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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 2, 1999
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AMERICAN GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 1-7981 74-0483432
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or organization) Identification No.)
2929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 522-1111
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ITEM 5. OTHER EVENTS.
On September 2, 1999, American General Corporation ("American General")
priced the public offering of 8,000,000 7 7/8% Trust Originated Preferred
Securities ("TOPrS") of American General Capital I, a subsidiary trust of
American General, at $25 per security. Each TOPrS security will pay cumulative
cash distributions at the annual rate of 7 7/8 percent of the stated $25
liquidation amount per security, payable quarterly commencing on September 30,
1999. Closing is scheduled for September 8, 1999, subject to customary closing
conditions. Proceeds from the offering of approximately $193.2 million (after
underwriting and other associated costs) will be used to repay indebtedness. In
connection with the issuance of the TOPrS securities, American General will
issue $206,185,575 principal amount of its 7 7/8% Junior Subordinated Debentures
due 2048 to American General Capital I. The Preferred Securities will be issued
pursuant to the shelf registration statement filed under the Securities Act of
1933, as amended, of American General, American General Capital I and certain
other trusts (Registration Statement Nos. 333-40583, et seq.).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
1.1 Underwriting Agreement for Preferred Securities of
American General Capital I.
1.2 Pricing Agreement dated September 2, 1999.
4.1 Resolutions establishing terms of 7 7/8% Junior
Subordinated Debentures due 2048.
4.2 Form of 7 7/8% Junior Subordinated Debentures due 2048
(included in Exhibit 4.1).
4.3 Form of Amended and Restated Declaration of Trust of
American General Capital I among American General, as
sponsor, the Trustees named therein and the holders from
time to time of undivided beneficial interest in the
assets of American General Capital I.
4.4 Form of Global Certificate for Preferred Securities of
American General Capital I (included in Exhibit 4.3).
4.5 Preferred Securities Guarantee Agreement between
American General, and Bankers Trust Company.
8.1 Opinion of Vinson & Elkins L.L.P. as to certain federal
income tax matters.
23.1 Consent of Vinson & Elkins L.L.P. (included in Exhibit
8.1).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN GENERAL CORPORATION
Date: September 8, 1999 By: /s/ JAMES L. GLEAVES
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Name: James L. Gleaves
Title: Vice President and Treasurer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 Underwriting Agreement for Preferred Securities of American General
Capital I.
1.2 Pricing Agreement dated September 2, 1999.
4.1 Resolutions establishing terms of 7 7/8% Junior Subordinated
Debentures due 2048.
4.2 Form of 7 7/8% Junior Subordinated Debentures due 2048 (included in
Exhibit 4.1).
4.3 Form of Amended and Restated Declaration of Trust of American General
Capital I among American General, as sponsor, the Trustees named
therein and the holders from time to time of undivided beneficial
interest in the assets of American General Capital I.
4.4 Form of Global Certificate for Preferred Securities of American
General Capital I (included in Exhibit 4.3).
4.5 Preferred Securities Guarantee Agreement between American General, and
Bankers Trust Company.
8.1 Opinion of Vinson & Elkins L.L.P. as to certain federal income tax
matters.
23.1 Consent of Vinson & Elkins L.L.P. (included in Exhibit 8.1).
</TABLE>
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EXHIBIT 1.1
AMERICAN GENERAL CAPITAL I
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT THAT AMERICAN GENERAL CAPITAL I
HAS FUNDS AVAILABLE BY
AMERICAN GENERAL CORPORATION
UNDERWRITING AGREEMENT
American General Capital I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as sponsor of the Trust and as guarantor (the
"Company"), propose to enter into a Pricing Agreement (the "Pricing Agreement")
in the form of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated herein
and therein, to issue and sell to the firms named in Schedule I to the Pricing
Agreement (such firms constituting the "Underwriters") certain preferred
securities representing beneficial interests in the assets of the Trust. The
preferred securities representing undivided beneficial interests in the assets
of the Trust specified in Schedule II to the Pricing Agreement as Initial
Preferred Securities are referred to as the "Initial Preferred Securities". If
specified in the Pricing Agreement, the Trust may grant the Underwriters the
right to purchase at their election an additional number of preferred securities
representing undivided beneficial interests in the assets of the Trust,
specified as provided in the Pricing Agreement as provided in Section 2 hereof
(the "Option Preferred Securities"). The Initial Preferred Securities and the
Option Preferred Securities, if any, which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively referred to as the
"Preferred Securities". The Preferred Securities will be guaranteed by the
Company as to the payment of distributions, and as to payments on liquidation or
redemption, to the extent set forth in a guarantee agreement (the "Guarantee")
between the Company and Bankers Trust Company, as trustee (the "Guarantee
Trustee"). The proceeds of the sale of the Preferred Securities and of the
Trust's common securities (the "Common Securities") will be invested by the
Trust in Junior Subordinated Debentures (the "Junior Subordinated Debentures")
of the Company to be issued pursuant to a Junior Subordinated Indenture, dated
as of November 15, 1997 (the "Indenture"), between the Company and Bankers Trust
Company, as trustee (the "Debenture Trustee"). The Preferred Securities may be
exchangeable into such Junior Subordinated Debentures or other property or
securities if so specified in Schedule II to the Pricing Agreement. The offer
and sale of the Preferred Securities, the Guarantee and the Junior Subordinated
Debentures (referred to herein, individually or together, as the "Securities")
have been registered under the registration statement referred to in Section
1(a) below.
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The representative or representatives of the Underwriters, if any,
specified in the Pricing Agreement are referred to herein as the
"Representatives"; provided, however, that if the Pricing Agreement does not
specify any representative of the Underwriters, the term "Representatives" shall
mean the Underwriters.
The Pricing Agreement will incorporate by reference the provisions of
this Agreement, except as otherwise provided therein.
Section 1. Representations and Warranties. Each of the Trust and the
Company, jointly and severally, represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement (Nos. 333-40583, 333-40583-01,
333-40583-02, 333-40583-03 and 333-40583-04) on Form S-3 relating to,
among other securities, the Securities, and all post-effective
amendments thereto required to the date of the Pricing Agreement, have
been filed with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered or to be delivered to
the Representatives (and, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus contained therein on or prior to the date of the Pricing
Agreement, to the Representatives for each of the other Underwriters)
and such registration statement and each such amendment thereto, if
any, have been declared effective by the Commission and no stop order
suspending the effectiveness thereof has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission.
For purposes of this Agreement, (i) the term "Registration Statement"
shall mean the foregoing registration statement, including all exhibits
thereto and all documents incorporated by reference therein as of the
effective date thereof; and any reference to the Registration Statement
as amended (or similar wording) shall mean the Registration Statement,
including all post-effective amendments thereto and all documents filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the effective date of the Registration Statement
and that are deemed to be incorporated by reference in the Registration
Statement upon the filing of such documents with the Commission and the
information, if any, deemed to be a part thereof pursuant to Rule 434
under the Securities Act of 1933, as amended (the "Act"); (ii) the term
"Prospectus" shall mean the prospectus, including all documents
incorporated by reference therein as of the date thereof, relating to
the Securities in the form included in the Registration Statement as of
the effective date thereof or, if different, in the form in which it
has most recently been filed or transmitted for filing with the
Commission on or prior to the date of the Pricing Agreement, as amended
or supplemented to reflect the terms of the offering of the Securities
by (A) if the Company elects not to rely on Rule 434 under the Act, the
Prospectus Supplement contemplated by Section 3(a) hereof, in the form
in which such Prospectus Supplement is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 3(a)
hereof or (B) if the Company elects to rely on Rule 434 under the Act,
the Term Sheet contemplated by Section 3(a) hereof, in the form in
which such Term Sheet is filed with the Commission pursuant to Rule
424(b) (7) under the Act in accordance with Section 3(a) hereof (and,
in such case, the term "Prospectus" shall include such Term Sheet and
the Rule 434(c) (2) Prospectus referred to in Section 3(a), if any,
each individually and taken together); any reference to the date of the
Prospectus shall be deemed to refer to the date of such Prospectus
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Supplement or Term Sheet, as the case may be, and any reference to the
Prospectus as amended or supplemented (or similar wording) shall mean
the Prospectus, including all supplements thereto and all documents
filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of the Prospectus
and that are deemed to be incorporated by reference in the Prospectus
upon the filing of such documents with the Commission; and (iii) the
term "Preliminary Prospectus" shall mean any preliminary prospectus
relating to the Securities, including all documents incorporated by
reference therein as of the date thereof, included in the registration
statement prior to the effectiveness thereof or filed with the
Commission pursuant to Rule 424(a) under the Act; and any reference to
any Preliminary Prospectus as amended or supplemented (or similar
wording) shall mean such Preliminary Prospectus, including all
documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of such
Preliminary Prospectus and that are deemed to be incorporated by
reference in the Preliminary Prospectus upon the filing of such
documents with the Commission. If the Company files a registration
statement to register a portion of the Securities and relies on Rule
462(b) under the Act for such registration statement to become
effective upon filing with the Commission (the "Rule 462 (b)
Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (Nos. 333-40583, 333-40583-01,
333-40583-02, 333-40583-03 and 333-40583-04 (the "Original Registration
Statement")) and the Rule 462 (b) Registration Statement, as each such
registration statement may be amended pursuant to the Act;
(b) The documents incorporated by reference in the Prospectus,
as amended or supplemented, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder, and,
when read together with the other information included or incorporated
by reference in the Prospectus at the time the Registration Statement
became effective, at the time any post-effective amendment thereto
became effective and at the time any annual report on Form 10-K was
filed by the Company and incorporated by reference into the Prospectus,
none of such documents 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; and any
further documents so filed during the period during which delivery of a
prospectus is required in connection with the offering or sale of the
Preferred Securities, and incorporated by reference in the Prospectus,
when such documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder and, when read together
with the other information included or incorporated by reference in the
Prospectus at the time such documents are filed with the Commission,
none of such documents will 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 Trust or the Company by or on
behalf of an Underwriter through the Representatives expressly for use
in the Prospectus;
(c) The Registration Statement, as amended, and the
Prospectus, as amended, conform, and any amendments or supplements
thereto filed during the period during
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which delivery of a prospectus is required in connection with the
offering or sale of the Securities will conform, in all material
respects to the applicable requirements of the Act, the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder. The Registration Statement,
as amended, and the Prospectus, as amended or supplemented, each as of
the effective date of the Registration Statement, as of the effective
date of each post-effective amendment to the Registration Statement, if
any, and at the time any annual report on Form 10-K was filed by the
Company and incorporated by reference into the Prospectus, did not, as
of the date of the Pricing Agreement do not, and as of the Time of
Delivery (as hereinafter defined) and during the period during which
delivery of a prospectus is required in connection with the offering
and sale of the Securities, 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 Trust or the
Company by or on behalf of an Underwriter through the Representatives
expressly for use in the Prospectus, or to the Statements of
Eligibility on Form T-1 (the "Forms T-1"), except as to statements or
omissions in such Forms T-1 made in reliance upon information furnished
in writing to the Debenture Trustee or the Guarantee Trustee by or on
behalf of the Trust or the Company for use therein;
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has been
no material adverse change, nor any development or event involving a
prospective material adverse change, in the business, financial
condition, shareholders' equity (without considering the effect of
unrealized gains and losses on debt and equity securities classified as
"available for sale" under Statement of Financial Accounting Standards
(SFAS) No. 115) or results of operations of the Trust or of the Company
and its subsidiaries taken as a whole, other than as set forth or
contemplated in the Prospectus as amended or supplemented, whether or
not arising in the ordinary course of business;
(e) The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act of the
State of Delaware (the "Delaware Business Trust Act") with the power
and authority to own its properties and conduct its business as
described in the Prospectus, and the Trust has conducted no business to
date, and it will conduct no business in the future that would be
inconsistent with the description of the Trust set forth in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Declaration of Trust dated as
of November 14, 1997 (the "Declaration") (and, at each Time of Delivery
(as defined in Section 2), the Amended and Restated Declaration of
Trust (the "Amended Declaration") among the Company , the trustees
named therein (the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust), and the
other agreements and instruments contemplated by the Declaration or the
Amended Declaration; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this
Agreement, the Declaration or the Amended Declaration and described in
the Prospectus; based on expected operations and current law, the Trust
is not and will not be classified as an association taxable as a
corporation
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for United States federal income tax purposes; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature;
(f) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Texas with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases substantial properties, or conducts business, and where the
failure so to qualify and be in good standing would have a material
adverse effect on the business of the Company and its subsidiaries
taken as a whole; each of the Company's consolidated subsidiaries the
consolidated assets of which constitute at least 15 percent of the
consolidated assets of the Company (herein the "Selected Subsidiaries")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, has
corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases substantial properties, or conducts business, and
where the failure so to qualify and be in good standing would have a
material adverse effect on the business of the Company and its
subsidiaries taken as a whole; and each of the Company and the Selected
Subsidiaries has all required authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental
regulatory officials and bodies (including, without limitation, each
insurance regulatory authority having jurisdiction over the Company or
any insurance subsidiary of the Company) to own or lease its properties
and conduct its business as described in the Prospectus, except such
authorizations, approvals, orders, licenses, certificates and permits
which, if not obtained, would not have a material adverse effect on the
business of the Company and its subsidiaries taken as a whole, and
neither the Company nor any of the Selected Subsidiaries has received
any notice of proceedings relating to the revocation or modification of
any such authorization, approval, order, license, certificate or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the
business of the Company and its subsidiaries taken as a whole;
(g) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to employee benefit plans, dividend
reinvestment plans, or the exercise of convertible securities or
options referred to in the Prospectus or subsequent purchases, if any,
pursuant to the Company's share buyback program); and all of the issued
and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, and
conform in all material respects to the description thereof contained
in the Prospectus;
(h) All of the outstanding shares of capital stock of each of
the Selected Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable, and (except for any directors'
qualifying shares) are owned, directly or indirectly, by the Company,
free and clear of all liens and encumbrances;
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(i) The Preferred Securities have been duly and validly
authorized by the Trust, and, when the Preferred Securities are issued
and delivered against payment therefor as provided herein and in the
Pricing Agreement, such Preferred Securities will be duly and validly
issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and will conform to the description of the
Preferred Securities contained in the Prospectus; the issuance of the
Preferred Securities is not subject to preemptive or other similar
rights; the Preferred Securities will have the rights set forth in the
Amended Declaration, and the terms of the Preferred Securities are
valid and binding on the Trust; the Preferred Securities 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;
(j) The Common Securities of the Trust have been duly and
validly authorized by the Trust and upon delivery by the Trust to the
Company against payment therefor as described in the Prospectus will be
duly and validly issued undivided beneficial interests in the assets of
the Trust and will conform 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 each Time of Delivery (as
defined in Section 2 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly or indirectly owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity;
(k) The issue and sale of the Preferred Securities and the
Common Securities by the Trust, the purchase of the Junior Subordinated
Debentures by the Trust, the exchange by the Trust of Junior
Subordinated Debentures for Preferred Securities, the compliance by the
Trust with all of the provisions of this Agreement and the Pricing
Agreement, and the consummation of the other transactions herein and
therein contemplated will not conflict with or result in any violation
of (i) the Declaration, the Amended Declaration or the Certificate of
Trust dated November 14, 1997 (the "Certificate of Trust") or (ii) any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its
properties, in any manner which, in the case of clause (ii), would have
a material adverse effect on the Trust; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Preferred Securities and the Common Securities by the Trust, the
purchase of the Junior Subordinated Debentures by the Trust, the
exchange by the Trust of Junior Subordinated Debentures for Preferred
Securities, or the consummation by the Trust of the other transactions
contemplated by this Agreement or the Pricing Agreement, except such as
have been, or will have been prior to the Time of Delivery, obtained
under the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or "blue sky" or state insurance laws in
connection with the purchase and distribution of the Preferred
Securities by the Underwriters;
(l) The issue and sale of the Preferred Securities and the
Common Securities by the Trust, the issue by the Company of the
Guarantee, the issue and sale by the Company of the Junior Subordinated
Debentures, the exchange by the Trust of the Junior Subordinated
Debentures for Preferred Securities, the compliance by each of the
Trust
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and the Company with all of the provisions of this Agreement, the
Pricing Agreement, the Declaration, the Amended Declaration, the
Certificate of Trust, the Guarantee, the Junior Subordinated Debentures
and the Indenture, and the consummation of the other transactions
contemplated herein and therein will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument for money borrowed to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, or (ii) result in any violation of (x) the provisions of the
Restated Articles of Incorporation, as amended, or the Amended and
Restated Bylaws of the Company or (y) any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Selected Subsidiaries or
any of their properties, in any manner which, in the case of clauses
(i) and (ii)(y), would have a material adverse effect on the business
of the Company and its subsidiaries taken as a whole; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue by the Company of the Guarantee, the issue and sale by the
Company of the Junior Subordinated Debentures, the exchange by the
Trust of Junior Subordinated Debentures for Preferred Securities, or
the consummation by the Company of the other transactions contemplated
by this Agreement, the Pricing Agreement, the Declaration, the Amended
Declaration, the Certificate of Trust, the Indenture or the Guarantee,
except such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or "blue sky" laws or state
insurance laws in connection with the purchase and distribution of the
Preferred Securities by the Underwriters;
(m) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Trust, the Company or any of its subsidiaries is a party or of which
any property of the Trust, the Company or any of its subsidiaries is
subject which, individually or in the aggregate, are expected to have a
material adverse effect on the business, financial condition, or
results of operations of the Trust or of the Company and its
subsidiaries taken as a whole; and, to the best of the Trust's and the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(n) Neither the Trust nor the Company is or, after giving
effect to the issue and sale of the Preferred Securities and the Junior
Subordinated Debentures, respectively, will be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(o) The Junior Subordinated Debentures have been duly and
validly authorized and, when executed and authenticated pursuant to the
Indenture, and issued and delivered against payment therefor as
contemplated by this Agreement and the Pricing Agreement, will be duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of
the Indenture, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of
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general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company and the Debenture Trustee, will constitute a valid and legally
binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture has been duly qualified under
the Trust Indenture Act; and the Junior Subordinated Debentures and the
Indenture will conform in all material respects with the descriptions
thereof contained in the Prospectus;
(p) The Guarantee has been duly and validly authorized by the
Company and, when executed and delivered by the Company as contemplated
by this Agreement and the Pricing Agreement, will have been duly
executed, issued and delivered, and assuming the valid execution and
delivery by the Guarantee Trustee, will constitute a valid and legally
binding obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; the Guarantee has been duly qualified under the Trust
Indenture Act; and the Guarantee will conform in all material respects
with the description thereof contained in the Prospectus;
(q) The Amended Declaration has been duly and validly
authorized and, when validly executed and delivered by the Company and
the Trustees, will constitute a valid and legally binding obligation of
the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Amended
Declaration will conform in all material respects to the description
thereof contained in the Prospectus; and
(r) In connection with the offering of the Preferred
Securities, neither the Trust nor the Company has taken or will take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result in a violation
of the anti-manipulation provisions under the Exchange Act, including
Regulation M.
Section 2. Purchase and Offering of Securities. The obligation of the
Trust to issue and sell the Preferred Securities and the obligation of any of
the Underwriters to purchase the Preferred Securities shall be evidenced by the
Pricing Agreement, which shall specify the aggregate number of the Initial
Preferred Securities, the maximum member of Option Preferred Securities, if any,
the initial public offering price of such Initial Preferred Securities and
Option Preferred Securities, if any, or the manner of determining such price,
the variable terms of the Preferred Securities, including whether and the terms
on which and terms of the Junior Subordinated Debentures into which the
Preferred Securities may be exchangeable, the form of the Preferred Securities,
the purchase price to the Underwriters of such Preferred Securities, the names
of the Underwriters of such Preferred Securities (subject to substitution as
provided by Section 7 herein), the names of the Representatives of such
Underwriters, the number of such Preferred Securities to be purchased by each
Underwriter and the commission payable to the Underwriters with respect thereto
and shall set forth the date, time and manner of delivery of
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such Initial Preferred Securities and Option Preferred Securities, if any, and
payment therefor. The Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and the Pricing Agreement shall be several and
not joint. Upon the execution of the Pricing Agreement and authorization by the
Representatives of the release of the Initial Preferred Securities, the several
Underwriters propose to offer the Initial Preferred Securities for sale upon the
terms and conditions set forth in the Prospectus.
The Trust may specify in the Pricing Agreement that the Trust thereby
grants to the Underwriters the right (an "Over-allotment Option") to purchase at
their election up to the number of Option Preferred Securities set forth in such
Pricing Agreement, on the same terms as the Initial Preferred Securities, for
the sole purpose of covering over-allotments in the sale of the Initial
Preferred Securities. Any such election to purchase Option Preferred Securities
may be exercised by written notice from the Representatives to the Trust, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Option Preferred Securities to be purchased and the date on which such
Option Preferred Securities are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined below) or, unless the Representatives and the Trust otherwise agree in
writing, earlier than or later than the respective number of business days after
the date of such notice set forth in the Pricing Agreement.
The number of Option Preferred Securities to be added to the number of
Initial Preferred Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement shall be, in each case, the number of Option
Preferred Securities which the Trust has been advised by the Representatives
have been attributed to such Underwriter; provided that, if the Trust has not
been so advised, the number of Option Preferred Securities to be so added shall
be, in each case, that proportion of Option Preferred Securities which the
number of Initial Preferred Securities to be purchased by such Underwriter under
the Pricing Agreement bears to the aggregate number of Initial Preferred
Securities (rounded as the Representatives may determine to the nearest 100
shares). The total number of Preferred Securities to be purchased by all the
Underwriters pursuant to the Pricing Agreement shall be the aggregate number of
Initial Preferred Securities set forth in Schedule I to the Pricing Agreement
plus the aggregate number of Option Preferred Securities which the Underwriters
elect to purchase.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used by the Trust to purchase the Junior Subordinated
Debentures, the Company hereby agrees to pay at each Time of Delivery to the
Representatives, for the accounts of the several Underwriters, an amount per
Preferred Security specified in the Pricing Agreement for the Preferred
Securities to be delivered hereunder at such Time of Delivery.
The Initial Preferred Securities and the Option Preferred Securities to
be purchased by each Underwriter pursuant to the Pricing Agreement, in the form
specified in the Pricing Agreement, shall be delivered by or on behalf of the
Trust to the Representatives, through the facilities of The Depository Trust
Company ("DTC"), for the account of each such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by wire
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transfer to the account specified by the Trust in same day funds, (i) with
respect to the Initial Preferred Securities, all in the manner and at the place
and time and date specified in the Pricing Agreement or at such other place and
time and date as the Representatives and the Trust may agree upon in writing
(such time and date being herein called the "First Time of Delivery") and (ii)
with respect to the Option Preferred Securities, if any, in the manner and at
the time and date specified by the Representatives in the written notice given
by the Representatives of the Underwriters' election to purchase such Option
Preferred Securities, or at such other time and date as the Representatives and
the Trust may agree upon in writing (such time and date, if not the First Time
of Delivery, being herein called the "Second Time of Delivery"). Each such time
and date for delivery is herein called a "Time of Delivery".
At each Time of Delivery, the Company will pay, or cause to be paid,
the compensation payable at such Time of Delivery to the Underwriters in the
same funds and manner as the purchase price for the Preferred Securities to be
paid by the Underwriters to the Trust (any such certified or official bank check
or checks to be payable to the order of the Representatives and any such wire
transfer to be to the account specified by the Representatives).
Section 3. Certain Agreements of the Company. Each of the Trust and the
Company, jointly and severally, agrees with each of the Underwriters:
(a) Immediately following the execution of the Pricing
Agreement, to prepare (i) if the Trust and the Company elect not to
rely on Rule 434 under the Act, an amendment or supplement to the
prospectus related to the Securities to reflect the terms of the
offering of the Securities (the "Prospectus Supplement") in a form
reasonably approved by the Representatives, and to file the Prospectus
Supplement pursuant to Rule 424(b) (2) or (5) under the Act by 3:00
p.m., New York City time, on the business day immediately succeeding
the date of the Pricing Agreement (or such other time as shall be
specified in the Pricing Agreement), or (ii) if the Trust and the
Company elect to rely on Rule 434 under the Act, (A) an abbreviated
term sheet relating to the Preferred Securities, the Guarantee and the
Junior Subordinated Debentures (the "Term Sheet") that complies with
the requirements of Rule 434(c) (3) and (e) under the Act in a form
reasonably approved by the Representatives, and (B) if required by Rule
434(c) (2) under the Act, a form of Prospectus relating to the
Preferred Securities, the Guarantee and the Junior Subordinated
Debentures (the "Rule 434(c) (2) Prospectus") complying with Rule
434(c) (2) under the Act in a form reasonably approved by the
Representatives, and to file such Term Sheet pursuant to Rule 424(b)
(7) under the Act, and any such Rule 434(c) (2) Prospectus pursuant to
Rule 424(b) under the Act, in each case by 3:00 p.m., New York City
time, on the business day immediately succeeding the date of the
Pricing Agreement (or such other time as shall be specified in the
Pricing Agreement); except as otherwise required by law, to make no
amendment or supplement to the Registration Statement or Prospectus
after the date of the Pricing Agreement and prior to any Time of
Delivery which shall be reasonably disapproved by the Representatives
promptly after reasonable notice thereof; for so long as the delivery
of a prospectus is required in connection with the offering or sale of
the Preferred Securities, to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Trust or the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, and to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
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<PAGE> 11
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed or transmitted for filing with the
Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating
to the Securities, of the suspension of the qualification of any of the
Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Preferred Securities, the Guarantee and the Junior Subordinated
Debentures, or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal.
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities and insurance laws of such
jurisdictions as the Representatives may reasonably request and to
comply with such laws to the extent necessary to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may
be necessary to complete the distribution of the Preferred Securities;
provided, however, that in connection therewith neither the Trust nor
the Company shall be required to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so
qualified or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the Securities and
if at such time any event shall have occurred or condition exist as a
result of which the Prospectus, as it may then be amended or
supplemented, would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period, in the
opinion of the Representatives, the Trust or the Company, to amend or
supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify
the Representatives of such event, condition, filing, amendment or
supplement and upon the Representatives' request to file such document
and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance;
(d) In the case of the Company, to make generally available to
its security holders as soon as practicable, but in any event not later
than 90 days following the close of the period covered thereby, an
earnings statement, 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 Rule 158 under the Act) of the
Registration Statement, of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including Rule 158);
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<PAGE> 12
(e) During the period beginning from the date of the Pricing
Agreement and continuing to and including the last Time of Delivery,
not to offer, sell, contract to sell or otherwise dispose of any
Preferred Securities, any other beneficial interests of the Trust, or
any preferred securities or any securities of the Trust or the Company,
as the case may be, that are substantially similar to the Preferred
Securities, including the Guarantee, and including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive Preferred Securities, preferred
securities or any such substantially similar securities of either the
Trust or the Company, without the prior consent of the Representatives;
(f) Not to be or become, at any time prior to the expiration
of three years after the Time of Delivery, an open-end investment
company, unit investment trust, closed-end investment company or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act;
(g) To use the net proceeds received by it from the sale of
the Preferred Securities, in the case of the Trust, and the Junior
Subordinated Debentures, in the case of the Company, as contemplated in
this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(h) In the case of the Company, to issue and deliver the
Guarantee and the Junior Subordinated Debentures concurrently with the
issuance and sale of the Preferred Securities; and
(i) If the Pricing Supplement specifies that the Preferred
Securities are to be listed on a securities exchange, to use its best
efforts to list on such securities exchange, subject to notice of
issuance, (i) the Preferred Securities, and (ii) the Junior
Subordinated Debentures, upon any distribution thereof to holders of
the Preferred Securities.
Section 4. Payment of Expenses. Each of the Trust and the Company
jointly and severally covenants and agrees with the several Underwriters to pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
their counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Pricing Agreement, the Declaration, the Amended Declaration, the
Indenture, the Junior Subordinated Debentures, the Guarantee, any Blue Sky
survey, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Preferred Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities and insurance laws
as provided in Section 3(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) any fees charged
by securities rating services for rating the Securities; (v) any filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Preferred Securities; (vi) any
fees and expenses in connection with listing on one or more securities exchanges
and under the Exchange Act of the Preferred Securities and, if applicable, any
Junior Subordinated Debentures distributed to holders of the Preferred
Securities; (vii) the cost of
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<PAGE> 13
preparing certificates, if any, for the Preferred Securities and any Junior
Subordinated Debentures; (viii) the cost and charges of any transfer agent or
registrar or dividend disbursing agent; (ix) the cost of qualifying the
Preferred Securities and the Junior Subordinated Debentures with DTC; (x) the
cost and charges of any conversion agent; (xi) the fees and expenses of the
Debenture Trustee, the Guarantee Trustee and the trustees of the Trust and the
fees and disbursements of their counsel; and (xii) all other costs and expenses
incident to the performance of its obligations hereunder and under any
Over-allotment Option which are not otherwise specifically provided for in this
Section 4. It is understood, however, that, except as provided in this Section
4, Section 6 and Section 8 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees and disbursements of their own counsel,
transfer taxes on resale of any of the Preferred Securities by them, and any
advertising expenses connected with any offers they may make.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters under the Pricing Agreement shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties of the Trust and the Company in or incorporated by reference in
the Pricing Agreement are, at and as of each Time of Delivery, true and correct,
the condition that the Trust and the Company shall have performed all of their
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus Supplement or, if the Company shall have
elected to rely on Rule 434 under the Act, the Term Sheet and any Rule
434 (c) (2) Prospectus required by Rule 434 (c) (2) under the Act,
shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed therefor by Section 3(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable
satisfaction;
(b) Brown & Wood LLP, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions, dated each
Time of Delivery, with respect to the incorporation of the Company and
the formation of the Trust, the validity of the Preferred Securities
and the Junior Subordinated Debentures being delivered at each Time of
Delivery and with respect to the Registration Statement, the Prospectus
and such other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters (in rendering such opinion or opinions, Brown & Wood LLP
may rely as to matters of Texas law upon the opinions of Vinson &
Elkins L.L.P. and of the General Counsel, the Deputy General Counsel or
the Associate General Counsel - Corporate/Finance of the Company
referred to in subsections 5(c) and 5(d), respectively, and as to
matters of Delaware law upon the opinion of Richards, Layton & Finger,
P.A., referred to in subsection 5(e));
(c) Vinson & Elkins L.L.P., counsel for the Company, shall
have furnished to the Representatives their written opinion (in
rendering such opinion, Vinson & Elkins L.L.P. may rely as to matters
of Delaware law upon the opinion of Richards, Layton &
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<PAGE> 14
Finger, P.A., referred to in subsection 5(e)), dated each Time of
Delivery, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Declaration and the Amended Declaration have
each been duly and validly authorized, executed and delivered
by the Company and the Declaration and the Amended Declaration
each conforms in all material respects to the description
thereof contained in the Prospectus;
(ii) All of the issued and outstanding Common
Securities of the Trust are owned of record directly or
indirectly by American General, free and clear of all liens
and encumbrances known to such counsel;
(iii) This Agreement and the Pricing Agreement have each
been duly authorized, executed and delivered by each of the
Trust and the Company;
(iv) The issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time
of Delivery, the purchase by the Trust of the Junior
Subordinated Debentures being purchased at such Time of
Delivery, the exchange by the Trust of Junior Subordinated
Debentures for such Preferred Securities, the compliance by
the Trust with all of the provisions of this Agreement and the
Pricing Agreement, and the consummation of the other
transactions contemplated herein and therein will not result
in any violation of the provisions of this Agreement, the
Pricing Agreement, the Amended Declaration or the Certificate
of Trust or any statute, or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Trust or any of its
properties (other than any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties solely as
a result of the Trust's affiliation with the Company or its
subsidiaries); and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
by the Trust of the Preferred Securities and the Common
Securities being delivered at such Time of Delivery, the
purchase by the Trust of the Junior Subordinated Debentures
being purchased at such Time of Delivery, the exchange by the
Trust of Junior Subordinated Debentures for such Preferred
Securities, or the consummation by the Trust of the other
transactions contemplated by this Agreement and the Pricing
Agreement, other than any such consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body having
jurisdiction over the Trust or any of its properties solely as
a result of the Trust's affiliation with the Company or its
subsidiaries and except such as have been obtained under the
Act and the Trust Indenture Act prior to such Time of Delivery
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
"blue sky" laws or insurance laws in connection with the
purchase and distribution of the Preferred Securities by the
Underwriters;
(v) The statements set forth in the Prospectus under
the captions "Description of Junior Subordinated Debentures",
"Description of Preferred Securities", "Description of
Guarantees", "Relationship among the Preferred
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<PAGE> 15
Securities, the Corresponding Junior Subordinated Debentures
and the Guarantee", "Description of Common Stock",
"Description of Preferred Stock", and any similar caption in
the Prospectus as amended with respect to the Preferred
Securities, insofar as they purport to constitute a summary of
the terms of the Junior Subordinated Debentures, the Preferred
Securities, the Guarantee, the Common Stock, and the Preferred
Stock, respectively, are accurate summaries in all material
respects and fairly present in all material respects the
information set forth therein;
(vi) Such counsel confirms their opinion filed as
Exhibit 8 to the Registration Statement and the information in
the Prospectus under "Certain Federal Income Tax
Consequences", to the extent that it constitutes matters of
law, summaries of legal matters, documents or proceedings or
legal conclusions, is correct in all material respects;
(vii) The Junior Subordinated Debentures have been duly
and validly authorized and, when executed and authenticated
pursuant to the Indenture and issued and delivered against
payment therefor as contemplated by this Agreement and the
Pricing Agreement, will be duly executed, authenticated,
issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles
and will be entitled to the benefits provided by the
Indenture; the Junior Subordinated Debentures are in the form
authorized in or pursuant to the Indenture; the Indenture has
been duly authorized, executed and delivered by the Company
and (assuming the Indenture has been duly authorized, executed
and delivered by the Debenture Trustee) constitutes a valid
and legally binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equity
principles; the Indenture has been duly qualified under the
Trust Indenture Act; and the Junior Subordinated Debentures
and the Indenture conform in all material respects to the
description thereof contained in the Prospectus;
(viii) The Guarantee has been duly and validly authorized
by the Company and, when executed and delivered as
contemplated by this Agreement and the Pricing Agreement, will
have been duly executed, issued and delivered, and (assuming
the Guarantee has been duly authorized, executed and delivered
by the Guarantee Trustee) will constitute a valid and legally
binding obligation of the Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Guarantee conforms in
all material respects to the description thereof contained in
the Prospectus;
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<PAGE> 16
(ix) The Registration Statement is effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been
instituted or threatened by the Commission;
(x) The documents incorporated by reference in the
Prospectus (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, appeared on their face to
comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
(xi) The Registration Statement, at the time it became
effective, and as amended or supplemented as of the date of
the Pricing Agreement (or, if the Company shall have elected
to rely on Rule 434 under the Act, as of the time the Term
Sheet was filed with the Commission pursuant to Rule 434(b)
(7) under the Act) (other than the financial statements and
other financial information included therein or the Forms T-1,
as to which no opinion or belief need be expressed), appeared
on its face to be appropriately responsive in all material
respects to the applicable requirements of the Act, the Trust
Indenture Act and the respective rules and regulations of the
Commission thereunder; and
(xii) Neither the Trust nor the Company is or, after
giving effect to the issue and sale of the Preferred
Securities and the Junior Subordinated Debentures, will be, an
"investment company" as such term is defined in the Investment
Company Act.
In addition, such opinion shall also contain a statement that no facts
have come to such counsel's attention that lead them to believe that the
Registration Statement (other than the financial statements and other financial
data contained therein, as to which such counsel need not express any comment),
at the time it became effective, and if an amendment to the Registration
Statement or an annual report on Form 10-K has been filed by the Company with
the Commission subsequent to the effectiveness of the Registration Statement,
then at the time each such amendment became effective and the most recent such
Form 10-K was filed, as the case may be, and as of the date of the Pricing
Agreement, 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 (other than the
financial statements and other financial data contained therein, as to which
such counsel need not express any comment), as amended or supplemented to
reflect the terms of the offering of the Securities by the Prospectus Supplement
or Term Sheet, as the case may be, and as amended or supplemented at the Time of
Delivery, contains an untrue statement of a material fact 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;
(d) The General Counsel or an Associate General Counsel of the
Company shall have furnished to the Representatives his or her written
opinion, dated each Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
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<PAGE> 17
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Texas, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) Each of the Selected Subsidiaries has been duly
incorporated and is validly existing as a business corporation
or an insurer, as the case may be, in good standing under the
laws of its jurisdiction of incorporation, provided, however,
that "good standing" means with respect to any corporation
incorporated under the laws of the State of Indiana that such
corporation has filed its most recent annual report required
by the laws of the State of Indiana and Articles of
Dissolution have not been filed in the State of Indiana with
respect to such corporation; to the knowledge of such counsel,
each of the Company and the Selected Subsidiaries has been
duly qualified as a foreign corporation for the transaction of
business or licensed to transact business as an insurance
company, as the case may be, and is in good standing under the
laws of each other jurisdiction in which it owns or leases
substantial properties, or conducts business, and where the
failure so to qualify would have a material adverse effect on
the business of the Company and its subsidiaries taken as a
whole; all of the outstanding shares of capital stock of each
Selected Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and (except for any
directors' qualifying shares) are owned, directly or
indirectly, by the Company, free and clear of all liens and
encumbrances; and, to the knowledge of such counsel, each of
the Company and the Selected Subsidiaries has all required
authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and
bodies (including, without limitation, each insurance
regulatory authority having jurisdiction over the Company or
any insurance subsidiary of the Company) to own or lease its
properties and to conduct its business as described in the
Prospectus, except such authorizations, approvals, orders,
licenses, certificates and permits which, if not obtained,
would not have a material adverse effect on the business of
the Company and its subsidiaries taken as a whole (such
counsel being entitled to rely in respect of the opinion in
this clause (ii) upon opinions (in form and substance
reasonably satisfactory to the Representatives) of local
counsel and of counsel for the Selected Subsidiaries, such
counsel being acceptable to counsel for the Underwriters,
copies of which shall be furnished to the Representatives; and
in respect of matters of fact upon certificates of officers of
the Company or the Selected Subsidiaries, provided that such
counsel shall state that he or she believes that he or she is
justified in relying upon such opinions and certificates);
(iii) To the knowledge of such counsel, there are no
legal or governmental proceedings pending or threatened of a
character that are required to be disclosed in the
Registration Statement and Prospectus, other than as disclosed
therein; and to the knowledge of such counsel, there are no
contracts, indentures, mortgages, deeds of trust, loan
agreements or other documents of a character required to be
described in the Registration Statement or Prospectus (or
required to be filed under the Exchange Act if upon such
filing they would be
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incorporated by reference therein) or to be filed as exhibits
to the Registration Statement that are not described and filed
as required;
(iv) The issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time
of Delivery, the purchase by the Trust of the Junior
Subordinated Debentures being purchased at such Time of
Delivery, the exchange by the Trust of Junior Subordinated
Debentures for such Preferred Securities, the compliance by
the Trust with all of the provisions of this Agreement and the
Pricing Agreement, and the consummation of the other
transactions contemplated herein and therein will not result
in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties solely as
a result of the Trust's affiliation with the Company or its
subsidiaries, which violation would have a material adverse
effect on the business, financial condition, shareholders'
equity or results of operations of the Company and its
subsidiaries taken as a whole; and no consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for
the issue and sale by the Trust of the Preferred Securities
and Common Securities being delivered at such Time of
Delivery, the purchase by the Trust of the Junior Subordinated
Debentures being purchased at such Time of Delivery, the
exchange by the Trust of Junior Subordinated Debentures for
such Preferred Securities, or the consummation by the Trust of
the other transactions contemplated by this Agreement or the
Pricing Agreement solely as a result of the Trust's
affiliation with the Company or its subsidiaries, except such
as have been obtained under the Act and the Trust Indenture
Act prior to such Time of Delivery and such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or "blue sky" laws or
insurance laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters;
and
(v) The issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time
of Delivery, the issue by the Company of the Guarantee, the
issue and sale by the Company of the Junior Subordinated
Debentures, the exchange by the Trust of Junior Subordinated
Debentures for such Preferred Securities, the compliance by
each of the Trust and the Company with all of the provisions
of this Agreement, the Pricing Agreement, the Declaration, the
Amended Declaration, the Certificate of Trust, the Guarantee,
the Junior Subordinated Debentures and the Indenture and the
consummation of the other transactions herein and therein
contemplated will not (A) conflict with or result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument for
money borrowed to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, or (B) result
in any violation of (x) the provisions of the Restated
Articles of Incorporation or the Amended and Restated By-Laws
of the Company or (y) any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
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any of their properties, in any manner which, in the case of
clauses (A) and (B)(y), would have a material adverse effect
on the business of the Company and its subsidiaries taken as a
whole (such counsel being entitled to rely in respect of the
opinion in this clause (v) with respect to subsidiaries upon
opinions (in form and substance reasonably satisfactory to the
Representatives) of counsel for the subsidiaries, such counsel
being acceptable to counsel for the Underwriters, copies of
which shall be furnished to the Representatives, provided that
such counsel shall state that he or she believes that he or
she is justified in relying upon such opinions); and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency
or body is required for the issue by the Company of the
Guarantee, the issue and sale by the Company of the Junior
Subordinated Debentures, the exchange by the Trust of Junior
Subordinated Debentures for such Preferred Securities, or the
consummation by the Company of the other transactions
contemplated by this Agreement, the Pricing Agreement, the
Indenture, the Amended Declaration, the Certificate of Trust
or the Guarantee, except such as have been obtained under the
Act and the Trust Indenture Act prior to such Time of Delivery
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
"blue sky" laws or insurance laws in connection with the
purchase and distribution of the Preferred Securities by the
Underwriters;
(e) Richards, Layton & Finger, P.A., special Delaware counsel
to the Trust and the Company, shall have furnished to the
Representatives their written opinion, dated each Time of Delivery, in
form and substance satisfactory to the Representatives, 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 Business Trust Act, and, under the Amended
Declaration and the Delaware Business Trust Act, has the trust
power and authority to own its properties and conduct its
business as described in the Prospectus; and all filings
required under the laws of Delaware with respect to the
creation and valid existence of the Trust as a business trust
have been made;
(ii) The Amended Declaration constitutes a valid and
binding obligation of the Company and the trustees of the
Trust and is enforceable against the Company and such trustees
in accordance with its terms; and the Preferred Securities
being delivered at such Time of Delivery have the rights set
forth in the Amended Declaration subject to the effect upon
the Amended Declaration of (a) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation,
fraudulent conveyance and transfer, and other similar laws
relating to or affecting the rights and remedies of creditors
generally, (b) 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 (c) the
effect of applicable public policy on the enforceability of
provisions relating to indemnification;
(iii) Under the Amended Declaration and the Delaware
Business Trust Act, the Trust has the trust power and
authority to (a) execute and deliver, and to
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<PAGE> 20
perform its obligations under this Agreement and the Pricing
Agreement and (b) issue and perform its obligations under the
Preferred Securities and the Common Securities being delivered
at such Time of Delivery;
(iv) Under the Amended Declaration and the Delaware
Business Trust Act, the execution and delivery by the Trust of
this Agreement and the Pricing Agreement, and the performance
by the Trust of its obligations hereunder, have been duly
authorized by all necessary trust action on the part of the
Trust;
(v) The Common Securities of the Trust being delivered
at such Time of Delivery have been duly authorized by the
Amended Declaration and are validly issued undivided
beneficial interests in the assets of the Trust; the Preferred
Securities being delivered at such Time of Delivery have been
duly and validly authorized by the Amended Declaration and are
duly and validly issued and, subject to the qualifications set
forth herein, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust; the holders
of such 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; provided that such counsel may note that
such holders may be obligated, pursuant to the Amended
Declaration, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising
from transfers or exchanges of certificates representing such
Preferred Securities and the issuance of replacement
certificates and (b) provide security and indemnity in
connection with requests of or directions to the Property
Trustee (as defined in the Amended Declaration) to exercise
its rights and powers under the Amended Declaration;
(vi) Under the Amended Declaration and the Delaware
Business Trust Act, the issuance of the Preferred Securities
and the Common Securities being delivered at such Time of
Delivery is not subject to preemptive or other similar rights;
(vii) The execution, delivery and performance of this
Agreement, the Pricing Agreement, the Amended Declaration, the
Preferred Securities and the Common Securities, the
consummation of the transactions contemplated herein and
therein, and the compliance by the Trust with its obligations
hereunder and thereunder do not and will not result in any
violation of the Amended Declaration, the Certificate of Trust
or any applicable Delaware law or administrative regulation
thereunder;
(viii) Except as previously made or obtained, as the case
may be, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
Delaware court or Delaware governmental authority or agency is
necessary or required to be obtained by the Trust solely in
connection with the execution or delivery by the Trust of this
Agreement or the Pricing Agreement, or the performance by the
Trust of the transactions contemplated hereby or thereby,
including the issuance and sale of the Preferred
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<PAGE> 21
Securities and the Common Securities being delivered at such
Time of Delivery; and
(ix) The holders of the Preferred Securities being
delivered at such Time of Delivery (other than those holders
who reside or are domiciled in the State of Delaware) will
have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the
Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
(f) Richards, Layton & Finger, P.A., special Delaware counsel
to Bankers Trust (Delaware), as Delaware Trustee under the Amended
Declaration, shall have furnished to the Representatives their written
opinion, dated each Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that Bankers Trust
(Delaware) has been duly incorporated and is validly existing in good
standing as a banking corporation under the laws of the State of
Delaware and has the corporate power to act as trustee of a Delaware
business trust under the laws of the State of Delaware, 12 Del.C.
ss.3801, et seq.;
(g) On the date of the Pricing Agreement prior to the
execution thereof and also at each Time of Delivery, the independent
certified public accountants who have audited the consolidated
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter or letters dated such Time of
Delivery, with respect to such consolidated financial statements, in
form and substance reasonably satisfactory to the Representatives, to
the effect set forth in Annex II hereto;
(h) Since the date of the Pricing Agreement and since the
respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement, there shall have
been no material adverse change, nor any development or event involving
a prospective material adverse change, in the business, financial
condition, shareholders' equity or results of operations of the Trust
or of the Company and its subsidiaries taken as a whole, whether or not
arising in the ordinary course of business, the effect of which is, in
the reasonable judgment of the Representatives, so material and adverse
as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Preferred Securities on the terms and
in the manner contemplated in the Prospectus;
(i) On or after the date of the Pricing Agreement, no
downgrading shall have occurred in the rating accorded the Preferred
Securities or any of the Company's long-term debt securities or
preferred stock by either Moody's Investors Service, Inc. or Standard &
Poor's Ratings Services;
(j) On or after the date of the Pricing Agreement, there shall
not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange or any other exchange on which application shall have been
made to list the Preferred Securities; (ii) a suspension or material
limitation in trading in the Preferred Securities or any of the
Company's securities on the New York Stock Exchange or any other
national securities exchange; (iii) a general moratorium on commercial
banking activities in New York declared by
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<PAGE> 22
either Federal or New York State authorities; or (iv) an outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this subsection 5(i), in the
reasonable judgment of the Representatives, makes it impracticable to
proceed with the public offering or the delivery of the Initial
Preferred Securities or the Option Preferred Securities, if any, or
both on the terms and in the manner contemplated in the Prospectus;
(k) The Amended Declaration, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form
reasonably satisfactory to the Representatives;
(l) The Trust and the Company shall have furnished or caused
to be furnished to the Representatives at each Time of Delivery, a
certificate or certificates of the Trust and the Company satisfactory
to the Representatives, signed by the administrative trustees of the
Trust and the Chairman, the Vice Chairman, the President or a Vice
President of the Company, as the case may be, as to the accuracy of the
representations and warranties of the Trust and the Company herein at
and as of such Time of Delivery, as to the performance by the Trust and
the Company of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in the first two clauses of subsection 5(a) and in subsection
5(h) and as to such other matters as the Representatives may reasonably
request; and
(m) If the Pricing Supplement specifies that the Preferred
Securities are to be listed on a securities exchange, the Preferred
Securities, at each Time of Delivery, shall have been duly listed,
subject to notice of issuance, on such securities exchange.
Section 6. Indemnification.
(a) The Trust and the Company, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, as incurred, to which
such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, preparing for or defending against any
such action or claim, commenced or threatened; provided, however, that
neither the Trust nor the Company shall be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives expressly for use therein; and provided, further, that
neither the Trust nor the Company shall be liable to any Underwriter
under the indemnity agreement in this subsection (a) with respect to
any Preliminary Prospectus to the extent that any such loss, claim,
damage or liability of such
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<PAGE> 23
Underwriter results from the fact that such Underwriter sold Preferred
Securities to a person to whom there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the Prospectus as
then amended or supplemented (excluding documents incorporated by
reference therein) in any case where such delivery is required by the
Act if the Trust or the Company has previously furnished copies thereof
to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission or alleged
untrue statement or omission of a material fact contained in the
Preliminary Prospectus which was corrected in the Prospectus (or the
Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold harmless the
Trust and the Company against any losses, claims, damages or
liabilities, as incurred, to which the Trust or the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
any Preliminary Prospectus, the Registration Statement, the Prospectus,
or any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Trust and the Company by or
on behalf of such Underwriter through the Representatives expressly for
use therein, and will reimburse the Trust and the Company for any legal
or other expenses reasonably incurred by the Trust or the Company in
connection with investigating, preparing for or defending against any
such action or claim, commenced or threatened.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement or threat of
any action, such indemnified party shall, if a claim in respect thereof
is to be made against an indemnifying party under such subsection,
notify such indemnifying party in writing of the commencement or threat
thereof; but the omission so to notify such indemnifying party shall
not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action
shall be commenced or threatened against any indemnified party and it
shall notify the indemnifying party of the commencement or threat
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish and so elect within a
reasonable time after receipt of such notification, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party and it being understood that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the fees and expenses of more than one separate firm of attorneys
(provided that local counsel may be retained to the extent necessary)
for all such indemnified parties (treating the indemnified party and
the persons referred to in subsection (e) below to which the provisions
of this Section 6 shall extend as a single indemnified party for such
purpose)), and, after notice
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<PAGE> 24
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is an actual
or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include any statement as to, or an admission
of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Trust and the Company on the one hand and the Underwriters on
the other hand from the offering of the Preferred Securities. If,
however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above or is not
entitled to receive the indemnification provided for in subsection (a)
above because of the second proviso thereof, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Trust
and 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, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Trust and the Company on the one hand and the
Underwriters on the other hand shall be deemed to be in the same
proportion as the total net proceeds from such offering (before
deducting expenses) received by the Trust bear to the total
underwriting discounts and commissions received by the Underwriters.
The relative fault 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 Trust and the Company on the one
hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, including, with respect to any
Underwriter, the extent to which such losses, claims, damages or
liabilities (or actions in respect thereof) with respect to any
Preliminary Prospectus result from the fact that such Underwriter sold
Preferred Securities to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required
by the Act, if either the Trust or the Company has previously furnished
copies thereof to such Underwriter and the loss,
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<PAGE> 25
claim, damage or liability results from an untrue statement or omission
or alleged untrue statement or omission of a material fact contained in
the Preliminary Prospectus which was corrected in the Prospectus (or
the Prospectus as amended or supplemented). The Trust, the Company and
the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) 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
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating, preparing for
or defending against any such action or claim. Notwithstanding the
provisions of this subsection (d), 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 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to the Preferred
Securities and not joint.
(e) The obligations of the Trust and the Company under this
Section 6 shall be in addition to any liability which the Trust and the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under
this Section 6 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer, trustee and director of the
Trust and of the Company, as the case may be, and to each person, if
any, who controls the Trust or the Company within the meaning of the
Act.
Section 7. Default of Underwriters.
(a) If any Underwriter shall default in its obligation to
purchase the Initial Preferred Securities or Option Preferred
Securities which it has agreed to purchase under the Pricing Agreement,
the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Initial Preferred
Securities or Option Preferred Securities on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such
Initial Preferred Securities or Option Preferred Securities, as the
case may be, then the Trust and the Company shall be entitled to a
further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase
such Initial Preferred Securities or Option Preferred Securities on
such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Trust and the Company that they
have so arranged for the purchase of such Initial Preferred Securities
or Option Preferred Securities, as the case may be, or the Trust and
25
<PAGE> 26
the Company notify the Representatives that they have so arranged for
the purchase of such Initial Preferred Securities or Option Preferred
Securities, as the case may be, the Representatives or the Trust and
the Company shall have the right to postpone the applicable Time of
Delivery for such Initial Preferred Securities or Option Preferred
Securities for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements,
and the Trust and the Company agree to file promptly any amendments or
supplements to the Registration Statement or the Prospectus which in
the opinion of the Representatives may thereby be made necessary. The
term "Underwriter" as used in this Agreement and the Pricing Agreement
shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing
Agreement.
(b) If, after giving effect to any arrangements for the
purchase of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Company as
provided in subsection (a) above, the aggregate number of such Initial
Preferred Securities or Option Preferred Securities which remains
unpurchased does not exceed ten percent of the aggregate number of the
Initial Preferred Securities or Option Preferred Securities, as the
case may be, to be purchased at the respective Time of Delivery, then
the Trust and the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Initial Preferred
Securities or Option Preferred Securities, as the case may be, which
such Underwriter agreed to purchase under the Pricing Agreement and, in
addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of the Initial Preferred Securities
or Option Preferred Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing Agreement) of the
Initial Preferred Securities or Option Preferred Securities, as the
case may be, of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Company as
provided in subsection (a) above, the aggregate number of Initial
Preferred Securities or Option Preferred Securities, as the case may
be, which remains unpurchased exceeds ten percent of the aggregate
number of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, to be purchased at the respective Time
of Delivery, as determined as set forth in subsection (b) above, or if
the Trust and the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Initial Preferred Securities or Option Preferred Securities, as the
case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Trust or the Company,
except for the expenses to be borne by the Trust, the Company and the
Underwriters as provided in Section 4 hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
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<PAGE> 27
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Trust and the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust or
the Company, or any officer, trustee or director or controlling person of the
Trust or the Company, and shall survive delivery of and payment for the
Preferred Securities. If the Pricing Agreement shall be terminated pursuant to
Section 7 hereof, neither the Trust nor the Company shall then be under any
liability to any Underwriter except as provided in Section 4 and Section 6
hereof; but, if for any other reason Preferred Securities are not delivered by
or on behalf of the Trust as provided herein, the Trust and the Company, jointly
and severally, will reimburse the Underwriters through the Representatives for
all reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Preferred Securities not so delivered, but
the Trust and the Company shall then be under no further liability to any
Underwriter with respect to such Preferred Securities except as provided in
Section 4 and Section 6 hereof.
Section 9. Parties and Notices.
(a) In all dealings hereunder, the Representatives shall act
on behalf of each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as
may be designated for such purpose in the Pricing Agreement; and
(b) All statements, requests, notices and agreements hereunder
shall be in writing, or by telegram or facsimile transmission if
promptly confirmed in writing, and if to the Underwriters shall be
sufficient in all respects if delivered or sent by registered mail to
the Representatives, as such, at the address of the Representatives
designated for such purpose as set forth in the Pricing Agreement; and
if to the Trust or the Company shall be sufficient in all respects if
delivered or sent by registered mail to the address of the Company set
forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 6(c)
hereof shall be delivered or sent by registered mail to such
Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address
will be supplied to the Trust and the Company by the Representatives
upon request. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
Section 10. Successors. This Agreement and the Pricing Agreement shall
be binding upon, and inure solely to the benefit of, the Underwriters, the
Trust, the Company and, to the extent provided in Section 6 and Section 8
hereof, the officers, trustees and directors of the Trust and the Company and
each person who controls the Trust, the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or the Pricing Agreement. No purchaser of any of the Preferred
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
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Section 11. Governing Law. This Agreement and the Pricing Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York applicable to agreements made and to be performed in such State.
Section 12. Time of the Essence. Time shall be of the essence of the
Pricing Agreement.
Section 13. Counterparts. The Pricing Agreement may be executed by any
one or more of the parties thereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
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<PAGE> 1
EXHIBIT 1.2
PRICING AGREEMENT
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY INC.
THE ROBINSON-HUMPHREY COMPANY, LLC
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
September 2, 1999
Ladies and Gentlemen:
American General Capital I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as sponsor of the Trust and as guarantor (the
"Company"), propose, subject to the terms and conditions stated herein and in
the Underwriting Agreement (a form of which was filed as an exhibit to the
registration statement filed by the Trust, certain other trusts and the Company
on Form S-3 (Nos. 333-40583, 333-40583-01, 333-40583-02, 333-40583-03 and
333-40583-04)) attached hereto (the "Underwriting Agreement"), to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") the
Preferred Securities specified in Schedule II hereto, consisting of the Initial
Preferred Securities and any Option Preferred Securities granted to the
Underwriters which the Underwriters elect to purchase.
If so specified in Schedule II hereto, the Preferred Securities are
exchangeable into Junior Subordinated Debentures of the Company or other
property or securities specified in Schedule II hereto. The Preferred Securities
will be guaranteed by the Company on a limited basis as to the payment of
Distributions and as to payments on liquidation or redemption (the "Guarantee").
Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Pricing Agreement to the same extent as if such provisions had been set forth in
full herein; and each of the representations and warranties set forth therein
shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 1 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined),
<PAGE> 2
and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Prospectus as amended or supplemented with respect to the
offering of the Preferred Securities. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters pursuant to Section 9 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 9
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the offering of the Preferred
Securities, in the form heretofore delivered to you, is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Initial Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriters shall exercise the option, if any, to purchase Option Preferred
Securities, as provided below, the Trust agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Option Preferred Securities as
to which such option shall have been exercised.
If so specified in Schedule II, the Trust hereby grants to each of the
Underwriters the right to purchase at their option up to the number of Option
Preferred Securities set forth opposite the name of such Underwriter in Schedule
I hereto on the terms referred to in the preceding paragraph for the sole
purpose of covering over-allotments, if any, in the sale of the Initial
Preferred Securities. Any such option to purchase Option Preferred Securities
may be exercised by written notice from the Representatives to the Trust given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Option Preferred Securities to be
purchased and the date on which such Option Preferred Securities are to be
delivered, as determined by the Representatives, but in no event earlier than
the First Time of Delivery or, unless the Representatives and the Trust
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
2
<PAGE> 3
If the foregoing is in accordance with your understanding, please sign
and return to us one counterpart hereof for the Trust and one for the Company,
one for each of the Representatives and one for each counsel, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters and the Trust and the Company. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is or will
be pursuant to the authority set forth in a form of Agreement Among
Underwriters, the form of which shall be submitted to the Trust and the Company
for examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
AMERICAN GENERAL CAPITAL I,
By: AMERICAN GENERAL CORPORATION,
as sponsor
By:
-----------------------------
Name:
Title:
AMERICAN GENERAL CORPORATION
By:
--------------------------------------
Name:
Title:
Accepted as of the date hereof:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY INC.
THE ROBINSON-HUMPHREY COMPANY, LLC
As Representatives of the several
Underwriters
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------------------
Authorized Signatory
On behalf of themselves and the other several Underwriters
3
<PAGE> 4
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
INITIAL PREFERRED
SECURITIES TO BE
UNDERWRITER PURCHASED
- -------------------------------------------------------------------------------- ---------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ..................................................... 1,430,000
Morgan Stanley & Co. Incorporated .............................................. 1,320,000
PaineWebber Incorporated ....................................................... 1,320,000
Salomon Smith Barney Inc. ...................................................... 1,320,000
The Robinson-Humphrey Company, LLC ............................................. 660,000
ABN AMRO Incorporated .......................................................... 50,000
Robert W. Baird & Co. Incorporated ............................................. 50,000
Banc of America Securities LLC ................................................. 50,000
Banc One Capital Markets, Inc. ................................................. 50,000
Bear, Stearns & Co. Inc. ....................................................... 50,000
CIBC World Markets Corp. ....................................................... 50,000
Chase Securities Inc. .......................................................... 50,000
Dain Rauscher Incorporated ..................................................... 50,000
Deutsche Bank Securities Inc. .................................................. 50,000
Donaldson, Lufkin & Jenrette Securities Corporation ............................ 50,000
A.G. Edwards & Sons, Inc. ...................................................... 50,000
EVEREN Securities, Inc. ........................................................ 50,000
Fahnestock & Co. Inc. .......................................................... 50,000
Fifth Third Securities, Inc. ................................................... 50,000
First Union Capital Markets Corp. .............................................. 50,000
Fleet Securities, Inc. ......................................................... 50,000
Goldman, Sachs & Co. ........................................................... 50,000
Legg Mason Wood Walker, Incorporated ........................................... 50,000
J.P. Morgan Securities Inc. .................................................... 50,000
OLDE Discount Corporation ...................................................... 50,000
Prudential Securities Incorporated ............................................. 50,000
Raymond James & Associates, Inc. ............................................... 50,000
Schroder & Co. Inc. ............................................................ 50,000
SG Cowen Securities Corporation ................................................ 50,000
Tucker Anthony Incorporated .................................................... 50,000
U.S. Bancorp Piper Jaffray Inc. ................................................ 50,000
Warburg Dillon Read LLC ....................................................... 50,000
Advest, Inc. ................................................................... 25,000
BB&T Capital Markets, a division of Scott & Stringfellow ....................... 25,000
</TABLE>
I-1
<PAGE> 5
<TABLE>
<S> <C>
J.C. Bradford & Co. ............................................................ 25,000
Crowell, Weedon & Co. .......................................................... 25,000
D.A. Davidson & Co. ............................................................ 25,000
First Albany Corporation ....................................................... 25,000
Gibraltar Securities Co. ....................................................... 25,000
Gruntal & Co., L.L.C. .......................................................... 25,000
J.J. B. Hillard, W.L. Lyons, Inc. .............................................. 25,000
Howe Barnes Investments, Inc. .................................................. 25,000
Wayne Hummer Investments LLC ................................................... 25,000
Janney Montgomery Scott Inc. ................................................... 25,000
Kirkpatrick, Pettis, Smith, Polian Inc. ........................................ 25,000
McDonald Investments Inc. ...................................................... 25,000
Mesirow Financial, Inc. ........................................................ 25,000
Morgan Keegan & Company, Inc. .................................................. 25,000
David A. Noyes & Company ....................................................... 25,000
Parker/Hunter Incorporated ..................................................... 25,000
Stephens Inc. .................................................................. 25,000
Stifel, Nicolaus & Company, Incorporated ....................................... 25,000
Stone & Youngberg .............................................................. 25,000
TD Securities (USA) Inc. ....................................................... 25,000
Trilon International Inc. ...................................................... 25,000
Utendahl Capital Partners, L.P. ................................................ 25,000
---------------------
Total................................................ 8,000,000
=====================
</TABLE>
I-2
<PAGE> 6
SCHEDULE II
PREFERRED SECURITIES
Title of Preferred Securities: 7 7/8% Trust Originated Preferred Securities
Filing Date of Prospectus Supplement Pursuant to Rule 424(b): September 3, 1999
Number of Preferred Securities:
Number of Initial Preferred Securities: 8,000,000
Maximum Number of Option Preferred Securities, if any: None
Distribution
Payments: Quarterly, on the last day of March, June, September
and December in each year, commencing September 30,
1999, at an annual rate of 7 7/8% of the liquidation
amount of $25.00 per Preferred Security
Record Dates: As long as the Preferred Securities are represented
by a global security, the record date for the payment
of distributions will be one business day before the
relevant payment date. If the Preferred Securities
are ever issued in certificated form, the record date
for the payment of distributions will be the 15th day
of the last month of each quarterly distribution
period, even if that day is not a business day.
Liquidation Amount: $25.00 per Preferred Security, plus accumulated and
unpaid distributions to the date of payment
Exchange Provisions: If the Company, as the sponsor of the
Trust, exercises its right to dissolve the Trust at
any time, the Trust will be liquidated by
distribution of the Junior Subordinated Debentures to
holders of the Preferred Securities and the Common
Securities.
Redemption Provisions: Redeemable when the Junior Subordinated Debentures
are paid, either at maturity on September 30, 2048,
or upon early redemption.
Initial Offering Price
to Public: $25.00 per Preferred Security, plus accumulated
distributions from September 8, 1999, if settlement
occurs after that date. Purchase Price by
Underwriters: $25.00 per Preferred Security, plus
accumulated distributions from September 8, 1999, if
settlement occurs after that date.
Underwriters'
Compensation: $0.7875 per Preferred Security
Method of and Specified Funds for Payment of Purchase Price and Underwriters'
Compensation:
By wire transfer to bank accounts specified by the Trust and the
Representatives in same day funds
II-1
<PAGE> 7
Form of Preferred Securities:
Book-entry-only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to each Time of Delivery at the office of
DTC.
Securities Exchange: NYSE
Time of Delivery: 9:00 a.m. (New York City time), September 8, 1999
Closing Location: Brown & Wood LLP
One World Trade Center
New York, New York 10048
Representatives: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Salomon Smith Barney Inc.
The Robinson-Humphrey Company, LLC
Designated
Representative: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Address for
Notices, etc.: World Financial Center
North Tower
New York, New York 10281
Attention: Dennis Kim
JUNIOR SUBORDINATED DEBENTURES
Title of Junior Subordinated Debentures: 7 7/8% Junior Subordinated Debenture
due 2048
Aggregate Principal
Amount: $206,185,575
Interest Payments: Quarterly, on the last day of March, June, September
and December in each year, commencing September 30,
1999, at an annual rate of 7 7/8%
Record Dates: As long as the Preferred Securities (or, if the
Junior Subordinated Debentures are distributed to the
holders of the Preferred Securities, then the Junior
Subordinated Debentures) are represented by a global
security, the record date for the payment of interest
on the Junior Subordinated Debentures will be one
business day before the relevant payment date. If the
Preferred Securities (or, if the Junior
II-2
<PAGE> 8
Subordinated Debentures are distributed to the
holders of the Preferred Securities, then the Junior
Subordinated Debentures) are ever issued in
certificated form, the record date for the payment of
interest will be the 15th day of the last month of
each quarterly interest period, even if that day is
not a business day.
Maturity Date: September 30, 2048
Redemption
Provisions: Redeemable at 100% of principal amount plus accrued
and unpaid interest to the date of redemption (i) in
whole or in part on one or more occasions any time on
or after September 8, 2004; and (ii) in whole but not
in part before September 8, 2004, if certain changes
in tax or investment company law occur or will occur
within 90 days.
Sinking Fund
Provisions: None
Extension
Provisions: The Company may, on one or more occasions, defer
interest payments on the Junior Subordinated
Debentures for up to 20 consecutive quarterly periods
(but not beyond September 30, 2048) unless an event
of default under the Junior Subordinated Debentures
has occurred and is continuing.
II-3
<PAGE> 1
EXHIBIT 4.1
AMERICAN GENERAL CORPORATION: Terms Committee
DATE: September 2, 1999
SUBJECT: 7 7/8% Trust Originated Preferred Securities of American
General Capital I
PURPOSE: The purpose of these resolutions is to authorize certain
matters relating to the issuance and sale of 7 7/8% Trust
Originated Preferred Securities of American General Capital I
RESOLUTIONS AUTHORIZING CERTAIN MATTERS RELATING TO
TRUST ORIGINATED PREFERRED SECURITIES
WHEREAS, at a meeting on October 23, 1997, the Board of Directors of
American General Corporation (the "Company") authorized the creation, issuance
and sale of up to $1,500,000,000 aggregate offering price of securities;
7 7/8% JUNIOR SUBORDINATED DEBENTURES DUE 2048
WHEREAS, American General Capital I, a Delaware statutory business
trust (the "Trust"), proposes to issue its 7 7/8% Trust Originated Preferred
Securities (the "Preferred Securities") and its 7 7/8% Common Securities (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities") and use the proceeds from the sale of the Trust Securities to
purchase junior subordinated debentures of the Company; and
WHEREAS, this Committee desires to establish the terms of such junior
subordinated debentures pursuant to Section 3.1 of the Junior Subordinated
Indenture, dated as of November 15, 1997 (the "Indenture"), between the Company
and Bankers Trust Company, as trustee (the "Trustee"); and
WHEREAS, in connection with the issuance of the Preferred Securities,
the Company and the Trust propose to file with the Commission a final prospectus
supplement to the Registration Statement on Form S-3 (Registration Nos.
333-40583, et. seq.), as amended, previously filed by the Company, the Trust and
certain other trusts with the Securities and Exchange Commission (the
"Commission"), which prospectus supplement sets forth, among other things,
information with respect to the terms of such Trust Securities and junior
subordinated debentures;
Now, therefore, be it:
JUNIOR SUBORDINATED DEBENTURES
RESOLVED, that, upon receipt of the purchase price therefor, the
Company shall issue, sell and deliver a series of its junior subordinated
debentures pursuant to the Indenture having an
-1-
<PAGE> 2
aggregate principal amount of $206,185,575 and, upon such issuance, such junior
subordinated debentures shall be valid and binding obligations of the Company;
and be it
FURTHER RESOLVED, that the title, principal amount, interest rate,
redemption provisions, and other terms of such junior subordinated debentures to
be fixed pursuant to Section 3.1 of the Indenture shall be as follows
(capitalized terms appearing below that are defined in the Indenture, but not
defined herein, having the meanings ascribed to them in the Indenture):
1. TITLE. The junior subordinated debentures shall be designated
as the "7 7/8% Junior Subordinated Debentures due 2048" (the "Debentures").
2. PRINCIPAL AMOUNT. The aggregate principal amount of the Debentures
which may be authenticated and delivered pursuant to these resolutions shall be
limited to $206,185,575 (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debentures
of the same series pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.6 of the
Indenture).
3. MATURITY DATE. The principal of the Debentures shall be payable
(together with any accrued and unpaid interest thereon) on September 30, 2048
(the "Maturity Date"), subject to earlier redemption as set forth below in
paragraphs 7 and 8. The Debentures will not be entitled to the benefit of any
sinking fund prior to maturity.
4. INTEREST RATE; Interest Payment Dates.
(a) The Debentures will bear interest on the principal amount thereof
at the fixed rate of 7 7/8% per annum (the "Coupon Rate") from and including
September 8, 1999 or from and including the most recent Interest Payment Date to
which interest has been paid or duly provided for to but excluding the related
Interest Payment Date (as defined below) until the principal thereof becomes due
and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject to the
provisions of paragraph 5 below) quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing on September 30, 1999. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a full quarter on the basis of the
actual number of days elapsed in such 90-day quarter.
(b) Interest on the Debentures (except defaulted interest) shall be
paid to the Persons in whose name the Debentures are registered at the close of
business on the Regular Record Date for such interest installment (including
Debentures that are canceled after the Regular Record Date and before the
Interest Payment Date), which, with respect to any Debentures of which the
Property Trustee of the Trust (the "Property Trustee") is the Holder or with
respect to a Debenture in Global Security form, shall be the close of business
on the Business Day next preceding that Interest Payment Date. If the Debentures
are no longer held by the Property Trustee and the Debentures are not
represented by a Debenture in Global Security form, the Regular
-2-
<PAGE> 3
Record Date for such interest installment shall be the 15th day of the last
month of the quarterly interest period (even if not a Business Day).
Notwithstanding the foregoing, any interest that is payable at maturity shall be
payable to the Person to whom principal payable at maturity shall be payable.
(c) If the Holder of a Debenture is the Property Trustee, the payment
of the principal of and interest on such Debenture will be made by wire transfer
in immediately available funds at such place and to such account as may be
designated by the Property Trustee.
(d) If, at any time while the Property Trustee is the Holder of any
Debentures, the Trust is required to pay any taxes, duties, assessment or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any case, the
Company will pay as additional interest on the Debentures held by the Property
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust would have
received had no such taxes, duties, assessments or other government charges been
imposed.
5. EXTENSION OF AN INTEREST PAYMENT PERIOD. So long as no Event of
Default under the Indenture has occurred and is continuing, the Company may
defer the payment of interest on the Debentures at any time and from time to
time for a period not exceeding 20 consecutive quarterly periods, including the
first such quarterly period during such period (each, an "Extension Period"),
provided that no Extension Period shall extend beyond the Maturity Date or the
earlier date of redemption. No interest shall be due and payable on the
Debentures until the end of the Extension Period unless the Debentures are
redeemed prior to that date, in which event interest on the Debentures so
redeemed shall be due and payable on the redemption date. At the end of the
Extension Period, the Company shall pay all interest accrued and unpaid on the
Debentures, which shall be payable to the Holders of the Debentures in whose
names the Debentures are registered in the Securities Register as of the Regular
Record Date relating to the Interest Payment Date that corresponds to the end of
such Extension Period. Notwithstanding such deferral, interest shall accrue on
the interest deferred (to the extent permitted by applicable law) at the Coupon
Rate, compounded quarterly, from the relevant Interest Payment Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Company
may further defer payments of interest by further extending such Extension
Period; provided that such Extension Period, together with all previous and
further extensions, if any, within such Extension Period, may not exceed 20
consecutive quarterly periods, including the first quarterly period during such
Extension Period, or extend beyond the Maturity Date of the Debentures or the
date of earlier redemption. Before the termination of any Extension Period, the
Company may pay all or any portion of the interest accrued on the Debentures to
the date of payment. Upon the expiration of any Extension Period and the payment
of all amounts then due, the Company may commence a new Extension Period,
subject to the above requirements. There is no limitation on the number of times
that the Company may elect to begin an Extension Period. The Company will give
notice of its commencement of an Extension Period as set forth in Section 3.11
of the Indenture.
-3-
<PAGE> 4
6. PLACE OF PAYMENT. The Trustee is hereby appointed as the initial
sole Paying Agent for the Debentures. The principal of and interest on the
Debentures shall be payable at the Corporate Trust Office of the Trustee in the
Borough of Manhattan, The City of New York; provided, however, that, at the
option of the Company, payment of interest may be made (a) except in the case of
Debentures in Global Security form, by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register or (b)
if proper transfer instructions have been received by the Securities Registrar
by the applicable Regular Record Date, by wire transfer to such account as may
be designated by the Person entitled thereto as specified in the Securities
Register. Notwithstanding the foregoing, so long as the Holder of any Debentures
is the Property Trustee, the payment of the principal of and interest on such
Debentures held by the Property Trustee will be made by wire transfer of
immediately available funds at such place and to such account as may be
designated by the Property Trustee. Payment of principal of the Debentures will
only be made upon surrender of the Debentures to the Trustee.
7. SPECIAL EVENT REDEMPTION.
(a) If a Tax Event or Investment Company Event (each as defined below,
and each a "Special Event") has occurred and is continuing, then the Company
shall have the right, upon no less than 30 days' nor more than 60 days' notice
to the Holders of the Debentures, to redeem the Debentures, in whole but not in
part, before September 8, 2004, for cash within 90 days following the occurrence
of such Special Event at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon to the date
of such redemption. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines and specifies in the notice of redemption.
(b) "Tax Event" means that the Administrative Trustees of the Trust
(the "Administrative Trustees") shall have received an opinion of an independent
tax counsel experienced in such matters to the effect that, as a result of (i)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority affecting taxation, or (ii) any official or
administrative pronouncement or action or judicial decision, interpreting or
applying such laws or regulations, which amendment or change becomes effective
or such pronouncement, action or decision is announced or occurs on or after
September 2, 1999, there is more than an insubstantial risk that (A) the Trust
is or, within 90 days of the date of such opinion, would be subject to United
States federal income tax with respect to interest accrued or received on the
Debentures, (B) interest payable by the Company on the Debentures is not or,
within 90 days of the date of such opinion, would not be deductible, in whole or
in part, by the Company for United States federal income tax purposes, or (C)
the Trust is or, within 90 days of the date of such opinion, would be, subject
to more than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
(c) "Investment Company Event" means that the Administrative Trustees
shall have received an opinion of an independent counsel experienced in practice
under the Investment
-4-
<PAGE> 5
Company Act to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an "Investment Company" that is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after September 2, 1999. For the purpose of the
preceding sentence, "Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
8. OPTIONAL REDEMPTION. The Company shall have the right to redeem the
Debentures, in whole or in part, at any time or from time to time, on or after
September 8, 2004, at a redemption price equal to 100% of the principal amount
to be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption. Any redemption pursuant to this paragraph 8 shall be made upon no
less than 30 days nor more than 60 days notice to the Holders of the Debentures.
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines and
specifies in the notice of redemption.
9. LISTING. If the Preferred Securities are listed on the New York
Stock Exchange or another securities exchange at the time, if any, of the
distribution of the Debentures to the holders of Preferred Securities in
accordance with the Amended and Restated Declaration of Trust of the Trust among
the Company, as sponsor, the Delaware Trustee, the Property Trustee and the
Administrative Trustees referred to therein (the "Declaration"), then, prior to
such distribution, the Company shall use its best efforts to cause the
Debentures to be listed on the New York Stock Exchange or such other exchange on
which the Preferred Securities were listed immediately prior to such
distribution.
10. REGISTRAR. The Debentures may be surrendered for registration of
transfer or exchange at the Corporate Trust Office of the Trustee and any
notices or demands at or upon the Company in respect of the Debentures and the
Indenture may be presented at that office.
11. FORM.
(a) The certificate or certificates evidencing the Debentures shall be
substantially in the form attached hereto as Annex A, with such changes as the
officer executing the same shall approve, such approval to be evidenced by such
officer's manual or facsimile signature. The terms of the Debentures are
specified therein as well as in these resolutions.
(b) Except as provided in (c) below, the Debentures shall be issued in
fully registered certificated form, without interest coupons.
(c) In connection with a distribution of the Debentures to the holders
of the Preferred Securities pursuant to the Declaration:
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<PAGE> 6
(i) the Debentures in certificated form to be distributed to
the holders of Preferred Securities may be presented to the Trustee by
the Property Trustee in exchange for a Debenture or Debentures in
Global Security form in an aggregate principal amount equal to the
aggregate principal amount of all Outstanding Debentures, to be
registered in the name of The Depository Trust Company as initial
Depository (the "Depository"), or its nominee, and delivered by the
Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Property Trustee. The
Company upon any such presentation shall execute one or more Debentures
in Global Security form in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance
with the Indenture and this resolution. Payments on the Debentures
issued as a Global Security will be made to the Depository; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented
to the Trustee by the Property Trustee and any certificate which
represents Preferred Securities ("Preferred Securities Certificate")
other than Preferred Securities held by the Depository or its nominee
("Non Book-Entry Preferred Securities") will be deemed to represent a
beneficial interest in Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the
Securities Registrar for transfer or reissuance, at which time such
Preferred Security Certificates will be canceled and a Debenture,
registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Security
Certificate canceled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with the
Indenture and this resolution. On issuance of such Debentures,
Debentures with an equivalent aggregate principal amount that were
presented by the Property Trustee to the Trustee will be deemed to have
been canceled.
12. TRANSFERABILITY. Prior to a distribution of the Debentures to the
holders of Trust Securities pursuant to the Declaration, the Debentures may not
be transferred by the Trust without the Company's prior consent.
13. DENOMINATION. The Debentures shall be issuable in denominations of
$25 and any integral multiple thereof.
14. RANKING; SUBORDINATION. The Debentures will be unsecured and will
be issued subject to the provisions of Article XIII of the Indenture. The
Debentures will rank pari passu with all other series of Securities issued
pursuant to the Indenture.
15. FORM OF AMENDED AND RESTATED DECLARATION OF TRUST AND GUARANTEE
AGREEMENT. Pursuant to Section 3.1(18) of the Indenture, the form of Declaration
and Preferred Securities
-6-
<PAGE> 7
Guarantee Agreement relating to the Debentures and the Trust Securities shall be
in the forms attached hereto as Annexes B and C, respectively.
-7-
<PAGE> 8
ANNEX A
[FORM OF FACE OF DEBENTURE]
[If the Debenture is a Global Security insert the following:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository. This Security is exchangeable for the Securities
registered in the name of a person other than the Depository or its nominee
only in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede
& Co. or to such other entity as its requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
AMERICAN GENERAL CORPORATION
7 7/8% JUNIOR SUBORDINATED DEBENTURE
DUE 2048
No. ___ REGISTERED
$___________
American General Corporation, a Texas corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
____________________, the principal sum of _____________________ Dollars
($___________) on September 30, 2048 unless redeemed prior thereto in
accordance with the provisions hereof, and to pay interest on such principal
sum from and including September 8, 1999, or from and including the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31
of each year commencing September 30, 1999, at the rate of 7 7/8% per annum
until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the same rate per annum. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarter on the
basis of the actual number of days elapsed in such 90-day quarter. In the event
that any date on which interest is payable on this Debenture is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day
<PAGE> 9
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the person in whose name this Debenture is registered
at the close of business on the regular record date for such interest
installment, which shall be the [close of business on the Business Day next
preceding such Interest Payment Date]/[fifteenth day of the last month of the
quarterly interest period]. Notwithstanding the foregoing, any interest that is
payable on the Maturity shall be payable to the Person to whom principal
payable at the Maturity shall be payable. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Security) is registered
at the close of business on a special record date to be fixed in accordance
with the provisions of Section 3.7 of the Indenture or may be paid in any other
manner lawfully permitted by the Indenture. The principal of and the interest
on this Debenture shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Securities Register or, subject to the provisions of the
Indenture, by a transfer of funds to an account designated in the Securities
Register. Notwithstanding the foregoing, so long as the Holder of this
Debenture is the Property Trustee, the payment of the principal of and interest
on this Debenture will be made by wire transfer in immediately available funds
at such place and to such account as may be designated by the Property Trustee.
Payment of principal of the Debentures will only be made upon surrender of the
Debentures to the Trustee or Paying Agent.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been manually
signed by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
-2-
<PAGE> 10
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: AMERICAN GENERAL CORPORATION
-------------------------------
By:
-----------------------------
Attest:
By:
---------------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
BANKERS TRUST COMPANY
By:
-----------------------------
Authorized Signatory
-3-
<PAGE> 11
[FORM OF REVERSE SIDE]
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in and
all issued or to be issued in one or more series under and pursuant to an
Indenture, dated as of November 15, 1997, executed and delivered between the
Company and Bankers Trust Company (as supplemented or amended from time to
time, the "Indenture" which, for the purposes hereof, shall be deemed to
include the Board Resolution dated September 2, 1999 establishing the terms of
the Debentures in accordance with the Indenture), to which Indenture reference
is hereby made for a description of the rights, limitations or rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures, and to all of which provisions the Holder of
this Debenture by acceptance hereof, assents and agrees. By the terms of the
Indenture, the Debentures are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Debentures is limited in aggregate principal amount
to $206,185,575 except as specified in the Indenture.
Except as provided in the next paragraph with respect to the
occurrence of a Special Event, the Debentures may not be redeemed by the
Company prior to September 8, 2004. The Company shall have the right to redeem
the Debentures in whole or in part at any time and from time to time on or
after September 8, 2004 (an "Optional Redemption"), at a redemption price equal
to 100% of the principal amount plus any accrued and unpaid interest, if any,
to the date of such redemption (the "Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days' notice.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Company
shall have the right, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole (but not in part) before September 8, 2004 for
cash at the Redemption Price, within 90 days following the occurrence of such
Special Event.
"Tax Event" means that the Administrative Trustees of American General
Capital I, a Delaware business trust (the "Trust"), shall have received an
opinion of an independent tax counsel experienced in such matters to the effect
that, as a result of (i) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority affecting taxation, or
(ii) any official or administrative pronouncement or action or judicial
decision, interpreting or applying such laws or regulations, which amendment or
change becomes effective or such pronouncement, action or decision is announced
or occurs on or after September 2, 1999, there is more than an insubstantial
risk that (A) the Trust is or, within 90 days of the date of such opinion,
would be subject to United States federal income tax with respect to interest
accrued or received on the Debentures, (B) interest payable by the Company on
the Debentures is not or, within 90 days of the date of such opinion, would not
be deductible, in whole or in part, by the Company for United States federal
income tax purposes, or (C) the Trust is or, within 90 days of the date of such
opinion, would be, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges.
-4-
<PAGE> 12
"Investment Company Event" means that such Administrative Trustees of
the Trust shall have receive an opinion of an independent counsel experienced
in practice under the Investment Company Act of 1940, as amended, to the effect
that, as a result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is more than an insubstantial risk that the Trust is or will be
considered an "Investment Company" that is required to be registered under the
Investment Company Act of 1940, as amended, which Change in 1940 Act Law
becomes effective on or after September 2, 1999.
Unless the Company defaults in the payment of the Redemption Price, on
and after the date of redemption, interest shall cease to accrue on the
Debentures or portions thereof called for redemption. If the Debentures are
only partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures will be redeemed by such method as the Trustee shall deem fair and
appropriate. In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series (for the unredeemed portion hereof) will
be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions that, if no Event of Default with
respect to the Debentures shall have occurred and be continuing, permit the
Company at any time, and from time to time, during the term of the Debentures,
to extend the interest payment period of the Debentures for up to 20
consecutive quarters not to extend beyond the Maturity of the Debentures (an
"Extension Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Debentures to the extent that payment of such interest is
enforceable under applicable law). At the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, and if no Event of Default with respect to the
Debentures shall have occurred and be continuing, the Company may commence a
new Extension Period.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions and limitations provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, and subject to certain
limitations, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Debentures. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the Debentures of any series at any time outstanding, on behalf of all of
the Holders of the Debentures of such series, to waive any past default with
respect to such series, and its consequences, except a default in the payment
of the principal of or interest on the Debentures or a default in respect of a
covenant or provision of the Indenture or the Debentures of such series which
cannot be modified or amended without the consent of each Holder of Debentures
of such series affected. Any such consent or waiver by the Holder of this
Debenture shall be conclusive and binding upon such Holder and upon
-5-
<PAGE> 13
all future Holders and owners of this Debenture and of any Debentures issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the time, place and rate and in the coin or
currency herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Securities Register of the Company, upon surrender of this
Debenture for registration of transfer at the Corporate Trust Office of the
Trustee duly endorsed by or accompanied by a written instrument of transfer in
form satisfactory to the Company duly executed by the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Debentures
of authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any Registrar shall be affected by any notice
to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture or any obligation of the Company under this
Debenture or the Indenture or for any claim based hereon or thereon, against
any incorporator, stockholder, officer, director or employee, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, Debentures of this series so issued are exchangeable for
a like aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Company and the Holder agree (i) that for United Stated federal,
state and local tax purposes it is intended that the Debenture constitute
indebtedness and (ii) to file all United States federal, state and local tax
returns and reports on such basis (unless the Company or the Holder, as the
case may be, shall have received an opinion of independent nationally
recognized tax counsel
-6-
<PAGE> 14
to the effect that as a result of a change in law after the date of the
issuance of the Debenture the Company or the Holder, as the case may be, is
prohibited from filing on such basis).
The Indenture and this Debenture shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws principles thereof.
-7-
<PAGE> 15
ABBREVIATIONS
The following abbreviations, when used in the inscription on the first
page of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations.
UNIF GIFT MIN ACT --
-------------------------------
(Cust)
Custodian
-------------------------------
(Minor)
Under Uniform Gifts to Minors Act
-------------------------------
(State)
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants
in common
Additional abbreviations may be used though not in the above list.
--------------------------------------------
-8-
<PAGE> 16
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
tranfer(s) unto:
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
the within Debenture and all rights thereunder, and hereby and irrevocably
constitues and appoints , attorney to transfer this debenture on
the books of the Company, with full power of substitution.
Date:
------------------------------------------
Signature:
-------------------------------------
(Sign exactly as your name appears
on the face of the within Debenture)
-9-
<PAGE> 1
EXHIBIT 4.3
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AMERICAN GENERAL CAPITAL I
DATED AS OF SEPTEMBER 8, 1999
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(a).......................................................................................................5.3(a)
310(b).......................................................................................................5.3(c)
310(c).................................................................................................Inapplicable
311(a) and (b)...............................................................................................5.3(c)
311(c).................................................................................................Inapplicable
312(a).......................................................................................................2.2(a)
312(b).......................................................................................................2.2(b)
313.............................................................................................................2.3
314(a)..........................................................................................................2.4
314(b).................................................................................................Inapplicable
314(c)..........................................................................................................2.5
314(d).................................................................................................Inapplicable
314(e).....................................................................................................1.1, 2.5
314(f).................................................................................................Inapplicable
315(a).......................................................................................................3.9(b)
315(b).......................................................................................................2.7(a)
315(c).......................................................................................................3.9(a)
315(d).......................................................................................................3.9(b)
316(a) and (b)...................................................................2.6 and Annex I (Sections 6 and 7)
316(c).......................................................................................................3.6(e)
317(a).......................................................................................................3.8(h)
317(b).......................................................................................................3.8(i)
318(a).......................................................................................................2.1(c)
</TABLE>
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.....................................................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................................6
SECTION 2.2 Lists of Holders of Securities..................................................................7
SECTION 2.3 Reports by the Property Trustee.................................................................7
SECTION 2.4 Periodic Reports to Property Trustee............................................................7
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................................7
SECTION 2.6 Events of Default; Waiver.......................................................................7
SECTION 2.7 Event of Default; Notice........................................................................9
ARTICLE III
ORGANIZATION
SECTION 3.1 Name............................................................................................9
SECTION 3.2 Office..........................................................................................9
SECTION 3.3 Purpose.........................................................................................9
SECTION 3.4 Authority......................................................................................10
SECTION 3.5 Title to Property of the Trust.................................................................10
SECTION 3.6 Powers and Duties of the Administrative Trustees...............................................10
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...........................................12
SECTION 3.8 Powers and Duties of the Property Trustee......................................................13
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee....................................15
SECTION 3.10 Certain Rights of Property Trustee.............................................................16
SECTION 3.11 Delaware Trustee...............................................................................18
SECTION 3.12 Execution of Documents.........................................................................18
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........................................18
SECTION 3.14 Duration of Trust..............................................................................18
SECTION 3.15 Mergers........................................................................................19
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities........................................................20
SECTION 4.2 Responsibilities of the Sponsor................................................................20
SECTION 4.3 Right to Proceed...............................................................................21
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-trustee..................................................21
SECTION 5.2 Delaware Trustee...............................................................................21
SECTION 5.3 Property Trustee; Eligibility..................................................................22
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally...............22
SECTION 5.5 Administrative Trustees........................................................................23
SECTION 5.6 Delaware Trustee...............................................................................23
SECTION 5.7 Appointment, Removal and Resignation of Trustees...............................................23
SECTION 5.8 Vacancies Among Trustees.......................................................................24
SECTION 5.9 Effect of Vacancies............................................................................25
SECTION 5.10 Meetings.......................................................................................25
SECTION 5.11 Delegation of Power............................................................................25
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business....................................25
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions..................................................................................26
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities........................................................26
SECTION 7.2 Execution and Authentication...................................................................26
SECTION 7.3 Form and Dating................................................................................27
SECTION 7.4 Registrar and Paying Agent.....................................................................28
SECTION 7.5 Paying Agent to Hold Money in Trust............................................................28
SECTION 7.6 Replacement Securities.........................................................................29
SECTION 7.7 Outstanding Preferred Securities...............................................................29
SECTION 7.8 Preferred Securities in Treasury...............................................................29
SECTION 7.9 Temporary Securities...........................................................................29
SECTION 7.10 Cancellation...................................................................................30
SECTION 7.11 CUSIP Numbers..................................................................................30
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust...........................................................................30
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.........................................................................31
SECTION 9.2 Deemed Security Holders........................................................................32
SECTION 9.3 Book-Entry Interests...........................................................................32
SECTION 9.4 Notices to Clearing Agency.....................................................................33
SECTION 9.5 Appointment of Successor Clearing Agency.......................................................33
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.............................................................................33
SECTION 10.2 Exculpation...........................................................................33
SECTION 10.3 Fiduciary Duty........................................................................34
SECTION 10.4 Indemnification.......................................................................34
SECTION 10.5 Outside Businesses....................................................................37
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...........................................................................37
SECTION 11.2 Certain Accounting Matters............................................................37
SECTION 11.3 Banking...............................................................................38
SECTION 11.4 Withholding...........................................................................38
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................................................38
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee....................................41
SECTION 13.2 Representations and Warranties of Delaware Trustee....................................41
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...............................................................................42
SECTION 14.2 Governing Law.........................................................................43
SECTION 14.3 Intention of the Parties..............................................................43
SECTION 14.4 Headings..............................................................................43
SECTION 14.5 Successors and Assigns................................................................43
SECTION 14.6 Partial Enforceability................................................................43
SECTION 14.7 Counterparts..........................................................................44
</TABLE>
iii
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AMERICAN GENERAL CAPITAL I
September 8, 1999
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of September 8, 1999, by the Trustees (as defined
herein), the Sponsor (as defined herein) and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust (as defined herein) to
be issued pursuant to this Declaration;
WHEREAS, the Delaware Trustee (as defined herein), the
Administrative Trustees (as defined herein) and the Sponsor established American
General Capital I (the "Trust"), a trust created under the Business Trust Act
(as defined herein) pursuant to a Declaration of Trust dated as of November 14,
1997 (the "Original Declaration"), and the Certificate of Trust for the Trust
(the "Certificate of Trust") filed with the Secretary of State of the State of
Delaware on November 14, 1997;
WHEREAS, the parties hereto, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of the Trust, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration and, in consideration of the
mutual covenants contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration and each Annex and Exhibit hereto, as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined
herein) has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or the context otherwise
requires;
<PAGE> 7
(f) a term defined in the Indenture (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined
in this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" means each of Nicholas R. Rasmussen, James L.
Gleaves and Gregory N. Picard, solely in such Person's capacity as
Administrative Trustee of the Trust created and continued hereunder and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.
"Book-Entry Interest" means a beneficial interest in a Global Preferred
Security registered in the name of a Clearing Agency or its nominee, ownership
and transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.3.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in The City of New York, New York are authorized
or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time or any
successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Preferred Security and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Time of Delivery", as such term is defined in
the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Four Albany Street, New York, New York
10006, Attn: Corporate Trust and Agency Services - Corporate Market Services.
"Covered Person" means: (a) any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holders of the Securities.
"Debenture Issuer" means American General Corporation, a Texas
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the 7 7/8% Junior Subordinated Debentures due 2048
of the Debenture Issuer issued pursuant to the Indenture.
"Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" has the meaning set forth in Section
7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.1(b).
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Preferred Securities" has the meaning set forth in Section
7.3(a).
"Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Junior Subordinated Indenture, dated as of
November 15, 1997, between the Debenture Issuer and the Debenture Trustee, as
supplemented or amended from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation Amount" with respect to any Security means the amount
designated as such with respect thereto in Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of such Person. Any Officers' Certificate
delivered by the Trust shall be signed by at least one Administrative Trustee.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
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"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement dated as
of the date hereof of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice president, any assistant vice president, any managing director, any
secretary, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means American General Corporation, a Texas corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b).
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Property Trustee" has the meaning set forth in Section
5.7(b).
"Successor Securities" has the meaning set forth in Section 3.15.
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"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of 10% or more of the aggregate
Liquidation Amount (including the amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Tax Event" has the meaning set forth in Annex I.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and the Administrative Trustees), so long as such Person shall continue as
Trustee of the Trust in accordance with the terms hereof, and all other Persons
who may from time to time be duly appointed, qualified and serving as Trustees
in accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Trustee Account and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of this
Declaration.
"Underwriting Agreement" means the Pricing Agreement dated September 2,
1999 among the Sponsor, the Trust, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated,
Salomon Smith Barney Inc. and The Robinson Humphrey Company, LLC, as
representatives of the several underwriters named therein (including the form of
Underwriting Agreement attached thereto) relating to the initial offering and
sale of the Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable to such an indenture, be governed by
such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
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(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the
Property Trustee is Registrar for the Securities, (i) within 14 days
after each record date for payment of Distributions, a list, in such
form as the Property Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of
such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Property
Trustee by the Sponsor and the Administrative Trustees on behalf of the
Trust and written notice of such fact is provided by an Administrative
Trustee to the Property Trustee, and (ii) at any other time, within 30
days of receipt by the Trust of a written request for a List of Holders
as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained
in Lists of Holders given to it or which it receives in the capacity as
Paying Agent (if acting in such capacity), provided that the Property
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after December 31 of each year, commencing December 31,
1999, the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information (if any) as are required by Section 314 of the Trust Indenture Act
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Sponsor or the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
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SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of the
Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the
proportion in aggregate Liquidation Amount of the Preferred
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded
from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist,
and any Event of Default with respect to the Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent
or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default with respect
to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of
the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences, provided, that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the Common
Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in aggregate Liquidation Amount of the Common Securities that
the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, that each Holder of the Common Securities will be
deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences
until all Events of Default with respect to the Preferred Securities
have been cured, waived or otherwise eliminated, and until such Events
of Default have been so cured, waived or
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otherwise eliminated, the Property Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only
the Holders of the Preferred Securities will have the right to direct
the Property Trustee in accordance with the terms of the Securities.
The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
are hereby expressly excluded from this Declaration and the Securities,
as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured
for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) Within five Business Days after the occurrence of any
Event of Default actually known to a Responsible Officer of the
Property Trustee, the Property Trustee shall transmit notice of such
Event of Default to the Holders of the Preferred Securities, the
Administrative Trustees and the Sponsor, unless such Event of Default
shall have been cured, waived or otherwise eliminated. The Sponsor and
the Administrative Trustees shall file annually with the Property
Trustee a certification as to whether or not they are in compliance
with all the conditions and covenants applicable to them under this
Declaration.
(b) For purposes of this Section 2.7, the Property Trustee
shall not be deemed to have knowledge of any default or Event of
Default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the
Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "American General Capital I", as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is c/o American
General Corporation, 2929 Allen Parkway, Houston, Texas 77019-2155. On ten
Business Days' written notice to the Holders of the Securities and the Property
Trustee, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Trust Securities, (b) to use the proceeds from the sale of the
Securities to acquire the Debentures, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto.
SECTION 3.4 Authority.
Except as specifically provided in this Declaration, the Property
Trustee and the Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to execute, deliver, issue and sell the Preferred
Securities and the Common Securities in accordance with this
Declaration; provided, however, that (i) the Trust may issue no more
than one series of Preferred Securities and no more than one series of
Common Securities, (ii) there shall be no interests in the Trust other
than the Securities, and (iii) the issuance of Securities shall be
limited to a simultaneous issuance of both Preferred Securities and
Common Securities at the Closing Time;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) file with the Commission a registration statement
prepared by the Sponsor on the appropriate form in relation to
the Preferred Securities, including any amendments thereto and
including any supplements or amendments to the form of
prospectus included therein, as permitted by the rules and
regulations of the Commission;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
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Preferred Securities in any state in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) at the direction of the Sponsor, execute and
file an application, prepared by the Sponsor, to the New York
Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing or quotation of the
Preferred Securities;
(iv) to execute and deliver letters, documents, or
instruments with DTC and any other Clearing Agencies relating
to the Preferred Securities;
(v) if required, execute and file with the Commission
a registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration
of the Preferred Securities under Section 12(b) or 12(g) of
the Exchange Act; and
(vi) to cause the Trust to enter into such agreements
and arrangements as may be necessary or desirable in
connection with the sale of Preferred Securities to the
underwriters thereof and the consummation thereof, and to take
all action as may be necessary or desirable in connection with
the consummation thereof;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however,
that the Administrative Trustees shall cause legal title to the
Debentures to be held of record in the name of the Property Trustee for
the benefit of the Holders of the Preferred Securities and the Holders
of Common Securities;
(d) if applicable, to give the Sponsor and the Property
Trustee prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of the Preferred
Securities and the Holders of the Common Securities as to such actions
and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e),
the Property Trustee has the exclusive power to bring such Legal
Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may
be executed by any Administrative Trustee;
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(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
for the Securities or to appoint a Paying Agent for the Securities as
provided in Section 7.4;
(m) to give prompt written notice to the Property Trustee and
to Holders of the Securities of any notice received from the Debenture
Issuer of its election to defer payments of interest on the Debentures
by extending the interest payment period under the Indenture;
(n) to take all action (provided that such action does not
materially adversely affect the interests of the Holders) that may be
necessary or appropriate for the preservation and the continuation of
the Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary to protect
the limited liability of the Holders of the Preferred Securities or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in
their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust not to be classified for
United States federal income tax purposes as an association
taxable as a corporation; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes;
(p) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the
Administrative Trustees, on behalf of the Trust; and
(q) to execute, deliver and record, file or register, as
applicable, all documents, certificates, agreements or instruments,
perform all duties and powers, and do all things for and on behalf of
the Trust in all matters necessary, advisable or incidental to the
foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor.
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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee and the Delaware Trustee) shall cause the Trust not
to, engage in any activity other than as required or authorized by this
Declaration. The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds
to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust Property for other than a Trust
purpose or execute any mortgage in respect of, or pledge, any
Trust Property;
(iv) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities in
any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Declaration, (A)
direct the time, method and place of conducting any proceeding
with respect to any remedy available to the Debenture Trustee,
or exercise any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any
right to rescind or annul any declaration that the principal
of all the Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of independent tax
counsel experienced in such matters to the effect that such
amendment, modification or termination will not cause the
Trust to be classified as an association taxable as a
corporation for United States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the
benefit of the Trust and the Holders of the Securities. The right,
title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property
Trustee in accordance with Section 5.7. Such vesting and cessation of
title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
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(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property
Trustee, and maintained in the Property Trustee's trust
department, on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make or cause the Paying
Agent to make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds
in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. Unless the
Property Trustee Account is held as a trust account in the
corporate trust department of the Property Trustee, the
Property Trustee Account shall be an account that is
maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the
rating assigned to the Preferred Securities by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent
the Debentures are prepaid or mature; and
(iii) upon written notice of distribution issued by
the Administrative Trustees in accordance with the terms of
the Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the occurrence of
certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of
Default of which a Responsible Officer of the Property Trustee has
actual knowledge or the Property Trustee's duties and obligations under
this Declaration or the Trust Indenture Act; provided, however, that if
an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay the
principal of or premium, if any, or interest on the Debentures on the
date such principal, premium, if any, or interest is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder
of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium,
if any, or interest on the Debentures having a principal amount equal
to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action") on or after the respective due date
specified in the Debentures. Notwithstanding any payments made to such
Holder by the Debenture Issuer in connection with such Direct Action,
the Debenture Issuer shall remain obligated to pay the principal of,
premium, if any, or interest on such Debentures, and the Debenture
Issuer shall be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
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(ii) a Successor Property Trustee has been appointed
and has accepted that appointment in accordance with Section
5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Property Trustee occurs and is
continuing, the Property Trustee shall, for the benefit of Holders of
the Securities, enforce its rights as holder of the Debentures subject
to the rights of the Holders pursuant to this Declaration and the terms
of such Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as
additional Paying Agents and to pay Distributions, redemption payments
or liquidation payments on behalf of the Trust with respect to all
Securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any such additional Paying Agent may be
removed by the Property Trustee at any time the Property Trustee
remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time
by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the Securities and no
implied covenants shall be read into this Declaration against the
Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in
it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and in the
Securities and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration and in the Securities,
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and no implied covenants or obligations shall be read
into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the
requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error or judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in Liquidation Amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account shall be to deal
with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the payment of
any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible
for monitoring the compliance by the Administrative Trustees
or the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable for any
default or misconduct of the Administrative Trustees or the
Sponsor.
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SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may
be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that
a matter be established before undertaking, suffering or
omitting any action hereunder, the Property Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the
Administrative Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any-financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or reregistration thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice or opinion of
such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the Property
Trustee security indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including
reasonable attorneys' fees and expenses and the expenses of
the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances
as may be requested by the Property Trustee, provided, that
nothing contained in this Section 3.10(a)(vi) shall be taken
to relieve the Property Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, approval,
bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as
it may see fit;
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(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through its agents, custodians,
nominees or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform any
such action and no third party shall be required to inquire as
to the authority of the Property Trustee to so act or as to
its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by
the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions shall be given by the Holders of
the same proportion in Liquidation Amount of the Securities as
would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be fully protected in conclusively
relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided in this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Administrative Trustees, the Property Trustee or of the Trustees generally
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act and taking such actions
as are required to be taken by the Delaware Trustee under the Business Trust
Act.
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SECTION 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or applicable
law, any Administrative Trustee is authorized to execute on behalf of the Trust
any documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence up to September 30, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to any
Person, except as described in Section 3.15(b) and (c) hereof or in
Annex I.
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two,
a majority of the Administrative Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Property
Trustee, merge or convert with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the
Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as
the Property Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed or quoted,
or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or with
another organization on which the Preferred Securities are
then listed or quoted, if any;
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(iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor
Securities) in any material respect (other than any dilution
of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) prior to such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Sponsor has received an opinion of an
independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to any
dilution of the Holders' interests in the new
entity); and
(B) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer, or lease, the Trust (or the Successor
Entity) will continue to be classified as a grantor
trust for United States federal income tax purposes;
and
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor
Entity and guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of all Holders of the Securities, consolidate,
amalgamate, merge or convert with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other
entity to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion,
replacement, conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for United
States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are issued
and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust, execute and file with
the Commission a registration statement on the appropriate form in
relation to the Preferred Securities, the Preferred Securities
Guarantee and the Debentures, including any amendments or supplements
thereto and including any supplements or amendments to the form of
prospectus included therein, as permitted by the rules and regulations
of the Commission;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) if deemed necessary or advisable by the Sponsor, to
prepare for filing and request the Administrative Trustees to cause the
filing by the Trust of an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for
listing or quotation of the Preferred Securities;
(d) if required, to prepare for and execute for filing by the
Trust with the Commission a registration statement on Form 8-A relating
to the registration of the Preferred Securities under Section 12(b) or
12(g) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of, and execute and deliver on
behalf of the Trust, the Underwriting Agreement providing for the sale
of the Preferred Securities and any agreements or instruments
contemplated thereby.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of the Preferred
Securities, in the event that a failure of the Trust to pay Distributions on the
Preferred Securities is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures, to institute Direct Actions against
the Debenture Issuer for enforcement of its payment obligations on the
Debentures.
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ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two (2); provided further, that (1) if required by the Business Trust
Act, one Trustee, in the case of a natural person, shall be a person
who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (2) at least one Trustee
shall be an employee or officer of, or affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property
Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an
Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's
property may at the time be located, the Holders of a Majority in
Liquidation Amount of the Common Securities acting as a class at a
meeting of the Holders of the Common Securities shall have power to
appoint one or more persons either to act as a co-trustee, jointly with
the Property Trustee, of all or any part of the Trust's property, or to
act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest
in such person or persons in such capacity any property, title, right
or power deemed necessary or desirable, subject to the provisions of
this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any
such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided, that, if the Property Trustee
has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, then the Property
Trustee may also be the Delaware Trustee and Section 3.11 shall have no
application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
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(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an
indenture trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
Bankers Trust Company
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
Nicholas R. Rasmussen,
James L. Gleaves, and
Gregory N. Picard
(b) Except where a requirement for action by a specific number
of Administrative Trustees is expressly set forth in this Declaration
and except with respect to any action the taking of which is the
subject of a meeting of the Administrative Trustees, any action
required or permitted to be taken by the Administrative Trustees may be
taken by, and any power of the Administrative Trustees may be exercised
by, or with the consent of, any one such Administrative Trustee.
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(c) Except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on
behalf of the Trust any documents which the Administrative Trustees
have the power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Bankers Trust (Delaware)
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after
the issuance of any Securities, by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting
as a class at a meeting of the Holders of the Common
Securities;
(iii) in the case of the Property Trustee and the
Delaware Trustee, unless an Event of Default shall have
occurred and be continuing after the issuance of any
Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the
Delaware Trustee, if an Event of Default shall have occurred
and be continuing after the issuance of the Securities, by
vote of Holders of a Majority in Liquidation Amount of the
Preferred Securities voting as a class at a meeting of Holders
of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Property Trustee under Section
5.3 (a "Successor Property Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a "Successor Delaware
Trustee") has been appointed and has accepted such appointment
by written instrument executed by such Successor Delaware
Trustee and delivered to the Administrative Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
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(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware
Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
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SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
and without prior notice by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any registration
statement or amendment thereto filed with the Commission, or making any
other governmental filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust
the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which any Trustee (excluding any Administrative Trustee
that is a natural person) may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee hereunder, provided that such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the terms of
such Holder's Securities as set forth herein and in Annex I. If and to the
extent that the Debenture Issuer makes a payment of interest (including
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held
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by the Property Trustee or any other payments with respect to the Debentures
held by the Property Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders in accordance with the respective terms of the
Securities held by them.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided
beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Preferred Securities") and one class of
common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata (as defined in Annex I hereto) with the
Common Securities except that, where an Event of Default has occurred
and is continuing, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of
the Holders of the Preferred Securities.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed
to the terms of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
one or more Administrative Trustees by manual or facsimile signature.
In case any Administrative Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Administrative Trustee
before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the person who
signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by
such persons who, at the actual date of execution of such Security,
shall be the Administrative Trustees of the Trust, although at the date
of the execution and delivery of the Declaration any such person was
not such an Administrative Trustee.
(b) A Common Security shall be valid upon execution by an
Administrative Trustee by manual or facsimile signature without any act
of the Property Trustee. A Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee, which signature shall be conclusive evidence that the
Preferred Security has been authenticated under this Declaration.
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Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in Annex I hereto except as provided in
Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee hereunder with respect to the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be in definitive or global form and
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by one or more of them. The Securities may have letters, CUSIP
or other numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange or quotation system
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee, the Delaware Trustee, the Administrative
Trustees and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to be bound thereby.
(a) Global Securities. The Preferred Securities shall be
issued in the form of one or more permanent global Securities in
definitive, fully registered form without Distribution coupons with the
appropriate global legends set forth in Exhibit A-1 hereto (a "Global
Preferred Security"), which shall be deposited on behalf of the
purchasers of the Preferred Securities represented thereby with the
Property Trustee or the Registrar, at its New York office, as custodian
for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the Trust
and authenticated by the Property Trustee as hereinafter provided. The
number of Preferred Securities represented by the Global Preferred
Security may from time to time be increased or decreased by adjustments
made on the records of the Property Trustee and the Clearing Agency or
its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be
deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Global Preferred Securities that (i)
shall be registered in the name of Cede & Co. or other nominee of such
Clearing Agency and (ii) shall be delivered by the Trustee to such
Clearing Agency or pursuant to such Clearing Agency's written
instructions or held by the Property Trustee or the Registrar as
custodian for the Clearing Agency.
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Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with
respect to any Global Preferred Security held on their behalf by the
Clearing Agency or by the Property Trustee or the Registrar as the
custodian of the Clearing Agency or under such Global Preferred
Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as
the absolute owner of such Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Trust, the Property Trustee or any agent of the Trust or the
Property Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Clearing Agency or impair, as
between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of
the rights of a holder of a beneficial interest in any Global Preferred
Security.
(c) Definitive Preferred Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Global Preferred
Security will not be entitled to receive physical delivery of
certificated Preferred Securities ("Definitive Preferred Securities").
SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"), and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Administrative Trustees may appoint the Registrar and Paying Agent
and may appoint one or more co-registrars and one or more additional paying
agents in such other locations as it shall determine. The term "Registrar"
includes any additional registrar, the term "Paying Agent" includes any
additional paying agent. The Administrative Trustees may change any Paying Agent
or Registrar without prior notice to any Holder. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Sponsor. The Administrative Trustees shall notify the Property
Trustee of the name and address of any Agent not a party to this Declaration. If
the Administrative Trustees fail to appoint or maintain another entity as
Registrar or Paying Agent, the Property Trustee shall act as such. The Trust or
any of its Affiliates may act as Paying Agent or Registrar.
The Trust shall act as Paying Agent and Registrar for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar and
Paying Agent for the Preferred Securities.
The Registrar and Paying Agent shall be entitled to all of the rights,
protections, immunities and indemnities afforded to the Property Trustee
hereunder.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions on the Securities, and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
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SECTION 7.6 Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. An indemnity bond must be provided by
the Holder which, in the judgment of the Property Trustee, is sufficient to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced.
The Trust may charge such holder for its expenses in replacing a Security.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced pursuant to Section 7.6 hereof, it
ceases to be outstanding unless the Property Trustee receives proof satisfactory
to it that the replaced Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
Except as otherwise provided herein, a Preferred Security does not
cease to be outstanding because one of the Trustees, the Sponsor or an Affiliate
of the Sponsor holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.
SECTION 7.9 Temporary Securities; Certificated Securities.
(a) Until Definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the
Property Trustee shall authenticate, temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities
but may have variations that the Trust considers appropriate for
temporary Securities. Without unreasonable delay, the Administrative
Trustees shall prepare and, in the case of the Preferred Securities,
the Property Trustee shall authenticate, Definitive Securities in
exchange for temporary Securities.
(b) A Global Preferred Security deposited with the Clearing
Agency or with the Property Trustee or the Registrar as custodian for
the Clearing Agency pursuant to Section 7.3 shall be transferred to the
beneficial owners thereof in the form of certificated Preferred
Securities only if (i) the Clearing Agency notifies the Company that it
is unwilling or unable to continue as Clearing Agency for such Global
Preferred Security or if at any time such Clearing Agency ceases to be
a "clearing agency" registered under the Exchange Act and a clearing
agency is not appointed by the
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Administrative Trustees within 90 days of such notice, or (ii) the
Administrative Trustees in their sole discretion elect to cause the
issuance of certificated Preferred Securities.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred
Securities pursuant to this Section 7.9 shall be surrendered by the
Clearing Agency to the Property Trustee located in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from
time to time in part, without charge, and the Property Trustee shall
authenticate and make available for delivery, upon such transfer of
each portion of such Global Preferred Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the
form of certificated Preferred Securities. Any portion of a Global
Preferred Security transferred pursuant to this Section shall be
registered in such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Preferred Security may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interests
through Participants, to take any action which such Holder is entitled
to take under this Declaration or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to
the Property Trustee or the Registrar a reasonable supply of
certificated Preferred Securities in fully registered form without
distribution coupons.
SECTION 7.10 Cancellation.
The Administrative Trustees at any time may deliver the Securities to
the Property Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Property Trustee any Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Securities surrendered for registration of transfer,
redemption, exchange, payment, replacement or cancellation and shall dispose of
canceled Securities as the Administrative Trustees direct, provided that the
Property Trustee shall not be obligated to destroy Preferred Securities. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or redeemed or that have been delivered to the Property Trustee
for cancellation.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically be dissolved and its affairs
wound up upon the earliest to occur of the following events:
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(i) the bankruptcy of the Sponsor;
(ii) the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor,
upon the dissolution of the Trust after having obtained the
consent of at least a Majority in Liquidation Amount of the
Securities voting together as a class to dissolve the Trust,
or the revocation of the Sponsor's charter and the expiration
of 90 days after the date of revocation without a
reinstatement thereof;
(iii) the distribution, after satisfaction of the
liabilities of the Trust to the creditors of the Trust, of a
Like Amount of the Debentures to the Holders of the Securities
pursuant to the terms thereof upon receipt of a written
direction from the Sponsor (which shall be at its sole
discretion) while the Debentures are outstanding requiring the
Trustees to dissolve the Trust and distribute a Like Amount of
the Debentures to Holders of the Securities;
(iv) the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption
thereof shall, after satisfaction of the liabilities of the
Trust to the creditors of the Trust, have been paid to the
Holders in accordance with the terms of the Securities;
(vi) the expiration of the term of the Trust provided
in Section 3.14; or
(vii) before the issuance of any Securities, with the
consent of the Administrative Trustees and the Sponsor.
(b) As soon as is practicable upon completion of winding up of
the Trust following the occurrence of an event referred to in Section
8.1(a) and after satisfaction of all liabilities to creditors of the
Trust, the Administrative Trustees shall terminate the Trust by filing
a certificate of cancellation with the Secretary of State of the State
of Delaware in accordance with the Business Trust Act.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. To the fullest extent
permitted by law, any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) The Sponsor may not transfer the Common Securities except
to an Affiliate of the Sponsor and except pursuant to any merger,
consolidation, sale of all or substantially all of its assets or other
transaction permitted pursuant to Article VIII of the Indenture.
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(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities, which
will be effected without charge but only upon payment (with such
indemnity as the Trustees may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon
surrender for registration of transfer of any Securities, the Trustees
shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Administrative Trustees duly
executed by the Holder or such Holder's attorney duly authorized in
writing. Each Security surrendered for registration of transfer shall
be canceled by the Administrative Trustees. A transferee of a Security
shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
SECTION 9.2 Deemed Security Holders.
The Trust, the Trustees, the Paying Agent and the Registrar may treat
the Person in whose name any Security shall be registered on the books and
records of the Trust as the sole owner of such Security for purposes of
receiving Distributions and for all other purposes whatsoever and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Security on the part of any Person, whether or not the Trust, the Trustees,
the Paying Agent or the Registrar shall have actual or other notice thereof.
SECTION 9.3 Book-Entry Interests.
Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 7.9. Unless and until definitive, fully registered Preferred Securities
certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 7.9:
(a) the provisions of this Section 9.3 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Preferred Securities and
receiving approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Preferred
Security Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3
conflict with any other provisions of this Declaration, the provisions
of this Section 9.3 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants, including receiving and transmitting
payments of Distributions on the Global Preferred Securities to such
Clearing Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration,
so long as any Global Preferred Securities remain outstanding, the
Trustees may conclusively rely on, and shall be protected in relying
on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Security
Beneficial
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Owners' votes or assigning the right to vote on any matter to any other
Persons either in whole or in part.
SECTION 9.4 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Securities to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
SECTION 9.5 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Preferred Securities Guarantee and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities, which shall be made solely from
assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or
otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to
the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall 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.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct
with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust
or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to
the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Person and any Indemnified Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
each Covered Person or Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
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SECTION 10.4 Indemnification and Expenses.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an
action by or in the right of the Trust) by reason of the fact
that he is or was an Indemnified Person against expenses
(including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Trust, and with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that he
is or was an Indemnified Person against expenses (including
attorneys' fees and expenses) actually and reasonably incurred
by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to
which such Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that an Indemnified Person shall
be successful on the merits or otherwise (including dismissal
of an action without prejudice or the settlement of an action
without admission of liability) in defense of any action, suit
or proceeding referred to in paragraphs (i) and (ii) of this
Section 10.4(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
(iv) Any indemnification of an Administrative Trustee
under paragraphs (i) and (ii) of this Section 10.4(a) (unless
ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees
by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such action,
suit or proceeding, (2) if such a Quorum is not obtainable,
or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
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(v) Expenses (including attorneys' fees and expenses)
incurred by an Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this
Section 10.4(a) shall be paid by the Sponsor in advance of the
final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding
the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the
Administrative Trustees by a majority vote of a Quorum of
disinterested Administrative Trustees, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the
facts known to the Administrative Trustees, counsel or the
Common Security Holder, as the case may be, at the time such
determination is made, such Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in
or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Indemnified
Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in
instances where the Administrative Trustees, independent legal
counsel or Common Security Holder reasonably determine that
such Person deliberately breached his duty to the Trust or its
Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of
this Section 10.4(a) shall not be deemed exclusive of any
other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both
as to action in his official capacity and as to action in
another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to
be provided by a contract between the Sponsor and each
Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any Person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability
under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a
director, trustee, officer or employee of such constituent
entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a)
shall, unless otherwise provided when authorized or ratified,
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continue as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors
and administrators of such a Person.
(b) To the fullest extent permitted by law, the Sponsor agrees
to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii)
any Affiliate of the Property Trustee and the Delaware Trustee, and
(iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person")
for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes
(other than taxes based on the income of such Fiduciary Indemnified
Person) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the earlier
resignation or removal of such Fiduciary Indemnified Person.
(c) The Sponsor agrees to pay to the Trustees from time to
time reasonable compensation for all services rendered by them
hereunder and, except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee, subject to Section 5.3(c), may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
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SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual
United States federal income tax information statement, required by the
Code, containing such information with regard to the Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Administrative Trustees shall endeavor to deliver
all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual
United States federal income tax return, on a Form 1041 or such other
form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrative
Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Administrative Trustees on behalf of the Trust shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees on behalf
of the Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding,
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Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be
amended by a written instrument executed by the Administrative Trustees
(or if there are more than two Administrative Trustees, a majority of
them) together with:
(i) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee, the
Property Trustee;
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee; and
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Sponsor, the Sponsor.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the terms
of this Declaration (including the terms of the
Securities),
provided, however, that the Property Trustee shall not be required to
sign any such amendment; or
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
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(B) reduce or otherwise adversely affect the
rights, powers, duties or immunities of the Property
Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act.
(c) After the Trust has issued any Securities that remain
outstanding, any amendment that would materially adversely affect the
rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities.
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in Liquidation Amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with
any other provision of this Declaration or to make any other
provisions with respect to matters or questions arising under
this Declaration which shall not be inconsistent with the
other provisions of the Declaration;
(ii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iii) modify, eliminate or add to any provisions of
the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any
Securities are outstanding or to ensure that the Trust will
not be required to register as an Investment Company under the
Investment Company Act;
provided that no such amendment may be made pursuant to this Section
12.1(g) that adversely affects the Holders of the Preferred Securities
in any material respect.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which
Holders of such class of Securities are entitled to act under the terms
of this Declaration, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or admitted
for trading. The Administrative Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least
10% in Liquidation Amount of such class of Securities. Such direction
shall be given by delivering to the Administrative Trustees one or more
notices in writing stating that the signing Holders of Securities wish
to call a meeting and indicating the general or specific purpose for
which the meeting is to be called. Any Holders of
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Securities calling a meeting shall specify in writing the Security
certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for
purposes of determining whether the required percentage set forth in
the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at
least seven days and not more than 60 days before the date of
such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in Liquidation Amount
that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented
in writing. The Administrative Trustees may specify that any
written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Administrative Trustees or by such
other Person that the Administrative Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Preferred
Securities are at the time listed or trading, otherwise
provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, Quorum requirements, voting in
person or by proxy or any other matter with respect to the
exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association or
a bank or trust company, duly organized, validly existing and in good
standing under the laws of the United States or a State of the United
States, as the case may be, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) No consent, approval or authorization of, or registration
with or notice to, any federal or New York State banking authority is
required for the execution, delivery or performance by the Property
Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, with power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration and has its principal place of business in the State of
Delaware;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the
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court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration; and
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware, and is a
person that satisfies the requirements of Section 3807(a) of the
Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the
Securities):
American General Capital I
c/o American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Treasury Department
Telecopy: (713) 522-3487
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
Bankers Trust (Delaware)
E. A. Delle Donne Corporate Center
Montgomery Building
1011 Centre Road, Suite 200
Wilmington, Delaware 19805-1266
Attention: M. Lisa Wilkins
Telecopy: (302) 636-3222
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders of the Securities):
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Services -
Corporate Market Services
Telecopy: (212) 250-6961
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<PAGE> 50
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Treasury Department
Telecopy: (713) 522-3487
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws. The provisions of Sections 3540 and 3561 of
Title 12 of the Delaware Code shall not apply to this Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
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<PAGE> 51
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees and the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 52
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
-----------------------------------------
Nicholas R. Rasmussen
not in his individual capacity but
solely as Administrative Trustee
-----------------------------------------
James L. Gleaves
not in his individual capacity but
solely as Administrative Trustee
-----------------------------------------
Gregory N. Picard
not in his individual capacity but
solely as Administrative Trustee
BANKERS TRUST (DELAWARE)
not in its individual capacity but solely
as Delaware Trustee
By:
--------------------------------------
Name:
------------------------------------
BANKERS TRUST COMPANY
not in its individual capacity but solely as
Property Trustee
By:
--------------------------------------
Name:
------------------------------------
AMERICAN GENERAL CORPORATION,
as Sponsor
By:
--------------------------------------
Nicholas R. Rasmussen
Executive Vice President and
Chief Financial Officer
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<PAGE> 53
ANNEX I
TERMS OF
7 7/8% TRUST ORIGINATED PREFERRED SECURITIES
7 7/8% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of September 8, 1999 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration
or, if not defined in such Declaration, as defined in the Indenture):
1. Designation and Number.
(a) Preferred Securities. 8,000,000 Preferred Securities of
the Trust, with an aggregate Liquidation Amount with respect to the
assets of the Trust of TWO HUNDRED MILLION dollars ($200,000,000), and
with a Liquidation Amount with respect to the assets of the Trust of
$25.00 per security, are hereby designated for the purposes of
identification only as "7 7/8% Trust Originated Preferred Securities"
(the "Preferred Securities"). The certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or quotation system on
which the Preferred Securities are listed or quoted.
(b) Common Securities. 247,423 Common Securities of the Trust
with an aggregate Liquidation Amount with respect to the assets of the
Trust of SIX MILLION ONE HUNDRED EIGHTY FIVE THOUSAND FIVE HUNDRED
SEVENTY FIVE dollars ($6,185,575) and a Liquidation Amount with respect
to the assets of the Trust of $25.00 per Security, are hereby
designated for the purposes of identification only as "7 7/8% Common
Securities" (the "Common Securities"). The certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A-2 to
the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount
of $25.00 per Security (the "Liquidation Amount"), such rate being the
rate of interest payable on the Debentures to be held by the Property
Trustee. Distributions in arrears for more than one quarterly period
will bear additional distributions thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes any such additional
distributions unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held
by the Property Trustee and to the extent the Property Trustee has
funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been
paid or, if no Distributions have been paid, from and including
September 8, 1999, to but excluding the related Distribution Date (as
defined below) or the date of redemption, and will be payable quarterly
in arrears on March 31, June 30, September 30 and
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December 31 of each year, commencing on September 30, 1999, except as
otherwise described below. The amount of Distributions payable for any
period will be computed on the basis of a 360-day year consisting of
twelve 30-day months and for any period of less than a full calendar
month on the basis of the actual number of days elapsed in such month.
If any date on which Distributions are payable on the Securities is not
a Business Day, then payment of the Distribution payable on such date
shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date
such payment was originally payable (each date on which Distributions
are payable in accordance with the foregoing, a "Distribution Date").
So long as no Event of Default (as defined in the Indenture)
has occurred and is continuing, the Debenture Issuer has the right
under the Indenture to defer the payment of interest on the Debentures
by extending the interest payment period at any time and from time to
time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each an
"Extension Period"), provided that no Extension Period shall extend
beyond the Maturity of the Debentures. Distributions will be deferred
during any Extension Period. Notwithstanding such deferral,
Distributions to which holders of Securities are entitled shall
continue to accumulate additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at
which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the
Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period,
together with all previous and further extensions, if any, within such
Extension Period, may not exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, or
extend beyond the Maturity of the Debentures. Upon the expiration of
any Extension Period (or any extension thereof) and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements. Payments of Distributions
that have accumulated but not been paid during any Extension Period
will be payable to Holders as they appear on the books and records of
the Trust on the record date for the first scheduled Distribution Date
following the expiration of such Extension Period and prior to the
commencement of any new Extension Period. As long as the Debentures are
held by the Property Trustee, the Debenture Issuer must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period or any extension thereof
at least five Business Days prior to the earlier of (i) the date the
Distributions on the Preferred Securities would have been payable
except for the election to begin or extend such Extension Period and
(ii) the date the Administrative Trustees are required to give notice
to any securities exchange on which the Preferred Securities are listed
(or any other applicable self regulatory organization) or to Holders of
the Preferred Securities of the record date or the date such
Distributions are payable. If the Property Trustee is not the sole
holder of the Debentures, the Debenture Issuer is required to give the
holders of the Debentures and the Debenture Trustee written notice of
its election of an Extension Period at least 10 Business days before
the earlier of (i) the next succeeding interest payment date on the
Debentures, or (ii) the date on which the Debenture Issuer is required
to give notice of the record or payment date of such interest payment
to any national securities exchange. There is no limitation on the
number of times that the Debenture Issuer may elect to begin an
Extension Period.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on
the record dates, which shall be the Business Day prior to the relevant
Distribution date as long as the Preferred Securities are held in
global form by a Clearing Agency, and the 15th day of the last month in
each quarterly distribution period (even if not a
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<PAGE> 55
Business Day) if the Preferred Securities are issued in certificated
form. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Preferred
Securities will be made as follows: (i) if the Preferred Securities are
held in global form by a Clearing Agency (or its nominee), in
accordance with the procedures of the Clearing Agency; and (ii) if the
Preferred Securities are held in definitive form, by check mailed to
the address of the Holder thereof as reflected in the records of the
Registrar unless otherwise agreed by the Trust. The relevant record
dates for the Common Securities shall be the same as the record dates
for the Preferred Securities. Distributions payable on any Securities
that are not punctually paid on any Distribution Date will cease to be
payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified
date determined in accordance with the Indenture.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the
Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
The Sponsor will have the right at any time to dissolve the Trust and
cause the Debentures to be distributed to the Holders of the Trust Securities in
Liquidation of the Trust.
In the event of any dissolution of the Trust pursuant to Sections
8.1(a)(i), (ii), (iv) or (vi) of the Declaration, the Trust shall be liquidated
by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
Distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for Distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount of $25.00 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the dissolution of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
On and from the date fixed by the Administrative Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding; (ii) the Clearing Agency or its
nominee, as the Holder of the Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution; and (iii) any Securities not held by the Clearing Agency or
its nominee will be deemed to represent beneficial interests in a Like Amount of
Debentures, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities, until such Securities
are presented to the Registrar or its agent for cancellation, whereupon the
Debenture Issuer will issue, and the Debenture Trustee will authenticate, a
certificate representing such Debentures. If the Debentures are distributed to
Holders of the Preferred Securities, pursuant to the terms of the Indenture, the
Debenture Issuer will use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities
were listed on immediately prior to the distribution of the Debentures.
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<PAGE> 56
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Maturity
thereof or the date of earlier redemption thereof prior thereto in
accordance with the terms thereof (such redemption being either at the
option of the Debenture Issuer on or after September 8, 2004 in whole
or in part or at the option of the Debenture Issuer in whole but not in
part prior to September 8, 2004 within 90 days after the occurrence of
a Special Event as described below), the proceeds from such repayment
or redemption shall be simultaneously applied by the Property Trustee
(subject to the Property Trustee having received notice no later than
30 days prior to such repayment or redemption) to redeem a Like Amount
of the Securities, on a Pro Rata basis in accordance with Section 9
hereof, at a redemption price equal to 100% of the Liquidation Amount
of the Securities to be redeemed plus accumulated and unpaid
Distributions thereon, if any, to the date of redemption (the
"Redemption Price").
(b) If, at any time, a Tax Event or an Investment Company
Event (each as defined below, and each a "Special Event") shall occur
and be continuing the Debenture Issuer shall have the right, upon not
less than 30 nor more than 60 days notice, to redeem the Debentures in
whole but not in part before September 8, 2004, for cash within 90 days
following the occurrence of such Special Event, and, following such
redemption, Securities with an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis in
accordance with Section 9 hereof.
"Tax Event" means that the Administrative Trustees shall have
received an opinion of an independent tax counsel experienced in such
matters to the effect that, as a result of (i) any amendment to, or
change (including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any political
subdivision or taxing authority affecting taxation, or (ii) any
official or administrative pronouncement or action or judicial
decision, interpreting or applying such laws or regulations, which
amendment or change becomes effective or such pronouncement, action or
decision is announced or occurs on or after September 2, 1999, there is
more than an insubstantial risk that (A) the Trust is or, within 90
days of the date of such opinion, would be subject to United States
federal income tax with respect to interest accrued or received on the
Debentures, (B) interest payable by the Debenture Issuer on the
Debentures is not or, within 90 days of the date of such opinion, would
not be deductible, in whole or in part, by the Debenture Issuer for
United States federal income tax purposes, or (C) the Trust is or,
within 90 days of the date of such opinion, would be, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
"Investment Company Event" means that the Administrative
Trustees shall have received an opinion of an independent counsel
experienced in practice under the Investment Company Act to the effect
that, as a result of the occurrence of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk
that the Trust is or will be considered an "Investment Company" that is
required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after September 2, 1999.
For the purpose of the preceding sentence, "Investment Company Act"
means the Investment Company Act of 1940, as amended from time to time,
or any successor legislation.
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<PAGE> 57
(c) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been
paid on all Securities for all Distribution periods that expire on or
before the date of redemption.
(d) The procedure with respect to redemptions or distributions
of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for repayment or
redemption of the Debentures. For purposes of the calculation
of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(d)(i), a
Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Securities, it
being understood that, in respect of Preferred Securities
registered in the name of and held of record by a Clearing
Agency or its nominee, the distribution of the proceeds of
such redemption will be made to the Clearing Agency or its
nominee and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, such notice shall be
irrevocable and (A) with respect to Preferred Securities
registered in the name of or held of record by a Clearing
Agency or its nominee, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related maturity or redemption of the
Debentures by 10:00 a.m., New York City time, on the Maturity
Date or the date of redemption, as the case may be, the
Property Trustee or the Paying Agent will pay to the Clearing
Agency or its nominee funds sufficient to pay the Redemption
Price with respect to such Preferred Securities, and (B) with
respect to Preferred Securities issued in certificated form
and Common Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related maturity or redemption of the
Debentures, the Property Trustee or the Paying Agent will pay
the Redemption Price to the Holders of such Securities against
presentation to the Registrar of the certificates therefor. If
a Redemption/Distribution Notice shall have been given and
funds deposited with the Property Trustee to pay the
Redemption Price (including all unpaid Distributions) with
respect to the Securities called for redemption, then
immediately prior to the close of business on the redemption
date, Distributions will cease to accumulate on the Securities
so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the
right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
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(iv) Payment of accumulated and unpaid Distributions
on the redemption date of any Securities will be subject to
the rights of Holders of such Securities on the close of
business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the
transfer of (A) any Securities beginning on the opening of
business 15 days before the day of mailing of a
Redemption/Distribution Notice or (B) any Securities selected
for redemption (except the unredeemed portion of any Security
being redeemed). If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with
the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of
any Securities is improperly withheld or refused and not paid
on the date fixed for redemption, either by the Property
Trustee or the Paying Agent or by the Sponsor as guarantor
pursuant to the Preferred Securities Guarantee, then (A)
Distributions on such Securities will continue to accumulate
from such redemption date to the actual date of payment, and
(B) the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption
Price.
(vi) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Sponsor or any of its Affiliates may at
any time and from time to time purchase outstanding Preferred
Securities by tender, in the open market or by private
agreement.
5. [Intentionally Omitted]
6. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 and as
otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in Liquidation Amount of the Preferred
Securities, voting separately as a class, may direct the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee, or direct the exercise of any trust or power
conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee, as Holder of the Debentures,
to (i) exercise the remedies available under the Indenture with respect
to the Debentures, (ii) waive any past default and its consequences
that are waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures
shall be due and payable, or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where
such consent would be required; provided that where a consent or action
under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected
thereby (a "Super Majority"), the Property Trustee may only give such
consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. In addition,
if the consent of the Property Trustee, as holder of the Debentures, is
required in connection with any amendment, modification or termination
of the Indenture or the Debentures, the Property Trustee will request
the direction of the Holders of the Preferred Securities and shall vote
with respect to such amendment, modification or termination as
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<PAGE> 59
directed by Holders of a Majority in Liquidation Amount of the
Preferred Securities voting together as a single class, provided that
where a consent or action under the Indenture would require the consent
or act of a Super Majority, the Property Trustee may only give such
consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities. The Property
Trustee shall notify each Holder of Preferred Securities of any written
notice of default received from the Indenture Trustee with respect to
the Debentures. Other than with respect to directing the time, method
and place of conducting a proceeding for any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as an
association taxable as a corporation on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on
the Debentures on any due date (including any Interest Payment Date or
redemption date or the Maturity), then a Holder of Preferred Securities
may directly institute a legal proceeding against the Debenture Issuer
for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct
Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the Holders of the
Common Securities will be subrogated to such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action. Except as
provided in this paragraph, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the
holders of the Debentures.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities or pursuant to written consent. The Property Trustee will
cause a notice of any meeting at which Holders of Preferred Securities
are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of
record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is
sought, and (iii) instructions for the delivery of proxies or consent.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred
Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described
above, any of the Preferred Securities that are owned by the Sponsor or
any Affiliate of the Sponsor shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
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7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), 7(c), and 8 or as
otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. If an Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the Holders of a Majority in Liquidation Amount
of the outstanding Preferred Securities. In no event will the Holders
of the Preferred Securities have the right to vote to appoint, remove
or replace the Administrative Trustees, which voting rights are vested
exclusively in the Sponsor as the Holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Declaration.
(c) Subject to Section 2.6 of the Declaration and only after
any Event of Default with respect to the Preferred Securities has been
cured, waived or otherwise eliminated and subject to the requirements
set forth in this paragraph, the Holders of a Majority in Liquidation
Amount of the Common Securities, voting separately as a class, may
direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as
Holder of the Debentures, to (i) exercise the remedies available under
the Indenture with respect to the Debentures, (ii) waive any past
default and its consequences that are waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent would be required; provided that,
where a consent or action under the Indenture would require the consent
or act of a Super Majority of the Holders of the Debentures affected
thereby, the Property Trustee may only give such consent or take such
action at the written direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding. In addition, if the consent of the Property
Trustee, as holder of the Debentures, is required in connection with
any amendment, modification or termination of the Indenture or the
Debentures, the Property Trustee will request the direction of the
Holders of the Common Securities and shall vote with respect to such
amendment, modification or termination as directed by Holders of a
Majority in Liquidation Amount of the Common Securities voting together
as a single class, provided that where a consent or action under the
Indenture would require the consent or act of a Super Majority, the
Property Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Common Securities. The Property Trustee shall notify each Holder of
Common Securities of any written notice of default received from the
Indenture Trustee with respect to the Indentures. Other than with
respect to directing the time, method and place of conducting a
proceeding for any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the
Common Securities under this paragraph unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that for
the purposes of United States federal income tax the Trust will not be
classified as an association taxable as a corporation on account of
such action.
I-8
<PAGE> 61
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on
the Debentures on the due date (including any Interest Payment Date or
redemption date or the Maturity), then a Holder of Common Securities
may institute a Direct Action for enforcement of payment to such Holder
of the principal of or premium, if any, or interest on a Like Amount of
Debentures on or after the respective due date specified in the
Debentures. Except as provided in this paragraph, the Holders of Common
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are
entitled to vote, or of any matter upon which action by written consent
of such Holders is to be taken, to be mailed to each Holder of record
of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption
at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for
the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities
or to distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
8. Amendments to Declaration.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended by the Trustees and the Sponsor with
(i) the consent of Holders representing a Majority in Liquidation Amount of all
outstanding Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an investment company under the Investment
Company Act, provided that, without the consent of each Holder of Securities,
the Declaration may not be amended to (i) change the amount or timing of any
Distribution or other payment on the Securities or otherwise adversely affect
the amount of any Distribution or other payment required to be made in respect
of the Securities as of a specified date, (ii) change the purpose of the Trust,
(iii) authorize the issuance of any additional beneficial interests in the
Trust, (iv) change the time or circumstances in which the Securities may be
redeemed or the amount payable upon such a redemption, (v) change the
Liquidation Distribution or other provisions relating to the timing or amount of
such distribution, (vi) affect the limited liability of any Holder of
Securities, or (vii) restrict the right of Holder of Securities to institute
suit for the enforcement of any such payment on or after such date.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to any payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Liquidation Amount of
Preferred Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Preferred Securities outstanding, and
I-9
<PAGE> 62
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate Liquidation Amount of Common Securities held by the relevant Holder
relative to the aggregate Liquidation Amount of all Common Securities
outstanding.
10. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.
11. Acceptance of Preferred Securities Guarantee and Indenture.
Each Holder of Preferred Securities by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture (including any supplemental indenture) to
a Holder without charge on written request to the Sponsor at its principal place
of business.
I-10
<PAGE> 63
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS
A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE
CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ITS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities
CUSIP NO._______
Certificate Evidencing Preferred Securities
of
American General Capital I
7 7/8% Trust Originated Preferred Securities
(Liquidation Amount $25.00 per Preferred Security)
American General Capital I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of securities of the Trust representing
undivided preferred beneficial interests in the assets of the Trust designated
the 7 7/8% Trust Originated Preferred Securities (Liquidation Amount $25.00 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are set forth herein, on the reverse hereof and in the
Amended and Restated Declaration of Trust of the Trust dated as of September 8,
1999, as the same may be amended from
A1-1
<PAGE> 64
time to time (the "Declaration"), and shall in all respects be subject to the
provisions thereof, including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Each capitalized term
used but not defined herein or in any legend, form or certificate hereon shall
have the meaning given to it in the Declaration. The Sponsor will provide a copy
of the Declaration, the Preferred Securities Guarantee and the Indenture to any
Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _____________.
American General Capital I
By:
------------------------------------
Name:
----------------------------------
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: _________________
Bankers Trust Company
as Property Trustee
By:
------------------------------------
Authorized Signatory
A1-2
<PAGE> 65
[FORM OF REVERSE OF PREFERRED SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount of $25.00
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will themselves accumulate distributions thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes any such additional
distributions payable for any period unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including September
8, 1999, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on September 30, 1999,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration on or after September 8, 2004 or earlier in certain circumstances
upon the occurrence of a Special Event.
A1-3
<PAGE> 66
-----------------------------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________
_______________________________________________________________
_________________________agent to transfer this Preferred Security Certificate
on the books of the Trust. The agent may substitute another to act for him or
her.
Date:___________________________
Signature:_______________________
(Sign exactly as your name appears on the other side of
this Preferred Security Certificate)
Signature Guarantee:
_____________________________________________
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-4
<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY CERTIFICATE IS NOT TRANSFERABLE
EXCEPT AS SET FORTH IN THE DECLARATION REFERRED TO HEREIN
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
American General Capital I
7 7/8% Common Securities
(Liquidation Amount $25.00 per Common Security)
American General Capital I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that American
General Corporation (the "Holder") is the registered owner of _______common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 7 7/8% Common Securities (Liquidation Amount
$25.00 per Common Security) (the "Common Securities"). The Common Securities are
not transferable except as set forth in the Declaration described below. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are set forth herein, on
the reverse hereof and in the Amended and Restated Declaration of Trust of the
Trust dated as of September 8, 1999, as the same may be amended from time to
time (the "Declaration"), and shall in all respects be subject to the provisions
thereof, including the designation of the terms of the Common Securities as set
forth in Annex I to the Declaration. Each capitalized term used but not defined
herein or in any legend, form or certificate hereon shall have the meaning given
to it in the Declaration. The Sponsor will provide a copy of the Declaration and
the Indenture (including any supplemental indenture) to any Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder to the extent provided
therein.
By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
_______ day of _____________, ___.
AMERICAN GENERAL CAPITAL I
By:
------------------------------------
Name:
----------------------------------
Administrative Trustee
A2-1
<PAGE> 68
[FORM OF REVERSE OF COMMON SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount of $25.00 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarterly period will themselves accumulate distributions thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes any such additional distributions
payable for any period unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
Distributions on the Common Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including September
8, 1999, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on September 30, 1999,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration on or after September 8, 2004 or earlier in certain circumstances
upon the occurrence of a Special Event.
<PAGE> 1
EXHIBIT 4.5
================================================================================
----------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
between
AMERICAN GENERAL CORPORATION
(as Guarantor)
and
Bankers Trust Company
(as Preferred Securities Guarantee Trustee)
Relating to Preferred Securities
of
AMERICAN GENERAL CAPITAL I
Dated as of September 8, 1999
----------------------
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- --------------------------------------------------------------------------------
310(a)....................................................................4.1(a)
310(b).............................................................. 4.1(c), 2.8
310(c) .............................................................Inapplicable
311(a) ...................................................................2.2(b)
311(b) ...................................................................2.2(b)
311(c) .............................................................Inapplicable
312(a) ...................................................................2.2(a)
312(b) ...................................................................2.2(b)
313 .........................................................................2.3
314(a) ......................................................................2.4
314(b) ............................................................ Inapplicable
314(c) ......................................................................2.5
314(d) ............................................................ Inapplicable
314(e) ............................................................1.1, 2.5, 3.2
314(f) .................................................................2.1, 3.2
315(a) .................................................................. 3.1(d)
315(b) ......................................................................2.7
315(c) ......................................................................3.1
315(d) .......................................... ........................3.1(d)
316(a) ............................................................1.1, 2.6, 5.4
316(b) ......................................................................5.3
316(c) .............................................................Inapplicable
317(a) ............................................................ Inapplicable
317(b) ............................................................ Inapplicable
318(a) .................................................................. 2.1(b)
318(b) ......................................................................2.1
318(c) ...................................................................2.1(b)
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................................................-1-
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.....................................................-4-
SECTION 2.2 Lists of Holders of Preferred Securities.............................................-4-
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee................................-5-
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee...........................-5-
SECTION 2.5 Evidence of Compliance with Conditions Precedent.....................................-5-
SECTION 2.6 Events of Default; Waiver............................................................-5-
SECTION 2.7 Event of Default; Notice.............................................................-6-
SECTION 2.8 Conflicting Interests................................................................-6-
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee......................-6-
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee.............................-8-
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee...........................................................................-10-
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility.................................-10-
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities Guarantee
Trustee.............................................................................-11-
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...........................................................................-12-
SECTION 5.2 Waiver of Notice and Demand.........................................................-12-
SECTION 5.3 Obligations Not Affected............................................................-12-
SECTION 5.4 Rights of Holders...................................................................-13-
SECTION 5.5 Guarantee of Payment................................................................-14-
SECTION 5.6 Subrogation.........................................................................-14-
SECTION 5.7 Independent Obligations.............................................................-14-
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..........................................................-14-
SECTION 6.2 Ranking.............................................................................-15-
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.........................................................................-15-
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.........................................................................-16-
SECTION 8.2 Indemnification.....................................................................-16-
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns..............................................................-16-
SECTION 9.2 Amendments..........................................................................-17-
SECTION 9.3 Notices.............................................................................-17-
SECTION 9.4 Benefit.............................................................................-18-
SECTION 9.5 Governing Law.......................................................................-18-
SECTION 9.6 Counterparts........................................................................-18-
</TABLE>
ii
<PAGE> 5
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of September 8, 1999, is executed and delivered
by American General Corporation, a Texas corporation (the "Guarantor"), and
Bankers Trust Company, a New York banking corporation, as trustee (the
"Preferred Securities Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of American General Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of the date hereof, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 8,000,000 preferred securities, having an
aggregate liquidation amount of $200,000,000, such preferred securities being
designated the 7 7/8% Trust Originated Preferred Securities (the "Preferred
Securities").
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay to
the Holders of the Preferred Securities the Guarantee Payments (as defined
below) and to make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution
of this Preferred Securities Guarantee have the same meaning
when used in this Preferred Securities Guarantee unless
otherwise defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from
time to time;
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(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in New York, New York are authorized or required
by law or executive order to close.
"Corporate Trust Office" means the office of the Preferred Securities
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at Four Albany Street, New York, New York 10006, Attention: Corporate Trust and
Agency Group - Corporate Market Services.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the 7 7/8% Junior Subordinated Debentures due 2048 held
by the Property Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities, to the extent the Issuer has funds on hand legally available
therefor, (ii) the redemption price with respect to any Preferred Securities
called for redemption by the Issuer, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds on hand legally available therefor, and (iii) upon a
voluntary or involuntary termination and liquidation of the Issuer (other than
in connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
Liquidation Distribution (as defined in the Declaration), and (b) the amount of
assets of the Issuer remaining available for distribution to Holders of
Preferred Securities.
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"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Securities Guarantee Trustee,
any Affiliate of the Preferred Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Securities Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of
November 15, 1997, between the Guarantor (the "Debenture Issuer") and Bankers
Trust Company, as trustee, as amended or supplemented, pursuant to which the
Debentures are to be issued to the Property Trustee of the Issuer.
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Preferred
Securities.
"Officers' Certificate" means a certificate signed by the Chairman, any
Vice Chairman, the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Guarantor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Guarantees" means (i) guarantees issued by the Guarantor with
respect to preferred securities (if any) similar to the Preferred Securities
issued by other trusts established or to be established by the Guarantor (if
any), in each case similar to the Issuer, including the guarantees issued by the
Guarantor with respect to the preferred securities issued by American General
Institutional Capital A and American General Institutional Capital B and (ii)
guarantees by the Guarantor relating to the preferred securities of American
General Capital, L.L.C. and American General Delaware, L.L.C.
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"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee Trustee" means Bankers Trust Company, a
New York banking corporation, until a Successor Preferred Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Preferred Securities Guarantee and thereafter means each such
Successor Preferred Securities Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Securities Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Preferred Securities Guarantee and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.2 Lists of Holders of Preferred Securities
(a) The Guarantor shall provide the Preferred Securities
Guarantee Trustee (unless the Preferred Securities Guarantee Trustee is
otherwise the registrar of the Preferred Securities) with a list, in
such form as the Preferred Securities Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders"), (i) within 14 days after each record
date for the payment of Distributions on the Preferred Securities as of
such date, and (ii) at any other time within 30 days of receipt
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by the Guarantor of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the
Preferred Securities Guarantee Trustee; provided that the Guarantor
shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders
given to the Preferred Securities Guarantee Trustee by the Guarantor.
The Preferred Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Securities Guarantee Trustee shall comply
with its obligations under Sections 311(a), 311(b) and Section 312(b)
of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee
Within 60 days after December 31 of each year, commencing December 31,
1999, the Preferred Securities Guarantee Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee, the Securities and Exchange Commission and the Holders such documents,
reports and information, if any, as required by Section 314 of the Trust
Indenture Act and the compliance certificate required by Section 314 of the
Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with such conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
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SECTION 2.7 Event of Default; Notice
(a) The Preferred Securities Guarantee Trustee shall, within
90 days after the occurrence of a default with respect to this
Preferred Securities Guarantee, mail by first class postage prepaid, to
all Holders of the Preferred Securities, notices of all defaults
actually known to a Responsible Officer of the Preferred Securities
Guarantee Trustee, unless such defaults have been cured before the
giving of such notice; provided that except in the case of default in
the payment of any Guarantee Payment, the Preferred Securities
Guarantee Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Preferred
Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Preferred
Securities Guarantee Trustee shall have received written notice, or a
Responsible Officer of the Preferred Securities Guarantee Trustee
charged with the administration of this Preferred Securities Guarantee
shall have obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders
of the Preferred Securities, and the Preferred Securities Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any
Person except a Holder of Preferred Securities exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Preferred
Securities Guarantee Trustee on acceptance by such Successor Preferred
Securities Guarantee Trustee of its appointment to act as Successor
Preferred Securities Guarantee Trustee. The right, title and interest
of the Preferred Securities Guarantee Trustee shall automatically vest
in any Successor Preferred Securities Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Securities Guarantee Trustee has occurred and
is continuing, the Preferred
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Securities Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events
of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants shall be read into this Preferred
Securities Guarantee against the Preferred Securities Guarantee
Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Securities Guarantee Trustee, the
Preferred Securities Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall
be construed to relieve the Preferred Securities Guarantee Trustee from
liability for its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Preferred Securities Guarantee Trustee shall be
determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred
Securities Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred
Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Preferred Securities Guarantee Trustee, the
Preferred Securities Guarantee Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Preferred Securities Guarantee Trustee and
conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof
or of the Trust Indenture Act are specifically
required to be furnished to the Preferred Securities
Guarantee Trustee, the Preferred Securities Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith by
a Responsible Officer of the Preferred Securities Guarantee
Trustee, unless it shall be proved that the Preferred
Securities
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Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Securities Guarantee Trustee
shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in Liquidation Amount
of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to
the Preferred Securities Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Securities
Guarantee Trustee under this Preferred Securities Guarantee;
and
(iv) no provision of this Preferred Securities
Guarantee shall require the Preferred Securities Guarantee
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if
the Preferred Securities Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the
terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Securities Guarantee
Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to
take any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(iv) the Preferred Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
registration thereof);
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(v) the Preferred Securities Guarantee Trustee may
consult with legal counsel of its selection, and the written
advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in accordance
with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Preferred Securities
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction;
(vi) the Preferred Securities Guarantee Trustee shall
be under no obligation to exercise any of the rights or powers
vested in it by this Preferred Securities Guarantee at the
request or direction of any Holder, unless such Holder shall
have provided to the Preferred Securities Guarantee Trustee
such security and indemnity, reasonably satisfactory to the
Preferred Securities Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the
expenses of the Preferred Securities Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Preferred Securities Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve
the Preferred Securities Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Preferred
Securities Guarantee;
(vii) the Preferred Securities Guarantee Trustee
shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred
Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit;
(viii) the Preferred Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents,
nominees, custodians or attorneys, and the Preferred
Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Preferred Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders of the Preferred Securities, and the signature of the
Preferred Securities Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the
authority of the Preferred Securities Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of
which shall be conclusively evidenced by the Preferred
Securities Guarantee Trustee's or its agent's taking such
action;
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(x) whenever in the administration of this Preferred
Securities Guarantee the Preferred Securities Guarantee
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other
action hereunder, the Preferred Securities Guarantee Trustee
(i) may request instructions from the Holders of a Majority in
Liquidation Amount of the Preferred Securities, (ii) may
refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (iii)
shall be protected in conclusively relying on or acting in
accordance with such instructions; and
(xi) the Preferred Securities Guarantee Trustee shall
not be liable for any action taken or omitted to be taken by
it in good faith, without negligence, and reasonably believed
by it to be authorized or within the discretion or rights or
powers conferred upon it by this Preferred Securities
Guarantee.
(b) No provision of this Preferred Securities Guarantee shall
be deemed to impose any duty or obligation on the Preferred Securities
Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Preferred
Securities Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Preferred Securities Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Preferred
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and
subject to
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supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the
Preferred Securities Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Preferred Securities Guarantee Trustee
and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Preferred Securities
Guarantee Trustee may be appointed or removed without cause at any time
by the Guarantor except during an Event of Default.
(b) The Preferred Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Preferred
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Securities Guarantee Trustee shall hold
office until a Successor Preferred Securities Guarantee Trustee shall
have been appointed or until its removal or resignation. The Preferred
Securities Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by
the Preferred Securities Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such
Successor Preferred Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Preferred Securities Guarantee Trustee.
(d) If no Successor Preferred Securities Guarantee Trustee
shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of removal
or resignation, the Preferred Securities Guarantee Trustee resigning or
being removed may petition any court of competent jurisdiction for
appointment of a Successor Preferred Securities Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Preferred Securities Guarantee
Trustee.
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(e) No Preferred Securities Guarantee Trustee shall be liable
for the acts or omissions to act of any Successor Preferred Securities
Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Securities Guarantee Trustee
pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
Securities Guarantee Trustee all amounts due to the Preferred
Securities Guarantee Trustee accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation
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Distribution or other sum payable that results from the extension of
any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Preferred Securities Guarantee Trustee in respect of this Preferred
Securities Guarantee or exercising any trust or power conferred upon
the Preferred Securities Guarantee Trustee under this Preferred
Securities Guarantee.
(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred
Securities Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the
Issuer, the Preferred Securities Guarantee Trustee or any other person
or entity. The Guarantor waives any right or remedy to require that any
action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
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SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection. This Preferred Securities Guarantee will not be discharged
except by payment of the Guarantee Payments in full (without duplication of
amounts theretofore paid by the Issuer) or upon distribution of Debentures to
Holders as provided in the Declaration.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, the Guarantor
shall not, and shall not permit any subsidiary of the Guarantor to, (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Guarantor's capital stock,
(ii) make any payment of principal, interest or premium, if any, on, or repay or
repurchase or redeem any debt securities of the Guarantor that rank pari passu
in all respects with or junior in interest to the Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
or junior in interest to the Debentures (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation or extension of a stockholder's
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
this Preferred Securities Guarantee, (d) as a result of a reclassification of
the Guarantor's capital stock or the
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<PAGE> 19
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (e) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) acquisitions of common stock of
the Guarantor in connection with the satisfaction of its obligations under any
benefit plan for its directors, officers or employees), if at such time (i)
there shall have occurred and be continuing any event of which the Guarantor has
actual knowledge (a) that is, or with the giving of notice or the lapse of time,
or both, would be an Event of Default under the Indenture and (b) in respect of
which the Guarantor shall not have taken reasonable steps to cure, (ii) the
Guarantor shall be in default with respect to its payment of any obligations
under this Preferred Securities Guarantee or (iii) the Guarantor shall have
given notice of its election of an Extension Period (as defined in the
Indenture) pursuant to the terms of the Debentures and shall not have rescinded
such notice, and any such Extension Period, or any extension thereof, shall be
continuing.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XIII of the Indenture shall apply to the obligations of the Guarantor
under this Preferred Securities Guarantee as if (x) such Article XIII were set
forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XIII, and (ii) pari passu with the
Debentures and with any Other Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price (as
defined in the Declaration) of all Preferred Securities, (ii) the distribution
of the Debentures to the Holders of all of the Preferred Securities, or (iii)
full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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<PAGE> 20
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith
in accordance with this Preferred Securities Guarantee and in a manner
that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Preferred
Securities Guarantee or by law, except that an Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor
by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the
Guarantor, including information, opinions, reports or statements as to
the value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly
be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee or resignation or removal of the Preferred
Securities Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
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<PAGE> 21
SECTION 9.2 Amendments
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Preferred Securities apply to the giving
of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustees at the Issuer's mailing address set forth below:
American General Capital I
c/o American General Corporation
2929 Allen Parkway
Houston, Texas 77019-2155
Attention: Treasury Department
Telecopy: (713) 522-3847
(b) If given to the Preferred Securities Guarantee Trustee, at
the Preferred Securities Guarantee Trustee's mailing address set forth
below (or such other address as the Preferred Securities Guarantee
Trustee may give notice of to the Holders of the Preferred Securities):
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency
Services - Corporate Market Services
Telecopy: (212) 250-6961
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Preferred Securities):
American General Corporation
2929 Allen Parkway
Houston, Texas 77019-2155
Attention: Treasury Department
Telecopy: (713) 522-3847
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<PAGE> 22
(d) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 9.6 Counterparts.
This Preferred Securities Guarantee may contain more than one
counterpart of the signature page and this Preferred Securities Guarantee may be
executed by the affixing of the signature of each of the parties to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
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<PAGE> 23
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
AMERICAN GENERAL CORPORATION,
as Guarantor
By:
--------------------------------------
Name: Nicholas R. Rasmussen
Title: Executive Vice President
and Chief Financial Officer
BANKERS TRUST COMPANY,
as Preferred Securities Guarantee Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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<PAGE> 1
EXHIBIT 8.1
[LETTERHEAD OF VINSON & ELKINS L.L.P.]
September 8, 1999
American General Corporation
2929 Allen Parkway
Houston, Texas 77019-2155
Ladies and Gentlemen:
We have acted as counsel to American General Corporation, a Texas
corporation ("American General"), and American General Capital I, a Delaware
statutory business trust (the "Trust") in connection with the registration
statement under the Securities Act of 1933, as amended, of American General and
the Trust (and other trusts) on Form S-3 (Registration Nos. 333-40583, et. seq.)
filed with the Securities and Exchange Commission (the "Commission") and
declared effective by the Commission on February 10, 1998 (as amended, the
"Registration Statement"). In that connection, reference is made to a prospectus
dated February 10, 1998 (the "Prospectus") constituting a part of the
Registration Statement relating to, among other things, junior subordinated
debentures of American General and a prospectus supplement to the Prospectus
dated September 2, 1999 (the "Prospectus Supplement") describing the 7 7/8%
Trust Originated Preferred Securities of the Trust (the "Preferred Securities")
and the 7 7/8% Junior Subordinated Debentures due 2048 of American General (the
"Junior Subordinated Debentures"). Capitalized terms not otherwise defined
herein have the meaning specified in the Prospectus and the Prospectus
Supplement.
We have examined the Prospectus, the Prospectus Supplement, and such
other documents and corporate records as we have deemed necessary or appropriate
for purposes of this opinion, and we have assumed that the Junior Subordinated
Debentures and the Preferred Securities will be issued in full compliance with
the operative documents described in the Prospectus and the Prospectus
Supplement.
Based on the facts and assumptions contained in the Prospectus
Supplement, in our opinion (i) the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation, (ii) the Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of American General,
and (iii) the statements of legal conclusion set forth under the heading
"Certain United States Federal Income Tax Consequences" in the Prospectus
Supplement reflect our opinions
<PAGE> 2
American General Corporation
Page 2
September 8, 1999
with respect to the material United States federal income tax consequences of
the ownership and disposition of the Preferred Securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this Firm in the section captioned
"Certain United States Federal Income Tax Consequences" in the Prospectus
Supplement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder.
Very truly yours,
VINSON & ELKINS L.L.P.
