Exhibit 1.1
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UNDERWRITING AGREEMENT
CONSECO, INC.
(AN INDIANA CORPORATION)
$400,000,000 10 3/4% Senior Notes due 2008
DATED AS OF JUNE 26, 2001
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Table of Contents
SECTION 1. Representations and Warranties..................................................................3
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................11
SECTION 3. Covenants of the Company.......................................................................12
SECTION 4. Payment of Expenses............................................................................15
SECTION 5. Conditions of Underwriters' Obligations........................................................16
SECTION 6. Indemnification................................................................................23
SECTION 7. Contribution...................................................................................26
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................27
SECTION 9. Termination of Agreement.......................................................................28
SECTION 10. Default by One or More of the Underwriters.....................................................28
SECTION 11. Notices........................................................................................29
SECTION 12. Parties........................................................................................29
SECTION 13. Governing Law and Time.........................................................................30
SECTION 14. Effect of Headings.............................................................................30
SECTION 15. Counterparts...................................................................................30
-ii-
CONSECO, INC.
(an Indiana corporation)
$400,000,000 10 3/4% Senior Notes due 2008
Underwriting Agreement
June 26, 2001
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
UBS WARBURG LLC
c/x Xxxxxx Brothers Inc.
World Headquarters
3 World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Conseco, Inc., an Indiana corporation (the "Company"), confirms its
agreement with Xxxxxx Brothers Inc., Banc of America Securities, LLC, X.X.
Xxxxxx Securities Inc. and UBS Warburg LLC (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof) with respect to the issue and sale by the Company
and the purchase by the Underwriters, acting severally and not jointly, of
$400,000,000 aggregate principal amount of the Company's 10 3/4% Notes due 2008
(the "Notes"), to be issued pursuant to an indenture dated as of November 13,
1997 (the "Base Indenture"), between the Company and The Bank of New York, as
successor to LTCB Trust Company, as trustee (the "Trustee"), as supplemented by
the first senior supplemental indenture to be dated as of June 29, 2001 between
the Company and the Trustee (the "Supplemental Indenture"). Capitalized terms
used herein without definition shall have the meanings ascribed in the
Prospectus (as defined below).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-83465) covering the
registration of securities of the Company, including the Notes, 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
this Agreement. Such registration statement, as amended, has been declared
effective by the Commission and the Base Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a final prospectus and final prospectus supplement in accordance with
the provisions of paragraph (b) of Rule 424 of the 1933 Act Regulations or (ii)
if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations,
prepare and file a term sheet or abbreviated term sheet (the "Term Sheet") in
accordance with the provisions of Rule 434 and Rule 424(b). Such registration
statement No. 333-83465, as 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 final prospectus supplement relating to the offering of
the Notes, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Notes, 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 this
Agreement; provided, further, that if the Company files a registration statement
with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (a
"Rule 462(b) Registration Statement"), then after such filing, all references to
the "Registration Statement" shall be deemed to include the Rule 462(b)
Registration Statement; and provided, 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, 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 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 applicable registration statement became effective
and any prospectus and any amendment or supplement thereto 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 underwriting 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 thereof 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.
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The Company understands that the Underwriters propose to make a public
offering of the Notes as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered. The terms of the public offering of
the Notes are set forth in the Prospectus.
The Company and the Underwriters agree that up to $10 million aggregate
principal amount of the Notes to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters to Xxxx Xxxxx, chief
executive officer of the Company, as part of the distribution of the Notes by
the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Securities are not orally confirmed for purchase by
Xx. Xxxxx by the end of the first business day after the date of this Agreement,
such Reserved Securities may be offered to the public as part of the public
offering contemplated hereby. Any Reserved Securities sold to Xx. Xxxxx shall
not be sold, transferred, assigned, pledged or hypothecated by Xx. Xxxxx for a
period of three months following the Closing Time.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the date
hereof (such date being hereinafter referred to as the "Representation Date")
and as of the Closing Time referred to in Section 2(b) hereof, and agrees with
each Underwriter that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been initiated
or, to the knowledge and information of the Company, threatened by the
Commission.
(ii) The Company meets, and at the respective times of the commencement
and consummation of the offering of the Notes will meet, the requirements for
the 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.
At the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became effective and at the
Representation Date and at the Closing Time (as defined herein), the
Registration Statement, any Rule 462 Registration Statement and any amendments
and supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") and did not 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. At the date of the
Prospectus and at the Closing Time, the Prospectus and any amendments and
supplements thereto 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. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule 434.
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Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through
Xxxxxx Brothers Inc. expressly for use in the Registration Statement or the
Prospectus or (B) the part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with the offering of Notes will, at the time of such delivery, be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement, or the Prospectus, at the time they
were or hereafter are filed with the Commission or last amended, as the case may
be, 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, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not 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; and any additional documents deemed to be incorporated by reference
in the Registration Statement or the Prospectus will, if and when such documents
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; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
any Underwriter through Xxxxxx Brothers Inc. expressly for use in the
Registration Statement or the Prospectus.
(iv) PricewaterhouseCoopers LLP, which certified the financial
statements and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) 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 consolidated subsidiaries, respectively, as of the dates
indicated and the results of their operations, changes in shareholders' equity
and cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been
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prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The supporting
schedules, if any, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The ratio of earnings to fixed
charges (and the ratio of earnings to fixed charges, preferred stock dividends
and distributions on Company-obligated mandatorily redeemable preferred
securities of subsidiary trusts) included in the Prospectus have been calculated
in compliance with Item 503(d) of Regulation S-K of the Commission. The selected
financial information and summary financial data 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 and the Prospectus. There are no historical or pro forma
financial statements that are required by the 1933 Act, the 1933 Act Regulations
or Regulation S-X to be included in the Registration Statement and the
Prospectus that are not included as required.
(vi) 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 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.
(vii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as otherwise stated
therein, (A) there has been no material adverse change and no development which
could reasonably be expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered into by
the Company or any of its subsidiaries, other than those arising in the ordinary
course of business, which are material with respect to the Company and its
subsidiaries, considered as one enterprise, and (C) except for regular dividends
on the Preferred Stock of the Company outstanding as of the date of the
Prospectus in amounts per share that are consistent with the applicable charter
document or supplement thereto, respectively, in effect as of the date of the
Prospectus, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(viii) The Company has been incorporated, is validly existing as a
corporation and its status is active 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 and to enter into and perform its obligations under, or as
contemplated under, this Agreement, the Base Indenture and the Supplemental
Indenture. The Company is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is
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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 have a Material Adverse Effect.
(ix) Each "significant subsidiary" of the Company within the meaning of
Rule 1-02 of Regulation S-X promulgated under the 1933 Act is listed on Schedule
C hereto, and each such subsidiary, and each of the other subsidiaries listed
for purposes of this Agreement on Schedule C hereto (each of such subsidiaries
listed on Schedule C, for purposes of this Agreement, a "Significant
Subsidiary") has been incorporated and is validly existing as a corporation in
good standing (to the extent such concept applies) 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, and is 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 have a Material Adverse Effect. Except
as otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding shares of capital stock of each Significant Subsidiary of
the Company have been authorized and validly issued, are fully paid and
non-assessable and all such shares are owned by the Company, directly or through
its subsidiaries, free and clear of any material security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Significant Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Significant
Subsidiary.
(x) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus; since the date indicated in the Prospectus
there has been no change in the consolidated capitalization of the Company and
its subsidiaries (other than changes in outstanding Common Stock of the Company
resulting from incentive compensation plan, employee or agent benefit plan or
dividend reinvestment and stock purchase plan transactions, including, without
limitation, the purchase of shares of Common Stock of the Company or
cancellation of options in connection therewith); and all of the issued and
outstanding capital stock of the Company has been authorized and validly issued,
is fully paid and non-assessable and conforms to the descriptions thereof
contained in the Prospectus.
(xi) The Base Indenture has been duly authorized, executed and
delivered by the Company and is qualified under the 1939 Act and constitutes a
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the "Bankruptcy Exceptions"); the Base
Indenture conforms in all material respects to the description thereof contained
in the Prospectus. The Supplemental Indenture has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and delivered by
the Company and will
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constitute a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions and will conform
in all material respects to the description thereof contained in the Prospectus.
(xii) The Notes have been duly authorized by the Company and, at the
Closing Time, will have been executed by the Company and, when authenticated in
the manner provided for in the Base Indenture and the Supplemental Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions, and
will be in the form contemplated by, and entitled to the benefits of, the
Supplemental Indenture and will conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xiii) Neither the Company nor any of its Significant Subsidiaries is
in violation of its charter or by-laws. Neither the Company nor any of its
Significant Subsidiaries is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, note, lease, loan or credit agreement or any other
agreement or instrument (the "Agreements and Instruments") to which the Company
or any of its Significant Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any
Significant Subsidiary is subject, or in violation of any applicable law, rule
or regulation or any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Significant Subsidiaries or any of their respective
properties or assets, which violation or default would, singly or in the
aggregate, have a Material Adverse Effect.
(xiv) The offer of the Notes as contemplated herein and in the
Prospectus, the execution, delivery and performance of this Agreement, the Base
Indenture and the Supplemental Indenture, and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
(including the issuance and sale of the Notes and the use of proceeds from the
sale of the Notes as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder and
thereunder do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of any of the
terms or provisions of, or constitute a default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Significant
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its Significant
Subsidiaries, or any of their assets, properties or operations (except for such
violations that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the
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Company or any Significant Subsidiary. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note, debenture or other
evidence of indebtedness of the Company or any Significant Subsidiary (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company
or any Significant Subsidiary.
(xv) There is no action, suit, proceeding, inquiry or investigation
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
Licenses (as defined below)), now pending or to the 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 and the Prospectus (other
than as stated therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might be reasonably expected to materially and
adversely affect the consummation of this Agreement, the Base Indenture, the
Supplemental Indenture or the transactions contemplated herein, therein or in
the Registration Statement or the Prospectus. The aggregate of all pending legal
or governmental proceedings to which the Company or any subsidiary thereof is a
party or of which any of their respective properties or operations is the
subject which are not described in the Registration Statement or the Prospectus,
including ordinary routine litigation incidental to the business or the Company
or any of its subsidiaries, could not reasonably be expected to result in a
Material Adverse Effect; and there are no contracts or documents of the Company
or 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.
(xvi) The Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies (including, without
limitation, insurance licenses from the insurance departments of the various
states where the subsidiaries write insurance business and consumer lending
licenses (collectively, the "Licenses") that are material to the Company and its
subsidiaries taken as a whole and are necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse Effect; all
of the Licenses are valid and in full force and effect, except where the
invalidity of such Licenses or the failure of such Licenses to be in full force
and effect would not result in a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Licenses which, singly or
in the aggregate, may reasonably be expected to result in a Material Adverse
Effect.
(xvii) No filing, authorization, approval, consent, order, registration
or qualification of or with any court or governmental authority or agency
(including, without limitation, any insurance regulatory agency or body) is
required in connection with the offering, issuance and sale of the Notes or for
the execution, delivery or performance by the Company of this Agreement, the
Base Indenture, the Supplemental Indenture, the
8
Notes or any other agreement or instrument entered into in connection herewith,
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 or Blue Sky laws.
(xviii) This Agreement has been duly authorized, executed and delivered
by the Company.
(xix) Neither the Company nor any of its Significant Subsidiaries is,
and upon the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus will
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").
(xx) None of the Company, its Significant Subsidiaries or any of their
respective directors, officers or controlling persons, has taken, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Notes or the Common Stock of the Company, in each case in violation of
applicable law.
(xxi) No "forward looking statement" (as defined in Rule 175 under the
0000 Xxx) contained in the Registration Statement, any preliminary prospectus or
the Prospectus was made or reaffirmed without a reasonable basis or was
disclosed other than in good faith.
(xxii) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
(xxiii) The Company and its subsidiaries carry or are entitled to the
benefits of insurance, with financially sound and reputable insurers, in such
amounts and covering such risks as is generally maintained by companies of
established repute engaged in the same or similar business, and all such
insurance is in full force and effect.
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(xxiv) The Company is, and immediately after the Closing Time will be,
Solvent. As used herein, the term "Solvent" means, with respect to the Company,
on a particular date, that on such date (A) the fair market value of the assets
of the Company is greater than the total amount of liabilities (including
contingent liabilities) of the Company, (B) the present fair salable value of
the assets of the Company is greater than the amount that will be required to
pay the probable liabilities of the Company on its debts as they become absolute
and mature, (C) the Company is able to realize upon its assets and pay its debts
and other liabilities, including contingent obligations, as they mature and (D)
the Company does not have unreasonably small capital.
(xxv) Except as described in the Prospectus and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xxvi) Except as described in the Prospectus and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) the Company
and its subsidiaries have filed all federal, state, local and foreign tax
returns which have been required to be filed and have paid all taxes shown
thereon and all assessments received by them or any of them to the extent that
such taxes have become due and are not being contested in good faith; and (B)
there is no tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any subsidiary.
(xxvii) Except as described in the Prospectus and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) each
employee benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and
10
its affiliates (each, a "Plan") has been maintained in compliance with its terms
and the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"), (B) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code has occurred with respect to
any Plan excluding transaction effected pursuant to a statutory or
administrative exemption and (C) for each Plan which is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, (1) no "accumulated
funding deficiency" as defined in Section 412 of the Code has been incurred,
whether or not waived, and (2) the fair market value of the assets of each such
Plan (excluding for these purposes accrued but unpaid contributions) exceeded
the present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.
(xxviii) No person has the right to require the Company to file a
registration statement under the 1933 Act with respect to any securities of the
Company or to require the Company to include such securities with the Notes
registered pursuant to the Registration Statement as a consequence of filing of
the Registration Statement with the Commission.
(b) Any certificate signed by any 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 the Underwriters 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, and each Underwriter severally and not jointly agrees to
purchase from the Company, the principal amount of Notes set forth in Schedule A
hereto opposite the name of such Underwriter, at the price and having such other
terms set forth on Schedule B hereto, plus any additional principal amount of
Notes which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Delivery of certificates for the Notes against payment of the purchase
price for such Notes 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 9:00 a.m.
(New York City time) on the third business day after execution of this Agreement
(or, if pricing of the Notes occurs after 4:30 p.m., New York City 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 referred to herein
as the "Closing Time"). Payment for the Notes purchased by the Underwriters
shall be made by wire transfer of immediately available funds, payable to the
Company, against delivery to the respective accounts of the Underwriters of the
Notes to be purchased by them. Delivery of, and payment for, the Notes shall be
made through the facilities of the Depository Trust Company.
11
Certificates for the Notes, if any, 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. Each Underwriter, severally and not
jointly, may (but shall not be obligated to) make payment of the purchase price
for the Notes, if any, to be purchased by any Underwriter whose funds have not
been received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder. The certificates for the Notes will
be made available for examination by the Underwriters no later than 10:00 a.m.
(New York City time) on the last business day prior to the Closing Time.
(c) The Company hereby confirms its engagement of Xxxxxx Brothers Inc. as,
and Xxxxxx Brothers Inc. hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") with respect to the offering and sale of the Notes.
Xxxxxx Brothers Inc., solely in its capacity as qualified independent
underwriter and not otherwise, is referred to herein as the "Independent
Underwriter".
SECTION 3. Covenants of the Company. The Company agrees with the
Underwriters as follows:
(a) Promptly following the execution of this Agreement, the Company will
cause the Prospectus to be filed with the Commission pursuant to Rule 424 of the
1933 Act Regulations and the Company will promptly advise the Underwriters when
such filing has been made. Prior to the filing, the Company will cooperate with
the Underwriters in the preparation of the prospectus supplement to assure that
the Underwriters have no reasonable objection to the form or content thereof
when filed or mailed.
(b) The Company, subject to Section 3(c), 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
of (i) the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the Prospectus, (ii)
the receipt of any comments from the Commission, (iii) 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) 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) the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or the exemption from
qualification of the Notes under state securities or Blue Sky laws or the
initiation or threatening of any proceeding for such purpose. The Company will
make all reasonable efforts to prevent the issuance of any stop order and, if
any stop order is issued, to promptly obtain the lifting thereof.
(c) 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
12
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, 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 the case may be; and will not file
any such Rule 462(b) Registration Statement, Term Sheet, amendment, supplement
or revision to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(d) The Company will deliver to each of the Underwriters and counsel for
the Underwriters, without charge, conformed 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 conformed copies of all
consents and certificates of experts, and will also deliver to each of the
Underwriters, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits). 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.
(e) The Company has delivered to each Underwriter, without charge, as many
copies of any preliminary prospectus as such Underwriter reasonably requested,
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, 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 may reasonably request. If applicable, the
Prospectus and any amendments or supplements thereto furnished to the
Underwriter 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.
(f) The Company will comply with the 1933 Act and the 1933 Act Regulations
and the 1934 Act and the 1934 Act Regulations so as to permit the completion of
the distribution of the Notes as contemplated in this Agreement and in the
Registration Statement and the Prospectus. If at any time when the Prospectus is
required by the 1933 Act or the 1934 Act to be delivered in connection with
sales of the Notes, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the Underwriters or for
the Company, to amend the Registration Statement in order that the Registration
Statement 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 or to amend or supplement the Prospectus in
order that 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 not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or
13
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(c), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Underwriters may designate; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified or subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.
(h) The Company will make generally available to its securityholders as
soon as practicable, but not later than 45 days (or 90 days, in the case of a
period that is also the Company's fiscal year) after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of 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.
(i) The Company will use the net proceeds received by it from the sale of
the Notes in the manner specified in the Prospectus under "Use of Proceeds."
(j) If, at the time that the Registration Statement became (or in the case
of a post-effective amendment becomes) effective, any information shall have
been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933 Act
Regulations, then immediately following the execution of this 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) of 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.
(k) If the Company elects to rely upon Rule 462(b), the Company shall 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
Regulations by the earlier of (i) 10:00 p.m. New York City time on the date of
this Agreement and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
(l) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
14
(m) Between the date of the Prospectus and the Closing Time, the Company
will not, without the prior written consent of the Underwriters, directly or
indirectly, issue, sell, offer or contract to sell, grant any option for the
sale of, or otherwise transfer or dispose of, any debt securities of the Company
(other than the Notes or commercial paper in the ordinary course of business).
(n) The Company, during a period of one year from the Closing Time, will
make generally available to the Underwriters copies of all reports and other
communications (financial or other) mailed to stockholders, and deliver to the
Underwriters promptly after they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
(such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission).
(o) Neither the Company nor its subsidiaries will take, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Notes or the Common Stock of
the Company, in each case, in violation of applicable law.
(p) During a period of 60 days from the date of the Prospectus, the Company
will not, without the prior written consent of Xxxxxx Brothers Inc., directly or
indirectly, issue, sell, offer or contract to sell, pledge or otherwise dispose
of any debt securities of the Company having terms similar to the Notes, or
options or warrants for such debt securities in connection with a public
offering or an offering in accordance with Rule 144A under the 1933 Act.
SECTION 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this 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 preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement Among Underwriters, the Base
Indenture, the Supplemental Indenture and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Notes; (iii) the preparation, issuance and delivery of the certificates for the
Notes; (iv) the fees and disbursements of the Company's counsel, accountants and
other advisors or agents (including the transfer agents and registrars), as well
as fees and disbursements of the Trustee and any Depositary, and their
respective counsel (except as provided for in the Prospectus); (v) the
qualification of the Notes under securities laws in accordance with the
provisions of Section 3(g), including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey and any Legal Investment
Survey; (vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed
15
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 any Blue Sky Survey and
any Legal Investment Survey; (viii) any fees payable in connection with the
rating of the Notes by nationally recognized statistical rating 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 NASD of the
terms of the sale of the Notes; (x) any fees payable in connection with any
listing of Notes on any securities exchange or quotation system; and (xi) any
fees payable to the Commission.
If this Agreement is terminated by the Underwriters 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
reasonable 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 to purchase and pay for the Notes pursuant to this Agreement 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 under the 1933 Act 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, no stop order suspending the effectiveness of the Registration
Statement or any part thereof 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 Notes, 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 Xx. Xxxxx
X. Xxxxxx, Executive Vice President, General Counsel and Secretary of the
Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
16
(i) The Company has been incorporated and is validly existing as a
corporation under the laws of the State of Indiana.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus.
(iii) The Company is 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 result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (including information which is
incorporated by reference therein) (except for subsequent issuances, if any,
pursuant to (x) incentive compensation plan, employee or agent benefit plan or
dividend reinvestment and stock purchase plan transactions, including, without
limitation, the purchase of shares of Common Stock of the Company or
cancellation of options in connection therewith, or (y) the exercise of
conversion or exchange rights with respect to securities outstanding as of the
date of the Prospectus), and all the issued and outstanding capital stock of the
Company has been authorized and validly issued and is fully paid and
non-assessable and conforms to the descriptions thereof contained in the
Prospectus.
(v) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing (to the
extent such concept is applicable) 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 described in the Prospectus, 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 have a
Material Adverse Effect; all of the issued and outstanding capital stock of each
such Significant Subsidiary of the Company has been authorized and validly
issued, is fully paid and non-assessable and, except as set forth in the
Prospectus, all such shares are owned by the Company, directly or through its
subsidiaries, free and clear of any material security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(vi) All legally required proceedings in connection with the
authorization and valid issuance of the Notes and the sale of such Notes in
accordance with this Agreement (other than the filing of post-issuance reports,
the non-filing of which would not render the Notes invalid) have been taken and
all legally required orders, consents or other authorizations or approvals of
any other public boards or bodies (including, without limitation, any insurance
regulatory
17
agency or body) in connection with the authorization and valid issuance of the
respective Notes and the sale of such Notes in accordance with this Agreement
(other than in connection with or in compliance with the provisions of the
securities or Blue Sky laws of any jurisdictions, as to which no opinion need be
expressed) have been obtained and are in full force and effect.
(vii) The Registration Statement is effective under the 1933 Act and,
to the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act, and no
proceedings therefor have been initiated or threatened by the Commission.
(viii) The Registration Statement, as of its effective date, and the
Prospectus, and each amendment or supplement thereto as of its issue date (in
each case, other than the financial statements and the notes thereto, the
financial schedules, and any other financial data included or incorporated by
reference therein, as to which such counsel need express no belief), complied as
to form in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; and each of the Base Indenture and the Supplemental
Indenture complied as to form in all material respects with the requirements of
the 1939 Act and the 1939 Act Regulations.
(ix) Each of the documents incorporated by reference or deemed to be
incorporated by reference in the Registration Statement or the Prospectus at the
time they were filed or last amended (other than the financial statements and
the notes thereto, the financial schedules, and any other financial data
included or incorporated by reference therein and the Statements of Eligibility
on Form T-1 filed with the Commission as part of the Registration Statement, as
to which such counsel need express no belief), complied as to form in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations, as applicable.
(x) The information in the Prospectus under the captions "Description
of the Notes," "Notes to Financial Statements-Litigation" and "Description of
Existing Indebtedness" and in the Registration Statement in Item 15, to the
extent it involves matters of law, summaries of legal matters, documents or
proceedings or legal conclusions, has been reviewed by such counsel and is
correct in all material respects.
(xi) This Agreement has been duly authorized, executed and delivered by
the Company.
(xii) Each of the Base Indenture and the Supplemental Indenture has
been duly authorized, executed and delivered by the Company and, assuming
authorization, execution, and delivery thereof by the Trustee, constitutes a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; and each of the Base
Indenture and the
18
Supplemental Indenture has been duly qualified under the 1939 Act and conforms
in all material respects to the description thereof contained in the Prospectus.
(xiii) The Notes are in the form contemplated by the Supplemental
Indenture, have been duly authorized, executed and delivered by the Company and,
when authenticated by the Trustee in the manner provided for in the Supplemental
Indenture and the Base Indenture and delivered against payment therefor by the
Company, will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and such Notes conform in all material respects to the description
thereof contained in the Prospectus.
(xiv) The offer of the Notes as contemplated herein and in the
Prospectus; the execution, delivery and performance of this Agreement, the Base
Indenture and the Supplemental Indenture, and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
(including the issuance and sale of the Notes and the use of proceeds from the
sale of the Notes as described in the prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder and
thereunder have been authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of any of the terms or provisions of,
or constitute a default or Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Significant Subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Significant Subsidiary or any of their assets, properties, or
operations (except for such violations that would not result in a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any Significant Subsidiary.
(xv) To such counsel's knowledge, there are no statutes required to be
described in or incorporated by reference in the Registration Statement which
are not described or incorporated by reference; and there are no legal or
governmental proceedings pending or, to such counsel's knowledge, threatened
which are required to be disclosed or incorporated by reference in the
Registration Statement, other than those disclosed or incorporated by reference
therein.
(xvi) To such counsel's knowledge, there are no contracts, indentures,
mortgages, 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
19
incorporated by reference therein or filed as exhibits thereto; and the
descriptions thereof or references thereto are true and correct in all material
respects.
(xvii) No filing, authorization, approval, consent, order, registration
or qualification of or with any court or federal or state governmental authority
or agency (including, without limitation, any insurance regulatory agency or
body) is required for the issuance and sale of the Notes by the Company to the
Underwriters or the performance by the Company of its obligations under this
Agreement, the Base Indenture, the Supplemental Indenture and the Notes except
such as has been obtained and made under the federal securities laws or state
insurance laws or such as may be required under state or foreign securities or
Blue Sky laws.
(xviii) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies (including,
without limitation, the Licenses) that are material to the Company and its
subsidiaries taken as a whole and are necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse Effect; all
of the Licenses are valid and in full force and effect, except where the
invalidity of such Licenses or the failure of such Licenses to be in full force
and effect would not result in a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Licenses which, singly or
in the aggregate, may reasonably be expected to result in a Material Adverse
Effect.
(xix) Neither the Company nor any of its subsidiaries is, and upon the
issuance and sale of the Notes as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will be, an "investment
company" as such term is defined in the 1940 Act.
Moreover, such counsel shall confirm that nothing has come to such counsel's
attention that causes such counsel to believe that the Registration Statement,
including any information provided pursuant to Rule 430A and related schedules
and Rule 434 (except for financial statements and the notes thereto, the
financial schedules and any other financial data included or incorporated by
reference therein, and the Statements of Eligibility on Form T-1 filed with the
Commission as part of the Registration Statement as to which such counsel need
express no opinion), at the time it became effective or at the Representation
20
Date, 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 (except for financial statements
and the notes thereto, the financial schedules, and any other financial data
included or incorporated by reference therein, as to which such counsel need
express no opinion), 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 Notes 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) or at the Closing Time, included (or includes) an
untrue statement of a material fact or omitted or omits 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 Xxxxx &
Xxxxxxx, special counsel to the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect that (i) subject to
the limitations and qualifications stated therein, the statements in the
Prospectus under the heading "Certain United States Federal Income Tax
Consequences" fairly summarize the provisions of the United States tax laws
therein described; and (ii) nothing has come to such counsel's attention that
causes such counsel to believe that the Registration Statement, including any
information provided pursuant to Rule 434 (except for financial statements and
the notes thereto, the financial schedules and any other financial data included
or incorporated by reference therein, and the Statements of Eligibility on Form
T-1 filed with the Commission as part of the Registration Statement as to which
counsel need express no opinion), at the time it became effective or at the
Representation Date, 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 (except for financial
statements and the notes thereto, the financial schedules, and any other
financial data included or incorporated by reference therein, as to which
counsel need express no opinion), 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 Notes 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) or at the Closing Time, included (or
includes) an untrue statement of a material fact or omitted or omits 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.
(3) The favorable opinion, dated as of the Closing Time, of LeBoeuf,
Lamb, Xxxxxx & XxxXxx, L.L.P., counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, with respect to the issuance and
sale of the Notes, and other related matters as the Underwriters may reasonably
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, LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. may rely as to
matters governed by the laws of Indiana upon the opinion referred to in Section
5(b)(1) hereto.
(c) Between the Representation Date and the Closing Time, no change in the
Capital Stock or long term debt of the Company or any of its subsidiaries shall
have occurred and no material adverse change shall have occurred in the
condition, financial or
21
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or not in
the ordinary course of business.
(d) At the Closing Time, the Underwriters shall have received a certificate
of the Chief Executive Officer, the President or a Vice-President of the Company
and of the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of the Closing Time, to the effect that (i) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not in the ordinary course of business,
(ii) the representations and warranties in Section 1 hereof are true and correct
as though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or, to the knowledge of such
officers, threatened by the Commission.
(e) At the Representation Date, the Underwriters shall have received from
PricewaterhouseCoopers LLP a "comfort letter", with respect to the financial
information of the Company, dated such date in form and substance satisfactory
to the Underwriters and counsel to the Underwriters.
(f) At the Closing Time, the Underwriters shall have received a letter from
PricewaterhouseCoopers LLP, with respect to the Company, dated as of the Closing
Time, to the effect that it reaffirms the statements made in the letter
furnished pursuant to subsection (e) of this Section and other customary
matters, except that (i) such statements shall include any financial statements
and pro forma financial information incorporated by reference in the
Registration Statement and the Prospectus which are filed subsequent to the date
of this Agreement and prior to the Closing Time and (ii) the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(g) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Notes as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Notes as herein contemplated shall
be satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(h) At the Closing Time, the Notes shall be rated at least BB- by Standard
& Poor's, a Division of The XxXxxx-Xxxx Companies and B1 by Xxxxx'x Investors
Service, and the Company shall have delivered to the Underwriters a letter,
dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Underwriters, confirming that the Notes have such ratings;
and between the Representation Date and the
22
Closing Time, (i) there shall not have occurred any decrease in the rating
assigned to the Notes or any securities of the Company or of the financial
strength or claims paying ability of the Company by any "nationally recognized
statistical rating organization," as defined for purposes of Rule 436(g)(2)
under the 1933 Act Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, without indicating an
improvement, its rating of the Notes or any securities of the Company or of the
financial strength or claims paying ability of the Company.
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 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter 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 the Rule 434 Information deemed to be
part thereof, if applicable, 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 included 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 arising out of or based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided, that
(subject to Section 6(e) below) any such settlement is effected with the
written consent of the Company, such consent not to be unreasonably
withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body,
23
commenced or threatened, or any claim whatsoever arising out of or 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 the foregoing indemnity
agreement shall not apply to any loss, liability, claim, damage or expense
to the extent arising out of or based upon any untrue statement or omission
or alleged untrue statement or omission (A) made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Underwriters expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 434 Information
deemed to be a part thereof, if applicable, or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or (B) made in
any preliminary prospectus supplement and corrected in the Prospectus, as
supplemented, as of the Closing Time, where the person asserting any such
loss, liability, claim, damage or expense purchased the Notes that are the
subject thereof, and it shall have been established (i) that there was not
sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus (excluding documents incorporated by reference) in any
case where such delivery is required by the 1933 Act and (ii) the Company
shall have previously furnished copies thereof in sufficient quantities to
such Underwriter.
(b) In addition to and without limitation of the Company's obligation to
indemnify Xxxxxx Brothers Inc. as an Underwriter, the Company also agrees to
indemnify and hold harmless the Independent Underwriter and each person, if any,
who controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, from and against (i) any and all loss,
liability, claim, damage and expense to the same extent and in the same manner
as provided with respect to Xxxxxx Brothers Inc. as an Underwriter under Section
6(a)(i) and (ii) any and all loss, liability, claim, damage and expense,
whatsoever, as otherwise incurred as a result of the Independent Underwriter's
participation as a "qualified independent underwriter" within the meaning of
Rule 2720 of the Conduct Rules of the NASD in connection with the offering of
the Notes, except, solely with respect to this clause (ii), any loss, liability
claim, damage or expense resulting from the Independent Underwriter's willful
misconduct or gross negligence.
(c) 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), including the Rule 434
Information deemed to be a part thereof, if applicable, 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 the Underwriters expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
24
(d) 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
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by the Underwriters, and, in the case of parties indemnified pursuant
to Section 6(c) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for 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;
provided, that, if indemnity is sought pursuant to Section 6(b), then, in
addition to the fees and expenses of such counsel for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one counsel (in addition to any local counsel) separate from its
own counsel and that of the other indemnified parties for the Independent
Underwriter in its capacity as a "qualified independent underwriter" and all
persons, if any, who control the Independent Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of 1934 Act 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 if, in the
reasonable judgment of the Independent Underwriter, there may exist a conflict
of interest between the Independent Underwriter and the other indemnified
parties. Any such separate counsel for the Independent Underwriter and such
control persons of the Independent Underwriter shall be designated in writing by
the Independent Underwriter. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such
25
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(f) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
affected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
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 Notes
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 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 Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Notes
pursuant to this Agreement shall in each case be deemed to be in the same
respective proportions as the total net proceeds from the offering of such Notes
(before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters in respect of such Notes, 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 price of such Notes as set forth on such cover.
26
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.
The Company and the Underwriters agree that Xxxxxx Brothers Inc. will not
receive any additional benefits hereunder for serving as the Independent
Underwriter in connection with the offering and sale of the Notes.
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 entity 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 Notes 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 0000 Xxx) 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 aggregate principal amount of Notes set forth opposite their
respective names in Schedule A to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative
27
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 Notes to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) The Underwriters may terminate this Agreement, by notice to the Company
at any time at or prior to the Closing Time, if (i) there has been, since the
date of this Agreement or since the respective dates as of which information is
given in the Prospectus, 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, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation of hostilities or
other calamity or crisis, or any change or development involving a prospective
change in national or international political, financial or economic conditions
the effect of which is such as to make it, in the judgment of the Underwriters,
impracticable to market the Notes or to enforce contracts for the sale of the
Notes, or (iii) if trading in the Common Stock or any other security of or
guaranteed by the Company has been suspended or limited by the Commission, the
NASD or the New York Stock Exchange, or if trading generally on any of the
American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market
or in the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of such exchanges or by such system or
by order of the Commission, the NASD or any other governmental authority, or
(iv) if a banking moratorium has been declared by any Federal, New York or
Indiana banking authority.
(b) If this Agreement is terminated pursuant to this Section 9, 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, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Notes which it
or they are obligated to purchase under this Agreement (the "Defaulted Notes"),
the Underwriters 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 Notes in
such amounts as may be agreed upon and upon the terms herein set forth; if,
however, the Underwriters shall not have completed such arrangements within such
24-hour period, then:
(a) if the aggregate principal amount of Defaulted Notes does not exceed
10% of the total aggregate principal amount of Notes, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions
28
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10% of the
total aggregate principal amount of the Notes to be purchased on such date, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 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 Underwriters 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 the Prospectus or
in any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
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 Underwriters c/x Xxxxxx Brothers Inc., 3
World Financial Center, World Headquarters, New York, New York 10285, Attention
of Xxx Xxxxxx; to Banc of America Securities LLC, 0 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of the Head of the High Yield Capital
Markets Group; to X.X. Xxxxxx Securities, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention of Xxxxxxxxx Xxxxxxx; and to UBS Warburg LLC, 000 Xxxxxxxxxx
Xxxx., Xxxxxxxx, XX 00000, Attention of the Head of High Yield Capital Markets,
with a copy (which shall not constitute notice under this Agreement) to UBS
Warburg LLC, 000 Xxxxxxxxxx Xxxx., Xxxxxxxx, XX 00000, Attention of the Legal
and Compliance Department; and with a copy to LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxx
Xxxxx, Esq. and Xxxxxxx X. Xxxxxx, Esq.; notices to the Company shall be
directed to the Company at Conseco, Inc., 00000 X. Xxxxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxx 00000, Attention of Xxxxx X. Xxxxxx, Executive Vice President, General
Counsel and Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors.
Nothing expressed or mentioned in this 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 any provision herein or therein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and thereto and their
respective successors and legal representatives, and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or
29
corporation. No purchaser of Notes from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
30
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 among
the Company and the Underwriters in accordance with its terms.
Very truly yours,
CONSECO, INC.
By: /s/ XXXXXX X. XXXXXX
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
CONFIRMED AND ACCEPTED, as
of the date first above written:
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
UBS WARBURG LLC
By: XXXXXX BROTHERS INC.
By: /s/ XXXXXXX XXXXXXXXXX
--------------------------
Authorized Signatory
31
Schedule A
Principal
Amount of
Underwriters Notes
------------ ----------
Xxxxxx Brothers Inc............................................. $200,000,000
Banc of America Securities LLC.................................. 72,000,000
X.X. Xxxxxx Securities Inc...................................... 72,000,000
UBS Warburg LLC................................................. 56,000,000
------------
Total......................................... $400,000,000
============
32
Schedule B
CONSECO, INC.
$400,000,000 10 3/4% Senior Notes due 2008
1. The initial public offering price of the Notes shall be 98.816% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance
2. The purchase price to be paid by the Underwriters for the Notes shall be
96.566% of the principal amount thereof; provided that any Reserved Securities
purchased by Xx. Xxxxx pursuant to the terms of the Underwriting Agreement shall
be purchased by the Underwriters at the initial public offering price and sold
to Xx. Xxxxx at the initial public offering price.
3. The interest rate on the Notes shall be 10 3/4% per annum.
4. On and after the issue date of the Notes, the Company may redeem all or any
portion of the Notes, at once or over time, after giving the required notice
under the Indenture, at a redemption price equal to the sum of the principal
amount of the Notes plus accrued and unpaid interest, if any, to the redemption
date (subject to the right of the Holders of record on the relevant record date
to receive interest due on the relevant interest payment date), plus the
Applicable Premium.
5. At any time prior to June 15, 2004, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes at a
redemption price of 110.75% of the principal amount, plus accrued and unpaid
interest, if any, to the redemption date, with the net cash proceeds of one or
more Equity Offerings by the Company, provided that:
(a) at least 65% of the aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption (excluding
Notes held by the Company and its Subsidiaries); and
(b) the redemption occurs within 45 days of the date of the closing of such
Equity Offering.
6. After June 15, 2005, the Company may redeem all or a part of the Notes upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest, if any, on the Notes redeemed, to the applicable redemption
date, if redeemed during the twelve-month period beginning on June 15 of the
years indicated below:
Year Percentage
---- ----------
2005.................................................... 105.375%
2006.................................................... 102.688%
2007 and thereafter..................................... 100.000%
33
Schedule C
Significant Subsidiaries
------------------------
Conseco Life Insurance Company of Texas
Wabash Life Insurance Company
CIHC, Incorporated
Bankers Life Insurance Company of Illinois
Bankers Life and Casualty Company
Conseco Annuity Assurance Company
Conseco Senior Health Insurance Company
Pioneer Life Insurance Company
Conseco Finance Corp.
Conseco Health Insurance Company
Conseco Life Insurance Company
34
