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EXHIBIT 1.1
AMERICAN GENERAL CAPITAL III
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT THAT AMERICAN GENERAL CAPITAL III
HAS FUNDS AVAILABLE BY
AMERICAN GENERAL CORPORATION
UNDERWRITING AGREEMENT
American General Capital III, 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.
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
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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
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
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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 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,
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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 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;
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(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;
(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
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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 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
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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 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
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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 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
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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
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
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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
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
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<PAGE> 11
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);
(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,
11
<PAGE> 12
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 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
12
<PAGE> 13
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 & 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:
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<PAGE> 14
(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) 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; and the Amended
Declaration has been duly qualified under the Trust Indenture
Act;
(iii) 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;
(iv) This Agreement and the Pricing Agreement have
each been duly authorized, executed and delivered by each of
the Trust and the Company;
(v) 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;
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<PAGE> 15
(vi) 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 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;
(vii) 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;
(viii) 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;
(ix) The Guarantee has been duly and validly
authorized, executed and delivered by the Company 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; the Guarantee has
been duly
15
<PAGE> 16
qualified under the Trust Indenture Act; and the Guarantee
conforms in all material respects to the description thereof
contained in the Prospectus;
(x) 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;
(xi) 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;
(xii) 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
(xiii) 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;
16
<PAGE> 17
(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:
(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
17
<PAGE> 18
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 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
18
<PAGE> 19
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 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
19
<PAGE> 20
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 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,
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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 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 and authority to act as trustee of
a statutory Delaware business trust under the laws of the State of
Delaware, 12 Del.C. Section 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
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<PAGE> 22
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 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
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<PAGE> 23
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 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
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<PAGE> 24
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 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
24
<PAGE> 25
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, 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
25
<PAGE> 26
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 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
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<PAGE> 27
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.
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
27
<PAGE> 28
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.
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> 29
ANNEX I
PRICING AGREEMENT
[Name of Representative]
[Name(s) of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o [Name of Representative]
[Representative's Address]
, 19
Ladies and Gentlemen:
American General Capital [ ], a statutory business trust created under
the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as depositor of the Trust and as guarantor
(the "Company"), propose, subject to the terms and conditions stated herein and
in the Underwriting Agreement filed as an exhibit to the registration statement
filed by the Trust and the Company on Form S-3 (Nos. 333-40583, 333-40583-01,
333-40583-02, 333-40583-03 and 333-40583-04) and 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), 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 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.
<PAGE> 30
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to 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.
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<PAGE> 31
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 [ ],
By: American General Corporation,
as depositor
By:
----------------------------------
Name:
Title:
American General Corporation
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of Representative]
[Name(s) of Co-Representative(s)]
By:
-----------------------------------
[Name:
Title:
Name of Representative Partnership]
On behalf of each of the Underwriters
3
<PAGE> 32
SCHEDULE I
<TABLE>
<CAPTION>
[MAXIMUM NUMBER
NUMBER OF OF OPTION PREFERRED
INITIAL PREFERRED SECURITIES WHICH
SECURITIES TO BE MAY BE
UNDERWRITER PURCHASED PURCHASED
<S> <C> <C>
[Name of Representative]........................................
[Name(s) of Co-Representative(s)]...............................
[Names of other Underwriters]...................................
--------------------- ---------------------
Total........................................................... ]
===================== =====================
</TABLE>
I-1
<PAGE> 33
SCHEDULE II
Title of Preferred Securities:
Filing Date:
[Time and date Prospectus Supplement and/or Term Sheet to be filed
pursuant to Rule 424 (b)]
Number of Preferred Securities:
Number of Initial Preferred Securities:
Maximum Number of Option Preferred Securities, if any:
Distribution Payments: [Monthly, Quarterly Semi-Annually, Other], on the
____ day of [the month] [____, ____, ____ and ____ in
each year] [____ and ____ in each year], commencing
, 19 , [at an annual rate of %
of the liquidation preference per share]
Record Dates:
Liquidation Preference: $ per share, plus accumulated and unpaid
Distributions to the date of payment
Exchange Provisions:
Redemption Provisions:
Initial Offering Price to Public: $ per Preferred Security
Purchase Price by Underwriters: $ per Preferred Security
Underwriters' Compensation: $ 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
Representative in same day funds
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: a.m. (New York City time), , 19
Closing Location: Brown & Wood LLP
One World Trade Center
New York, New York 10048
II-1
<PAGE> 34
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
Title of Junior Subordinated Debentures:
Aggregate Principal Amount:
Interest Payments: [Monthly, Quarterly Semi-Annually, Other], on the
____ day of [the month] [____, ____, ____ and ____ in
each year] [____ and ____ in each year], commencing
, 19 , [at an annual rate of %]
Record Dates:
Maturity Date:
Redemption Provisions:
Sinking Fund Provisions:
Extension Provisions:
* A DESCRIPTION OF PARTICULAR TAX, ACCOUNTING OR OTHER UNUSUAL FEATURES
OF THE PREFERRED SECURITIES AND THE JUNIOR SUBORDINATED DEBENTURES SHOULD BE SET
FORTH, OR REFERENCED TO AN ATTACHED AND ACCOMPANYING DESCRIPTION, IF NECESSARY
TO THE TRUST'S AND THE COMPANY'S UNDERSTANDING OF THE TRANSACTION CONTEMPLATED.
SUCH A DESCRIPTION MIGHT APPROPRIATELY BE IN THE FORM IN WHICH SUCH FEATURES
WILL BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT FOR THE OFFERING.
II-2
<PAGE> 35
ANNEX II
Pursuant to subsection 5(f) of the Underwriting Agreement, the
Underwriters shall have received from the independent certified public
accountants who have audited the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
and Prospectus, one or more letters, dated as of each Time of Delivery, each of
which shall be to the effect that they are independent auditors with respect to
the Company within the meaning of the Act and the applicable published rules and
regulations thereunder and which, when read together, shall be to the further
effect that:
(i) In their opinion, the consolidated financial statements
audited by them and included or incorporated by reference in the
Registration Statement and Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations
thereunder;
(ii) On the basis of performing the procedures specified by
the American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included or incorporated by reference in the
Registration Statement and Prospectus, a reading of any other unaudited
financial statement data included or incorporated by reference in the
Registration Statement and Prospectus, a reading of the latest
available interim unaudited financial statements of the Company and its
subsidiaries ("Interim Financials"), if any, a reading of any unaudited
pro forma financial statements included or incorporated by reference in
the Registration Statement and Prospectus and a reading of the minutes
of the Company's shareholder's meetings, the meetings of the Board of
Directors, the Executive Committee of the Board of Directors, the Audit
Committee of the Board of Directors and the Terms Committee of the
Board of Directors since the end of the most recent fiscal year with
respect to which an audit report has been issued and inquiries of and
discussions with certain officials of the Company who have
responsibility for financial and accounting matters with respect to the
unaudited financial statements and any other unaudited financial
statement data included or incorporated by reference in the
Registration Statement and Prospectus, any Interim Financials, and any
unaudited pro forma financial statements included or incorporated by
reference in the Registration Statement and Prospectus, and as to
whether (1) as of a specified date not more than three days prior to
the date of the letter, there was any change in the consolidated
capital stock (other than issuances of capital stock upon the exercise
of options or for purposes of employee compensation plans, upon
earn-outs of performance shares, upon conversions of convertible
securities and upon the exercise of put options, in each case which
were outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in
consolidated long-term debt of the Company and its subsidiaries (except
for increases due to accretion of discount on original issue discount
securities, if any) or any decrease in the consolidated net assets of
the Company and its subsidiaries (before 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) as compared with the amounts shown on the most recent
consolidated balance sheet of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement and
Prospectus (the "Recent Balance Sheet") or (2) during the period, if
any, from the
<PAGE> 36
date of the Recent Balance Sheet to the date of the most recent balance
sheet included in the Interim Financials (the "Interim Period") there
was any decrease, as compared with the corresponding period in the
preceding year, in consolidated total revenues or in consolidated net
income of the Company and its subsidiaries, or (3) during the period
from the date of the Interim Financials or, if there are no Interim
Financials, from the date of the Recent Balance Sheet to a specified
date not more than three days prior to the date of the letter there was
any decrease, as compared with the corresponding period in the
preceding year, in consolidated total revenues or in consolidated net
income of the Company and its subsidiaries, which reading, inquiries
and discussions would not necessarily reveal changes in the financial
position or results of operations or inconsistencies in the application
of generally accepted accounting principles or other matters of
significance with respect to the following, nothing came to their
attention that caused them to believe that (A) any material
modifications should be made to the unaudited financial statements of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and Prospectus for them to be in
conformity with generally accepted accounting principles or that such
unaudited financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations thereunder, (B) the
Interim Financials, if any, are not stated on a basis substantially
consistent with that of the audited consolidated financial statements
included or incorporated by reference in the Registration Statement and
Prospectus, (C) any other unaudited financial statement data included
or incorporated by reference in the Registration Statement and
Prospectus do not agree with the corresponding items in the unaudited
financial statements from which such data were derived or any such
unaudited financial statement data were not determined on a basis
substantially consistent with the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement and Prospectus, (D) any unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements, (E)(1) as of the date of the Interim Financials, if any,
and as of a specified date not more than three days prior to the date
of the letter, there was any change in the consolidated capital stock
(other than issuances of capital stock upon the exercise of options or
for purposes of employee compensation plans, upon earn-outs of
performance shares, upon conversions of convertible securities and upon
the exercise of put options, in each case which were outstanding on the
date of the latest balance sheet included or incorporated by reference
in the Prospectus) or any increase in consolidated long-term debt of
the Company and its subsidiaries (except for increases due to accretion
of discount on original issue discount securities, if any) or any
decrease in the consolidated net assets of the Company and its
subsidiaries (before 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) as
compared with the amounts shown on the Recent Balance Sheet or (2)
during any Interim Period, there was any decrease, as compared with the
corresponding period in the preceding year, in consolidated total
revenues or in consolidated net income of the Company and its
2
<PAGE> 37
subsidiaries, or (3) during the period from the date of the Interim
Financials or, if there are no Interim Financials, from the date of the
Recent Balance Sheet to a specified date not more than three days prior
to the date of the letter there was any decrease, as compared with the
corresponding period in the preceding year, in consolidated total
revenues or in consolidated net income of the Company and its
subsidiaries except in each such case for (1), (2) and (3) as set forth
in or contemplated by the Registration Statement and Prospectus or
except for such exceptions as may be enumerated in such letter; and
(iii) In addition to the limited procedures referred to in
clause (ii) above, they have carried out certain other specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information which are derived from the
general financial and accounting records of the Company and its
subsidiaries, which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by the
Representatives and have compared such amounts, percentages and
financial information with the financial and accounting records of the
Company and its subsidiaries and have found them to be in agreement.
3
