Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
September 10, 2003 by and between CONSECO, INC., a Delaware corporation (the
"Issuer"), and the holders of convertible exchangeable preferred stock of the
Issuer named on the signature pages hereto; which holders shall be limited to
(i) holders of 5% or more of such class of the Issuer's securities as of the
Effective Date, (ii) other holders who have notified the Issuer in writing that
they are members of a "group" (as such term is defined for purposes of the
Exchange Act) of holders owning 5% or more of such class of the Issuer's
securities as of the Effective Date and (iii) other holders who have notified
the Issuer in writing that they are "underwriters" (as such term is defined in
Section 1145 of the Bankruptcy Code (as defined below)) (the "Initial Holders").
WHEREAS, concurrently herewith the Issuer is consummating the issuance of
Conseco, Inc. Class A Convertible Exchangeable Preferred Stock (the "Preferred
Stock"), pursuant to a reorganization plan (the "Plan") under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code");
WHEREAS, the Initial Holders will be holders of Preferred Stock of the
Issuer following the confirmation of the Plan;
WHEREAS, the parties hereto wish to enter into this Agreement in order to
provide for certain arrangements concerning their relationship following the
issuance of the Preferred Stock;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. As used herein the following terms shall have
the following meanings:
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under common control with such Person. For the
purposes of this definition, "control" when used with respect to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" has the meaning set forth in the Preamble hereto.
"Angelo Gordon" means Angelo Gordon & Co., L.P. and its Affiliates.
"Bank of America" means Bank of America, N.A. and its Affiliates.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $0.01, of the Issuer.
"Common Registration Rights Agreement" means that certain Registration
Rights Agreement dated of even date herewith by and between the Issuer and
certain holders of Common Stock.
"Demand Registration" means a Demand Registration as defined in Section
2.2.
"Effective Date" means the date the Plan becomes effective under the
Bankruptcy Code.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Holder" shall mean any Initial Holder who holds Registrable Securities or
any assignee or transferee of a Registrable Security unless such Registrable
Security is acquired in a public distribution pursuant to a registration
statement under the Securities Act or pursuant to a transaction exempt from
registration under the Securities Act where securities sold in such transaction
may be resold without subsequent registration under the Securities Act.
"Issuer" has the meaning set forth in the Preamble hereto.
"Naugatuck" means Naugatuck Holding Corp. and its Affiliates.
"Person" means any individual, corporation, partnership, trust, limited
liability company, government or governmental agency.
"Piggy-Back Registration" means a Piggy-Back Registration as defined in
Section 2.3.
"Preferred Stock" has the meaning set forth in the preamble hereto.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" means (i) the Preferred Stock, (ii) any other
securities that may be issued or distributed in respect of such Preferred Stock
by way of any stock split, stock dividend, exchange or other distribution,
recapitalization, reclassification, merger, consolidation or similar event and
(iii) the shares of Common Stock issuable upon conversion or exchange of the
Preferred Stock. For the purposes of this Agreement, Registrable Securities of
any Holder will cease to be Registrable Securities when (a) a registration
statement covering such Registrable Securities has been declared effective and
such Registrable Securities have been sold pursuant to such effective
registration statement or (b) in the opinion of counsel for the Issuer the sale
of such Holder's Registrable Securities are not required to be registered under
the Securities Act.
"Securities" means the Preferred Stock.
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"Securities Act" means the United States Securities Act of 1933, as
amended.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement under the Securities Act.
"Shelf Registration Statement" means a Shelf Registration Statement as
defined in Section 2.1.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 Shelf Registration.
(a) As expeditiously as practicable (but in no event after the later of (i)
15 days after the date the Issuer is required to file its first annual report on
Form 10-K or quarterly report on Form 10-Q in each case including fresh start
financial statements, whichever comes first and (ii) 90 days after the Effective
Date), the Issuer shall file with the Commission a registration statement (the
"Shelf Registration Statement") relating to the offer and sale of Registrable
Securities by the Holders to the public, from time to time, on a delayed or
continuous basis (but not involving any underwriting). The Issuer shall use its
reasonable best efforts to cause the Shelf Registration Statement to be declared
effective by the Commission as soon as practicable thereafter.
(b) The Issuer agrees to use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective and not to suspend use of the
prospectus included therein in order to permit the prospectus included therein
to be usable by the Holders until the earlier of: (1) the date all Holders could
sell shares free of any volume limitations imposed by Rule 144 of the Securities
Act; (2) the date all Holders have disposed of all Registrable Securities; or
(3) three years from the date on which such Shelf Registration Statement was
declared effective; provided, that the Issuer shall be deemed to have used its
reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if it determines, in its reasonable judgment and
upon the advice of counsel, as authorized by a resolution of its Board of
Directors, that the filing of such Shelf Registration Statement or the
maintenance of effectiveness of such Shelf Registration Statement or prospectus
included therein would materially interfere with any material financing,
corporate reorganization or other material transaction involving the Issuer or
any subsidiary, or would require premature disclosure thereof, and the Issuer
promptly gives the Holders written notice of such determination, containing a
general statement of the reasons for such postponement or suspension and an
approximation of the anticipated delay; provided, however, that the failure to
keep the Shelf Registration Statement effective and usable for offers and sales
of Registrable Securities for such reasons shall last no longer than 120 days in
the aggregate in any 12-month period.
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SECTION 2.2 Demand Registration.
(a) Commencing 30 days following the Effective Date, any Holder of
Registrable Securities may make a written request substantially in the form of
Annex A hereto for registration under the Securities Act of all or part of its
or their Registrable Securities (a "Demand Registration"); provided that the
Issuer shall not be obligated to effect (i) any Demand Registration, except for
the first Demand Registration hereunder, unless the aggregate market value of
the Registrable Securities covered by such written requests (calculated as of a
recent date as determined by the Issuer) is at least $50,000,000; provided that
in the case of a Demand Registration which may only be requested by Angelo
Gordon, Bank of America or Naugatuck (as provided in clause (iii) below) the
aggregate market value of the Registrable Securities covered by such written
requests (calculated as of a recent date as determined by the Issuer) is at
least $25,000,000, (ii) more than one Demand Registration in any 6-month period,
(iii) more than five Demand Registrations in total (of which, one such Demand
Registration may only be requested by Angelo Gordon, one such Demand
Registration may only be requested by Bank of America and one such Demand
Registration may only be requested by Naugatuck), (iv) any Demand Registration
within 3 months of a previous registration in which the holders of Registrable
Securities were given piggyback rights pursuant to Section 2.3 and in which
there was no reduction in the number of Registrable Securities requested to be
included or (v) any Demand Registration at a time when doing so would be in
violation of Section 5.3(b) of the Common Registration Rights Agreement. Each
such request will specify the number of Registrable Securities proposed to be
sold and will also specify the intended method of disposition thereof and may
specify the book-running managing Underwriter and any additional investment
bankers and managers to be used in connection with an underwritten offering.
Promptly after receipt of requests for the registration of Registrable
Securities with an aggregate market value of at least $50,000,000 (or
$25,000,000 for a Demand Registration which may only be requested by Angelo
Gordon, Bank of America or Naugatuck, as provided in clause (iii) above), in
each case, determined as aforesaid or, in the case of the first Demand
Registration hereunder, promptly after the receipt of a request for the
registration of Registrable Securities, the Issuer will give written notice of
such registration request to all other Holders of the Registrable Securities and
include in such registration all such Registrable Securities with respect to
which the Issuer has received a written request for inclusion therein within 30
calendar days after written notice has been mailed. Each such request will also
specify the number of Registrable Securities to be registered and the intended
method of disposition thereof. The registration statement to be filed pursuant
to a Demand Registration shall not include securities being sold for the account
of other persons and entities (other than securities being sold for the account
of other persons and entities pursuant to the piggy-back registration rights
provisions of the Common Registration Rights Agreement) or for the account of
the Issuer, unless the Holders of a majority of the Registrable Securities to be
included in such Demand Registration consent in writing thereto.
(b) A registration will not count as a Demand Registration until it has
become effective and remains effective for not less than 90 days or such shorter
period as is required for all of the Registrable Securities so registered to be
sold unless such Demand Registration has not become effective due solely to the
fault of, or is terminated at the request of, the requesting Holders.
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(c) If the Holders of a majority of the Registrable Securities to be
registered in a Demand Registration so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. Unless otherwise specified by the Holders of a majority
of the Registrable Securities to be included in such Demand Registration, and
subject to the approval of such Holders, which shall not be unreasonably
withheld, the Issuer shall select the book-running managing Underwriter in
connection with such offering and any additional investment bankers and managers
to be used in connection with the offering. Any book-running managing
Underwriter or additional investment bankers and managers specified by the
Holders shall be subject to the approval of the Issuer, which shall not be
unreasonably withheld. To the extent 25% or more of the Registrable Securities
so requested to be registered are excluded from the offering in accordance with
Section 2.4, the registration of such offering will not count as a Demand
Registration.
SECTION 2.3 Piggy-Back Registration. If the Issuer proposes to file a
registration statement under the Securities Act with respect to an equity
offering by the Issuer for its own account or for the account of any of its
respective securityholders of any class of equity security (other than a
registration statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the Commission) or a registration statement to be filed in connection
with an exchange offer or offering of securities solely to the Issuer's existing
securityholders), then the Issuer shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event less than 30 calendar days before the anticipated filing date), and
such notice shall offer such Holders the opportunity to register such number of
shares of Registrable Securities as each such Holder may request (a "Piggy-Back
Registration"). The Issuer shall use its reasonable best efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Issuer included therein.
SECTION 2.4 Reduction of Offering. Notwithstanding anything to the contrary
contained herein, if the managing Underwriter or Underwriters of an offering
described in Section 2.2 or 2.3 shall advise the Issuer that, in its judgment,
either (a) the size of the offering that the Holders, the Issuer and such other
persons intend to make exceeds the size that can be sold in an orderly manner in
such offering within a price range acceptable to the Holders, the Issuer or such
other persons participating in the offering, or (b) in the case of a Piggy-Back
Registration, the type of securities proposed to be offered in such registration
statement by the Holders or such other persons would materially adversely affect
such offering, then in the case of (a) above, the amount of securities to be
offered for the accounts of Holders shall be reduced pro rata (according to the
Registrable Securities proposed for registration), to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount recommended by such managing Underwriter or Underwriters; provided that,
in the case of a Piggy-Back Registration initiated for the account of the
Issuer, the amount of Registrable Securities being offered by Holders shall be
reduced before the amount of securities being offered by the Issuer is reduced
but, subject to (b) above, the proportion by which the amount of Registrable
Securities being offered by Holders is reduced shall not exceed the proportion
by which the amount of such securities intended to be offered by such other
persons or entities is reduced; provided further that, in the case of a
Piggy-Back Registration initiated for the account of other persons or entities,
then the amount of Registrable Securities being offered by Holders shall be
reduced
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before the amount of securities being offered by such other persons or entities
or the Issuer is reduced; and provided further that, in the case of a Demand
Registration, if securities are being offered for the account of other persons
or entities or for the account of the Issuer, then the amount of such securities
being offered by such other persons or entities or by the Issuer shall be
reduced before the amount of any Registrable Securities intended to be offered
by Holders is reduced; and in the case of (b) above, the type of securities
proposed to be offered in such registration statement by Holders or such other
persons shall not be included in such registration statement.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1 Filings; Information. Whenever Holders validly request that any
Registrable Securities be registered pursuant to Section 2.2 hereof, the Issuer
will use its reasonable best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Issuer will as expeditiously as practicable prepare and file with
the Commission a registration statement on any form for which the Issuer then
qualifies or which counsel for the Issuer shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its reasonable best efforts to cause such filed registration statement to
become and remain effective for a period of not less than 90 days; provided that
if the Issuer shall furnish to the Holders making a request pursuant to Section
2.2 a resolution of its Board of Directors stating that in their good faith
judgment it would be disadvantageous to the Issuer or its shareholders for such
a registration statement to be filed as expeditiously as practicable or that
such registration and offering would materially interfere with any material
financing, corporate reorganization or other material transaction involving the
Issuer or any of its subsidiaries, or would require premature disclosure
thereof, and promptly gives the Holders making such request written notice that
such determination has been made (a "Valid Business Reason"), the Issuer shall
have a period of not more than 180 days within which to file such registration
statement measured from the date the notice is sent to the Holders in accordance
with Section 2.2 or, in the case of a registration statement that has been filed
in connection with a Demand Registration, the Issuer may cause such registration
statement to be withdrawn and its effectiveness terminated or may postpone
amending or supplementing such registration statement until such Valid Business
Reason no longer exists.
(b) The Issuer will prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the registration form utilized by the Issuer or by
the instructions applicable to such registration form or by the Securities Act
or the rules and regulations promulgated thereunder, until the earlier of (i)
such time as all of such Registrable Securities and other securities have been
disposed of in accordance with the intended methods of disposition or otherwise
by the Selling Holders set
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forth in such registration statement and (ii) 90 days, in either case, after the
initial effective date of such registration statement.
(c) The Issuer will, prior to filing a registration statement or prospectus
or any amendment or supplement thereto, furnish copies of all such documents to
each Selling Holder and each Underwriter, if any, and their respective counsel,
which documents shall be subject to the review and comment of such Selling
Holder, Underwriter and counsel, and thereafter furnish, without charge, to such
Selling Holder and Underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Selling Holder or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder. The information contained
in such documents are confidential shall not be disclosed by such Selling Holder
unless (i) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement or (ii) the release of
such information is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction. Each Selling Holder of such Registrable Securities
agrees that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Issuer or its Affiliates unless and until
such information is made generally available to the public. Each Selling Holder
of such Registrable Securities further agrees that it will, upon learning that
disclosure of such information is sought in a court of competent jurisdiction,
give notice to the Issuer and allow the Issuer, at its expense, to undertake
appropriate action to prevent disclosure of the information deemed confidential.
(d) After the filing of the registration statement, the Issuer will
promptly notify each Selling Holder of Registrable Securities covered by such
registration statement of any stop order issued or threatened by the Commission
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.
(e) The Issuer will use its reasonable best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as any Selling Holder reasonably (in
the light of such Selling Holder's intended plan of distribution) requests and
(ii) cause such Registrable Securities to be registered with or approved by such
other federal and state governmental agencies or authorities as may be necessary
to enable the Selling Holders to consummate the disposition of such Registrable
Securities and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Selling Holder to consummate the
disposition of the Registrable Securities owned by such Selling Holder; provided
that the Issuer will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (e), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.
(f) The Issuer will promptly notify each Selling Holder of such Registrable
Securities, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the discovery of any condition or the
occurrence of any event requiring the preparation of a supplement or amendment
to such prospectus so that, as thereafter delivered to
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the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and promptly make available to each Selling Holder any such
supplement or amendment.
(g) The Issuer will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities.
(h) The Issuer will make available for inspection by any Selling Holder,
any Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
such Selling Holder or Underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Issuer (collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Issuer's
officers, directors and employees to supply all information reasonably requested
by any Inspectors in connection with such registration statement. Records which
the Issuer determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such registration statement or (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Each Selling Holder of such Registrable Securities
agrees that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Issuer or its Affiliates unless and until
such information is made generally available to the public. Each Selling Holder
of such Registrable Securities further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Issuer and allow the Issuer, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(i) The Issuer will use reasonable best efforts to cause to be furnished to
each Selling Holder and to each Underwriter, if any, a signed counterpart,
addressed to such Selling Holder or Underwriter, of (i) an opinion or opinions
of counsel to the Issuer and (ii) a comfort letter or comfort letters from the
Issuer's independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions of counsel or comfort
letters, as the case may be, as the managing Underwriter for the offering
reasonably requests.
(j) The Issuer will otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its securityholders, as soon as reasonably practicable, an earnings statement
covering the first fiscal year of the Issuer commencing after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(k) The Issuer will use its reasonable best efforts to cause all such
Registrable Securities to be listed or quoted on each securities exchange or
inter-dealer automated quotation system on which similar securities issued by
the Issuer are then listed or quoted.
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The Issuer may require each Selling Holder of Registrable Securities to
promptly furnish in writing to the Issuer such information regarding such
Selling Holder and the distribution of the Registrable Securities as the Issuer
may from time to time reasonably request and such other information as may be
legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from the Issuer
of the discovery of any condition or the happening of any event, in each case of
the kind described in Section 3.1(f) hereof, such Selling Holder will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Selling Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3.1(f) hereof, and, if so directed by the Issuer, such Selling Holder
will deliver to the Issuer (at the Issuer's expense) all copies, other than
permanent file copies then in such Selling Holder's possession, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. In the event the Issuer shall give such notice, the Issuer shall
extend the period during which such registration statement shall be maintained
effective (including the periods referred to in Sections 3.1(a) and 3.1(b)
hereof) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 3.1(f) hereof to the date when the
Issuer shall make available to the Selling Holders of Registrable Securities
covered by such registration statement a prospectus supplemented or amended to
conform with the requirements of Section 3.1(f) hereof.
SECTION 3.2 Registration Expenses. In connection with any registration
statement required to be filed hereunder, the Issuer shall pay the following
expenses incurred in connection with the registration hereunder (the
"Registration Expenses"): (i) all registration and filing fees, (ii) fees and
expenses of compliance with State securities or "blue sky" laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing, messenger and
customary delivery expenses, (iv) internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with any listing or quotation of the Registrable Securities on any securities
exchange or inter-dealer automated quotation system, (vi) reasonable fees and
disbursements of counsel for the Issuer and customary fees and expenses for
independent certified public accountants retained by the Issuer (including the
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 3.1(i)
hereof), (vii) the reasonable fees and expenses of any special experts retained
by the Issuer in connection with such registration, and (viii) reasonable fees
and expenses of one counsel (who shall be reasonably acceptable to the Issuer)
for the Holders.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification by the Issuer. The Issuer agrees to indemnify
and hold harmless each Selling Holder of Registrable Securities, its officers,
directors, partners, employees, advisors and agents, and each Person, if any,
who controls such Selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, expenses (including without limitation
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reasonable costs of investigation and fees, disbursements and other charges of
counsel) and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
the Issuer shall have furnished any amendments or supplements thereto) or any
preliminary prospectus or any document incorporated by reference in any of the
foregoing, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, expenses or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Issuer by such Selling Holder or on such Selling Holder's behalf expressly for
use therein. The Issuer also agrees to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Selling Holders provided in this Section 4.1.
SECTION 4.2 Indemnification by Holders of Registrable Securities. Each
Selling Holder agrees, severally but not jointly, to indemnify and hold harmless
the Issuer, its officers, directors and agents and each Person, if any, who
controls the Issuer within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Issuer to such Selling Holder, but only with reference to
information related to such Selling Holder furnished in writing by such Selling
Holder or on such Selling Holder's behalf expressly for use in any registration
statement or prospectus relating to the Registrable Securities, or any amendment
or supplement thereto, or any preliminary prospectus; provided that the
liability of any Selling Holder under this Section 4.2 shall be limited to the
net proceeds received by such Selling Holder in the offering giving rise to such
liability. In case any action or proceeding shall be brought against the Issuer
or its officers, directors or agents or any such controlling person, in respect
of which indemnity may be sought against such Selling Holder, such Selling
Holder shall have the rights and duties given to the Issuer, and the Issuer or
its officers, directors or agents or such controlling person shall have the
rights and duties given to such Selling Holder, by the preceding paragraph. Each
Selling Holder also agrees to indemnify and hold harmless Underwriters of the
Registrable Securities, their officers and directors and each person who
controls such Underwriters on substantially the same basis as that of the
indemnification of the Issuer provided in this Section 4.2.
SECTION 4.3 Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 4.1 or
4.2, such person (an "Indemnified Party") shall promptly notify the person
against whom such indemnity may be sought (an "Indemnifying Party") in writing
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that
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the Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without such consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability arising out of such proceeding.
SECTION 4.4 Contribution. If the indemnification provided for in this
Article 4 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages, expenses or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, expenses or liabilities (i) as between the
Issuer and the Selling Holders on the one hand and the Underwriters on the
other, in such proportion as is appropriate to reflect the relative benefits
received by the Issuer and the Selling Holders on the one hand and the
Underwriters on the other from the offering of the Registrable Securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Issuer and the Selling Holders on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, expenses or liabilities, as well as
any other relevant equitable considerations, and (ii) as between the Issuer on
the one hand and each Selling Holder on the other, in such proportion as is
appropriate to reflect the relative fault of the Issuer and of each Selling
Holder in connection with such statements or omissions, as well as any other
relevant equitable considerations. The relative benefits received by the Issuer
and the Selling Holders on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Issuer and the Selling Holders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
the Issuer and the Selling Holders on the one hand and of the Underwriters on
the other 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 Issuer
and the Selling Holders or by the Underwriters. The relative fault of the Issuer
on the one hand and of each Selling Holder on the other 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 such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
11
The Issuer and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 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 did not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the 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, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities of such Selling Holder were offered to the
public exceeds the amount of any damages which such Selling Holder 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Selling Holders' obligations to contribute pursuant to
this Section 4.4 are several in proportion to the proceeds of the offering
received by each such Selling Holder bears to the total proceeds of the offering
received by all the Selling Holders and not joint.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Participation in Underwritten Registrations. No Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and hereunder.
SECTION 5.2 Rule 144 and Rule 145. The Issuer covenants that it will file
any reports required to be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 and Rule 145 under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Issuer will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 5.3 Holdback Agreements. (a) Restrictions on Public Sale by Holder
of Registrable Securities. To the extent not inconsistent with applicable law,
each Holder whose securities are included in a registration statement agrees not
to effect any public sale or distribution of securities of the same class as the
securities being registered or a similar security
12
of the Issuer, or any securities convertible into or exchangeable or exercisable
for such securities, including a sale pursuant to Rule 144 or Rule 145 under the
Securities Act, during the 14 days prior to, and during the up to 180-day period
beginning on, the effective date of such registration statement (except as part
of such registration), if and to the extent requested by the Issuer in the case
of a non-underwritten public offering or if and to the extent requested by the
managing Underwriter or Underwriters in the case of an underwritten public
offering.
(b) Restrictions on Public Sale by the Issuer and Others. The Issuer agrees
not to effect any public sale or distribution of any securities of the same
class as those being registered in accordance with Section 2.2 or Section 2.3
hereof, or any securities convertible into or exchangeable or exercisable for
such securities, during the 14 days prior to, and during the period beginning
on, the effective date requested by the managing Underwriter or Underwriters
(which period shall not exceed 90 days) of any registration statement with
respect to an underwritten public offering (except as part of such registration
statement as provided herein); provided that the provisions of this paragraph
(b) shall not prevent the conversion or exchange of any securities pursuant to
their terms into or for other securities.
SECTION 5.4 Delay of Registration. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the implementation of
this Agreement.
SECTION 5.5 Governing Law. This Agreement shall be interpreted, construed
and enforced in accordance with the laws of the State of New York.
SECTION 5.6 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of the parties hereto.
SECTION 5.7 Entire Agreement; Amendment; Waiver. This Agreement constitutes
the full and entire understanding and agreement between the parties hereto with
respect to the subject hereof. Neither this Agreement nor any terms hereof may
be amended, waived, discharged or terminated, except by a written instrument
signed by the holders of at least a majority of the Registrable Securities
outstanding as of such time and the Issuer and any such amendment, waiver,
discharge or termination shall be binding on all the Holders, but in no event
shall the obligation of any Holder hereunder be materially increased, except
upon the written consent of such Holder.
SECTION 5.8 Notices, etc. All notices and other communications required or
permitted hereunder to the Issuer shall be in writing and shall be mailed by
first-class mail, postage prepaid, or delivered by hand, facsimile transmission
or by messenger, addressed to it at 11825 North Pennsylvania Street, Carmel, IN
46032, Attn.: General Counsel, or to such other address as the Issuer may
specify by notice to the Holders.
SECTION 5.9 Separability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
13
SECTION 5.10 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
SECTION 5.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
* * * * *
14
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first above written.
CONSECO, INC.
By:/s/Daniel J. Murphy
------------------------------------------
Name: Daniel J. Murphy
Title: Senior Vice President and
Treasurer
ANGELO GORDON & CO., L.P.,
on behalf of itself and its affiliates
By: AG Partners, L.P.,
Its General Partner
By:/s/Jeffrey H. Aronson
-------------------------------------------
Name: Jeffrey H. Aronson
Title: Authorized Signatory
BANK OF AMERICA, N.A.
By:/s/Bridget A. Garavalia
-------------------------------------------
Name: Bridget A. Garavalia
Title: Managing Director
NAUGATUCK HOLDING CORP.
By:/s/Charles O. Freegood
-------------------------------------------
Name: Charles O. Freegood
Title: President
[SIGNATURE PAGE TO PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT]
ANNEX A
FORM OF NOTICE TO BE DELIVERED
IN CONNECTION WITH A REQUEST FOR
DEMAND REGISTRATION
, 200
------------ --
CONSECO, INC.
11825 N. Pennsylvania Street
Carmel, IN 46032
Dear Sirs:
Pursuant to Section 2.2 of the Registration Rights Agreement dated
September 10, 2003, the undersigned hereby requests Conseco, Inc. (the
"Company") to register __________ shares of the Company's Convertible
Exchangeable Preferred Stock, of which the undersigned is the registered holder.
[We request that such securities be sold in an underwritten offering [to be
lead-managed by ____________]].
[Name of Transferor]
By:
---------------------------------