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EXHIBIT 4.23
FORM OF COMMON SECURITIES GUARANTEE AGREEMENT
Conseco Financing Trust IV
Dated as of December , 1997
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TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II.
POWERS, DUTIES AND RIGHTS OF
COMMON GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1. Powers and Duties of the Common Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Certain Rights of Common Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III.
COMMON GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.1. Common Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.2. Appointment, Removal and Resignation of Common
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV.
GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.2. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.4. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.7. Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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ARTICLE V.
LIMITATION OF TRANSACTIONS; RANKING . . . . . . . . . . . . . . . . . . . 16
SECTION 5.1. Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2. Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI.
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII.
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.1. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.1. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.4. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"),
dated as of December , 1997, is executed and delivered by Conseco, Inc., an
Indiana corporation (the "Guarantor"), and The First National Bank of Chicago,
as trustee (the "Common Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of Conseco Financing Trust IV, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of December , 1997, among the trustees
of the Issuer named therein, the Guarantor, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof _________ preferred securities, having an
aggregate liquidation amount of $________, designated the _% Trust Originated
Preferred Securities (the "Preferred Securities") and ______ common securities,
having an aggregate liquidation amount of $_________, designated the __% Trust
Originated Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Preferred Securities Guarantee") in substantially
identical terms to this Common Securities Guarantee for the benefit of the
holders of the Preferred Securities (as defined herein), except that if an
Event of Default (as defined in the Indenture), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under this Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under the
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
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ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation. In this Common
Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Common Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Common Securities
Guarantee has the same meaning throughout;
(c) all references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common Securities
Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Common Securities Guarantee, unless otherwise defined
in this Common Securities Guarantee or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than Saturday, Sunday or
any day on which banking institutions in New York City in the State of New York
are authorized or required by any applicable law to close.
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"Common Guarantee Trustee" means The First National Bank of
Chicago until a Successor Common Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Common Securities
Guarantee and thereafter means each such Successor Common Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Common
Guarantee Trustee at which the corporate trust business of the Common Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at The First
National Bank of Chicago, Global Corporate Trust Service, Xxx Xxxxx Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of
Common Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the __% Junior Subordinated Debentures
due February 16, 2003, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Common Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Common Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Repayment Price") to the extent
the Issuer has funds available therefor, with respect to any Common Securities
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Common
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Common
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b)
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the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
hereunder are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments under the Preferred Securities Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Common Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Common
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Common Guarantee Trustee, any
Affiliate of the Common Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Common Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of
December , 1997, among the Guarantor (the "Debenture Issuer") and The First
National Bank of Chicago, as trustee, and any indenture supplemental thereto
pursuant to which certain subordinated debt securities of the Debenture Issuer
are to be issued to the Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Common
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Common Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Common Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition relating
thereto;
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(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Common
Guarantee Trustee, any officer within the Corporate Trust Office of the Common
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Common Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Common Guarantee Trustee" means a successor Common
Guarantee Trustee possessing the qualifications to act as Common Guarantee
Trustee under Section 3.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
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ARTICLE II.
POWERS, DUTIES AND RIGHTS OF
COMMON GUARANTEE TRUSTEE
SECTION 2.1. Powers and Duties of the Common Guarantee
Trustee. (a) This Common Securities Guarantee shall be held by the Common
Guarantee Trustee for the benefit of the Holders of the Common Securities, and
the Common Guarantee Trustee shall not transfer this Common Securities
Guarantee to any Person except a Holder of Common Securities exercising his or
her rights pursuant to Section 4.4(b) or to a Successor Common Guarantee
Trustee on acceptance by such Successor Common Guarantee Trustee of its
appointment to act as Successor Common Guarantee Trustee. The right, title and
interest of the Common Guarantee Trustee shall automatically vest in any
Successor Common Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Common Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Common Guarantee Trustee has occurred and is continuing, the
Common Guarantee Trustee shall enforce this Common Securities Guarantee for the
benefit of the Holders of the Common Securities.
(c) The Common Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Common Securities Guarantee, and no implied covenants shall
be read into this Common Securities Guarantee against the Common Guarantee
Trustee. In case an Event of Default has occurred and is actually known to a
Responsible Officer of the Common Guarantee Trustee, the Common Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Common Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Common Securities Guarantee shall be
construed to relieve the Common Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Common
Guarantee Trustee shall be determined solely by the express
provisions of this Common Securities Guarantee, and the Common
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Common Securities Guarantee, and no implied
covenants or obligations shall be read into this Common
Securities Guarantee against the Common Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Common Guarantee Trustee, the Common Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Common Guarantee
Trustee and conforming to the requirements of this Common
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Common Guarantee Trustee, the
Common Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Common Securities Guarantee;
(ii) the Common Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Common Guarantee Trustee, unless it shall be proved that the Common
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Common Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Common Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Common Guarantee Trustee, or exercising any trust or
power conferred upon the Common Guarantee Trustee under this Common
Securities Guarantee; and
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(iv) no provision of this Common Securities Guarantee shall
require the Common Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers,
if the Common Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Common Securities
Guarantee or indemnity, reasonably satisfactory to the Common
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 2.2. Certain Rights of Common Guarantee Trustee. (a)
Subject to the provisions of Section 2.1:
(i) The Common Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Common Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Common
Securities Guarantee, the Common Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Common Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Common Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Common Guarantee Trustee may consult with competent
legal counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in
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respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and
may include any of its employees. The Common Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Common Securities Guarantee from any court of
competent jurisdiction.
(vi) The Common Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Common Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Common Guarantee
Trustee such security and indemnity, reasonably satisfactory to the
Common Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Common Guarantee
Trustee's agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Common
Guarantee Trustee; provided that, nothing contained in this Section
2.2(a)(vi) shall be taken to relieve the Common Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Common Securities
Guarantee.
(vii) The Common Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Common Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Common Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Common Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Common Guarantee Trustee or its
agents hereunder shall bind the Holders of the Common Securities, and
the signature of the Common Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No
third party shall be required to
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inquire as to the authority of the Common Guarantee Trustee to so act
or as to its compliance with any of the terms and provisions of this
Common Securities Guarantee, both of which shall be conclusively
evidenced by the Common Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Common Securities
Guarantee the Common Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Common Guarantee Trustee (i)
may request instructions from the Holders of a Majority in liquidation
amount of the Common Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on
or acting in accordance with such instructions.
(b) No provision of this Common Securities Guarantee
shall be deemed to impose any duty or obligation on the Common Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Common Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Common Guarantee Trustee shall be construed to be a duty.
SECTION 2.3. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Common Guarantee Trustee does not assume
any responsibility for their correctness. The Common Guarantee Trustee makes
no representation as to the validity or sufficiency of this Common Securities
Guarantee.
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ARTICLE III.
COMMON GUARANTEE TRUSTEE
SECTION 3.1. Common Guarantee Trustee; Eligibility. (a)
There shall at all times be a Common Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above, then,
for the purposes of this Section 3.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Common Guarantee Trustee shall cease
to be eligible to so act under Section 3.1(a), the Common Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
3.2 (c).
(c) If the Common Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Common Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 3.2. Appointment, Removal and Resignation of Common
Guarantee Trustees. (a) Subject to Section 3.2(b), the Common Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Common Guarantee Trustee shall not be removed in
accordance with Section 3.2(a) until a Successor Common Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Common Guarantee Trustee and delivered to the Guarantor.
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(c) The Common Guarantee Trustee appointed to office shall
hold office until a Successor Common Guarantee Trustee shall have been
appointed or until its removal or resignation. The Common Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Common Guarantee Trustee and delivered to
the Guarantor, which resignation shall not take effect until a Successor Common
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Common Guarantee Trustee and
delivered to the Guarantor and the resigning Common Guarantee Trustee.
(d) If no Successor Common Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 3.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Common Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Common Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Common Guarantee Trustee.
(e) No Common Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Common Guarantee Trustee.
(f) Upon termination of this Common Securities Guarantee or
removal or resignation of the Common Guarantee Trustee pursuant to this Section
3.2, the Guarantor shall pay to the Common Guarantee Trustee all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE IV.
GUARANTEE
SECTION 4.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
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SECTION 4.2. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Common Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 4.3. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Common Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Repayment Price, Liquidation
Distribution or any other sums payable under the terms of the Common Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Common Securities (other than an
extension of time for payment of Distributions, Repayment Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer or
any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
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(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 4.4. Rights of Holders. (a) The Holders of a
Majority in liquidation amount of the Common Securities have the right to
direct the time, method and place of conducting of any proceeding for any
remedy available to the Common Guarantee Trustee in respect of this Common
Securities Guarantee or exercising any trust or power conferred upon the Common
Guarantee Trustee under this Common Securities Guarantee.
(b) If the Common Guarantee Trustee fails to enforce this
Common Securities Guarantee, any Holder of Common Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Common Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a holder of Common Securities may directly institute a proceeding
against the Guarantor for enforcement of the Common Security Guarantee for such
payment. The Guarantor waives any right or remedy to require that any action on
this Common Securities Guarantee be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
SECTION 4.5. Guarantee of Payment. This Common Securities
Guarantee creates a guarantee of payment and not of collection.
SECTION 4.6. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders of Common Securities against the Issuer
in respect of any amounts paid to such Holders by the Guarantor under this
Common Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Common Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this
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Common Securities Guarantee. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
SECTION 4.7. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Common Securities, and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Common Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 4.3 hereof.
ARTICLE V.
LIMITATION OF TRANSACTIONS; RANKING
SECTION 5.1. Limitation of Transactions. So long as any
Common Securities remain outstanding, if there shall have occurred an Event of
Default or an event of default under the Declaration, then (a) the Guarantor
shall not declare or pay dividends or make distributions with respect to, or
redeem, purchase or acquire or make a liquidation payment with respect to, any
of its capital stock (other than (i) purchases or acquisitions of capital stock
of the Guarantor in connection with the satisfaction by the Guarantor of its
obligations under any employee or Agent benefit plans or the satisfaction by
the Guarantor of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Guarantor to purchase
capital stock of the Guarantor, (ii) as a result of a reclassification of its
capital stock or the exchange or conversion of one class or series of its
capital stock for another class or series of its capital stock, (iii) the
purchase of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or purchases of any rights outstanding under a shareholder rights
plan), (b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Guarantor that rank junior to such Debentures to the extent appropriate
notice has been given to the holders thereof effectively blocking such payment
or to the extent the failure to make any such payment is otherwise authorized
under the agreements governing such debt securities, and (c) the Guarantor
shall not make any guarantee payments with respect to the foregoing other than
pursuant to the Preferred Securities Guarantee
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or the Common Securities Guarantee to the extent appropriate notice has been
given to the beneficiaries thereof effectively blocking such payment or to the
extent the failure to make any such payment is otherwise authorized under the
agreements governing such guarantee payments.
SECTION 5.2. Ranking. This Common Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all Senior Indebtedness as such
term is defined in the Indenture (ii) pari passu with the Preferred Securities
Guarantee, the Debentures and with all unsecured trade creditors of the Company
and any other liabilities or obligations that may be pari passu by their terms
and (iii) senior to the Guarantor's common stock, the most senior preferred or
preference stock now or hereafter issued, from time to time, by the Guarantor
and to any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any affiliate of the Guarantor.
If an Event of Default has occurred and is continuing under
the Declaration, the rights of the Holders of the Common Securities to receive
Guarantee Payments under this Common Securities Guarantee shall be subordinated
to the rights of the holders of the Preferred Securities to receive payment of
all amounts due and owing under the terms of the Preferred Securities
Guarantee.
ARTICLE VI.
TERMINATION
SECTION 6.1. Termination. This Common Securities Guarantee
shall terminate upon (i) full payment of the Repayment Price of all Common
Securities, (ii) upon the distribution of the Debentures to the Holders of all
of the Common Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
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ARTICLE VII.
INDEMNIFICATION
SECTION 7.1. Exculpation. (a) No Indemnified Person shall
be liable, responsible or accountable in damages or otherwise to the Guarantor
or any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Common Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Common Securities Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Common Securities might
properly be paid.
SECTION 7.2. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of negligence or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
reasonable expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or pro-
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ceeding upon receipt by the Guarantor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
7.2(a).
(c) The obligation to indemnify as set forth in this Section
7.2 shall survive the termination of the Common Securities Guarantee.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns. All guarantees and
agreements contained in this Common Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Common Securities then
outstanding.
SECTION 8.2. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Common Securities Guarantee may only be amended
with the prior approval of the Holders of at least a Majority in liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all the outstanding Common
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 8.3. Notices. All notices provided for in this
Common Securities Guarantee shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by registered
or certified mail, as follows:
(a) if given to the Common Guarantee Trustee, at the Common
Guarantee Trustee's mailing address set forth below (or such other address as
the Common Guarantee Trustee may give notice of to the Holders of the Common
Securities):
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The First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Global Corporate Trust Services
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Common Securities):
Conseco, Inc.
00000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Secretary
(c) If given to any Holder of Common Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Common Securities Guarantee is
solely for the benefit of the Holders of the Common Securities and, subject to
Section 2.1(a), is not separately transferable from the Common Securities.
SECTION 8.5. Governing Law. THIS COMMON SECURITIES GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
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THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
CONSECO, INC., as Guarantor
By:
-----------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Common Guarantee Trustee
By:
-----------------------
Name:
Title:
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