CONSECO, INC.
Senior Medium-Term Notes, Series C
Subordinated Medium-Term Notes, Series C
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
October 7, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. First Union Securities, Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
World Financial Center
North Tower, 10th Floor ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
New York, New York ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Brothers Inc.
Charlotte, North Carolina 28255 3 World Financial Center
New York, New York 10285
Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Cowen Securities Corporation
New York, New York ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Deutsche Bank Securities Inc.
▇▇ ▇. ▇▇▇▇ Warburg Dillon Read LLC
New York, New York ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Conseco, Inc., an Indiana corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, Banc of America Securities LLC, Chase Securities Inc., Deutsche
Bank Securities Inc., First Union Securities, Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇▇
Brothers Inc., ▇▇ ▇▇▇▇▇ Securities Corporation and Warburg Dillon Read LLC,
(each, an "Agent", and collectively, the "Agents") with respect to the issue and
sale by the Company of its Senior Medium-Term Notes, Series C Due Nine Months or
More From Date of Issue (the "Senior Notes") and its Subordinated Medium-Term
Notes, Series C 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
Bank of New York, successor to LTCB Trust Company, as trustee (the "Senior
Trustee"). The Subordinated Notes are to be issued pursuant to an Indenture,
dated as of July 21, 1999, as amended or modified from time to time (the
"Subordinated Indenture" and, together with the Senior Indenture, the
"Indentures") between the Company and ▇▇▇▇▇▇ Trust and Savings 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 $3,700,000,000 aggregate initial offering price of Notes (or
its equivalent, based upon the exchange rate on the
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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 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. 333-83465) and a
registration statement on Form S-3 (No. 333-56611) for the registration of
preferred stock, depositary shares, common stock, stock purchase contracts,
stock purchase units, warrants, guarantees 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. 333-83465) (as so amended, if applicable) is
referred to herein as the "Registration Statement" and the registration
statement (No. 333- 56611) (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.
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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 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
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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, 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
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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. PricewaterhouseCoopers LLP, the
accountants who certified the financial statements 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 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'
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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) 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 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.
(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.
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(xii) Absence of Proceedings. Except as disclosed in the Company's
public filings with the Commission made prior to the date hereof, 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 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,
except where the failure so to possess such permits, licenses,
approvals, consents and other authorizations would not, singly or in
the aggregate, result in a Material Adverse Effect; 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, 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,
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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 sent 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 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.
8
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 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
9
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 Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agents, without charge, such 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 information 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
10
(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.
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:
11
(i) Opinion of Counsel for the Company. The favorable opinions of
▇▇▇▇ ▇. ▇▇▇▇, general counsel for the Company, to the effect set forth
in Exhibit C hereto.
(ii) Opinion of Counsel for the Agents. The favorable opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Agents, with respect to the matters
set forth in paragraphs 6 through 10 and the final paragraph of Exhibit
C 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 earnings, 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 PricewaterhouseCoopers LLP. On the date hereof,
the Agents shall have received a letter from PricewaterhouseCoopers 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 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.
12
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 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 opinion of ▇▇▇▇ ▇. ▇▇▇▇, general counsel for the Company or other
counsel satisfactory to the Agent(s), dated the date of filing with the
13
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 PricewaterhouseCoopers 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, 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 such Agent 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
14
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 Agent 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
15
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 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
16
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. 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.
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.
17
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 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.: (▇▇▇) ▇▇▇-▇▇▇▇
18
If to the Agents:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial Center
North Tower - 15th Floor
New York, New York 10281-1315
Attention: MTN Product Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Medium-Term Note Desk-▇▇▇▇▇ ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Mailstop: NC1007-07-01
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche Bank Securities Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attention: Deutsche Bank Securities Legal Dept.
(Attn: ▇▇▇ ▇▇▇▇▇▇▇)
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Grade Syndicate
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Credit Department
Credit Control - Medium - Term Notes
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10285
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
19
▇▇ ▇▇▇▇▇ Securities Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Capital Markets
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Warburg Dillon Read LLC
High Grade Debt Syndicate
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Stamford, Connecticut 06901
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
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.
20
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: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President and
Chief Financial Officer
21
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
FIRST UNION SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
-------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
22
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ READ LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
23
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
---------------
From 9 months to less than 1 year............................ .125%
From 1 year to less than 18 months........................... .150
From 18 months to less than 2 years.......................... .200
From 2 years to less than 3 years............................ .250
From 3 years to less than 4 years............................ .350
From 4 years to less than 5 years............................ .450
From 5 years to less than 6 years............................ .500
From 6 years to less than 7 years............................ .550
From 7 years to less than 10 years........................... .600
From 10 years to less than 15 years.......................... .625
From 15 years to less than 20 years.......................... .700
From 20 years to 30 years.................................... .750
Greater than 30 years........................................ 1
--------
1 As agreed to by the Company and the applicable Agent at the time of sale.
1
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
|_| LIBOR Reuters Page:
|_| LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
|_| Weekly Average
|_| Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Reset Period:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
1
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the
Distribution Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution
Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement.
Restrictions on Offers and Sales of Securities pursuant to
Section 4(k) of the Distribution Agreement.
2
Exhibit B
CONSECO, INC.
ADMINISTRATIVE PROCEDURES
for Fixed Rate and Floating Rate Medium-Term Notes
(Dated as of October 7, 1999)
Senior Medium-Term Notes, Series C Due Nine Months or More From Date of
Issue (the "Senior Notes") and Subordinated Medium-Term Notes, Series C Due Nine
Months or More From Date of Issue (the "Subordinated Notes" and, together with
the Senior Notes, the "Notes") are to be offered on a continuous basis by
Conseco, Inc., an Indiana corporation (the "Company"), to or through ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Banc of America
Securities LLC, Chase Securities Inc., Deutsche Bank Securities Inc., First
Union Securities, Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇▇ Brothers Inc., ▇▇ ▇▇▇▇▇
Securities Corporation and Warburg Dillon Read LLC (each, an "Agent" and,
collectively, the "Agents") pursuant to a Distribution Agreement, dated October
7, 1999 (the "Distribution Agreement"), by and among the Company and the Agents.
The Distribution Agreement provides both for the sale of Notes by the Company to
one or more of the 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 related Agent or
Agents), in which case each such Agent will act as an agent of the Company in
soliciting purchases of Notes.
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related Agent
or Agents and the Company (which terms shall be agreed upon orally, with written
confirmation prepared by the related Agent or Agents and mailed to the Company).
If agreed upon by any Agent or Agents and the Company, the Agent or Agents,
acting solely as agent or agents for the Company and not as principal, will use
reasonable efforts to solicit offers to purchase the Notes. Only those
provisions in these Administrative Procedures that are applicable to the
particular role to be performed by the related Agent or Agents shall apply to
the offer and sale of the relevant Notes. To the extent that these
Administrative Procedures are inconsistent with the particular terms of the
Notes or the Distribution Agreement, the terms of such Notes or the Distribution
Agreement, as the case may be, shall govern.
The Senior Notes will be issued as a series of debt securities under an
Indenture, dated as of November 13, 1997, as amended, supplemented or modified
from time to time (the "Senior Indenture"), between the Company and Bank of New
York, as successor to LTCB Trust Company, as trustee (together with any
successor in such capacity, the "Senior Trustee"). The Subordinated Notes will
be issued as a series of debt securities under an Indenture dated as of July 21,
1999, as amended or modified from time to time (the "Subordinated Indenture"
and, together with the Senior Indenture, the "Indentures"), between the Company
and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (together with any successor in
such capacity, the "Subordinated Trustee"). As used herein, the "Trustee" shall
mean, with respect to any Senior Notes issued, the Senior Trustee and, with
respect to any Subordinated Notes issued, the Subordinated Trustee. The Company
has filed a Registration Statement with the Securities and Exchange Commission
(the "Commission") registering, among other securities, debt securities (which
includes the Notes) (the "Registration Statement", which term shall include any
additional registration statements filed in connection with the Notes). The most
recent base prospectus deemed part of the Registration Statement, as
supplemented with respect to the Notes, is herein referred to as the
"Prospectus". The most recent supplement to the Prospectus setting forth the
purchase price, interest rate or formula, maturity date and other terms of the
Notes (as applicable) is herein referred to as the "Pricing Supplement".
1
The Notes will either be issued (a) in book-entry form and represented by
one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
(each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Additionally, Notes issued in book-entry form will be issued in
accordance with the procedures set forth in Part II hereof and Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the applicable Indenture or the Notes, as the case
may be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also
bear an original issue date (each, an "Original Issue
Date"). The Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer,
exchange or substitution of an original Note
regardless of their dates of authentication.
Maturities: Each Note will mature on a date nine months or
months or more from its Original Issue Date (the
"Stated Maturity Date") selected by the investor or
other purchaser and agreed to by the Company.
Registration: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes will be issued in denominations
of $1,000 and integral multiples thereof.
Interest Rate Bases
applicable to
Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes will bear interest at
a rate or rates determined by reference to the CD
Rate, the CMT Rate, the Commercial Paper Rate, the
Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the Treasury Rate,
or such other interest rate basis or formula as may
be set forth in applicable Pricing Supplement, or by
reference to two or more such rates, as adjusted by
the Spread and/or Spread Multiplier, if any,
applicable to such Floating Rate Notes.
Redemption/Repayment: The Notes will be subject to redemption by the
Company in accordance with the terms of the Notes,
which will be fixed at the time of sale and set forth
in the applicable Pricing Supplement. If no Initial
Redemption Date is indicated with respect to a Note,
such Note will
2
not be redeemable prior to its Stated Maturity Date.
The Notes will be subject to repayment at the option
of the Holders thereof in accordance with the terms
of the Notes, which will be fixed at the time of sale
and set forth in the applicable Pricing Supplement.
If no Optional Repayment Date is indicated with
respect to a Note, such Note will not be repayable at
the option of the Holder prior to its Stated Maturity
Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Interest
Rate Basis or Bases plus or minus the applicable
Spread, if any, and/or multiplied by the applicable
Spread Multiplier, if any.
Unless otherwise provided in the applicable Pricing
Supplement, interest on each Floating Rate Note will
be calculated by multiplying its principal amount by
an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor
calculated for each day in the period for which
accrued interest is being calculated. Unless
otherwise provided in the applicable Pricing
Supplement, the interest factor for each such day is
computed by dividing the interest rate applicable to
such day by 360 if the CD Rate, Commercial Paper
Rate, Eleventh District Cost of Funds Rate, Federal
Funds Rate, LIBOR or Prime Rate is an applicable
Interest Rate Basis, or by the actual number of days
in the year if the CMT Rate or Treasury Rate is an
applicable Interest Rate Basis. As provided in the
applicable Pricing Supplement, the interest factor
for Notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases
will be calculated in each period in the same manner
as if only one of the interest rate bases applied.
Interest: General. Each Note will bear interest in accordance
with its terms. Unless otherwise provided in the
applicable Pricing Supplement, interest on each Note
will accrue from and including the Original Issue
Date of such Note for the first interest period or
from the most recent Interest Payment Date (as
defined below) to which interest has been paid or
duly provided for all subsequent interest periods to
but excluding applicable Interest Payment Date or the
Stated Maturity Date or date of earlier redemption or
repayment, as the case may be (the Stated Maturity
Date or date of earlier redemption or repayment is
referred to herein as the "Maturity Date" with
respect to the principal repayable on such date).
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is
not a Business Day (as defined below), the required
payment to be made on such day need not be made on
such day, but may be made on the next succeeding
Business Day with the same force and effect as if
made on such day, and no interest
3
shall accrue on such payment for the period from and
after such day to the next succeeding Business Day.
If an Interest Payment Date other than the Maturity
Date with respect to any Floating Rate Note would
otherwise fall on a day that is not a Business Day,
such Interest Payment Date will be postponed to the
next succeeding Business Day, except that in the case
of a Note for which LIBOR is an applicable Interest
Rate Basis, if such Business Day falls in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding Business Day. If
the Maturity Date with respect to any Floating Rate
Note falls on a day that is not a Business Day, the
required payment to be made on such day need not be
made on such day, but may be made on the next
succeeding Business Day with the same force and
effect as if made on such day, and no interest shall
accrue on such payment for the period from and after
the Maturity Date to the next succeeding Business
Day. Unless otherwise provided in the applicable
Pricing Supplement, "Business Day" means any day,
other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or
executive order to close in The City of New York;
provided, however, that, with respect to Notes the
payment of which is to be made in a currency other
than U.S. dollars or composite currencies (such
currency or composite currency in which a Note is
denominated is the "Specified Currency"), such day is
also not a day on which banking institutions are
authorized or required by law, regulation or
executive order to close in the Principal Financial
Center (as defined below) of the country issuing such
Specified Currency (or, in the case of Euros, is a
day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) System is
open; provided, further, that, with respect to Notes
for which LIBOR is an applicable Interest Rate Basis,
such day is also a London Business Day (as defined
below). "London Business Day" means (i) if the
currency (including composite currencies) specified
in the applicable Pricing Supplement as the currency
(the "Index Currency") for which LIBOR is calculated
is other than Euros, any day on which dealings in
such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is the
Euro, any day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer (TARGET)
System is open. It being understood that if no such
currency or composite currency is specified in the
applicable Pricing Supplement, the Index Currency
shall be U.S. dollars. "Principal Financial Center"
means the capital city of the country issuing the
currency or composite currency in which any payment
in respect of the Notes is to be made or, solely with
respect to the calculation of LIBOR, the Index
Currency, except that with respect to U.S. dollars,
Australian dollars, Canadian dollars, Deutsche marks,
Dutch guilders, South African rand, Swiss francs and
Euros, the Principal Financial Center shall be The
City of New York, Sydney and Melbourne, Toronto,
Frankfurt, Amsterdam, Johannesburg, and Zurich,
respectively.
Regular Record Dates. Unless otherwise provided in
the applicable Pricing Supplement, the "Regular
Record Date" for a Note shall be the date 15 calendar
days (whether or not a Business Day) preceding the
applicable Interest Payment Date.
4
Interest Payment Dates. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; provided, however, the first
payment of interest on any Note originally issued
between a Regular Record Date and an Interest Payment
Date will occur on the Interest Payment Date
following the next succeeding Regular Record Date.
Unless otherwise provided in the applicable Pricing
Supplement, interest payments on Fixed Rate Notes
will be made semiannually in arrears on January 15
and July 15 of each year and on the Maturity Date,
while interest payments on Floating Rate Notes will
be made as specified in the applicable Pricing
Supplement.
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the Company, then
such Agent acting solely as agent for the Company and
not as principal will solicit purchases of the Notes.
Each Agent will communicate to the Company, orally or
in writing, each reasonable offer to purchase Notes
solicited by such Agent on an agency basis, other
than those offers rejected by such Agent. Each Agent
has the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes,
as a whole or in part, and any such rejection shall
not be a breach of such Agent's agreement contained
in the Distribution Agreement. The Company has the
sole right to accept or reject any proposed purchase
of Notes, in whole or in part, and any such rejection
shall be not a breach of the Company's agreement
contained in the Distribution Agreement. Each Agent
has agreed to make reasonable efforts to assist the
Company in obtaining performance by each purchaser
whose offer to purchase Notes has been solicited by
such Agent and accepted by the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a Pricing
Supplement reflecting the terms of such Note.
Information to be included in the Pricing Supplement
shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and
the date of the Prospectus to which the Pricing
Supplement relates;
4. the name of the Offering Agent (as defined below);
5. whether such Notes are being sold to the
Offering Agent as principal or to an investor or
other purchaser through the Offering Agent acting
as agent for the Company;
6. with respect to Notes sold to the Offering
Agent as principal,
5
whether such Notes will be resold by the Offering
Agent to investors and other purchasers at (i) a
fixed public offering price of a specified
percentage of their principal amount or (ii) at
varying prices related to prevailing market
prices at the time of resale to be determined by
the Offering Agent;
7. with respect to Notes sold to an investor
or other purchaser through the Offering Agent
acting as agent for the Company, whether such
Notes will be sold at (i) 100% of their principal
amount or (ii) a specified percentage of their
principal amount;
8. the Offering Agent's discount or commission;
9. Net proceeds to the Company;
10. the Principal Amount, Specified Currency (if
other than U.S. dollars), Original Issue Date,
Stated Maturity Date, Interest Payment Date(s),
Authorized Denomination, Initial Redemption Date,
if any, Initial Redemption Percentage, if any,
Annual Redemption Percentage Reduction, if any,
Optional Repayment Date(s), if any, Exchange Rate
Agent, if any, and, in the case of Fixed Rate
Notes, the Interest Rate, and whether such Fixed
Rate Note is an Original Issue Discount Note
(and, if so, the Issue Price), and, in the case
of Floating Rate Notes, the Interest Category,
the Interest Rate Basis or Bases, the Day Count
Convention, Index Maturity (if applicable),
Initial Interest Rate, if any, Maximum Interest
Rate, if any, Minimum Interest Rate, if any,
Initial Interest Reset Date, Interest Reset
Dates, Spread and/or Spread Multiplier, if any,
and Calculation Agent; and
11. any other additional provisions of the Notes
material to investors or other purchasers of the
Notes not otherwise specified in the Prospectus.
The Company shall use reasonable efforts to send such
Pricing Supplement by telecopy or overnight express
(for delivery by the close of business on the
applicable trade date, but in no event later than
11:00 a.m. New York City time, on the Business Day
following the applicable trade date) to the Agent
which made or presented the offer to purchase the
applicable Note (in such capacity, the "Offering
Agent") and the Trustee at the following applicable
address: if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., to: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Production Technologies, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Prospectus
Operations/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇/5/6; if to Banc of America
Securities LLC, to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Mailcode: NC1007-07-01, telecopier (704)
388-9939; if to Chase Securities Inc., to: ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Medium-Term Note Desk - ▇▇▇▇▇ ▇▇▇▇, (212)
834-4421, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to Deutsche
Bank Securities Inc., one copy to: Deutsche Bank
Securities Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
6
Attention: Syndicate Operations, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇, and one copy to: ▇▇▇
▇▇▇▇▇▇▇, Deutsche Bank Securities Inc., ▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to First Union
Securities, Inc., to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Investment Grade Syndicate, (704) 383- 7727,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., to: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Credit Department, Credit
Control - Medium-Term Notes, (212) 902- 0346,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇▇▇▇▇ Brothers
Inc. 3 World Financial Center, Debt Capital Markets -
9th Floor, New York, New York 10285, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇ ▇▇▇▇▇ Securities
Corporation to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Capital Markets, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇; if to Warburg Dillon Read LLC, to:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Debt Syndicate, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier
(▇▇▇) ▇▇▇-▇▇▇▇; if to the Senior Trustee, to: The
Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier (212)
815-5915; and if to the Subordinated Trustee, to:
▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier (▇▇▇) ▇▇▇-▇▇▇▇. For record keeping
purposes, one copy of such Pricing Supplement shall
also be mailed or telecopied to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
World Financial Center, North Tower, 10th Floor, New
York, New York, 10281- 1310, Attention: MTN Product
Management, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (212)
449-2234, with a copy to Sidley & Austin, Bank One
Plaza, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇.
In each instance that a Pricing Supplement is
prepared, the Offering Agent will provide a copy of
such Pricing Supplement to each investor or purchaser
of the relevant Notes or its agent. Pursuant to Rule
434 ("Rule 434") of the Securities Act of 1933, as
amended, the Pricing Supplement may be delivered
separately from the Prospectus. Out dated Pricing
Supplements (other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to such
Note, constitute "settlement". Offers accepted by the
Company will be settled in three Business Days, or at
such time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the timetable
for settlement set forth in Parts II and III hereof
under "Settlement Procedure Timetable" with respect
to Global Notes and Certificated Notes, respectively
(each such date fixed for settlement is hereinafter
referred to as a "Settlement Date"). If procedures A
and B of the applicable Settlement Procedures with
respect to a particular offer are not completed on or
before the time set forth under the applicable
"Settlement Procedures Timetable", such offer shall
not be settled until the Business Day following the
completion of settlement procedures A and B or such
later date as the purchaser and the Company shall
agree.
7
The foregoing settlement procedures may be modified
with respect to any purchase of Notes by an Agent as
principal if so agreed by the Company and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any Notes
being sold by the Company, the Company will promptly
advise the Agents and the Trustee by facsimile
transmission and the Agents will forthwith suspend
solicitation of offers to purchase such Notes. The
Agents will telephone the Company with
recommendations as to the changed interest rates or
other variable terms. At such time as the Company
notifies the Agents and the Trustee of the new
interest rates or other variable terms, the Agents
may resume solicitation of offers to purchase such
Notes. Until such time, only "indications of
interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase
Notes at a new interest rate or new variable term,
the Company, the Offering Agent and the Trustee shall
follow the procedures set forth under the applicable
"Settlement Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any time.
Upon receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase
from the Company until such time as the Company has
advised the Agents that solicitation of offers to
purchase may be resumed. If the Company decides to
amend or supplement the Registration Statement or the
Prospectus (other than to establish or change
interest rates or formulas, maturities, prices or
other similar variable terms with respect to the
Notes), it will promptly advise the Agents and will
furnish the Agents and their counsel with copies of
the amendment or supplement. Copies of such amendment
or supplement will be delivered or mailed to the
Agents, their counsel, the Senior Trustee and the
Subordinated Trustee in quantities which such parties
may reasonably request at the following respective
addresses: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., World Financial
Center, North Tower, 15th Floor, New York, New York
10281-1315, Attention: MTN Product Management, (212)
449-7476, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to Banc of
America Securities LLC, to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Mailcode: NC1007-07-01, telecopier (704)
388-9939; if to Chase Securities, Inc., to: ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Medium-Term Note Desk - ▇▇▇▇▇ ▇▇▇▇, (212)
834-4421, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to Deutsche
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., one copy to: Deutsche Bank
Securities Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ATTENTION: Syndicate
Operations, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (212)
469-6333, and one copy to: ▇▇▇ ▇▇▇▇▇▇▇, Deutsche Bank
Securities Inc., ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (212)
469-8173; if to First Union Securities, Inc., to:
8
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Operations,
(▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., to: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Credit Department - Credit
Control - Medium-Term Notes, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇▇▇▇▇ Brothers
Inc., to: 3 World Financial Center, Debt Capital
Markets - 9th Floor, New York, New York 10285, (212)
526-2301, telecopier (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇ ▇▇▇▇▇
Securities Corporation to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Capital Markets, (212)
278-5718, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to Warburg
Dillon Read LLC, to: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Debt Syndicate, (203)
719-1088, telecopier (203) 719- 0495; if to the
Senior Trustee, to: The Bank of New York to: ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (212)
815-6285, telecopier (▇▇▇) ▇▇▇-▇▇▇▇; and if to the
Subordinated Trustee, to: ▇▇▇▇▇▇ Trust and Savings
Bank, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier (312)
461-3525. For record keeping purposes, one copy of
each such amendment or supplement shall also be
mailed or telecopier to Sidley & Austin, Bank One
Plaza, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to establish or change interest rates or
formulas, maturities, prices or other similar
variable terms with respect to the Notes) there shall
be any offers to purchase Notes that have been
accepted by the Company which have not been settled,
the Company will promptly advise the Offering Agent
and the Trustee whether such offers may be settled
and whether copies of the Prospectus as theretofore
amended and/or supplemented as in effect at the time
of the suspension may be delivered in connection with
the settlement of such offers. The Company will have
the sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such offers may not be
settled or that copies of such Prospectus may not be
so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and the
applicable Pricing Supplement, which pursuant to Rule
434 may be delivered separately from the Prospectus,
must accompany or precede the earlier of (a) the
written confirmation of a sale sent to an investor or
other purchaser or its agent and (b) the delivery of
Notes to an investor or other purchaser or its agent.
Authenticity of
Signatures: The Agents will have no obligation or liability
to the Company, the Senior Trustee or the
Subordinated Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Company or either Trustee on any Note.
9
Documents Incorporated
by Reference: The Company shall supply the Agents upon request
with an adequate supply of all documents incorporated
by reference in the Registration Statement and the
Prospectus.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Senior Trustee to DTC, dated September 10, 1998, and a
Certificate Agreement, dated November 17, 1995, between the Senior Trustee and
DTC, as amended (the "Senior Certificate Agreement"), or a Letter of
Representations from the Company assumed by the Subordinated Trustee to DTC,
dated September 10, 1998, and a Certificate Agreement, dated July 2, 1980,
between the Subordinated Trustee and DTC, as amended (the "Subordinated
Certificate Agreement" and, together with the Senior Certificate Agreement, the
"Certificate Agreements"), as the case may be, and the Trustee's obligations as
a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having
the same Original Issue Date, Specified Currency,
Interest Rate, Default Rate, Interest Payment Dates,
redemption and/or repayment terms, if any, and Stated
Maturity Date (collectively, the "Fixed Rate Terms")
will be represented initially by a single Global
Note; and all Floating Rate Notes issued in
book-entry form having the same Original Issue Date,
Specified Currency, Interest Category, formula for
the calculation of interest (including the Interest
Rate Basis or Bases, which may be the CD Rate, the
CMT Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate,
LIBOR, the Prime Rate or the Treasury Rate or any
other interest rate basis or formula, and Spread
and/or Spread Multiplier, if any), Day Count
Convention, Initial Interest Rate, Default Rate,
Index Maturity (if applicable), Minimum Interest
Rate, if any, Maximum Interest Rate, if any,
redemption and/or repayment terms, if any, Interest
Payment Dates, Initial Interest Reset Date, Interest
Reset Dates and Stated Maturity Date (collectively,
the "Floating Rate Terms") will be represented
initially by a single Global Note.
For other variable terms with respect to the Fixed
Rate Notes and Floating Rate Notes, see the
Prospectus and the applicable Pricing Supplement.
Owners of beneficial interests in Global Notes will
be entitled to physical delivery of Certificated
Notes equal in principal amount to their respective
beneficial interests only upon certain limited
circumstances described in the Prospectus.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of one series of
CUSIP numbers with respect to the Senior Notes and
one series of CUSIP numbers with respect to the
10
Subordinated Notes, each of which consists of
approximately 900 CUSIP numbers which have been
reserved for and relating to Global Notes and the
Company has delivered to each of the Trustees and DTC
such lists of such CUSIP numbers. The Company will
assign CUSIP numbers to Global Notes as described
below under Settlement Procedure B. DTC will notify
the CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Notes. The appropriate Trustee will notify the
Company at any time when fewer than 100 of the
reserved CUSIP numbers relating to Senior Notes or
Subordinated Notes, as the case may be, remain
unassigned to Global Notes, and, if it deems
necessary, the Company will reserve and obtain
additional CUSIP numbers for assignment to Global
Notes. Upon obtaining such additional CUSIP numbers
for either Senior Notes or Subordinated Notes, the
Company will deliver a list of such additional
numbers to the appropriate Trustee and DTC. Notes
issued in book-entry form in excess of $200,000,000
(or the equivalent thereof in one or more foreign or
composite currencies) aggregate principal amount and
otherwise required to be represented by the same
Global Note will instead be represented by two or
more Global Notes which shall all be assigned the
same CUSIP number.
Registration: Unless otherwise specified by DTC, each Global Note
will be registered in the name of Cede & Co., as
nominee for DTC, on the register maintained by the
Trustee under the applicable Indenture. The
beneficial owner of a Note issued in book-entry form
(i.e., an owner of a beneficial interest in a
Global Note) (or one or more indirect participants in
DTC designated by such owner) will designate one or
more participants in DTC (with respect to such Note
issued in book-entry form, the "Participants") to act
as agent for such beneficial owner in connection with
the book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such Note issued in
book-entry form in the account of such Participants.
The ownership interest of such beneficial owner in
such Note issued in book-entry form will be recorded
through the records of such Participants or through
the separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of beneficial ownership interests in
a Global Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in
DTC) acting on behalf of beneficial transferors and
transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Global Notes outstanding on such date that represent
Global Notes having the same Fixed Rate Terms or
Floating Rate Terms, as the case may be (other than
Original Issue Dates), and for which interest has
been paid to the same date; (b) a date, occurring at
least 30 days after such written notice is delivered
and at least 30 days before the next Interest Payment
Date for the related Notes issued in book-entry form,
on which such Global Notes shall be exchanged for a
single
11
replacement Global Note; and (c) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Note. Upon receipt of such a
notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global
Notes for a single Global Note bearing the new CUSIP
number and the CUSIP numbers of the exchanged Notes
will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the
Global Notes to be exchanged exceed $200,000,000 (or
the equivalent thereof in one or more foreign or
composite currencies) in aggregate principal amount,
one replacement Note will be authenticated and issued
to represent each $200,000,000 (or the equivalent
thereof in one or more foreign or composite
currencies) in aggregate principal amount of the
exchanged Global Notes and an additional Global Note
or Notes will be authenticated and issued to
represent any remaining principal amount of such
Global Notes (See "Denominations" below).
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes issued in book-entry form will be
issued in denominations of $1,000 and integral
multiples thereof. Global Notes will not be
denominated in excess of $200,000,000 (or the
equivalent thereof in one or more foreign or
composite currencies) aggregate principal amount. If
one or more Notes are issued in book-entry form in
excess of $200,000,000 (or the equivalent thereof in
one or more foreign or composite currencies)
aggregate principal amount and would, but for the
preceding sentence, be represented by a single Global
Note, then one Global Note will be issued to
represent each $200,000,000 (or the equivalent
thereof in one or more foreign or composite
currencies) in aggregate principal amount of such
Notes issued in book-entry form and an additional
Global Note or Notes will be issued to represent any
remaining aggregate principal amount of such Note or
Notes issued in book-entry form. In such a case, each
of the Global Notes representing Notes issued in
book-entry form shall be assigned the same CUSIP
number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Note on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
the Maturity Date) and the total of such amounts. DTC
will confirm the amount payable on each Global Note
on such Interest Payment Date by reference to the
daily bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date, the
Company will pay to the Trustee in immediately
available funds an amount sufficient to pay the
interest then due and owing on the Global Notes, and
upon receipt of such
12
funds from the Company, the Trustee in turn will pay
to DTC such total amount of interest due on such
Global Notes (other than on the Maturity Date) which
is payable in U.S. dollars, at the times and in the
manner set forth below under "Manner of Payment". The
Trustee shall make payment of that amount of interest
due and owing on any Global Notes that Participants
have elected to receive in foreign or composite
currencies directly to such Participants.
Notice of Interest Rates. Promptly after each
Interest Determination Date or Calculation Date, as
the case may be, for Floating Rate Notes issued in
book-entry form, the Trustee will notify each of Duff
& ▇▇▇▇▇▇ Credit Rating Company and Standard & Poor's
Corporation of the interest rates determined as of
such Interest Determination Date.
Payments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Company and DTC a written list of principal, premium,
if any, and interest to be paid on each Global Note
maturing or otherwise becoming due in the following
month. The Trustee, the Company and DTC will confirm
the amounts of such principal, premium, if any, and
interest payments with respect to each such Global
Note on or about the fifth Business Day preceding the
Maturity Date of such Global Note. On the Maturity
Date, the Company will pay to the Trustee in
immediately available funds an amount sufficient to
make the required payments, and upon receipt of such
funds the Trustee in turn will pay to DTC the
principal amount of Global Notes, together with
premium, if any, and interest due on the Maturity
Date, which are payable in U.S. dollars, at the times
and in the manner set forth below under "Manner of
Payment". The Trustee shall make payment of the
principal, premium, if any, and interest to be paid
on the Maturity Date of each Global Note that
Participants have elected to receive in foreign or
composite currencies directly to such Participants.
Promptly after (i) payment to DTC of the principal,
premium, if any, and interest due on the Maturity
Date of such Global Note which are payable in U.S.
dollars and (ii) payment of the principal, premium,
if any, and interest due on the Maturity Date of such
Global Note to those Participants who have elected to
receive such payments in foreign or composite
currencies, the Trustee will cancel such Global Note
and deliver it to the Company with an appropriate
debit advice. On the first Business Day of each
month, the Trustee will deliver to the Company a
written statement indicating the total principal
amount of outstanding Global Notes as of the close of
business on the immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Notes on
any Interest Payment Date or the Maturity Date, as
the case may be, which is payable in U.S. dollars
shall be paid by the Company to the Trustee in funds
available for use by the Trustee no later than 10:00
a.m., New York City time, on such date. The Company
will make such payment on such Global Notes to an
account specified by the Trustee. Upon receipt of
such funds, the Trustee will pay by separate wire
transfer (using Fedwire message entry instructions in
a form previously specified by DTC) to an account at
the Federal Reserve Bank of New York previously
specified by
13
DTC, in funds available for immediate use by DTC,
each payment in U.S. dollars of principal, premium,
if any, and interest due on Global Notes on such
date. Thereafter on such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate
use to the respective Participants in whose names the
beneficial interests in such Global Notes are
recorded in the book-entry system maintained by DTC.
Neither the Company nor the Trustee shall have any
responsibility or liability for the payment in U.S.
dollars by DTC of the principal of, or premium, if
any, or interest on, the Global Notes. The Trustee
shall make all payments of principal, premium, if
any, and interest on each Global Note that
Participants have elected to receive in foreign or
composite currencies directly to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Global Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding
payments and materials directly to the beneficial
owner of such Global Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by an Agent, as agent of the
Company, or purchased by an Agent, as principal, will
be as follows:
A. The Offering Agent will advise the Company
by telephone, confirmed by facsimile, of the
following settlement information:
1. Principal amount, Authorized Denomination,
and Specified Currency.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such
Note is being issued with Original
Issue Discount and, if so, the
terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread Multiplier,
if any.
14
(v) Initial Interest Reset Date or
Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(viii) Calculation Agent.
4. Price to public, if any, of such Note (or
whether such Note is being offered at
varying prices relating to prevailing
market prices at time of resale as
determined by the Offering Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Default Rate, if any.
11. Net proceeds to the Company.
12. The Offering Agent's discount or
commission.
13. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
14. Such other information specified with
respect to such Note (whether by Addendum
or otherwise).
B. The Company will assign a CUSIP number to the
Global Note representing such Note and then
advise the Trustee by facsimile transmission
or other electronic transmission of the above
settlement information received from the
Offering Agent, such CUSIP number and the name
of the Offering Agent. The Company will also
advise the Offering Agent of the CUSIP number
assigned to the Global Note.
C. The Trustee will communicate to DTC and the
Offering Agent through DTC's Participant
Terminal System a pending deposit
15
message specifying the following settlement
information:
1. The information set forth in the
Settlement Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Trustee and the Offering Agent.
3. Identification of the Global Note as a
Fixed Rate Global Note or Floating Rate
Global Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the date
five calendar days preceding the Interest
Payment Date) and, if then calculable, the
amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Global Note
representing such Note.
6. Whether such Global Note represents any
other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit
message described above to be transmitted
to Standard & Poor's Corporation, which
will use the information in the message to
include certain terms of the related Global
Note in the appropriate daily bond report
published by Standard & Poor's Corporation.
D. The Trustee will complete and authenticate
the Global Note representing such Note.
E. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the
Offering Agent maintained by DTC and (ii) to
debit the settlement account of the Offering
Agent and credit the settlement account of the
Trustee maintained by DTC, in an amount equal
to the price of such Note less such Offering
Agent's discount or underwriting commission,
as applicable. Any entry of such a deliver
order shall be deemed to constitute a
representation and warranty by the Trustee to
DTC that (i) the Global Note representing such
Note has been issued and authenticated and
(ii) the Trustee is holding such Global Note
pursuant to the applicable Certificate
Agreement.
16
G. In the case of Notes in book-entry form sold
through the Offering Agent, as agent, the
Offering Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC (i) to debit such Note
to the Offering Agent's participant account
and credit such Note to the participant
account of the Participants maintained by DTC
and (ii) to debit the settlement accounts of
such Participants and credit the settlement
account of the Offering Agent maintained by
DTC in an amount equal to the initial public
offering price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures F and G will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
I. Upon receipt, the Trustee will pay the
Company, by wire transfer of immediately
available funds to an account specified by the
Company to the Trustee from time to time, the
amount transferred to the Trustee in
accordance with Settlement Procedure H.
J. The Trustee will send a copy of the Global
Note by first class mail to the Company
together with a statement setting forth the
principal amount of Notes Outstanding as of
the related Settlement Date after giving
effect to such transaction and all other
offers to purchase Notes of which the Company
has advised the Trustee but which have not yet
been settled.
K. If such Note was sold through the Offering
Agent, as agent, the Offering Agent will
confirm the purchase of such Note to the
investor or other purchaser either by
transmitting to the Participant with respect
to such Note a confirmation order through
DTC's Participant Terminal System or by
mailing a written confirmation to such
investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the
Company, Settlement Procedures A through K set
forth above shall be completed as soon as
possible following the trade but not later than
the respective times (New York City time) set
forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade
date or within one
hour following the trade
B 12:00 noon on the trade
date or within one
hour following the trade
C No later than the close
of business on the trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on
Settlement Date
17
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in
the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Note issued in book-entry form
is rescheduled or canceled, the Trustee will
deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such
effect by no later than 5:00 p.m., New York City
time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver
order with respect to a Note issued in book-entry
form pursuant to Settlement Procedure F, the
Trustee may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC
to debit such Note to the participant account of
the Trustee maintained at DTC. DTC will process
the withdrawal message, provided that such
participant account contains a principal amount
of the Global Note representing such Note that is
at least equal to the principal amount to be
debited. If withdrawal messages are processed
with respect to all the Notes represented by a
Global Note, the Trustee will mark such Global
Note "canceled", make appropriate entries in its
records and send certification of destruction of
such canceled Global Note to the Company. The
CUSIP number assigned to such Global Note shall,
in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. If withdrawal messages are processed
with respect to a portion of the Notes
represented by a Global Note, the Trustee will
exchange such Global Note for two Global Notes,
one of which shall represent the Global Notes for
which withdrawal messages are processed and shall
be canceled immediately after issuance and the
other of which shall represent the other Notes
previously represented by the surrendered Global
Note and shall bear the CUSIP number of the
surrendered Global Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the
purchase price for any such Note is not timely
paid to the Participants with respect thereto by
the beneficial investor or other purchaser
thereof (or a person, including an indirect
participant in DTC, acting on behalf of such
investor or other purchaser), such Participants
and, in turn, the related Offering Agent may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures F and
G, respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred
for any reason other than default by the
applicable Offering Agent to perform its
obligations hereunder or under the Distribution
Agreement, the Company will reimburse such
Offering Agent on an equitable basis for its
reasonable loss of the use of funds during the
period when the funds
18
were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure
to settle with respect to a Note in book-entry
form, DTC may take any actions in accordance with
its SDFS operating procedures then in effect. In
the event of a failure to settle with respect to
a Note that was to have been represented by a
Global Note also representing other Notes, the
Trustee will provide, in accordance with
Settlement Procedure D, for the authentication
and issuance of a Global Note representing such
remaining Notes and will make appropriate entries
in its records.
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable
Pricing Supplement, the Certificated Notes will
be issued in denominations of $1,000 and integral
multiples thereof.
Payments of Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the
Certificated Note, the Trustee upon receipt of
immediately available funds from the Company will
pay the principal of, premium, if any, and
interest on, each Certificated Note on the
Maturity Date in immediately available funds. All
interest payments on a Certificated Note, other
than interest due on the Maturity Date, will be
made by check mailed to the address of the person
entitled thereto as such address shall appear in
the Security Register; provided, however, that
Holders of $10,000,000 or more in aggregate
principal amount of Certificated Notes (whether
having identical or different terms and
provisions) shall be entitled to receive such
interest payments by wire transfer of immediately
available funds if appropriate wire transfer
instructions have been received in writing by the
Trustee not less than 15 calendar days prior to
the applicable Interest Payment Date.
The Trustee will provide monthly to the Company a
list of the principal, premium, if any, and
interest to be paid on Certificated Notes
maturing in the next succeeding month. The
Trustee will be responsible for withholding taxes
on interest paid as required by applicable law.
Certificated Notes presented to the Trustee on
the Maturity Date for payment will be canceled by
the Trustee. All canceled Certificated Notes held
by the Trustee shall be destroyed, and the
Trustee shall furnish to the Company a
certificate with respect to such destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased by an Agent, as
principal, or through an Agent, as agent, shall
be as follows:
A. The Offering Agent will advise the
Company by telephone of
19
the following Settlement information with
regard to each Certificated Note:
1. Exact name in which the
Certificated Note(s) is to be registered
(the "Registered Owner").
2. Exact address or addresses of the
Registered Owner for delivery, notices
and payments of principal, premium, if
any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount, Authorized
Denomination and Specified Currency.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is
being issued with
Original Issue Discount
and, if so, the terms
thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or
Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread
Multiplier, if any.
(v) Initial Interest Reset
Date and Interest Reset
Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum
Interest Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
7. Price to public of such
Certificated Note (or whether
20
such Note is being offered at varying
prices relating to prevailing market
prices at time of resale as determined by
the Offering Agent).
8. Trade Date.
9. Settlement Date (Original Issue
Date).
10. Stated Maturity Date.
11. Redemption provisions, if any.
12. Repayment provisions, if any.
13. Default Rate, if any.
14. Net proceeds to the Company.
15. The Offering Agent's discount
or commission.
16. Whether such Note is being sold to
the Offering Agent as principal or
to an investor or other purchaser
through the Offering Agent acting
as agent for the Company.
17. Such other information specified
with respect to such Note (whether
by Addendum or otherwise).
B. After receiving such settlement information
from the Offering Agent, the Company will
advise the Trustee of the above settlement
information by facsimile transmission
confirmed by telephone. The Company will cause
the Trustee to issue, authenticate and deliver
the Certificated Note.
C. The Trustee will complete the
Certificated Note in the form approved by the
Company and the Offering Agent, and will make
three copies thereof (herein called "Stub 1",
"Stub 2" and "Stub 3"):
1. Certificated Note with the Offering
Agent's confirmation, if traded on a
principal basis, or the Offering Agent's
customer confirmation, if traded on an
agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee
will deliver the Certificated Note and Stub 2
thereof to the Offering Agent at the following
applicable address: ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Money Markets
21
Clearance, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Level,
N.S.C.C. Window, New York, New York 10041,
Attention: ▇▇ ▇▇▇▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; Banc of America
Securities LLC, c/o Bank of New York, ▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ Securities LLC Attention: ▇▇▇
▇▇▇▇▇▇▇▇▇, New York, New York 10286, A/C
#016854; Chase Securities Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Window 17 or 18, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; Deutsche Bank
Securities Inc., one copy to: Deutsche Bank
Securities Inc. c/o ADP Prospectus, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (▇▇▇) ▇▇▇-▇▇▇▇,
and one copy to: ▇▇▇ ▇▇▇▇▇▇▇, Deutsche Bank
Securities Inc., ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇; First Union Securities, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investment Grade
Syndicate, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (704)
383-9165; ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Credit Department - Credit Control -
Medium-Term Notes, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier:
(212) 346- 2793; ▇▇▇▇▇▇ Brothers Inc. 3 World
Financial Center, Debt Capital Markets - 9th
Floor, New York, New York 10285, (212)
526-2301, telecopier (▇▇▇) ▇▇▇-▇▇▇▇; if to ▇▇
▇▇▇▇▇ Securities Corporation to: ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Capital
Markets, (▇▇▇) ▇▇▇-▇▇▇▇, telecopier: (212)
278-5099; Warburg Dillon Read LLC: ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Debt Syndicate, (▇▇▇) ▇▇▇-▇▇▇▇,
telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; and the Trustee
will keep Stub 1. The Offering Agent will
acknowledge receipt of the Certificated Note
through a broker's receipt and will keep Stub
2. Delivery of the Certificated Note will be
made only against such acknowledgment of
receipt. Upon determination that the
Certificated Note has been authorized,
delivered and completed as aforementioned, the
Offering Agent will wire the net proceeds of
the Certificated Note after deduction of its
applicable commission to the Company pursuant
to standard wire instructions given by the
Company.
E. In the case of a Certificated Note sold
through the Offering Agent, as agent, the
Offering Agent will deliver such Certificated
Note (with the confirmation) to the purchaser
against payment in immediately available
funds.
F. The Trustee will send Stub 3 to the
Company.
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes
accepted by the Company, Settlement Procedures A
through F set forth above shall be completed as
soon as possible following the trade but not later
than the respective times (New York City time) set
forth below:
22
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or within
one hour following the trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes sold through the
Offering Agent, as agent, if an investor or other
purchaser of a Certificated Note from the Company
shall either fail to accept delivery of or make
payment for such Certificated Note on the date fixed
for settlement, the Offering Agent will forthwith
notify the Trustee and the Company by telephone,
confirmed in writing, and return such Certificated
Note to the Trustee.
The Trustee, upon receipt of such Certificated Note
from the Offering Agent, will immediately advise the
Company and the Company will promptly arrange to
credit the account of the Offering Agent in an amount
of immediately available funds equal to the amount
previously paid to the Company by such Offering Agent
in settlement for such Certificated Note. Such
credits will be made on the Settlement Date if
possible, and in any event not later than the
Business Day following the Settlement Date; provided
that the Company has received notice on the same day.
If such failure shall have occurred for any reason
other than failure by such Offering Agent to perform
its obligations hereunder or under the Distribution
Agreement, the Company will reimburse such Offering
Agent on an equitable basis for its reasonable loss
of the use of funds during the period when the funds
were credited to the account of the Company.
Immediately upon receipt of the Certificated Note in
respect of which the failure occurred, the Trustee
will cancel and destroy such Certificated Note, make
appropriate entries in its records to reflect the
fact that such Certificated Note was never issued,
and accordingly notify in writing the Company.
23
EXHIBIT C
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(b)(1)
(1) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Indiana.
(2) The Company has 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 the Distribution Agreement and consummate the
transactions contemplated in the Prospectus.
(3) 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 Effect.
(4) 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.
(5) Each Significant Subsidiary has been duly incorporated 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 to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not 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 have been duly authorized and are validly issued, fully
paid and non-assessable and, to the best of my knowledge, are owned by the
Company, directly or through subsidiaries, free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(6) The Distribution Agreement has been duly authorized, executed and
delivered by the Company.
(7) Each Indenture has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the applicable Trustee) constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (B) general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law), (C)
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 (D) governmental authority to limit, delay or prohibit the
making of payments outside the United States.
(8) The Notes have been duly authorized by the Company for offer, sale,
issuance and delivery pursuant to the Distribution Agreement and, when issued,
authenticated and delivered in the manner provided for in the applicable
Indenture and delivered against payment of the consideration therefor, will
constitute valid
1
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement thereof may be limited
by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, (B) general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law), (C) 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 of
exchange prevailing on a date determined pursuant to applicable law or (D)
governmental authority to limit, delay or prohibit the making of payments
outside the United States; and the Notes, in the forms certified on the date
hereof, are in the form contemplated by, and each registered holder thereof is
entitled to the benefits of, the applicable Indenture.
(9) The Indentures and the Notes, in the forms certified on the date
hereof, conform in all material respects to the statements relating thereto
contained in the Prospectus and are in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the Registration
Statement and the Previous Registration Statement.
(10) The information in the Prospectus under "Description of Debt
Securities," "Description of Notes" and "Certain Federal Income Tax
Considerations," or any caption purporting to cover such matters, the
information in the Annual Report on Form 10-K under "Business of Conseco -
Federal Income Taxation" and the information in the Registration Statement and
the Previous Registration Statement under Item 15, to the extent that such
information constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by me and is correct in all material respects.
(11) To the best of my knowledge, neither the Company nor any of its
Significant Subsidiaries is in violation of its charter or by-laws and no
default by the Company or any of its Significant Subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any Agreement and Instrument that is described or
referred to in the Registration Statement, the Previous Registration Statement
or the Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(12) The execution, delivery and performance of the Distribution
Agreement, each Indenture and 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 in the Prospectus, the
consummation of the transactions contemplated in the Prospectus (including the
issuance and sale of the Notes and the use of the proceeds therefrom as
described in the Prospectus) and the compliance by the Company with its
obligations thereunder 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 passage of time or both, conflict with or constitute a
breach of, or default or 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 subsidiaries pursuant to, any Agreement
and Instrument known to me, except 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, known to me, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
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.
(13) Except as disclosed in the Company's public filings with the
Securities and Exchange Commission made prior to the date hereof, to the best of
my knowledge, there is no action, suit, proceeding, inquiry or investigation to
which the Company or any of its Significant Subsidiaries thereof is a party or
to which the assets, properties or operations of the Company or any of its
Significant Subsidiaries thereof is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
2
reasonably be expected to result in a Material Adverse Effect.
(14) All descriptions in the Prospectus of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; and, to the best of my knowledge, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in the Registration
Statement or the Previous Registration Statement or to be filed as exhibits to
the Registration Statement or the Previous Registration Statement other than
those described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(15) To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(16) Each of the Registration Statement and the Previous Registration
Statement has been declared effective under the 1933 Act; any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and to the best of my knowledge, no
stop order suspending the effectiveness of the Registration Statement or the
Previous Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been initiated or are pending or threatened by
the Commission.
(17) The Registration Statement, the Previous Registration Statement
and the Prospectus, excluding the documents incorporated by reference therein,
and each amendment or supplement to the Registration Statement, Previous
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules included therein or omitted
therefrom and the Form T-1, as to which I express no opinion), complied as to
form in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(18) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which I express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations.
(19) The Company is not, and upon the issuance and sale of the Notes
and the application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the 1940 Act.
(20) The Notes, in the forms certified on the date hereof, will be
excluded or exempted under, or beyond the purview of, the Commodity Exchange Act
and the Commodity Exchange Act Regulations.
(21) No filing with, or approval, authorization, consent, license,
registration, qualification, order or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
performance by the Company of its obligations under the Distribution Agreement,
either Indenture or the Notes or the consummation of 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
contemplated in the Distribution Agreement.
(22) The Company and each of its subsidiaries hold all material
licenses, certificates and permits from all governmental authorities (including,
without limitation, the Insurance Licenses) which are necessary to the conduct
of their businesses; the Company and each of its subsidiaries have fulfilled and
performed all material obligations necessary to maintain their respective
Insurance Licenses, and no event or events have occurred which may be reasonably
expected to result in the material impairment, modification, termination or
3
revocation of such Insurance Licenses.
Nothing has come to my attention that would cause me to believe that
the Registration Statement or the Previous Registration Statement or any
post-effective amendment thereto (other than financial statement, schedules and
other financial data included or incorporated therein and for the Form T-1, as
to which I express no belief), at the time the Registration Statement or the
Previous Registration Statement, as the case may be, or any post-effective
amendment thereto became effective or at the date of any agreement of the
applicable Agent(s) to purchase Notes from the Company as principal (but after
giving effect to Rule 430A under the 1933 Act), contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (other than financial
statements and schedules and other financial data included or incorporated, as
to which I express no belief), at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering my opinion, I may rely as to matters of fact (but not as
to legal conclusions), to the extent I deem proper, on certificates of
responsible officers of the Company and public officials.
4
EXHIBIT D
FORM OF ACCOUNTANT'S COMFORT LETTER
PURSUANT TO SECTION 5(d)
We are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
and:
(i) in our opinion, the audited consolidated financial
statements and the related financial statement schedules included or
incorporated by reference in the Registration Statement, the Previous
Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim consolidated financial statements of
the Company for the [three- month periods ended _________, 19__ and
_________, 19__, the three- and six-month periods ended _________, 19__
and _________, 19__ and the three- and nine-month periods ended
_________, 19__ and _________, 19__, included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus (collectively, the "10-Q Financials")] [,
a reading of the latest available unaudited interim consolidated
financial statements of the Company],1 a reading of the minutes of all
meetings of the stockholders and directors of the Company and its
subsidiaries and committees thereof since [day after end of last
audited period], inquiries of certain officials of the Company and its
subsidiaries responsible for financial and accounting matters, a review
of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the [description of relevant
periods]2 and such other inquiries and procedures as may be specified
in such letter, nothing came to our attention that caused us to believe
that:
(A) the 10-Q Financials included or incorporated by
reference in the Registration Statement, the Previous
Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations applicable to unaudited financial statements
included in Form 10-Q or any material modifications should
be made to the 10-Q Financials included or incorporated by
reference in the Registration Statement, the Previous
Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;
-------------
1 Include if the latest available unaudited financial statements are more
recent than the unaudited financial statements included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus.
2 The relevant periods include all interim unaudited consolidated financial
statements included or incorporated by reference in the Registration
Statement, the Previous Registration Statement and the Prospectus.
1
(B) at [_________, 19___ and at]3 a specified date not
more than five days4 prior to the date hereof, there was any
decrease in the consolidated total assets or shareholders'
equity of the Company and its subsidiaries or any increase
in the consolidated long-term debt of the Company and its
subsidiaries, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by
reference in the Registration Statement, the Previous
Registration Statement and the Prospectus, except in each
case for any changes, decreases or increases that the
Registration Statement, the Previous Registration Statement
and the Prospectus disclose have occurred or may occur; or
(C) for the period from [_________, 19__ to _________,
19__ and for the period from]5 _________, 19__ to a
specified date not more than five days prior to the date
hereof, there was any decrease in the total amounts of
consolidated premiums (including annuity deposits),
collected net investment income, total revenues, net income,
earnings applicable to common stock or net income per
diluted common share, in each case as compared with the
comparable period in the preceding year, except in each case
for any decreases that the Registration Statement and the
Prospectus discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii) above
and a reading of the Selected Financial Data included or incorporated
by reference in the Registration Statement and the Prospectus [and a
reading of the financial statements from which such data were
derived],6 nothing came to our attention that caused us to believe that
the Selected Financial Data included or incorporated by reference in
the Registration Statement and the Prospectus do not comply as to form
in all material respects with the disclosure requirements of Item 301
of Regulation S-K of the 1933 Act [, that the amounts included in the
Selected Financial Data are not in agreement with the corresponding
amounts in the audited consolidated financial statements for the
respective periods or that the financial statements not included or
incorporated by reference in the Registration Statement and the
Prospectus from which certain of such data were derived are not in
conformity with generally accepted
--------
3 If the latest available unaudited financial statements are more recent
than the unaudited financial statements included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus, include and insert the date of the latest
available financial statements of the Company.
4 According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the comfort letter.
5 If the latest available unaudited financial statements
are more recent than the unaudited financial statements included or
incorporated by reference in the Registration Statement, the Previous
Registration Statement and the Prospectus, include and insert the period
from the end of the period of the unaudited financial statements included
or incorporated by reference in the Registration Statement, the Previous
Registration Statement and the Prospectus to the date of the latest
available financial statements of the Company. Even if this first period is
applicable, the second period should run from the date of the most recent
financial statements included or incorporated by reference in the
Registration Statement, the Previous Registration Statement and the
Prospectus, not from the latest available financial statements of the
Company.
6 Include only if there are selected financial data that have been
derived from financial statements not included or incorporated by reference
in the Registration Statement, the Previous Registration Statement and the
Prospectus.
2
accounting principles;
(iv) we have compared the information included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus under selected captions with the
disclosure requirements of Regulation S-K of the 1933 Act and on the
basis of limited procedures specified herein, nothing came to our
attention that caused us to believe that such information does not
comply as to form in all material respects with the disclosure
requirements of Items 302, 402 and 503(d), respectively, of Regulation
S-K;
[(v) based upon the procedures set forth in clause (ii) above, a
reading of the latest available unaudited financial statements of the
Company that have not been included or incorporated by reference in the
Registration Statement, the Previous Registration Statement and the
Prospectus and a review of such financial statements in accordance with
SAS 71, nothing came to our attention that caused us to believe that
the unaudited amounts for ________ for the [most recent period] do not
agree with the amounts set forth in the unaudited consolidated
financial statements for those periods or that such unaudited amounts
were not determined on a basis substantially consistent with that of
the corresponding amounts in the audited consolidated financial
statements;]7
[(vi) we are unable to and do not express any opinion on the [Pro
Forma Combined Balance Sheet and Statement of Operations]
(collectively, the "Pro Forma Statements") included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus or on the pro forma adjustments applied to
the historical amounts included in the Pro Forma Statements; however,
for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with
SAS 71] of the financial statements to which the pro
forma adjustments were applied;
(C) made inquiries of certain officials of the
Company who have responsibility for financial and
accounting matters about the basis for their determination
of the pro forma adjustments and whether the Pro Forma
Statements comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X; and
(D) proved the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in
the Pro Forma Statements; and
on the basis of such procedures and such other inquiries and procedures
as specified herein, nothing came to our attention that caused us to
believe that the Pro Forma Statements included or incorporated by
reference in the Registration Statement, the Previous Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;]
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed
----------
7 This language should be included when the Registration Statement and the
Prospectus include earnings or other data for a period after the date of
the most recent financial statements included or incorporated by reference
in the Registration Statement and the Prospectus. The blank should be
filled in with a description of the financial statement item(s) included.
3
other procedures, not constituting an audit, with respect to certain
amounts, percentages, numerical data and financial information
included or incorporated by reference in the Registration Statement,
the Previous Registration Statement and the Prospectus, which are
specified herein, and have compared certain of such items with, and
have found such items to be in agreement with, the accounting and
financial records of the Company; and
[(viii) [If applicable, add comfort on a financial forecast that
is included or incorporated by reference in the Registration Statement,
the Previous Registration Statement and the Prospectus].
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