirements of the 1934 Act and the 1934 Act Regulations and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading after the date hereof; provided, however, (x) that the
representations and warranties in this subsection shall not apply to statements
contained in or omitted from the Registration Statement or the Prospectus in
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reliance upon, and in conformity with, information furnished to the Company in
writing by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement or the Prospectus and (y) for purposes of this
subsection, there shall be excluded any statements in such documents
incorporated or to be incorporated by reference deemed not to be incorporated by
reference as provided in Rule 412 under the 1933 Act.
(iii) Coopers & Xxxxxxx, the accountants who certified the
financial statements and supporting schedules of the Company included or
incorporated by reference in the Registration Statement, are independent public
accountants with respect to the Company and its subsidiaries as required by the
1933 Act and the 1933 Act Regulations.
(iv) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its subsidiaries as of the dates indicated and the
results of their operations for the periods specified. Except as otherwise
stated in the Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis. The supporting schedules included or incorporated by
reference in the Registration Statement present fairly the information required
to be included therein. The ratios of earnings to fixed charges (including
preferred stock dividends) included in the Prospectus have been calculated in
compliance, in all material respects, with Item 503(d) of Regulation S-K of the
Commission. The selected financial data and the summary financial information
included in the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma financial
statements of the Company and its subsidiaries and the related notes thereto
included in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) The statutory financial statements of each of the
Company's insurance subsidiaries, from which certain ratios and other
statistical data contained in the Registration Statement have been derived, have
for each relevant period been prepared in accordance with accounting practices
prescribed or permitted by the National Association of Insurance Commissioners,
and with respect
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to each insurance subsidiary, the appropriate Insurance Department of the state
of domicile of such insurance subsidiary, and such accounting practices have
been applied on a consistent basis throughout the periods involved, except as
disclosed therein.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated or contemplated therein, (A) there has been no material adverse change
and no development which would reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or in the earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by the Company or any of its subsidiaries
which are material to the Company and its subsidiaries, considered as one
enterprise, other than those entered into in the ordinary course of business,
and (C) except for regular quarterly dividends, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(vii) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Indiana, with corporate
power and authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus or in the
Company's Annual Report filed on Form 10-K for the year ended December 31, 1994;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not reasonably be expected to have a material adverse effect on
the condition, financial or otherwise, or the earnings or business affairs of
the Company and its subsidiaries, considered as one enterprise.
(viii) Each of the subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and as described in the Prospectus or in the Company's Annual Report
filed on Form 10-K for the year ended December 31, 1994; and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not reasonably be expected to
have a material adverse effect on the condition, financial or otherwise, or the
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earnings or business affairs of the Company and its subsidiaries, considered as
one enterprise; and the outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and validly issued, are fully paid and
nonassessable and all such shares are owned by the Company or by a subsidiary of
the Company, except as set forth in a letter previously delivered by the Company
to you.
(ix) The Company and each of its subsidiaries hold all
material licenses, certificates and permits from governmental authorities
(including, without limitation, insurance licenses from the insurance
departments of the various states where the subsidiaries write insurance
business (the "Insurance Licenses")) which are necessary to the conduct of their
businesses; the Company and its subsidiaries have fulfilled and performed all
material obligations necessary to maintain their respective Insurance Licenses,
and no event or events have occurred which could reasonably be expected to
result in the impairment, modification, termination or revocation of such
Insurance Licenses.
(x) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to stock option agreements or employee
benefit plans); all of the issued and outstanding shares of the common stock, no
par value, of the Company (the "Common Stock") have been duly authorized and
validly issued, and are fully paid and nonassessable; the Securities have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in the Pricing
Agreement, will be validly issued and fully paid and nonassessable; the
Securities will conform to the provisions of the Articles of Incorporation of
the Company, as amended on the Closing Date (the "Amended Articles of
Incorporation") related thereto; the relative rights, preferences, interests and
powers of the Securities will be as set forth in the Amended Articles of
Incorporation, and all such provisions will be valid under the Indiana Business
Corporation Law; the Securities and the Common Stock into which the Securities
are convertible or for which the Securities may be redeemed conform to all
statements relating thereto contained in the Prospectus; and the issuance of the
Securities is not subject to preemptive or other similar rights.
(xi) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the
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Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject, or in violation of any applicable law, administrative
regulation or administrative or court order or decree, which violation or
default would, singly or in the aggregate, reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Company and its subsidiaries, considered as
one enterprise; and the execution, delivery and performance of this Agreement
and the Pricing Agreement, and the consummation of the transactions contemplated
herein and therein, will not conflict with or constitute a breach of, or a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
for a conflict, breach, default, lien, charge or encumbrance which would not
reasonably be expected to have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the Company and
its subsidiaries considered as one enterprise, nor will such action result in
any violation of the provisions of the charter or by-laws of the Company or any
of its subsidiaries or any applicable law, administrative regulation or
administrative or court decree.
(xii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign (including, without
limitation, any proceeding to revoke or deny renewal of any Insurance Licenses),
now pending, or, to the best knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries which is required to be
disclosed in the Registration Statement or the Prospectus, or which is
reasonably likely to result in any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company
and its subsidiaries, considered as one enterprise, or which could be reasonably
likely to materially and adversely affect a material portion of the properties
or assets thereof or which is reasonably likely to materially and adversely
affect the consummation of this Agreement; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of
which any of their respective property or assets is the subject which are not
described in the Registration Statement or the Prospectus, including ordinary
routine litigation incidental to the business of the Company or any of its
subsidiaries, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company or
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any of its subsidiaries which are required to be filed as exhibits to the
Registration Statement, or to be incorporated by reference therein, by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, which
have not been so filed or incorporated by reference.
(xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the issuance
and sale of the Securities hereunder, or the issuance of the Common Stock upon
conversion or redemption of the Securities, or the consummation by the Company
of any other transactions contemplated hereby, except such as have been obtained
and made under the federal securities laws or state insurance laws and such as
may be required under state or foreign securities laws.
(xiv) The shares of Common Stock issuable upon conversion or at
redemption of the Securities have been duly and validly authorized and reserved
for issuance upon such conversion or redemption; such shares, when issued and
delivered upon such conversion or redemption in the manner provided for in the
Amended Articles of Incorporation governing the Securities, will be duly
authorized, validly issued, fully paid and nonassessable and free of any lien or
adverse claim; and the issuance of such shares upon such conversion or
redemption will not be subject to preemptive or other similar rights.
(xv) The Securities and the Common Stock issuable upon
conversion or at redemption of the Securities conform in all material respects
to the respective statements relating thereto contained in the Prospectus and
the Registration Statement.
(xvi) There are no holders of securities of the Company with
currently exercisable registration rights to have any securities registered as
part of the Registration Statement or included in the offering contemplated by
this Agreement.
(xvii) No order preventing or suspending the use of any
preliminary prospectus with respect to the Securities has been issued and no
proceedings for that purpose are pending, threatened, or, to the knowledge of
the Company, contemplated by the Commission; to the knowledge of the Company, no
order suspending the offering of the Securities in any jurisdiction designated
by the Underwriters pursuant to Section 3(f) of this Agreement has been issued
and, to the knowledge of the Company, no proceedings for that purpose have been
instituted or threatened or are contemplated, and any request of the Commission
for additional information (to be included in the Registration Statement or
Prospectus or otherwise) has been complied with.
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(xviii) The Company has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Pricing Agreement and the Company has full corporate power and authority to
issue, sell and deliver the Securities.
(xix) The Company has not taken, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or result in
manipulation of the price of the Securities or the Common Stock.
(xx) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(b) Any certificate signed by an officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter severally, and not jointly, and each
Underwriter agrees to purchase from the Company, at the price per share set
forth in the Pricing Agreement, the number of Initial Securities set forth in
Schedule A opposite the name of such Underwriter (except as otherwise provided
in the Pricing Agreement), plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A
under the 1933 Act Regulations, the initial public offering price per
Security, the dividend rate, the call price (including related premium)
payable upon redemption, in each case, in respect of each Security, and
the purchase price per Security to be paid by the several Underwriters
for the Securities (collectively, the "Pricing Terms") have each been
determined and set forth in the Pricing Agreement, dated the date
hereof, and an amendment to the Registration Statement and the
Prospectus will be filed before the Registration Statement becomes
effective.
(2) If the Company has elected to rely upon Rule 430A under
the 1933 Act Regulations, the purchase price per
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Security to be paid by the several Underwriters shall be an amount
equal to the initial public offering price per Security, less an
amount per Security to be determined by agreement between the
Underwriters and the Company. The Pricing Terms likewise shall
be determined by agreement between the Underwriters and the Company.
The Pricing Terms, when so determined, shall be set forth in the
Pricing Agreement. In the event that such Pricing Terms have not
been agreed upon and the Pricing Agreement has not been executed
and delivered by the parties thereto by the close of business on the
fourth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party
to any other party, unless otherwise agreed to by the Company and
the Underwriters.
(b) In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby grants an option to the Underwriters,
severally and not jointly, to purchase from it up to an additional 570,000
shares of the Securities at the price per share set forth in the Pricing
Agreement. The option hereby granted will expire automatically at the close of
business on the 30th calendar day after (i) later of the date the Registration
Statement and any Rule 462(b) Registration Statement becomes effective, if the
Company has elected not to rely upon Rule 430A under the 1933 Act Regulations,
or (ii) the Representation Date, if the Company has elected to rely upon Rule
430A under the 1933 Act Regulations, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by the Underwriters to the Company setting forth the number of
Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
the Underwriters but shall not be later than seven full business days after the
exercise of such option, nor in any event before the Closing Time, as
hereinafter defined, unless otherwise agreed upon by the Underwriters and the
Company. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities (except as otherwise provided in the Pricing Agreement), subject in
each case to such adjustments as the Underwriters in their discretion shall make
to eliminate any sales or purchases of fractional shares.
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(c) Delivery of certificates for the Initial Securities shall be made
at the offices of the Underwriters in New York, and payment of the purchase
price for the Initial Securities shall be made at the offices of LeBoeuf, Lamb,
Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other place as shall be agreed upon by the Underwriters and the Company, at
10:00 a.m. (New York time) on the third business day after the date the
Registration Statement becomes effective (or, if the Company has elected to rely
upon Rule 430A, the third full business day after execution of the Pricing
Agreement (or, if pricing of the Securities occurs after 4:30 p.m. Eastern time,
on the fourth full business day thereafter)), or such other time not later than
ten business days after such date as shall be agreed upon by the Underwriters
and the Company (such time and date of payment and delivery being herein called
the "Closing Time"). In addition, if the Underwriters purchase any or all of the
Option Securities, payment of the purchase price and delivery of certificates
for such Option Securities shall be made at the offices of LeBoeuf, Lamb, Xxxxxx
& XxxXxx, L.L.P. set forth above, or at such other place as shall be agreed upon
by the Underwriters and the Company, on each Date of Delivery as specified in
the relevant notice from the Underwriters to the Company. Payment for the
Securities purchased by the Underwriters shall be made to the Company by
certified or official bank check or checks, drawn in New York Clearing House
funds or similar next day funds, payable to the order of the Company, against
delivery to the respective accounts of the Underwriters of certificates for the
Securities to be purchased by it. Certificates for the Initial Securities and
the Option Securities shall be in such denominations and registered in such
names as the Underwriters may request in writing at least two full business days
before the Closing Time or any Date of Delivery, as the case may be. Xxxxxxx
Xxxxx, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose check has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder. The certificates for the Initial
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Underwriters no later than 10:00 a.m. (New York
City time) on the last business day prior to the Closing Time or the Date of
Delivery, as the case may be.
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Section 3. Covenants of the Company.
The Company covenants with each Underwriter as follows:
(a) The Company will comply with the requirements of Rule 430A of the
1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as
applicable, and will notify the Underwriters immediately, and confirm the notice
in writing, (i) of the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose and (v) of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or the
exemption from qualification of the Securities or the Common Stock issuable upon
conversion or redemption of the Securities under state securities or Blue Sky
laws or the initiation of any proceedings for that purpose. The Company will
promptly effect the filings necessary pursuant to Rule 424 and will take such
steps as it deems necessary to ascertain promptly whether the Prospectus
transmitted for filing under Rule 424 was received for filing by the Commission
and, in the event that it was not, it will promptly file the Prospectus. The
Company will use its best efforts to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus (including any revised prospectus or Term Sheet
and preliminary prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus or Term
Sheet and preliminary prospectus is required to be filed pursuant to Rule 424(b)
under the 1933 Act Regulations), whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Underwriters with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as
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the case may be; and will not file or use any such Rule 462(b) Registration
Statement, Term Sheet, amendment, supplement or revision to which the
Underwriters or counsel for the Underwriters shall object.
(c) The Company will deliver to the Underwriters and to counsel to the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Underwriters,
without charge, as many conformed copies of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) as the
Underwriters reasonably may request. If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(d) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, from
time to time without charge during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter reasonably may
request. If applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(e) If any event shall occur as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, the
Company will forthwith amend or supplement the Prospectus (in form and substance
reasonably satisfactory to counsel for the Underwriters) so that, as so amended
or supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company will furnish to the
Underwriters as many copies of such amendment or supplement as the Underwriters
may request.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities and the Common Stock issuable upon
conversion and redemption of the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Underwriters may designate (with a good faith intent at that time
to offer or sell any such securities in such jurisdiction); provided, however,
that the Company shall not be obligated to qualify as a foreign corporation or
to execute a general consent as to service of process in any jurisdiction in
which it is not so qualified or to make any undertakings with respect to the
conduct of its business therein. In each jurisdiction in which the Securities or
such shares of Common Stock have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required in
connection with the distribution of the Securities and such Common Stock.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the period
covered thereby, an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act
(in form and in a manner complying with the provisions of Rule 158 under the
1933 Act Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(i) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule 430A or
Rule 434 under the 1933 Act Regulations, then promptly following the execution
of the Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A or Rule 434 and
Rule 424(b) under the 1933 Act Regulations, copies of an amended Prospectus, or
Term Sheet, or, if required by such Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing all
information so omitted.
(j) If the Company elects to rely upon Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the
1933 Act
-15-
Regulations by the earlier of (i) 10:00 p.m. Eastern time on the date of the
Pricing Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(k) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will promptly file all documents required to be
filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act of which the Underwriters
shall have previously been advised and previously furnished a copy, and with
respect to which the Company shall endeavor in good faith to provide the
Underwriters or the Underwriters' counsel with an opportunity to comment.
(l) For a period of one year after the Closing Time, the Company will
furnish to the Underwriters copies of all reports and communications delivered
to the Company's stockholders or to holders of the Securities as a class and
will also furnish copies of all reports (including exhibits) filed with the
Commission on Forms 8-K, 10-Q and 10-K, and all other reports and information
furnished to its stockholders generally, not later than the time such reports
are first furnished to such holders generally.
(m) During a period commencing on the date hereof and ending 90 days
from the date of the Prospectus, the Company will not, without the prior written
consent of the Underwriters, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, or enter into any agreement
to sell, any Common Stock or any securities similar to the Securities or any
security convertible into or exchangeable or exercisable for any Common Stock or
any such similar securities; provided, however, that such restriction shall not
affect the ability of the Company to take any such action (i) as a consequence
of obligations under securities outstanding prior to the date of the Prospectus,
(ii) in connection with any employee benefit or incentive plan of the Company or
its subsidiaries, or (iii) in connection with the offering of the Securities
made in connection with the Prospectus.
(n) The Company will use its best efforts to effect the listing of the
Securities and the shares of Common Stock issuable upon conversion or redemption
on the New York Stock Exchange and to cause the Securities to be registered
under the 1934 Act.
(o) The Company will reserve and keep available at all times, free of
preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy any obligations to issue shares of Common
Stock upon conversion or redemption of all of the Securities outstanding from
time to time.
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(p) The Company will supply the Underwriters with copies of all
correspondence to and from, and all documents delivered to and by, the
Commission in connection with the registration of the Securities under the 1933
Act.
(q) Prior to the Closing Date, the Company will issue no press release
or other communications directly or indirectly and hold no press conference with
respect to the Company or any of its subsidiaries, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of any of
them, or the offering of the Securities, without the prior written consent
of the Underwriters unless in the judgment of the Company and its counsel, and
after notification to the Underwriters, such press release or communication is
required by law.
(r) The Company will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
manipulation of the price of the Securities or the Common Stock.
Section 4. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement and the Pricing Agreement, including, without
limitation, expenses related to the following, if incurred: (i) the preparation,
delivery, printing and filing of the Registration Statement and Prospectus as
originally filed (including financial statements and exhibits) and of each
amendment thereto; (ii) the printing and delivery to the Underwriters of this
Agreement, the Pricing Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale and delivery of the Securities; (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters; (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors
or agents (including transfer agents and registrars); (v) the qualification of
the Securities and the shares of Common Stock issuable upon conversion or
redemption of the Securities under securities laws in accordance with the
provisions of Section 3(f), including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of the Blue Sky Survey and any amendment thereto; (vi) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
prospectus, any Term Sheet and of the Prospectus and any amendments or
supplements thereto; (vii) the printing and delivery to the Underwriters of
copies of the Blue Sky Survey; (viii) any fees payable in connection with the
rating of the Securities by nationally recognized statistical rating
-17-
organizations; (ix) the filing fees incident to, and the fees and disbursements
of counsel to the Underwriters in connection with, the review, if any, by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities; (x) any fees payable to the Commission; and (xi) the
fees and expenses incurred in connection with the listing on the New York Stock
Exchange of the Securities and the shares of Common Stock issuable upon
conversion or redemption of the Securities.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., counsel
for the Underwriters.
Section 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company herein contained
or in certificates of any officer of the Company or any subsidiary delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, shall have become effective not later than 5:30 p.m., New York City
time, on the date hereof, and on the date hereof and at the Closing Time and any
Date of Delivery no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Xxxxxxxx X. Xxxxx, Executive Vice President, Secretary and
-18-
General Counsel of the Company, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State
of Indiana; and the Company has the corporate power under the
laws of the State of Indiana and under its charter to own,
lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus
or in the Company's Annual Report filed on Form 10-K for the
year ended December 31, 1994.
(ii) The Securities delivered at the Closing Time,
and all other outstanding securities of the Company have been
duly authorized and validly issued, are fully paid and
nonassessable; the Common Stock and the Securities are each
registered under the 1934 Act, and the
Securities and the Common Stock issuable upon conversion or
redemption of the Securities at the Closing Time have been
authorized for listing on the NYSE, upon official notice of
issuance.
(iii) The issuance of the Securities is not subject
to preemptive or other similar rights arising by law.
(iv) The shares of Common Stock issuable upon
conversion or redemption of the Securities have been duly
authorized and validly reserved for issuance upon such
conversion or redemption, and such shares, when issued and
delivered upon such conversion or redemption in the manner
provided in the Amended Articles of Incorporation, will be
validly issued, fully paid and nonassessable and the issuance
of such shares upon such conversion or redemption will not be
subject to preemptive or other similar rights arising by law.
(v) The Purchase Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by
the Company and constitute valid and binding obligations of
the Company enforceable in accordance with their terms (except
(1) as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting
creditors' rights generally and except that the remedies of
specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and
to the discretion of the court before which any proceeding
-19-
therefor may be brought and (2) that no opinion is given as to
the enforceability of the indemnity and contribution
provisions under the Purchase Agreement and the Pricing
Agreement).
(vi) The Securities and the Common Stock conform in
all material respects to the descriptions thereof contained in
the Prospectus and the Registration Statement.
(vii) The forms of certificates used to evidence the
Securities and the Common Stock comply with all applicable
statutory requirements, with any applicable requirements of
the Company's Amended Articles of Incorporation and by-laws,
and with the requirements of the New York Stock Exchange.
(viii) Each subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation and has the
corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted
and as described in the Registration
Statement and the Prospectus or in the Company's Annual Report
filed on Form 10-K for the year ended December 31, 1994.
Nothing has come to the attention of such counsel to lead such
counsel to believe that any subsidiary is not duly qualified
as a foreign corporation to transact business or is not in
good standing in each jurisdiction in which such qualification
is required, except where the failure to so qualify or be in
good standing would not reasonably be expected to have a
material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise. All of the
issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued, is fully
paid and nonassessable, and all such shares are owned by the
Company or by a subsidiary of the Company, except as set forth
in a letter previously delivered by the Company to you.
(ix) The Registration Statement, including any Rule
462(b) Registration Statement, is effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated, to such
counsel's best knowledge, or threatened by the Commission.
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(x) The Registration Statement, including any Rule
462(b) Registration Statement, each of the incorporated
documents and the Prospectus, and each amendment or supplement
thereto (other than the financial statements or other
financial information or statistical data included therein and
each Trustee's Statement of Eligibility on Form T-1, as to
which no opinion need be rendered), as of their respective
effective or issue dates, or when amended, as appropriate,
complied as to form in all material respects with the
requirements of the 1933 Act or the 1934 Act and the Rules and
Regulations thereunder.
(xi) Each document filed pursuant to the 1934 Act
and incorporated by reference in the Prospectus, at the time
it was filed or last amended (other than financial statements
or other financial information or statistical data included
therein, as to which no opinion need be rendered), complied as
to form in all material respects to the requirements of the
1934 Act and the 1934 Regulations.
(xii) The information in the Prospectus under the
caption "Description of PRIDES", to the extent that such
information involves matters of law, summaries of legal
matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, is correct in all material
respects.
(xiii) No authorization, approval or consent of any
court or governmental authority or agency is necessary in
connection with the issuance and sale of the Securities
hereunder or the issuance of the Common Stock upon conversion
or redemption of the Securities or the consummation by the
Company of any other transactions contemplated hereby, except
such as have been obtained and made under the federal
securities laws or state insurance laws and such as may be
required under the state or foreign securities laws.
(xiv) To the best knowledge of such counsel, there
are no statutes or regulations required to be described or
incorporated by reference in the Registration Statement which
are not described or incorporated by reference as required and
there are no legal or governmental proceedings pending or
threatened which are required to be disclosed or incorporated
by reference in the Registration Statement, other than those
disclosed or incorporated by reference therein.
-21-
(xv) To the best knowledge of such counsel, there
are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to or incorporated by reference in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to or incorporated by reference therein
or filed as exhibits thereto; the descriptions thereof or
references thereto are true and correct in all material
respects and no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described,
referred to or incorporated by reference or filed, which
default would reasonably be expected to have a material
adverse effect on the Company and its subsidiaries considered
as one enterprise.
(xvi) The issuance and delivery of the Securities and
the Common Stock issuable upon conversion or redemption of the
Securities, the execution and delivery of the Purchase
Agreement and the Pricing Agreement and the consummation of
the transactions contemplated therein, will not conflict with
or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant
to, any material contract, indenture, mortgage, loan agreement
(except the Credit Agreement, dated as of August 31, 1995 by
and among the Company, the financial institutions who are or
from time to time become party thereto, The Chase Manhattan
Bank, N.A., First Union National Bank of North Carolina, the
Managing Bank named therein and the Bank of America National
Trust and Savings Association, as to which a waiver has been
obtained), note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property
or assets of the Company or any of its subsidiaries is
subject, except for a conflict, breach, default, lien, charge
or encumbrance which would not reasonably be expected to have
a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise nor will
such action result in any violation of the provisions of the
charter or by-laws of the Company, or any material applicable
law, administrative regulation or administrative or court
decree.
-22-
(xvii) The Company and its subsidiaries hold all
material licenses, certificates and permits from all
governmental authorities (including, without limitation, the
Insurance Licenses) which are necessary to the conduct of
their businesses; the Company and its subsidiaries have
fulfilled and performed all material obligations necessary to
maintain their respective Insurance Licenses, and no event or
events have occurred which could reasonably be expected to
result in the material impairment, modification, termination
or revocation of such Insurance Licenses.
(xviii) The Company is not an "investment company" or
an entity "controlled" by an "investment company," as such
terms are defined in the 1940 Act.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements or other
financial information or statistical data included or incorporated by
reference therein, as to which such counsel need express no belief), at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus at the Representation Date (except for financial
statements and other financial data included or incorporated by
reference therein as to which such counsel need express no belief),
at the Representation Date (unless the term "Prospectus"
refers to a prospectus which has been provided to the Underwriters by
the Company for use in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective, in which case at the time
it is first provided to the Underwriters for such use) or at the
Closing Time, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(2) The favorable opinion, dated as of the Closing Time, of
Krieg, DeVault, Alexander & Xxxxxxxx, special counsel to the Company,
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in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) All consents and waivers required in connection
with the issuance and delivery of the Securities and the
Common Stock issuable upon conversion or redemption of the
Securities, the execution and delivery of the Purchase
Agreement and the Pricing Agreement and the consummation of
the transactions contemplated therein under the Credit
Agreement, dated as of August 31, 1995, by and among the
Company, the financial institutions who are or from time to
time become party thereto, The Chase Manhattan Bank, N.A.,
First Union National Bank of North Carolina, the Managing Bank
named therein and the Bank of America National Trust and
Savings Association, have been obtained.
(ii) The statements in the Prospectus under the
caption "Certain Federal Income Tax Considerations" have been
reviewed by such counsel and, insofar as they constitute legal
conclusions or matters of law, fairly summarize the matters
referred to therein.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements or other
financial information or statistical data included or incorporated by
reference therein, as to which such counsel need express no belief), at
the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus at the Representation Date (except for financial
statements and other financial data included or incorporated by
reference therein as to which such counsel need express no belief),
at the Representation Date (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of
the Securities which differs from the Prospectus
on file at the Commission at the time the Registration Statement
becomes effective, in which case at the time it is first provided to
the Underwriters for such use) or at the Closing Time, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
-24-
(3) The favorable opinion, dated as of the Closing Time, of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., counsel for the Underwriters,
with respect to the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as you may require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, XxXxxxx, Xxxx, Xxxxxx & XxxXxx,
L.L.P., may rely as to matters governed by the laws of the State of
Indiana upon the opinion referred to in subsection (b)(1) above.
(c) At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, other than as stated or contemplated
in the Registration Statement or the Prospectus, any material adverse change or
any development which would reasonably be expected to result in any prospective
material adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Underwriters shall have received a certificate of the president or a vice
president of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) there has been no downgrading in the
rating assigned to any outstanding securities of the Company by any nationally
recognized securities rating agency, and no such securities rating agency has
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's outstanding
securities, (iii) the representations and warranties in Section 1 are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, (iv) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (v) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best of each such officer's
knowledge and information, no proceedings for that purpose have been initiated
or threatened by the Commission.
(d) At the time of the execution of this Agreement, the Representatives
shall have received from Coopers & Xxxxxxx a letter, dated such date, in form
and substance satisfactory to the Representatives, to the effect that (i) they
are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act, the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations; (ii) it is their opinion that the
-25-
financial statements and supporting schedules included or incorporated by
reference in the Registration Statement and covered by their opinions therein
comply with the applicable accounting requirements of the 1933 Act and the 1933
Act Regulations and the 1934 Act and the 1934 Act Regulations; (iii) based upon
limited procedures set forth in detail in such letter, nothing has come to their
attention which causes them to believe that (A) the unaudited financial
information of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations or are not presented
in conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, or (B) at the date of the latest available
balance sheet read by such accountants, or at a subsequent specified date not
more than five days prior to the date of this Agreement, there was any increase
in consolidated long-term debt or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in consolidated total
assets or shareholders' equity, as compared with amounts shown on the latest
balance sheet included in the Prospectus, or (C) for the period from the closing
date of the latest income statement included in the Prospectus to the closing
date of the latest available income statement read by such accountants, there
were any decreases, as compared with the corresponding period of the previous
year and with the period of corresponding length ended the date of the latest
income statement included in the Prospectus, in consolidated premiums (including
annuity deposits) collected, net investment income, total revenues, earnings
applicable to common stock or net income per fully diluted common share except,
in all cases set forth in this clause (iii), for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are described
in such letter; (iv) they have examined the statutory financial statements of
each of the Company's insurance subsidiaries, from which certain ratios and
other statistical data contained in the Registration Statement have been
derived, and in their opinion such statements, with respect to each insurance
subsidiary, have for each relevant period been prepared in accordance with
accounting practices prescribed or permitted by the appropriate Insurance
Department of the state of domicile of such subsidiary, and such accounting
practices have been applied on a consistent basis throughout the periods
involved, except as disclosed therein; and (v) in addition to the examination
referred to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages, ratios and
financial information that has been derived from the accounting and financial
records of the
-26-
Company that are subject to internal accounting controls which
are included or incorporated by reference in the Registration Statement and
Prospectus and which are specified by the Underwriters, and have found such
amounts, percentages, ratios and financial information to be in agreement with
the relevant accounting and financial records of the Company and its
subsidiaries identified in such letter.
(e) At the Closing Time, the Underwriters shall have received from
Coopers & Xxxxxxx a letter, dated as of the Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a date
not more than five days prior to the Closing Time and, if the Company has
elected to rely on Rule 430A under the 1933 Act Regulations, to the further
effect that they have carried out procedures as specified in clause (iv) of
subsection (d) of this Section with respect to certain amounts, percentages and
financial information specified by the Underwriters and deemed to be a part of
the Registration Statement pursuant to Rule 430(A)(b) and have found such
amounts, percentages and financial information to be in agreement with the
records specified in such clause (iv).
(f) At the Closing Time, the Securities and the Common Stock issuable
upon conversion or redemption of the Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(g) At the Closing Time, and at each Date of Delivery, if any, counsel
for the Underwriters shall have been furnished with such documents and opinions
as they may reasonably require with respect to unforeseen materially changed
circumstances since the date of this Agreement for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein contemplated; and
all proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters.
(h) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(i) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of,
-27-
and as if made on, each Date of Delivery, and at the relevant
Date of Delivery, the Underwriters shall have received:
(1) A certificate, dated such Date of Delivery, of the
president or a vice president of the Company and the chief
financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(c)
hereof is true and correct as of, and as if made on, such Date of
Delivery.
(2) The favorable opinion of Xxxxxxxx X. Xxxxx, Executive Vice
President, Secretary and General Counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Xxxxx XxXxxxx Xxxxxxxxx &
Xxxxxxxx, special counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(2) hereof.
(4) The favorable opinion of XxXxxxx, Xxxx, Xxxxxx & XxxXxx,
L.L.P., counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b)(3) hereof.
(5) A letter from Xxxxxxx & Xxxxxxx in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to
the Underwriters pursuant to Section 5(d) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(i)(5) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
-28-
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including any Rule
430(A) Information or Rule 434 Information, or the omission or alleged
omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that (A) the foregoing indemnity shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and (B) the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of the Underwriter from whom the person asserting any such
losses, claims,
-29-
damages or liabilities purchased Securities, or any person controlling any
Underwriter, if the Company shall sustain the burden of proving that a copy of
the Prospectus (as then amended or supplemented, if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of the Underwriters to such person if such is required by law at or prior
to the written confirmation of the sale of such Securities to such person and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability, and the Company has
complied with its obligations under Section 3(d) hereof.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Xxxxxxx Xxxxx expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action (which approval
shall not be unreasonably withheld), unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal defenses
available to them which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event
-30-
shall the indemnifying parties be liable for reasonable fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. An indemnifying party shall not
be liable for any settlement or any action or claim effected without its
consent, which consent shall not be unreasonably withheld.
Section 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial
public offering of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
-31-
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to
Survive Delivery.
All representations, warranties and agreements contained in
-32-
this Agreement and the Pricing Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Securities to the Underwriters.
Section 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement and the Pricing
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Registration Statement (except as
otherwise stated or contemplated therein at the date of the Pricing Agreement),
any material adverse change or any development which could reasonably be
expected to result in a prospective material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak of
hostilities or other calamity or crisis, or any material worsening thereof, or
any change or development involving a prospective change in national or
international political, financial or economic conditions, the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Underwriters, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock or any other security of the Company has been suspended or limited
by the Commission or the New York Stock Exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges of prices for securities have been required, by either of said
Exchanges or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by Federal, Indiana
or New York authorities.
(b) If this Agreement and the Pricing Agreement are terminated pursuant
to this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4, and provided, further, that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
Section 10. Default by One or More of the Underwriters.
-33-
If one or more of the Underwriters shall fail at Closing Time to
purchase the Initial Securities which it or they are obligated to purchase under
this Agreement and the Pricing Agreement (the "Defaulted Securities"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Initial Securities, the non-defaulting Underwriters
shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
Section 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives c/x Xxxxxxx Xxxxx & Co., 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Managing Director, with a copy to LeBoeuf,
Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Xxxxxxx Xxxxx, Esq.; notices to the Company shall be
directed to it at 00000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000,
Attention: Xxxxxxxx X. Xxxxx, Esq., with a copy to Krieg, Devault, Alexander &
Capehart, special counsel to the Company, at 0000 Xxx Xxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Esq.
-34-
Section 12. Parties.
This Agreement and the Pricing Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement or the
Pricing Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 13. Governing Law and Time.
This Agreement and the Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Unless otherwise set forth
herein, specified times of day refer to New York City time.
-35-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, shall become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
CONSECO, INC.
By /s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title:Executive Vice President
and General Counsel
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX XXXXXXXX INC
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxx Xxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxx
Title:Attorney-in-fact
For themselves and as Representatives
of the other Underwriters named in
Schedule A hereto
-36-
SCHEDULE A
Number of
Shares of
PRIDES to be
Name Purchased
---- ------------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated . . . . . . . . . 1,220,000
Xxxx Xxxxxx Xxxxxxxx Inc. . . . . . . . . 1,220,000
Salomon Brothers Inc . . . . . . . . . . . 1,220,000
Xxx-Xxxx, Xxxxxx Inc. . . . . . . . . . . 50,000
Xxxxxxxxx, Xxxxxxxx & Co. Inc. . . . . . . 50,000
Forum Capital Markets L.P. . . . . . . . . 20,000
Parallax Group, Inc. . . . . . . . . . . . 20,000
---------
Total.............................. 3,800,000
=========
-37-
EXHIBIT A
3,800,000 Shares
CONSECO, INC.
(an Indiana corporation)
Preferred Redeemable Increased Dividend Equity
Securities (SM), 7% PRIDES (SM), Convertible Preferred Stock
(Stated Liquidation Value $61.125 Per Share)
PRICING AGREEMENT
January 17, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX XXXXXXXX INC
As Representatives of the
Underwriters named in the
within-mentioned
Purchase Agreement
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Reference is made to the Purchase Agreement dated January 17,
1996 (the "Purchase Agreement") relating to the purchase by Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, Xxxx Xxxxxx Xxxxxxxx Inc.
and Salomon Brothers Inc, as representatives of the Underwriters named in
Schedule A thereto (the "Underwriters"), of the above shares of Preferred
Redeemable Increased Dividend Equity Securities (SM), 7% PRIDES (SM),
Convertible Preferred Stock (the "Securities"), of Conseco, Inc., an Indiana
corporation (the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company
agrees with each Underwriter as follows:
1. The initial public offering price per share for the
Securities, determined as provided in Section 2, shall be $61.125 per
share, plus all accrued and unpaid dividends, if any, from the date of
original issue of such Securities;
provided that the purchase price per share for any Option Securities
(as defined in the Purchase Agreement) purchased upon exercise of the
over-allotment option described in Section 2(b) of the Purchase
Agreement shall be reduced by an amount per share equal to any
dividends declared by the Company and payable on the Initial Securities
(as defined in the Purchase Agreement) but not payable on the Option
Securities.
2. The annual dividend payable in respect of the
Securities shall be $4.279 per share.
3. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $59.295, being an amount equal to
the initial public offering price set forth above less $1.83 per share.
4. The Mandatory Conversion Date shall be February 1,
2000.
5. The Call Price per share for the Securities shall be the
sum of (i) $62.195 on and after February 1, 1999, to and including
April 30, 1999, $61.928 on and after May 1, 1999, to and including July
31, 1999, $61.660 on and after August 1, 1999, to and including October
31, 1999, and $61.393 on and after November 1, 1999, to and including
December 31, 1999, and $61.125 on and after January 1, 2000, to and
including February 1, 2000, and (ii) all accrued and unpaid dividends
thereon to but not including the date fixed for redemption (other than
previously paid dividends payable to a holder of record as of a prior
date).
6. The Optional Conversion Rate shall be .855.
7. The redemption rate per share of the Securities shall be
the greater of (i) the number of share(s) of Common Stock equal to the
applicable Call Price in effect on the redemption date divided by the
Current Market Price, as defined in the Prospectus (as defined in the
Purchase Agreement), of the Common Stock, determined as of the second
trading day immediately preceding the Notice Date (as defined in the
Prospectus) or (ii) .855 of a share of Common Stock, subject to
adjustment as described in the Prospectus.
A-2
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
CONSECO, INC.
By /s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title:Executive Vice President
and General Counsel
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX XXXXXXXX INC
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxx Xxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxx
Title:Attorney-in-fact
For themselves and as Representatives
of the other Underwriters named in
the Purchase Agreement
A-3
