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EXHIBIT 4
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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 III
DATED AS OF DECEMBER 7, 2000
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CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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<C> <C>
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)
</TABLE>
* 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.
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TABLE OF CONTENTS
<TABLE>
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Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION-1-
SECTION 1.1 Definitions and Interpretation...................................................... -1-
ARTICLE II
TRUST INDENTURE ACT-4-
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-6-
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-10-
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-12-
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-
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<TABLE>
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..........................................................-14-
SECTION 6.2 Ranking.............................................................................-15-
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>
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PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of December 7, 2000 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 III, 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 4,000,000 preferred securities, having an aggregate
liquidation amount of $100,000,000, such preferred securities being designated
the 8.05% Trust 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 8.05% Junior Subordinated Debentures due 2049 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, American General Institutional Capital B, American
General Capital I and American General Capital II and (ii) guarantees by the
Guarantor relating to the preferred securities of American General Capital,
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,
2001, 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. Notwithstanding anything to the
contrary in this Preferred Securities Guarantee, in no event shall the
Preferred Securities Guarantee Trustee be deemed to be an ERISA
fiduciary, and in the event that the Preferred Securities Guarantee
Trustee believes it appropriate to take or omit to take any action
hereunder that would cause it to be deemed an ERISA fiduciary, it shall
obtain and follow the direction of the Sponsor, the Administrative
Trustees or Holders, as the case may be.
(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
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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 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
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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);
(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;
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(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;
(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:
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(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 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.
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(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.
(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:
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(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 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.
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(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.
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
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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 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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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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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 III
c/o American General Corporation
2929 Allen Parkway
Houston, Texas 77019-2155
Attention: Corporate Finance 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: Corporate Finance Department
Telecopy: (713) 522-3847
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(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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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
AMERICAN GENERAL CORPORATION,
as Guarantor
By: /s/ C. JEFFREY GAY
------------------------------------
Name: C. Jeffrey Gay
Title: Vice President
and Assistant Treasurer
BANKERS TRUST COMPANY,
as Preferred Securities Guarantee Trustee
By: /s/ TERA NETHERTON
------------------------------------
Name: Tera Netherton
Title: Associate
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