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EXHIBIT 1.3
CONSECO, INC.
Senior Medium-Term Notes, Series A
Subordinated Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
November __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. Chase Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. First Union Capital Markets Corp.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Services
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ NC1-007-07-01
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Salomon Brothers Inc ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
7 World Trade Center ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Conseco, Inc., an Indiana corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, Chase Securities Inc., Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., First Union
Capital Markets Corp., ▇▇▇▇▇▇▇, Sachs & Co., NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities,
Inc., Salomon Brothers Inc and ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. (each, an "Agent", and
collectively, the "Agents") with respect to the issue and sale by the Company of
its Senior Medium-Term Notes, Series A Due Nine Months or More From Date of
Issue (the "Senior Notes") and its Subordinated Medium-Term Notes, Series A Due
Nine Months or More From Date of Issue (the "Subordinated Notes" and, together
with the Senior Notes, the "Notes"). The Senior Notes are to be issued pursuant
to an Indenture, dated as of November 13, 1997, as amended or modified from time
to time (the "Senior Indenture"), between the Company and LTCB Trust Company, as
trustee (the "Senior Trustee"). The Subordinated Notes are to be issued pursuant
to an Indenture, dated as of November 14, 1996, as amended or modified from time
to time (the "Subordinated Indenture" and, together with the Senior Indenture,
the "Indentures") between the Company and Fleet National Bank, as trustee (the
"Subordinated Trustee" and, together with the Senior Trustee, the "Trustees").
As of the date hereof, the Company has authorized the issuance and sale of up to
U.S. $1,000,000,000 aggregate initial offering price of Notes (or its
equivalent, based upon the exchange rate on the applicable trade date in such
foreign or composite currencies as the Company shall designate at the time of
issuance) to or through the Agents pursuant to the terms of this Agreement. It
is understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that such additional Notes may be sold to or
through the Agents or other agents who from time to time become parties to this
Agreement or another agreement with terms that are the same in all material
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respects to the terms contained herein pursuant to the terms of this Agreement,
all as though the issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-27803) and a
registration statement on Form S-3 (No. 333-14991) for the registration of
preferred stock, depository shares, common stock, warrants and debt securities,
including the Notes, under the Securities Act of 1933, as amended (the "1933
Act"), 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 any acceptance by the Company of an offer for the
purchase of Notes. Such registration statements (as so amended, if applicable)
have been declared effective by the Commission and each Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The registration statement (No. 333-27803) (as so amended, if applicable) is
referred to herein as the "Registration Statement" and the registration
statement (No. 333-14991) (as so amended, if applicable) is referred to herein
as the "Previous Registration Statement," and the final prospectus and all
applicable amendments or supplements thereto (including the final prospectus
supplement and pricing supplement relating to the offering of Notes), in the
form first furnished to the applicable Agent(s), are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement," the "Previous Registration Statement" and the
"Prospectus" shall also 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 any acceptance by the Company of an offer for the purchase
of Notes; provided, further, that if the Company files a registration statement
with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the
"Rule 462(b) Registration Statement"), then, after such filing, all references
to the "Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the applicable registration statement became
effective and any prospectus furnished by the Company after the registration
statements became effective and before any acceptance by the Company of an offer
for the purchase of Notes which omitted 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. For purposes of this Agreement, all references to the
Registration Statement, Previous Registration Statement, Prospectus or
preliminary prospectus or to any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "disclosed", "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Previous
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, Previous
Registration Statement, Prospectus or preliminary prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be.
1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold to or through
one or more of the Agents and/or to or through other agents on terms that are
the same in all material respects to the terms contained herein.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial
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offering price of Notes registered pursuant to the Registration Statement. The
Agents shall have no responsibility for maintaining records with respect to the
aggregate initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for the purchase of Notes, in whole or in
part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
such Agent on an agency basis and accepted by the Company, the Company shall (i)
hold such Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay to such Agent any commission
to which it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
from the Company by one or more Agents as principal shall be purchased, and any
Notes the placement of which an Agent arranges as an agent of the Company shall
be placed by such Agent, in reliance on the representations, warranties,
covenants and agreements of the Company contained herein and on the terms and
conditions and in the manner provided herein.
2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of
the Company. The Company has been duly organized and is validly
existing as a corporation under the laws of Indiana with corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
this Agreement and consummate the transactions contemplated in the
Prospectus; the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not 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 (a "Material Adverse
Effect"); all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and are validly issued, fully
paid and non-assessable; and none of the outstanding shares of capital
stock of the Company were issued in violation of preemptive or other
similar rights of any securityholder of the Company.
(ii) Due Incorporation, Good Standing and Due Qualification
of Significant Subsidiaries. Each significant subsidiary (as such
term is defined in Rule 1-02 of Regulation S-X promulgated under the
1933 Act), if any (each,
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a "Significant Subsidiary") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and 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
result in a Material Adverse Effect; except as stated in the
Prospectus, all of the issued and outstanding shares of capital stock
of each Significant Subsidiary has been duly authorized and is validly
issued, fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(iii) Registration Statements and Prospectus. The Company
meets the requirements for use of Form S-3 under the 1933 Act; each of
the Registration Statement (including any Rule 462(b) Registration
Statement) and the Previous Registration Statement has become effective
under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement (including any Rule 462(b) Registration
Statement) or the Previous Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by
the Commission, and any request on the part of the Commission for
additional information has been complied with; each Indenture has been
duly qualified under the 1939 Act; at the respective times that the
Registration Statement, the Previous Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendment thereto
(including the filing of the Company's most recent Annual Report on
Form 10-K with the Commission (the "Annual Report on Form 10-K"))
became effective and at each Representation Date, the Registration
Statement (including any Rule 462(b) Registration Statement), the
Previous Registration Statement and any amendments 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;
each preliminary prospectus and prospectus filed as part of the
Registration Statement or the Previous 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; each preliminary prospectus and
the Prospectus delivered to the applicable Agent(s) for use in
connection with the offering of Notes are identical to any
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
and at the date hereof, at the date of the Prospectus and at each
Representation Date, neither the Prospectus nor any amendment or
supplement thereto included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to (1) statements in or omissions from the Registration
Statement, the Previous Registration Statement or the Prospectus made
in reliance upon and in conformity with information furnished to the
Company in writing by the Agents expressly for use in the Registration
Statement, the Previous Registration Statement or the Prospectus or (2)
the Statements of Qualification and Eligibility filed as exhibits to
the Registration Statement or the Previous Registration Statement (the
"Form T-1").
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations").
(v) Independent Accountants. Coopers & ▇▇▇▇▇▇▇, LLP, the
accountants who certified the financial state ments and any supporting
schedules thereto of the Company included in the Registration
Statement, the Previous Registration Statement and the Prospectus, are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(vi) Financial Statements. The consolidated financial
statements of the Company included in the Registration Statement, the
Previous Registration Statement and the Prospectus, together with the
related schedules
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and notes present fairly the consolidated financial position of the
Company and its subsidiaries at the dates indicated and the
consolidated statements of operations, shareholders' equity and cash
flows of the Company and its subsidiaries for the periods specified;
except as stated therein, such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved; the
supporting schedules, if any, included in the Registration Statement,
the Previous Registration Statement and the Prospectus present fairly
in accordance with GAAP the information required to be stated therein;
any selected financial data and the summary financial information
included in the Registration Statement, the Previous Registration
Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement,
the Previous Registration Statement and the Prospectus; and any pro
forma consolidated financial statements of the Company and its
subsidiaries and the related notes thereto included in the Registration
Statement, the Previous Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
(vii) Statutory Financials. The statutory financial statements
of each of the Company's insurance subsidiaries, from which certain
ratios and other statistical data which may be contained in the
Registration Statement or the Previous Registration Statement from time
to time 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, except as disclosed therein.
(viii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement, the Previous
Registration Statement and the Prospectus, except as otherwise stated
therein, there has been no event or occurrence that would result in a
Material Adverse Effect.
(ix) Authorization, etc. of this Agreement, the Indentures and
the Notes. This Agreement has been duly authorized, executed and
delivered by the Company; each Indenture has been duly authorized,
executed and delivered by the Company and is a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally,
(2) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), (3) requirements that
a claim with respect to any debt securities issued under the Indenture
that are payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (4) governmental authority to limit,
delay or prohibit the making of payments outside the United States; the
Notes have been duly authorized by the Company for offer, sale,
issuance and delivery pursuant to this Agreement and, when issued,
authenticated and delivered in the manner provided for in the
appropriate Indenture and delivered against payment of the
consideration therefor, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by (1) bank ruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally, (2) general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law), (3)
requirements that a claim with respect to any Notes payable in a
foreign or composite currency (or a foreign or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a
rate or exchange prevailing on a date determined pursuant to applicable
law or (4) governmental authority to limit, delay or prohibit the
making of payments outside the United States; the Notes will be
substantially in a form previously certified to the Agents and
contemplated by the appropriate Indenture; and each holder of Notes
will be entitled to the benefits of the appropriate Indenture.
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(x) Descriptions of the Indentures and the Notes. The
Indentures and the Notes conform and will conform as of the date such
Notes are purchased in all material respects to the statements relating
thereto contained in the Prospectus and are substantially in the form
filed or incorporated by reference, as the case may be, as an exhibit
to the Registration Statement and the Previous Registration Statement.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its Significant Subsidiaries is in violation of the
provisions of its charter or by-laws or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its Significant Subsidiaries is a party or by
which it or any of them may be bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, each Indenture, the Notes
and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated by the Prospectus, the consummation of the
transactions contemplated in the Prospectus (including the issuance and
sale of the Notes and the use of proceeds therefrom as described in the
Prospectus) and the compliance by the Company with its obligations
hereunder and under the Indentures, the Notes and such other agreements
or instruments have been duly authorized by all necessary corporate
action and, in each case, do not and will not, whether with or without
the giving of notice or the passage of time or both, conflict with or
constitute a breach of, or default or event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (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 of its Significant Subsidiaries (a
"Repayment Event") under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its Significant Subsidiaries
pursuant to, any Agreements and Instruments, except, in each case, for
such conflicts, breaches or defaults 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, or any violation of the provisions of the
charter or by-laws of the Company or any of its Significant
Subsidiaries.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its Significant Subsidiaries which is required to be
disclosed in the Registration Statement and the Prospectus (other than
as stated therein), or which may reasonably be expected to result in a
Material Adverse Effect, or which may reasonably be expected to
materially and adversely affect the performance by the Company of its
obligations under this Agreement, the Indentures and the Notes or the
consummation of the transactions contemplated in the Prospectus.
(xiii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such material 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
(the "Insurance Licenses")) 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 Insurance Licenses, except
where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect; all of the Insurance Licenses are
valid and in full force and effect, except where the invalidity of such
Insurance Licenses or the failure of such Insurance 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 Insurance Licenses which, singly or in the aggregate, may
reasonably be expected to result in a Material Adverse Effect.
(xiv) No Filings, Regulatory Approvals, etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, order or decree of, any court or governmental authority
or agency, domestic or foreign,
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is necessary or required for the performance by the Company of its
obligations under this Agreement, the Indentures and the Notes or in
connection with the transactions contemplated in the Prospectus, except
such as have been previously obtained or rendered, as the case may be,
and such as may be obtained under the state securities laws of any
jurisdiction in connection with the sale of the Notes as herein
contemplated.
(xv) Investment Company Act. The Company is not, 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 not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the ("1940 Act").
(xvi) Commodity Exchange Act. The Notes, upon issuance, will
be excluded or exempted under or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the Commodity Futures Trading Commission under the
Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(xvii) Ratings. The Medium-Term Note Program under which the
Notes are issued (the "Program"), as well as the Notes, are rated by
Duff & ▇▇▇▇▇▇ Credit Rating Company and by Standard & Poor's Ratings
Service, or such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section 4(a) hereof.
(b) Additional Certifications. Any certificate signed by any officer of
the Company and delivered to one or more Agents or to counsel for the Agents in
connection with an offering of Notes to one or more Agents as principal or
through an Agent as agent shall be deemed a representation and warranty by the
Company to such Agent or Agents as to the matters covered thereby on the date of
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Notes purchased from the Company by the
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and (1) shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the Company,
or (2) shall be set forth in a written agreement between the Company and such
Agent or Agents). An Agent's commitment to purchase Notes as principal shall be
deemed to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and conditions
herein set forth. Unless the context otherwise requires, references herein to
"this Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof and whether
Section 4(k) hereof will be required.
If the Company and two or more Agents enter into an agreement pursuant
to which such Agents agree to purchase Notes from the Company as principal and
one or more of such Agents shall fail at the Settlement Date to purchase the
Notes which it or they are obligated to purchase (the "Defaulted Notes"), then
the nondefaulting Agents shall have the right, within 24 hours thereafter, to
make arrangements for one of them or one or more other Agents or 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; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Notes does
not exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, the
nondefaulting Agents shall
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be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective initial underwriting
obligations bear to the underwriting obligations of all nondefaulting
Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default which
does not result in a termination of such agreement, either the nondefaulting
Agents or the Company shall have the right to postpone the Settlement Date 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.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use all reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
Upon receipt of instructions from the Company, such Agent will suspend
solicitation of offers for the purchase of Notes from the Company until such
time as the Company has advised such Agent that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and the
Trustees. Unless otherwise agreed, the Procedures shall be those attached hereto
as Exhibit B. The Agents and the Company agree to perform, and the Company
agrees to use all reasonable efforts to cause the Trustees to agree to perform,
their respective duties and obligations specifically provided to be performed by
them in the Procedures.
4. Covenants of the Company.
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the Previous
Registration Statement or the filing of any amendment or supplement to the
Prospectus (other than any amendment or supplement thereto providing solely for
the determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), (ii) the receipt of any comments
from the Commission relating to the Registration Statement, the Previous
Registration Statement, the Prospectus or the Notes, (iii) any request by the
Commission for any amendment to the Registration Statement, the Previous
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 Previous
Registration Statement, or of any order preventing or suspending the use of any
preliminary prospectus, or of the initiation of any proceedings for that purpose
or (v) any change in the rating assigned by any nationally
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recognized statistical rating organization to the Program or any debt securities
(including the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of the
Program or any such debt securities, or the withdrawal by any nationally
recognized statistical rating organization of its rating of the Program or any
such debt securities. 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.
(b) Filing or Use of Amendments. The Company will give the Agents
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or the Previous Registration Statement or any amendment or
supplement to the prospectus included in the Registration Statement at the time
it became effective or to the Prospectus (other than an amendment or supplement
thereto providing solely for the determination of the variable terms of the
Notes or relating solely to the offering of securities other than the Notes),
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish to the
Agents copies of any such document a reasonable amount of time prior to such
proposed filing or use, as the case may be.
(c) Delivery of the Registration Statements. The Company has furnished
to each Agent and to counsel for the Agents, without charge, conformed copies of
the Registration Statement and the Previous Registration Statement, each as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed and conformed copies
of all consents and certificates of experts. The Registration Statement, the
Previous Registration Statement and each amendment thereto furnished to the
Agents will be identical to any electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to each Agent,
without charge, such number of copies of the Prospectus (as amended or
supplemented) as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical to
any electronically transmitted copies thereof filed with the Commission pursuant
to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement or the Previous Registration
Statement in order that the Registration Statement or the Previous Registration
Statement, as the case may be, 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 the Prospectus is delivered to a purchaser,
or if it shall be necessary, in the opinion of either such counsel, to amend the
Registration Statement or the Previous Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company shall give immediate notice,
confirmed in writing, to the Agents to cease the solicitation of offers for the
purchase of Notes in their capacity as agents and to cease sales of any Notes
they may then own as principal, and the Company will promptly prepare and file
with the Commission, subject to Section 4(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration State ment and Prospectus comply with such requirements, and
the Company will furnish to the Agents, without charge, such
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10
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall cause the Prospectus to be amended
or supplemented to include financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other infor mation and explanations as shall be necessary
for an understanding thereof or as shall be required by the 1933 Act or the 1933
Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include such audited consolidated financial
statements and the report or reports, and consent or consents to such inclusion,
of the independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of such
consolidated financial statements or as shall be required by the 1933 Act or the
1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between one or more Agents acting as principal and the Company,
between the date of the agreement by such Agent(s) to purchase the related Notes
from the Company and the Settlement Date with respect thereto, the Company will
not, without the prior written consent of such Agent(s), issue, sell, offer or
contract to sell, grant any option for the sale of, or otherwise dispose of, any
debt securities of the Company which are substantially similar to the Notes
being sold (other than the Notes that are to be sold pursuant to such agreement
or commercial paper in the ordinary course of business).
(l) Use of Proceeds. The Company will use the net proceeds received
by it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
(m) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of offers for the purchase of Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes purchased from the Company as principal, as the case may be, until the
time the Company shall determine that solicitation of offers for the purchase of
Notes should be resumed or an Agent shall subsequently purchase Notes from the
Company as principal.
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5. Conditions of Agents' Obligations.
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes as an agent
of the Company, and the obligations of any purchasers of Notes sold through an
Agent as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance and
observance by the Company of its covenants and other obligations hereunder, and
to the following additional conditions precedent:
(a) Effectiveness of Registration Statements. Each of the Registration
Statement (including any Rule 462(b) Registration Statement) and the Previous
Registration Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or the Previous
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(i) Opinion of Counsel for the Company. The favorable opinions
of ▇▇▇▇ ▇. ▇▇▇▇, general counsel for the Company, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, to the effect set forth in
Exhibit C(i) and C(ii) hereto, respectively.
(ii) Opinion of Counsel for the Agents. The favorable opinion
of Sidley & Austin, counsel for the Agents, with respect to the matters
set forth in paragraphs 6 through 10 of Exhibit C(i) hereto and the
first paragraph of Exhibit C(ii) hereto.
(c) Officer's Certificate. On the date hereof, there shall not have
been, since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earn ings, business affairs or business prospects of the
Company and its Significant Subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, and the Agents shall have
received a certificate of 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 date hereof, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties of the Company herein
contained are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate with respect
to the Notes, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to the best of such officer's knowledge, are
threatened by the Commission.
(d) Comfort Letter of Coopers & ▇▇▇▇▇▇▇, LLP. On the date hereof, the
Agents shall have received a letter from Coopers & ▇▇▇▇▇▇▇, LLP, dated as of the
date hereof and in form and substance satisfactory to the Agents, to the effect
set forth in Exhibit D hereto.
(e) Additional Documents. On the date hereof, counsel to the Agents
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations and 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 Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
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 applicable Agent or Agents by notice to the Company at any time and any
such
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termination shall be without liability of any party to any other party except as
provided in Section 10 hereof and except that Sections 8, 9, 11, 14 and 15
hereof shall survive any such termination and remain in full force and effect.
6. Delivery of and Payment for Notes Sold through an Agent as Agent.
Delivery of Notes sold through an Agent as an agent of the Company
shall be made by the Company to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
7. Additional Covenants of the Company.
The Company further covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent(s) or to the purchaser or its agent, as the case may be, of the
Notes relating to such acceptance or sale, as the case may be, as though made at
and as of each such time (it being understood that such representations and
warranties shall relate to the Registration Statement, the Previous Registration
Statement and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement, the Previous Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for the determination of the variable terms of the Notes or
relating solely to the offering of securities other than the Notes or, except as
provided below, an amendment or supplement by the filing of any document
incorporated by reference), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal, (iii) the Company files with the
Commission an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q, a
Current Report on Form 8-K which contains financial information required to be
set forth in or incorporated by reference into the Prospectus pursuant to Item
11 of Form S-3 under the Securities Act or, upon the reasonable request of the
Agents, any other Report on Form 8-K, or (iv) the Company sells Notes in a form
not previously certified to the Agents by the Company, the Company shall furnish
or cause to be furnished to the Agent(s), forthwith a certificate dated the date
of filing with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s) to the effect that the statements contained in the
certificate referred to in Section 5(c) hereof which were last furnished to the
Agents are true and correct at the time of the filing or effectiveness of such
amendment or supplement, as applicable, or the time of such sale, as the case
may be, as though made at and as of such time (except that such statements shall
be deemed to relate to the Registration Statement, the Previous Registration
Statement and the Prospectus as amended and supplemented to such time) or, in
lieu of such certificate, a certificate of the same tenor as the certificate
referred to in Section 5(c) hereof, modified as necessary to relate to the
Registration Statement, the Previous Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such certificate (it
being understood that, in the case of clause (ii) above, any such certificate
shall also include a certification that 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 since the date of the agreement by such Agent(s) to purchase
Notes from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement, the Previous Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for the determination of the variable terms of the Notes or
relating solely to the offering of securities other
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than the Notes or, except as provided below, an amendment or supplement by the
filing of any document incorporated by reference), (ii) (if required in
connection with the purchase of Notes from the Company by one or more Agents as
principal) the Company sells Notes to one or more Agents as principal, (iii) the
Company files with the Commission an Annual Report on Form 10-K, a Quarterly
Report on Form 10-Q, a Current Report on Form 8-K which contains financial
information required to be set forth in or incorporated by reference into the
Prospectus pursuant to Item 11 of Form S-3 under the Securities Act or, upon the
reasonable request of the Agents, any other Report on Form 8-K, or (iv) the
Company sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished forthwith to the
Agent(s) and to counsel to the Agents the written opinions of ▇▇▇▇ ▇. ▇▇▇▇,
general counsel for the Company, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to
the Company (unless otherwise waived), or other counsel satisfactory to the
Agent(s), dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the date of
such sale, as the case may be, in form and substance satisfactory to the
Agent(s), of the same tenor as the opinion referred to in Section 5(b)(i)
hereof, but modified, as necessary, to relate to the Registration Statement, the
Previous Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinion or, in lieu of such opinion, counsel
last furnishing such opinion to the Agents shall furnish the Agent(s) with a
letter substantially to the effect that the Agent(s) may rely on such last
opinion to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such last opinion shall be
deemed to relate to the Registration Statement, the Previous Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement, the Previous Registration Statement or the Prospectus
shall be amended or supplemented to include additional financial information
(other than by an amendment or supplement providing solely for the determination
of the variable terms of the Notes or relating solely to the issuance and/or
offering of securities other than the Notes or, except as provided below, an
amendment or supplement by the filing of any document incorporated by
reference), (ii) (if required in connection with the purchase of Notes from the
Company by one or more Agents as principal) the Company sells Notes to one or
more Agents as principal, or (iii) the Company files with the Commission an
Annual Report on Form 10-K, a Quarterly Report on Form 10-Q, a Current Report on
Form 8-K which contains financial information required to be set forth in or
incorporated by reference into the Prospectus pursuant to Item 11 of Form S-3
under the Securities Act or, upon the reasonable request of the Agents, any
other Report on Form 8-K, the Company shall cause Coopers & ▇▇▇▇▇▇▇, LLP
forthwith to furnish to the Agent(s) a letter, dated the date of filing with the
Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form satisfactory
to the Agent(s), of the same tenor as the letter referred to in Section 5(d)
hereof but modified to relate to the Registration Statement, the Previous
Registration Statement and Prospectus as amended and supplemented to the date of
such letter.
8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (a
"Controlling Person") against any and all loss, liability, claim, damage and
expense whatsoever, as incurred (including, to the extent provided herein, the
fees and disbursements of counsel chosen by such Agent), (i) arising out of an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Previous Registration Statement (or, in each case,
any amendment thereto), 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 an 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) 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 any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
provided that (subject to Section 8(d) hereof) any such settlement is effected
with the written consent of the Company, and (iii) reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above; provided, however, that
this indemnity does not apply to any loss, liability,
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claim, damage or expense to the extent arising out of an 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 the Agents
expressly for use in the Registration Statement or the Previous Registration
Statement (or, in each case, any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), (B) made
in the Form T-1 or (C) made in any preliminary prospectus supplement if a copy
of the final prospectus supplement (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Agent at or prior to the confirmation of the
sale of a Note or Notes to the person asserting such loss, liability, claim,
damage or expense who purchased such Note or Notes which are the subject thereof
from such Agent, and if the final prospectus supplement (as so amended or
supplemented) had been sent or given to such person at or prior to confirmation
it would have relieved the Company, the Agent and any Controlling Person of any
liability for such loss, liability, claim, damage or expense; provided, further,
that in the case of clause (C) above, the Company shall have delivered the final
prospectus supplement in compliance with the time schedule set forth in Section
4(e) of this Agreement.
(b) Indemnification of Company, Directors and Officers. Each Agent
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 Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement or the
Previous Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Agents expressly for use in the Registration Statement or the
Previous Registration Statement (or, in each case, any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions Against Parties; Notification. 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 case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel as well as one local counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. 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.
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 8 or 9 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.
(d) Settlement without Consent if Failure to Reimburse. 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 8(a)(ii) effected without its written
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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 8(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.
9. Contribution. If the indemnification provided for in Section 8 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
applicable Agent(s), on the other hand, from the offering of the Notes that were
the subject of the claim for indemnification 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
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one
hand, and the applicable Agent(s), on the other hand, in connection with the
offering of the Notes that were the subject of the claim for indemnification
shall 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 discount or commission received by each applicable
Agent, as the case may be, bears to the aggregate initial offering price of such
Notes.
The relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the applicable Agent(s) and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) 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 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 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 applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes that were the subject of the claim for
indemnification sold through it and distributed to the public were offered to
the public exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of any applicable untrue or alleged untrue statement
or omission or alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
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For purposes of this Section 9, each person, if any, who
controls an Agent 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 Agent, and
each director of the Company, each officer of the Company 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.
10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration
Statement and the Previous Registration Statement as originally filed and all
amendments thereto and any preliminary prospectus, the Prospectus and any
amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and the
Indentures;
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent or exchange rate
agent) and of the Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the written approval of the Company.
11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for the Notes.
12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 10 days' prior written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the
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respective dates as of which information is given in the Prospectus, any
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, if such Notes are
denominated and/or payable in, or indexed to, one or more foreign or composite
currencies, in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development or event involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of such Agent(s), impracticable to market
such Notes or enforce contracts for the sale of such Notes, or (iii) trading in
any securities of the Company has been suspended or limited by the Commission or
a national securities exchange, or if trading generally on the New York Stock
Exchange or the American Stock Exchange or in the Nasdaq National Market has
been suspended or limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by either of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) a banking moratorium has been declared by either
Federal or New York authorities or by the relevant authorities in the country or
countries of origin of any foreign or composite currency in which such Notes are
denominated and/or payable, or (v) the rating assigned by any nationally
recognized statistical rating organization to the Program or any debt securities
(including the Notes) of the Company as of the date of such agreement shall have
been lowered or withdrawn since that date or if any such rating organization
shall have publicly announced that it has under surveillance or review its
rating of the Program or any such debt securities.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Conseco, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agents:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: MTN Product Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Desk
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attention: Deutsche Bank Legal Dept. (Attn: ▇▇▇ ▇▇▇▇▇▇▇)
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
First Union Capital Markets Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Registration Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
Capital Market Services
NC1-007-07-01
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
Salomon Brothers Inc
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
3 ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
14. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company 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 parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof 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 contained. This Agreement and all conditions and provisions
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hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
15. GOVERNING LAW; FORUM.
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR
ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL
COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
16. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
17. 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.
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If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
CONSECO, INC.
By:
Name:
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CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
Authorized Signatory
CHASE SECURITIES INC.
By:
Authorized Signatory
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By:
Authorized Signatory
FIRST UNION CAPITAL MARKETS CORP.
By:
Authorized Signatory
▇▇▇▇▇▇▇, SACHS & CO.
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
NATIONABANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
By:
Authorized Signatory
SALOMON BROTHERS INC
By:
Authorized Signatory
▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By:
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