$200,000,000
CONSECO FINANCING TRUST VI
(a Delaware Business Trust)
9% Preferred Securities
(Liquidation Amount $25 per Security)
Underwriting Agreement
October 8, 1998
$200,000,000
CONSECO FINANCING TRUST VI
(a Delaware Business Trust)
9% Trust Originated Preferred Securities
(Liquidation Amount $25 per Preferred Security)
Underwriting Agreement
October 8, 1998
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CIBC OPPENHEIMER
A.G. EDWARDS & SONS, INC.
LEHMAN BROTHERS
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Conseco Financing Trust VI (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sections 3801
et seq.) and Conseco, Inc., an Indiana corporation (the "Company" and, together
with the Trust, the "Offerors"), confirm their agreement with the several
underwriters named in Schedule A hereto (collectively, the "Underwriters," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof) with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of 9% preferred securities (liquidation amount $25 per
preferred security) of the Trust (the "Preferred Securities") set forth in said
Schedule A (the "Initial Preferred Securities"), to be issued pursuant to an
Amended and Restated Declaration of Trust, dated as of October 14, 1998 (the
"Declaration"), among the Company, as Sponsor, State Street Bank and Trust
Company, as Property Trustee (the "Property Trustee"), First Union Bank of
Delaware, as Delaware Trustee (the "Delaware Trustee"), Stephen C. Hilbert and
Rollin M. Dick, as regular trustees (the "Regular Trustees" and, together with
the Property Trustee and the Delaware Trustee, the "Trustees"), and the holders
from time to time of undivided beneficial interests in the assets of the Trust.
The Company and the Trust also propose
- 1 -
to grant to the Underwriters an option to purchase up to 1,200,000 additional
Preferred Securities (the "Optional Securities") as described in Section 2(b)
hereof. The Preferred Securities will be guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption or otherwise (the
"Preferred Securities Guarantee") pursuant to the Preferred Securities Guarantee
Agreement (the "Preferred Securities Guarantee Agreement"), to be dated as of
October 14, 1998, between the Company and State Street Bank and Trust Company as
trustee (the "Guarantee"), and in certain circumstances described in the
Prospectus, the Trust will distribute Subordinated Debentures (as defined
herein) to holders of Preferred Securities. The 8,000,000 Initial Preferred
Securities, and all or any part of the 1,200,000 Optional Securities, together
with the related Preferred Securities Guarantee and the Subordinated Debentures,
are collectively referred to herein as the "Securities." Capitalized terms used
herein without definition shall be used as defined in the Prospectus (defined
below).
The Company and the Trust, Conseco Financing Trust V and
Conseco Financing Trust VII (collectively, the "Conseco Trusts") have filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-56611) covering the registration of securities of
the Company and the Conseco Trusts, including the Securities, under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations") and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
this Agreement. Such registration statement, as amended, has been declared
effective by the Commission. Registration statement no. 333-56611, as so
amended, including the exhibits and schedules thereto, if any, and the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus and the prospectus supplement
relating to the offering of the Securities, in the form first furnished to the
Underwriters by the Company for use in connection with the offering of the
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), prior to the execution of this Agreement; provided, further, that if the
Offerors file a registration statement with the Commission pursuant to Section
462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"),
then after such filing, all references to the "Registration Statement" shall be
deemed to include the Rule 462(b) Registration Statement; and provided, further,
that if the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations,
then all references to "Prospectus" shall be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the form first furnished to the
Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. A "preliminary prospectus" shall be
deemed to refer to any prospectus used before the applicable registration
statement became effective and any prospectus that omitted, as applicable, the
Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form of prospectus filed with the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations, that was used after such
effectiveness and prior to the execution and delivery of the applicable
underwriting agreement. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
- 2 -
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered and the Declaration, the Indenture (as
defined herein), and the Preferred Securities Guarantee Agreement have been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The entire proceeds from the sale of the Preferred Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities," and together with the Preferred Securities,
the "Trust Securities") and will be used by the Trust to purchase 9%
subordinated deferrable interest debentures (the "Subordinated Debentures")
issued by the Company. The Common Securities will be guaranteed by the Company,
to the extent set forth in the Prospectus, with respect to distributions and
payments upon liquidation and redemption (the "Common Securities Guarantee" and
together with the Preferred Securities Guarantee, the "Guarantees") pursuant to
the Common Securities Guarantee Agreement (the "Common Securities Guarantee
Agreement" and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), to be dated as of October 14, 1998, between the Company
and the Guarantee Trustee, as Trustee. The Preferred Securities and the Common
Securities will be issued pursuant to the Declaration. The Subordinated
Debentures will be issued pursuant to an indenture, dated as of November 14,
1996, between the Company and State Street Bank and Trust Company, successor to
Fleet National Bank, as trustee (the "Debt Trustee"), as supplemented by the
Fifth Supplemental Indenture dated as of October 14, 1998 (the "Supplemental
Indenture," and together with any other amendments or supplements thereto, the
"Indenture"), between the Company and the Debt Trustee.
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof (such date being hereinafter referred to as a
"Representation Date") that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the knowledge and information of the Offerors, threatened
by the Commission.
(ii) The Company and the Conseco Trusts meet, and at the
respective times of the commencement and consummation of the offering of the
Securities will meet, the requirements for the use of Form S-3 under the 1933
Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective and at the Representation
Date, the Closing Time (as defined herein) and each Date of Delivery (as defined
herein), the Registration Statement, any Rule 462 Registration Statement and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
- 3 -
Regulations and the 1939 Act and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations") and did not and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
At the date of the Prospectus and at the Closing Time, the Prospectus and any
amendments and supplements thereto did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. If the Offerors elect to rely upon Rule 434 of
the 1933 Act Regulations, the Offerors will comply with the requirements of Rule
434. Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Offerors in writing by the Underwriters
expressly for use in the Registration Statement or the Prospectus or (B) the
part of the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if applicable,
each preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of the
time of any subsequent amendment, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading; and any additional documents
deemed to be incorporated by reference in the Registration Statement or the
Prospectus will, if and when such documents are filed with the Commission, or
when amended, as appropriate, comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Merrill Lynch &
Co. ("Merrill Lynch") expressly for use in the Registration Statement or the
Prospectus.
(iv) PricewaterhouseCoopers LLP and KPMG Peat Marwick LLP,
which certified the financial statements and supporting schedules of the Company
and Green Tree Financial Corporation ("Green Tree"), respectively, included or
incorporated by reference in the Registration Statement and the Prospectus, each
are independent public accountants as required by the 1933 Act and the 1933 Act
Regulations with respect to the Company and Green Tree, respectively.
(v) The financial statements of the Company and of Green Tree
included or incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated subsidiaries and Green
Tree and its consolidated subsidiaries, respectively, as of the dates indicated
and the results of their respective operations
- 4 -
for the periods specified. Except as otherwise stated therein such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
required to be stated therein. The ratio of earnings to fixed charges (and the
ratio of earnings to fixed charges and preferred stock dividends) included in
the Prospectus have been calculated in compliance with Item 503(d) of Regulation
S-K of the Commission. Any selected financial information and summary financial
data included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus. Any pro
forma financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
(vi) The statutory financial statements of each of the
Company's insurance subsidiaries, from which certain ratios and other
statistical data contained in the Registration Statement have been derived, have
for each relevant period been prepared in accordance with accounting practices
prescribed or permitted by the National Association of Insurance Commissioners,
and with respect to each insurance subsidiary, the appropriate Insurance
Department of the state of domicile of such insurance subsidiary, and such
accounting practices have been applied on a consistent basis throughout the
periods involved.
(vii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no development
which could reasonably be expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those arising
in the ordinary course of business, which are material with respect to the
Company and its subsidiaries, considered as one enterprise, and (C) except for
regular dividends on the Common Stock or Preferred Stock of the Company in
amounts per share that are consistent with past practice or the applicable
charter document or supplement thereto, respectively, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(viii) The Company has been incorporated, is validly existing
as a corporation and its status is active under the laws of the State of
Indiana, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement, the Guarantee Agreements, the Subordinated
Debentures, and the Indenture. The Company is qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not have a Material Adverse Effect.
(ix) Each significant subsidiary (as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the 1933 Act) (each, a
"Significant Subsidiary") of the Company is set forth on Schedule B hereto and
has been incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own, lease and operate its
- 5 -
properties and to conduct its business as presently conducted and as described
in the Prospectus, and is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not have a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding shares of capital stock of each Significant Subsidiary of
the Company have been authorized and validly issued, are fully paid and
non-assessable and all such shares are owned by the Company, directly or through
its subsidiaries, free and clear of any material security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(x) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus; since the date indicated in the
Prospectus there has been no change in the consolidated capitalization of the
Company and its subsidiaries (other than changes in outstanding Common Stock of
the Company resulting from employee or agent benefit plan or dividend
reinvestment and stock purchase plan transactions); and all of the issued and
outstanding capital stock of the Company has been authorized and validly issued,
is fully paid and non-assessable and conforms to the descriptions thereof
contained in the Prospectus.
(xi) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Preferred Securities, the Common
Securities and the Declaration; the Trust is duly qualified to transact business
as a foreign company and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust; the Trust is not
a party to or otherwise bound by any agreement other than those described in the
Prospectus; the Trust is and will, under current law, be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
(xii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Registration Statement and Prospectus, will
be validly issued and will represent undivided beneficial interests in the
assets of the Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Common Securities is
not subject to preemptive or other similar rights; and at the Closing Time and
each Date of Delivery all of the issued and outstanding Common Securities of the
Trust will be directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(xiii) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and delivery
of the Declaration by the Property Trustee and the Delaware Trustee, the
Declaration will, at the Closing Time and each Date of Delivery, be a valid and
binding obligation of the Company and the Regular Trustees, enforceable against
the Company and the Regular Trustees in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (the "Bankruptcy Exceptions")
and will conform in all material respects to the description thereof contained
in the Prospectus.
- 6 -
(xiv) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and, in the case of the Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Preferred Securities
Guarantee by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantee Agreements will conform in all
material respects to the description thereof contained in the Prospectus.
(xv) The Preferred Securities have been duly authorized for
issuance and sale to the Underwriters and, when issued and delivered against
payment therefor as provided herein, will be validly issued and fully paid and
non-assessable undivided beneficial interests in the assets of the Trust and
will conform in all material respects to the description thereof contained in
the Prospectus; the issuance of the Preferred Securities is not subject to
preemptive or other similar rights.
(xvi) The Indenture has been authorized by the Company and
qualified under the 1939 Act and, at the Closing Time, has been executed and
delivered and constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions; the
Indenture conforms in all material respects to the description thereof contained
in the Prospectus.
(xvii) The Subordinated Debentures have been authorized by the
Company and, at the Closing Time and each Date of Delivery, will have been
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment therefor as described in the
Prospectus, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions, and
will be in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the description thereof
contained in the Prospectus.
(xviii) Each of the Regular Trustees of the Trust is an
officer of the Company and has been duly authorized by the Company to execute
and deliver the Declaration.
(xix) Neither the Company nor any of its Significant
Subsidiaries is in violation of its articles of incorporation or by-laws. None
of the Company or any of its Significant Subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, note, lease, loan or credit
agreement or any other agreement or instrument (the "Agreements and
Instruments") to which the Company or any of its Significant Subsidiaries is a
party or by which any of them may be bound, or to which any of the property or
assets of the Company or any Significant Subsidiary is subject, or in violation
of any applicable law, rule or regulation or any judgment, order or decree of
any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its Significant Subsidiaries or
any of their respective properties or assets, which violation or default would,
singly or in the aggregate, have a Material Adverse Effect; the Trust is not in
violation of the Declaration or its certificate of trust filed with the State of
Delaware on May 23, 1997 (the "Certificate of Trust").
(xx) The offer of the Securities as contemplated herein and in
the Prospectus; the execution, delivery and performance of this Agreement, the
Declaration, the Preferred Securities, the Common Securities, the Indenture, the
Subordinated Debentures, the Guarantee Agreements and the Guarantees and
- 7 -
the consummation of the transactions contemplated herein, therein and in the
Registration Statement (including the issuance and sale of the Securities and
the use of proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Offerors
with their respective obligations hereunder and thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of any of the terms or provisions of, or
constitute a default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Trust, the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Trust, the Company or any of its Significant Subsidiaries, or any of
their assets, properties or operations (except for such violations that would
not result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the Certificate of Trust or the charter or
by-laws of the Company or any Significant Subsidiary. As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness of the Trust, the Company or
any Significant Subsidiary (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Trust, the Company or any Significant Subsidiary.
(xxi) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic or
foreign (including, without limitation, any proceeding to revoke or deny renewal
of any Insurance Licenses (as defined below)), 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 might
reasonably be expected to result in a Material Adverse Effect, or which might be
reasonably expected to materially and adversely affect the consummation of this
Agreement, the Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debentures, the Guarantee Agreements or the
Guarantees or the consummation of the transactions contemplated herein, therein
or in the Registration Statement. The aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary thereof is a
party or of which any of their respective properties or operations is the
subject which are not described in the Registration Statement or the Prospectus,
including ordinary routine litigation incidental to the business or the Company
or any of its subsidiaries, could not reasonably be expected to result in a
Material Adverse Effect; and there are no contracts or documents of the Company
or any of its subsidiaries which are required to be filed as exhibits to the
Registration Statement, or to be incorporated by reference therein, by the 1933
Act, the 1933 Act Regulations, the 1934 Act of the 1934 Act Regulations, which
have not been so filed or incorporated by reference.
(xxii) 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
Licences")) that are material to the Company and its subsidiaries taken as a
whole and are necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and conditions of
all such 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 Licences
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
- 8 -
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.
(xxiii) No authorization, approval, consent, order,
registration or qualification of or with any court or governmental authority or
agency (including, without limitation, any Insurance regulatory agency or body)
is required in connection with the issuance and sale of the Common Securities or
the offering, issuance and sale of the Preferred Securities, the Subordinated
Debentures or the Guarantees hereunder, or the consummation by the Offerors of
any other transactions contemplated hereby, except such as have been obtained
and made under the federal securities laws or state Insurance laws and such as
may be required under state or foreign securities or Blue Sky laws.
(xxiv) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(xxv) The Company is in compliance with, the provisions of
that certain Florida act relating to disclosure of doing business in Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xxvi) Neither the Trust, nor the Company nor any of its
Significant Subsidiaries is, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxvii) None of the Trust, the Company, its Significant
Subsidiaries or any of their respective directors, officers or controlling
persons, has taken, directly or indirectly, any action resulting in a violation
of Regulation M under the 1934 Act, or designed to cause or result in, or that
has constituted or that reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the Trust or the
Company to facilitate the sale or resale of the Securities or the Common Stock
of the Company, in each case in violation of applicable law.
(xxviii) No "forward looking statement" (as defined in Rule
175 under the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable basis
or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or the
Trust, as the case may be, to the Underwriters as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, and each Underwriter severally and not jointly agrees
to purchase from the Trust, at the price per security of $25.00, the number of
Initial Preferred Securities set forth in Schedule A hereto opposite the name of
such Underwriter, plus any additional number of Preferred Securities which such
Underwriter may become obligated to purchase pursuant to the
- 9 -
provisions of Section 10 hereof. The compensation to be paid by the Company to
the Underwriters in respect of its commitments hereunder shall be an amount in
same day funds of $0.7875 per Preferred Security.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Offerors hereby grant to the Underwriters, severally and not jointly, the right
to purchase at their election up to 1,200,000 Optional Securities at the price
per security of $25.00. The option hereby granted will expire automatically at
the close of business on the 30th calendar day after (i) the later of the date
the Registration Statement and any Rule 462(b) Registration Statement becomes
effective, if the Offerors have elected not to rely upon Rule 430A under the
1933 Act Regulations, or (ii) the Representation Date, if the Offerors have
elected to rely upon Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Preferred Securities upon notice by the Underwriters
to the Offerors setting forth the aggregate number of additional Optional
Securities to be purchased and the time and date of delivery for the related
Optional Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Underwriters but shall not be later than seven full
business days after the exercise of such option, nor in any event before the
Closing Time, as defined below, unless otherwise agreed upon by the Underwriters
and the Offerors. If the option is exercised as to all or any portion of the
Optional Securities, each of the Underwriters, acting severally and not jointly,
will purchase from the Company the same percentage of the total number of
Optional Securities as such Underwriter is purchasing of the Initial Preferred
Securities as set forth in Schedule A hereto (subject in each case to such
adjustments as the Underwriters in their discretion shall make to eliminate any
fractional Optional Securities).
(c) Delivery of certificates for the Initial Preferred Securities and
the Optional Securities (if the option provided for in Section 2(b) hereof shall
have been exercised on or before the first business day prior to the Closing
Time) against payment of the purchase price for such Initial Preferred
Securities and the Optional Securities, if any, shall be made at the offices of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York
10019 or at such other place as shall be agreed upon by the Underwriters and the
Offerors, at 9:00 a.m. (New York City time) on October 14, 1998, or such other
time not later than ten business days after such date as shall be agreed upon by
the Underwriters and the Offerors (such time and date of payment and delivery
being referred to herein as the "Closing Time"). In addition, if the
Underwriters purchase any or all of the Optional Securities (if the option
provided for in Section 2(b) hereof shall have been exercised after the first
business day prior to the Closing Time), payment of the purchase price and
delivery of certificates for such Optional Securities shall be made at the
offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P. set forth above, or at such
other place as shall be agreed upon by the Underwriters and the Offerors, on
each Date of Delivery as specified in the relevant notice from the Underwriters
to the Offerors. Payment for the Preferred Securities purchased by the
Underwriters shall be made to the Trust by wire transfer of immediately
available funds, payable to the order of the Trust, against delivery to the
respective accounts of the Underwriters of the certificates for the Preferred
Securities to be purchased by them. Delivery of, and payment for, the Preferred
Securities shall be made through the facilities of the Depository Trust Company.
Certificates for the Preferred Securities, if any, shall be in
such denominations and registered in such names as the Underwriters may request
in writing at least two full business days before the Closing Time or the Date
of Delivery, as the case may be. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Preferred Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
- 10 -
Time or the Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder. The certificates for
the Preferred Securities will be made available for examination by the
Underwriters no later than 10:00 a.m. (New York City time) on the last business
day prior to the Closing Time or the Date of Delivery, as the case may be.
(d) If settlement for the Optional Securities occurs after the Closing
Time, the Offerors will deliver to the Underwriters on the relevant Date of
Delivery, and the obligations of the Underwriters to purchase the Optional
Securities shall be conditioned upon the receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered at the Closing Time pursuant to Section 5(j) hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree with the
Underwriters as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus to be filed with the Commission pursuant to Rule 424
of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made. Prior to the filing, the Offerors
will cooperate with the Underwriters in the preparation of such prospectus
supplement to assure that the Underwriters have no reasonable objection to the
form or content thereof when filed or mailed.
(b) The Offerors, subject to Section 3(c), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the
1933 Act Regulations if and as applicable, and will notify the Underwriters
immediately (i) of the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
and (v) of the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or the exemption from
qualification of the Securities under state securities or Blue Sky laws or the
initiation or threatening of any proceeding for such purpose. The Offerors will
make all reasonable efforts to prevent the issuance of any stop order and, if
any stop order is issued, to promptly obtain the lifting thereof.
(c) The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Underwriters with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file any such Rule 462(b) Registration Statement, Term Sheet,
amendment, supplement or revision to which the Underwriters or counsel for the
Underwriters shall reasonably object.
(d) The Company will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and conformed copies of all
consents and certificates of experts, and will also deliver to Merrill Lynch,
without charge, a conformed copy of the Registration Statement as originally
- 11 -
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company has delivered to each Underwriter, without charge, as
many copies of any preliminary prospectus as such Underwriter reasonably
requested, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Preferred Securities as contemplated in
this Agreement and in the Registration Statement and the Prospectus. If at any
time when the Prospectus is required by the 1933 Act or the 1934 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Offerors, to amend the Registration
Statement in order that the Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or to
amend or supplement the Prospectus in order that the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(c), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Offerors will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(g) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as Merrill Lynch may designate; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
(h) The Company will make generally available to its securityholders as
soon as practicable, but not later than 45 days (or 90 days, in the case of a
period that is also the Company's fiscal year) after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in said
Rule 158) of the Registration Statement.
- 12 -
(i) The Company and the Trust will use the net proceeds received by
them from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(j) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933
Act Regulations, then immediately following the execution of this Agreement, the
Company will prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A or Rule 434 and Rule 424(b) of the 1933 Act
Regulations, copies of an amended Prospectus, or Term Sheet, or, if required by
such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(k) If the Offerors elect to rely upon Rule 462(b), the Offerors shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933
Act Regulations by the earlier of (i) 10:00 p.m. New York City time on the date
of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(l) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
(m) The Offerors will use their best efforts to effect the listing of
the Preferred Securities on the New York Stock Exchange and to cause the
Preferred Securities to be registered under the 1934 Act.
(n) During a period of 30 days from the date hereof, neither the Trust
nor the Company will, without the prior written consent of Merrill Lynch,
directly or indirectly, issue, sell, offer or contract to sell, grant any option
for the sale of, or otherwise transfer or dispose of, any Preferred Securities
or any securities substantially similar to the Preferred Securities, any
security convertible into or exchangeable or exercisable for Preferred
Securities or any securities substantially similar to the Preferred Securities,
or any debt securities of the Company (other than the Securities or commercial
paper in the ordinary course of business).
(o) The Trust and the Company, during a period of one year from the
Closing Time, will make generally available to the Underwriters copies of all
reports and other communications (financial or other) mailed to stockholders,
and deliver to the Underwriters promptly after they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission).
(p) Neither the Trust, the Company nor its subsidiaries will take,
directly or indirectly, any action resulting in a violation of Regulation M
under the 1934 Act, or designed to cause or result in, or that reasonably might
be expected to constitute, the stabilization or manipulation of the price of any
security of the Trust or the Company to facilitate the sale or resale of the
Securities or the Common Stock of the Company, in each case in violation of
applicable law.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement including,
without limitation, expenses related to the following, if incurred: (i) the
preparation, delivery, printing and filing of the Registration Statement and
Prospectus as
- 13 -
originally filed (including financial statements and exhibits) and of each
amendment thereto; (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement Among Underwriters, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale and delivery of the Securities; (iii) the preparation, issuance
and delivery of the certificates for the Preferred Securities; (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or agents
(including the transfer agents and registrars), as well as fees and
disbursements of the Trustees and any Depositary, and their respective counsel
(except as provided for in the Prospectus); (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(g), including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
prospectus, any Term Sheet and of the Prospectus and any amendments or
supplements thereto; (vii) the printing and delivery to the Underwriters of
copies of any Blue Sky Survey and any Legal Investment Survey; (viii) any fees
payable in connection with the rating of the Preferred Securities by nationally
recognized statistical rating organizations; (ix) the filing fees incident to,
and the fees and disbursements of counsel to the Underwriters in connection
with, the review, if any, by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Preferred Securities; (x) any
fees payable in connection with any listing of Securities on any securities
exchange or quotation system; and (xi) any fees payable to the Commission.
If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors herein contained or in certificates of any officer of the Company
or any subsidiary or the trustees of the Trust delivered pursuant to the
provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, shall have become effective under the 1933 Act not later than 5:30
p.m., New York City time, on the date hereof and on the date hereof and at the
Closing Time, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the satisfaction of counsel to the Underwriters. A prospectus
containing information relating to the description of the Securities, the
specific method of distribution and similar matters shall have been filed with
the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required post-effective amendment providing such information
shall have been filed and declared effective in accordance with the requirements
of Rule 430A), or, if the Company has elected to rely upon Rule 434 of the 1933
Act Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
- 14 -
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Mr. John J. Sabl, Executive Vice President, General Counsel and Secretary of the
Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation under the laws of the State of
Indiana.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus;
(iii) The Company is qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus
(including information which is incorporated by reference therein)
(except for subsequent issuances, if any, pursuant to (x) incentive
compensation plan, employee or agent benefit plan or dividend
reinvestment and stock purchase plan transactions or (y) the exercise
of conversion rights with respect to securities outstanding as of the
date of the Prospectus), and the shares of issued and outstanding
capital stock of the Company have been authorized and validly issued
and are fully paid and non-assessable.
(v) Each Significant Subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
such Significant Subsidiary of the Company has been authorized and
validly issued, is fully paid and non-assessable and, except as set
forth in the Prospectus, all such shares are owned by the Company,
directly or through its subsidiaries, free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(vi) All legally required proceedings in
connection with the authorization and valid issuance of the Securities
and the sale of the Securities in accordance with this Agreement (other
than the filing of post-issuance reports, the non-filing of which would
not render the Securities invalid) have been taken and all legally
required orders, consents or other authorizations or approvals of any
other public boards or bodies (including, without limitation, any
insurance regulatory agency or body) in connection with the
authorization and valid issuance of the Securities and the sale of the
Securities in accordance with this Agreement (other than in connection
with or in compliance with the provisions of the securities or Blue Sky
laws of any jurisdictions, as to which no opinion need be expressed)
have been obtained and are in full force and effect.
- 15 -
(vii) The Registration Statement is effective
under the 1933 Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
(viii) Each of the Registration Statement as of
its effective date and the Prospectus and each amendment or supplement
thereto as of its issue date (in each case, other than the financial
statements and the notes thereto, the financial schedules, and any
other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; and the Declaration, the Indenture and the
Preferred Securities Guarantee Agreement filed with the Commission as
part of the Registration Statement complied as to form in all material
respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(ix) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the time
they were filed or last amended (other than the financial statements
and the notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein and the Statements
of Eligibility on Form T-1 filed with the Commission as part of the
Registration Statement, as to which such counsel need express no
belief), complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, as
applicable.
(x) The Common Securities, the Preferred
Securities, the Subordinated Debentures, each of the Guarantees, the
Declaration, the Indenture and each of the Guarantee Agreements conform
in all material respects to the descriptions thereof contained in the
Prospectus.
(xi) The information in the Prospectus under
the captions "Description of the Preferred Securities," "Description of
the Trust Guarantee," "Description of the Subordinated Debentures" and
"Effect of Obligations under the Subordinated Debentures and the Trust
Guarantee," to the extent that they involve matters of law, summaries
of legal matters, the Company's Charter and By-Laws, the Declaration or
legal proceedings, or legal conclusions, has been reviewed by such
counsel and is correct in all material respects.
(xii) To such counsel's knowledge, all of the
issued and outstanding Common Securities of the Trust are directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(xiii) This Agreement has been duly authorized,
executed and delivered by each of the Trust and the Company.
(xiv) Each of the Guarantee Agreements has been
duly authorized, executed and delivered by the Company; the Preferred
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a valid
and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by Bankruptcy Exceptions; and the
Preferred Securities Guarantee Agreement has been duly qualified under
the 1939 Act.
- 16 -
(xv) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming authorization,
execution, and delivery thereof by the Debt Trustee, constitutes a
valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions;
and the Indenture has been duly qualified under the 1939 Act.
(xvi) The Subordinated Debentures are in the
form contemplated by the Indenture, have been duly authorized, executed
and delivered by the Company and, when authenticated by the Debt
Trustee in the manner provided for in the Indenture and delivered
against payment therefor by the Company, will constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xvii) The offer of the Preferred Securities as
contemplated herein and in the Prospectus, the execution, delivery and
performance of this Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Debentures, the Guarantee Agreements and the Guarantees and the
consummation of the transactions contemplated herein, therein and in
the Registration Statement (including the issuance and sale of the
Preferred Securities and the use of proceeds from the sale of the
Securities as described in the prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
and thereunder have been authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of any
of the terms or provisions of, or constitute a default or Repayment
Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Significant Subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Significant Subsidiary or
any of their assets, properties, or operations (except for such
violations that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
charter or by-laws of the Company or any Significant Subsidiary.
(xviii) To such counsel's knowledge, there are no
statutes required to be described in or incorporated by reference in
the Registration Statement which are not described or incorporated by
reference; and there are no legal or governmental proceedings pending
or, to such counsel's knowledge, threatened which are required to be
disclosed or incorporated by reference in the Registration Statement
other than those disclosed or incorporated by reference therein.
(xix) To such counsel's knowledge, there are no
contracts, indentures, mortgages, agreements, notes, leases or other
instruments required to be described or referred to or incorporated by
reference in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to or incorporated by
reference therein or filed as exhibits thereto; and the descriptions
thereof or references thereto are true and correct in all material
respects.
(xx) No authorization, approval, consent,
order, registration or qualification of or with any court or federal or
state governmental authority or agency (including, without
- 17 -
limitation, any insurance regulatory agency or body) is required for
the issuance and sale of the Securities by the Company to the
Underwriters or the performance by the Company of its obligations in
this Agreement, the Indenture, the Subordinated Debentures, the
Preferred Securities Guarantee Agreement, the Preferred Securities
Guarantee, the Declaration and the Preferred Securities except such as
has been obtained and made under the federal securities laws or such as
may be required under state or foreign securities or Blue Sky laws.
(xxi) The Company and its subsidiaries possess
such permits, licenses, approvals, consents and other authorizations
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies (including, without limitation, the Insurance
Licenses) that are material to the Company and its subsidiaries taken
as a whole and are necessary to conduct the business now operated by
them; the Company and its subsidiaries are in compliance with the terms
and conditions of all such 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 Licences 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.
(xxii) None of the Trust or the Company or any
of its subsidiaries is, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will be, an
"investment company" as such term is defined in the 1940 Act.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that causes such counsel to believe that the
Registration Statement including any information provided pursuant to
Rule 430A and related schedules and Rule 434 (except for financial
statements and the notes thereto, the financial schedules and any other
financial data included or incorporated by reference therein, and the
Statements of Eligibility on Form T-1 filed with the Commission as part
of the Registration Statement as to which such counsel need express no
opinion), at the time it became effective or at the Representation
Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorporated by
reference therein, as to which such counsel need express no opinion),
at the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) or at the Closing
Time, included (or includes) an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Time, of
Locke Reynolds Boyd & Weisell, special counsel to the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, to the effect
that the statements in the Prospectus under the caption "United States Federal
- 18 -
Income Taxation" have been reviewed by such counsel and, insofar as they
constitute legal conclusions or matters of law, fairly summarize the matters
referred to therein. Moreover, such counsel shall confirm that nothing has come
to such counsel's attention that causes such counsel to believe that the
Registration Statement, including any information provided pursuant to Rule 434
(except for financial statements and the notes thereto, the financial schedules
and any other financial data included or incorporated by reference therein, and
the Statements of Eligibility on Form T-1 filed with the Commission as part of
the Registration Statement as to which counsel need express no opinion), at the
time it became effective or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (except for financial statements and the notes thereto, the
financial schedules, and any other financial data included or incorporated by
reference therein, as to which counsel need express no opinion), at the
Representation Date (unless the term "Prospectus" refers to a prospectus which
has been provided to the Underwriters by the Company for use in connection with
the offering of the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective, in which
case at the time it is first provided to the Underwriters for such use) or at
the Closing Time, included (or includes) an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(3) The favorable opinion, dated as of Closing Time, of
Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors, in
form and substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Trust
as a business trust have been made.
(ii) Under the Delaware Act and the
Declaration, the Trust has the business trust power and authority to
own property and conduct its business, all as described in the
Prospectus.
(iii) The Declaration constitutes a valid and
binding obligation of the Company and the Trustees and is enforceable
against the Company and the Trustees, in accordance with its terms,
subject, as to enforcement, to (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and
other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and
applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification or contribution.
(iv) Under the Delaware Act and the
Declaration, the Trust has the business trust power and authority to
(i) execute and deliver, and to perform its obligations under, this
Agreement and (ii) issue, and perform its obligations under, the Trust
Securities.
(v) Under the Delaware Act and the
Declaration, the execution and delivery by the Trust of this Agreement,
and the performance by the Trust of its obligations hereunder, have
been duly authorized by all necessary action on the part of the Trust.
- 19 -
(vi) Under the Delaware Act, the certificate
attached to the Declaration as Exhibit A-1 is an appropriate form of
certificate to evidence ownership of the Preferred Securities; the
Preferred Securities have been duly authorized by the Declaration and
are duly and validly issued and, subject to qualifications hereinafter
expressed in this paragraph (vi), fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; said counsel may note
that the holders of the Preferred Securities may be obligated to make
payments as set forth in the Declaration.
(vii) The Common Securities have been duly
authorized by the Declaration and are duly and validly issued and
represent undivided beneficial interests in the assets of the Trust.
(viii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is not subject to
preemptive rights.
(ix) The issuance and sale by the Trust of the
Trust Securities, the purchase by the Trust of the Subordinated
Debentures, the execution, delivery and performance by the Trust of
this Agreement, the consummation by the Trust of the transactions
contemplated hereby and compliance by the Trust with its obligations
hereunder and thereunder will not violate (i) any of the provisions of
the Certificate of Trust or the Declaration or (ii) any applicable
Delaware law or Delaware administrative regulation.
(4) The favorable opinion, dated as of Closing Time, of Reid &
Riege, P.C., counsel to State Street Bank and Trust Company as Debt Trustee
under the Indenture, Property Trustee under the Declaration, and Guarantee
Trustee under the Preferred Securities Guarantee Agreements, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) State Street Bank and Trust Company is a
national banking association with trust powers, formed and authorized
to transact the business of banking under the laws of the United States
with all necessary power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of the Indenture,
the Declaration and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance
by the Debt Trustee of the Indenture, the Property Trustee of the
Declaration and the execution, delivery and performance by the
Guarantee Trustee of the Preferred Securities Guarantee Agreement have
been duly authorized by all necessary corporate action on the part of
the Debt Trustee, the Property Trustee and the Guarantee Trustee,
respectively. The Indenture, the Declaration and the Preferred
Securities Guarantee Agreement have been duly executed and delivered by
the Debt Trustee, the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations
of the Debt Trustee, the Property Trustee and the Guarantee Trustee,
respectively, enforceable against the Debt Trustee, the Property
Trustee and the Guarantee Trustee, respectively, in accordance with
their terms, except to the extent the enforcement thereof may be
limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance
of the Indenture, the Declaration and the Preferred Securities
Guarantee Agreement by the Debt Trustee, the Property
- 20 -
Trustee and the Guarantee Trustee, respectively, do not conflict with
or constitute a breach of the Articles of Organization or By-laws of
the Debt Trustee, the Property Trustee and the Guarantee Trustee,
respectively.
(iv) No consent, approval or authorization of,
or registration with or notice to, any federal banking authority is
required for the execution, delivery or performance by the Debt
Trustee, the Property Trustee and the Guarantee Trustee of the
Indenture, the Declaration and the Preferred Securities Guarantee
Agreement.
(5) The favorable opinion, dated as of the Closing Time, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, in form
and substance satisfactory to the Underwriters, with respect to the issuance and
sale of the Preferred Securities, and other related matters as the Underwriters
may reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion LeBoeuf, Lamb, Greene & MacRae, L.L.P.
may rely as to matters governed by the laws of Indiana and Delaware upon the
opinions referred to in Sections 5(b)(1) and 5(b)(3) hereto.
(c) Between the date of this Agreement and prior to the Closing Time,
no material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise, whether
or not in the ordinary course of business.
(d) At the Closing Time, the Underwriters shall have received a
certificate of a Regular Trustee of the Trust and 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 Closing Time, to the effect
that (i) there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise, whether
or not in the ordinary course of business, (ii) the representations and
warranties in Section 1 hereof are true and correct as though expressly made at
and as of the Closing Time, (iii) the Trust and the Company have complied with
all agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or, to the knowledge of such officers,
threatened by the Commission.
(e) At the time of the execution of this Agreement, the Underwriters
shall have received from PricewaterhouseCoopers LLP a "comfort letter" dated
such date in form and substance satisfactory to the Underwriters and counsel to
the Underwriters.
(f) At the time of the execution of this Agreement, the Underwriters
shall have received from KPMG Peat Marwick LLP a "comfort letter" with respect
to the financial information of Green Tree, dated such date in form and
substance satisfactory to the Underwriters and counsel to the Underwriters.
(g) At the Closing Time, the Underwriters shall have received from each
of PricewaterhouseCoopers LLP, with respect to the Company, and Peat Marwick
LLP, with respect to Green Tree, a letter, dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letters furnished pursuant
to subsection (e) and (f) of this Section, and other customary matters, except
that (i) such statements shall include any financial statements and pro forma
financial information incorporated by reference in the
- 21 -
Registration Statement and the Prospectus which are filed subsequent to the date
of this Agreement and prior to the Closing Time and (ii) the specified date
referred to shall be a date not more than five days prior to the Closing Time.
(h) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(i) At the Closing Time, (i) the Preferred Securities shall be rated at
least BBB- by Standard & Poor's Ratings Service, and the Trust shall have
delivered to the Underwriters a letter, dated the Closing Time, from such rating
agency, or other evidence satisfactory to the Underwriters, confirming that the
Preferred Securities have such ratings; (ii) there shall not have occurred any
decrease in the rating assigned to the Preferred Securities or any securities of
the Company or of the financial strength or claims paying ability of the Company
by any "nationally recognized statistical rating organization," as defined for
purposes of Rule 436(g)(2) under the 1933 Act Regulations, and (iii) no such
organization shall have publicly announced that it has under surveillance or
review, without indicating an improvement, its rating of the Preferred
Securities or any securities of the Company or of the financial strength or
claims paying ability of the Company.
(j) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Optional
Securities, the representations and warranties of the Offerors contained herein
and the statements in any certificates furnished by the Offerors hereunder shall
be true and correct as of, and as if made on, each Date of Delivery, and at the
relevant Date of Delivery, the Underwriters shall have received:
(1) A certificate, dated such Date of Delivery, of the
President or a Vice-President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company and a certificate of a Regular Trustee
of the Trust confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof is true and correct as of, and as if made on,
such Date of Delivery.
(2) The favorable opinion of John J. Sabl, Esq., Executive
Vice President, General Counsel and Secretary for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Optional Securities and otherwise to the same effect
as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Locke Reynolds Boyd & Weisell,
special counsel to the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the Optional
Securities and otherwise to the same effect as the opinion required by Section
5(b)(2) hereof.
(4) The favorable opinion of Richards, Layton & Finger,
special Delaware counsel to the Offerors, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Optional Securities and otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.
- 22 -
(5) The favorable opinion of Reid & Riege, P.C., counsel to
State Street Bank and Trust Company as Debt Trustee under the Indenture,
Property Trustee under the Declaration, and Guarantee Trustee under the
Preferred Securities Guarantee Agreements, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Optional Securities and otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.
(6) The favorable opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., counsel to the Underwriters, dated such Date of Delivery, relating to
the Optional Securities and otherwise to the same effect as the opinion required
by Section 5(b)(5) hereof.
(7) A "comfort letter" from PricewaterhouseCoopers LLP in form
and substance satisfactory to the Underwriters and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Underwriters pursuant to Section 5(e) hereof, except that the "specified date"
in the letter furnished pursuant to this Section shall be a date no more than
five days prior to such Date of Delivery.
(8) A "comfort letter" from KPMG Peat Marwick LLP with respect
to the financial information of Green Tree, in form and substance satisfactory
to the Underwriters and dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to the Underwriters pursuant to
Section 5(f) hereof, except that the "specified date" in the letter furnished
pursuant to this Section shall be a date no more than five days prior to such
Date of Delivery.
At the Date of Delivery, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Optional Securities as herein
contemplated shall be satisfactory in form and substance to the Underwriters and
counsel for the Underwriters.
At the Date of Delivery, (i) the Preferred Securities shall be
rated at least BBB- by Standard & Poor's Ratings Service, and the Trust shall
have delivered to the Underwriters a letter, dated such Date of Delivery, from
each such rating agency, or other evidence satisfactory to the Underwriters,
confirming that the Preferred Securities have such ratings; (ii) there shall not
have occurred any decrease in the rating assigned to the Preferred Securities or
any securities of the Company or of the financial strength or claims paying
ability of the Company by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g)(2) under the 1933 Act
Regulations, and (iii) no such organization shall have publicly announced that
it has under surveillance or review, without indicating an improvement, its
rating of the Preferred Securities or any securities of the Company or of the
financial strength or claims paying ability of the Company.
If any condition specified in this Section 5 shall not have been fulfilled when
and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of the Optional Securities on a Date of Delivery which
is after the Closing Time, the obligations of the several Underwriters to
purchase the relevant Optional Securities, may be terminated by the Underwriters
by notice to the Company at any time at or prior to the Closing Time, or such
Date of Delivery, as the case may be, and such termination shall be without
- 23 -
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 434 Information deemed to be part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of or
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, provided, that (subject to Section 6(d)
below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
Merrill Lynch), 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 arising out of or based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that the foregoing indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent
arising out of or based upon any untrue statement or omission or
alleged untrue statement or omission (A) made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 434
Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), (B) made in any Statement of Eligibility on Form
T-1 filed as an exhibit to the Registration Statement or (C) made in
any preliminary prospectus supplement and corrected in the Prospectus,
as supplemented, where the person asserting any such loss, liability,
claim, damage or expense purchased the Preferred Securities that are
the subject thereof, and it shall have been established (i) that there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus (excluding documents incorporated by
reference) in any case where such delivery is required by the 1933 Act
and (ii) the Company shall have previously furnished copies thereof in
sufficient quantities to such Underwriter.
- 24 -
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the Trust and
each of the Regular Trustees of the Trust, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 434 Information deemed
to be a part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
affected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
- 25 -
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand, and the Underwriters, on the other hand, from the offering of the
Preferred Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by Company on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Preferred Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of such
Preferred Securities (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set
forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering price
of such Preferred Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Preferred Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
- 26 -
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Preferred Securities set forth opposite their
respective names in Schedule A to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company and the Trust
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of and payment for the Preferred Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Underwriters may terminate this Agreement, by notice to the
Company at any time at or prior to the Closing Time or at or prior to any Date
of Delivery, if (i) there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change or any development which could reasonably be expected to
result in a prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation of hostilities or other calamity or
crisis, or any change or development involving a prospective change in national
or international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of Merrill Lynch impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in the Common Stock or any other security of the Company has been
suspended or limited by the Commission, NASD or the New York Stock Exchange, or
if trading generally on either the American Stock Exchange, the New York Stock
Exchange or in the over-the-counter market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by such
system or by order of the Commission, NASD or any other governmental authority,
or (iv) if a banking moratorium has been declared by either Federal, New York or
Indiana authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided, further, that Sections 1, 6, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Preferred
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), Merrill Lynch shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be
- 27 -
agreed upon and upon the terms herein set forth; if, however, Merrill Lynch
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the total number of Preferred Securities, the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full number
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
total number of the Defaulted Securities to be purchased on such date, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Optional
Securities, as the case may be, either Merrill Lynch or the Company shall have
the right to postpone the Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch & Co., 5500
Sears Tower, Chicago, Illinois 60606, Attention of David C. Sherwood, with a
copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., Attention of Michael Groll,
Esq.; notices to the Company or the Trust shall be directed to the Company or
the Trust at, or in care of, Conseco, Inc., 11825 N. Pennsylvania Street,
Carmel, Indiana 46032, Attention of John J. Sabl, Esq., Executive Vice
President, General Counsel and Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Offerors and the Underwriters and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and
their respective successors and legal representatives, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
- 28 -
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE
INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
- 29 -
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Offerors and the Underwriters in accordance with its terms.
Very truly yours,
CONSECO, INC.
By: /s/ Rollin M. Dick
------------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
CONSECO FINANCING TRUST VI
By: /s/ Rollin M. Dick
-----------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CIBC OPPENHEIMER
A.G. EDWARDS & SONS, INC.
LEHMAN BROTHERS
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
as Representatives of the several Underwriters
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Gary Antenberg
---------------------------
Name: Gary Antenberg
Title: Vice President
SCHEDULE A
Number of Preferred Securities
Underwriters To Be Purchased
------------ ---------------
Merrill Lynch, Pierce, Fenner & Smith 830,000
Incorporated
CIBC Oppenheimer Corp. 815,000
A.G. Edwards & Sons, Inc. 815,000
Lehman Brothers Inc. 815,000
PaineWebber Incorporated 815,000
Prudential Securities Incorporated 815,000
Salomon Smith Barney Inc. 815,000
ABN AMRO Incorporated 80,000
BT Alex. Brown Incorporated 80,000
Robert W. Baird & Co. Incorporated 80,000
Bear, Stearns & Co. Inc. 80,000
Dain Rauscher Incorporated 80,000
Donaldson, Lufkin & Jenrette Securities Corporation 80,000
EVEREN Securities, Inc. 80,000
Fleet Securities, Inc. 80,000
Legg Mason Wood Walker, Incorporated 80,000
McDonald & Company Securities, Inc. 80,000
Piper Jaffray Inc. 80,000
Raymond James & Associates, Inc. 80,000
Sands Brothers & Co., Ltd. 80,000
SG Cowen Securities Corporation 80,000
Tucker Anthony Incorporated 80,000
Warburg Dillon Read LLC 80,000
Wheat First Securities, Inc. 80,000
Advest, Inc. 40,000
J.C. Bradford & Co. 40,000
Craigie Incorporated 40,000
Crowell, Weedon & Co. 40,000
Fahnestock & Co. Inc. 40,000
Fidelity Capital Markets 40,000
A division of National Financial Services Corp.
First Albany Corporation 40,000
Gibraltar Securities Co. 40,000
Gruntal & Co., L.L.C. 40,000
A-1
Number of Preferred Securities
Underwriters To Be Purchased
------------ ---------------
J.J.B. Hilliard, W.L. Lyons, Inc. 40,000
Interstate/Johnson Lane Corporation 40,000
Janney Montgomery Scott Inc. 40,000
Kirkpatrick, Pettis, Smith, Polian Inc. 40,000
McGinn, Smith & Co., Inc. 40,000
Mesirow Financial, Inc. 40,000
Morgan Keegan & Company, Inc. 40,000
David A. Noyes & Company 40,000
The Robinson-Humphrey Company, LLC 40,000
Roney Capital Markets 40,000
A division of First Chicago Capital Markets Inc.
Stifel, Nicolaus & Company, Incorporated 40,000
Stone & Youngberg 40,000
TD Securities (USA) Inc. 40,000
Utendahl Capital Partners, L.P. 40,000
--------------------------
Total 8,000,000
A-2
SCHEDULE B
----------
Significant Subsidiaries
________________________
Jefferson National Life Insurance Company of Texas
CIHC, Incorporated
Bankers Life Insurance Company of Illinois
Bankers Life and Casualty Company
American Life Holdings, Inc.
Conseco Annuity Assurance Company
American Travellers Life Insurance Company
Wabash Life Insurance Company
Pioneer Financial Services, Inc.
Capitol American Financial Corporation
Green Tree Financial Corporation
B-1