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EXHIBIT 2
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AMERICAN GENERAL CAPITAL III
DATED AS OF DECEMBER 7, 2000
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CROSS-REFERENCE TABLE*
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<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
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310(a) ....................................................... 5.3(a)
310(b) ....................................................... 5.3(c)
310(c) ................................................. Inapplicable
311(a)and (b) ................................................ 2.2(b)
311(c) ................................................. Inapplicable
312(a) ....................................................... 2.2(a)
312(b) ....................................................... 2.2(b)
313 ............................................................. 2.3
314(a) .......................................................... 2.4
314(b) ................................................. Inapplicable
314(c) .......................................................... 2.5
314(d) ................................................. Inapplicable
314(e) ..................................................... 1.1, 2.5
314(f) ................................................. Inapplicable
315(a) ....................................................... 3.9(b)
315(b) ....................................................... 2.7(a)
315(c) ....................................................... 3.9(a)
315(d) ....................................................... 3.9(b)
316(a) and (b) ................... 2.6 and Annex I (Sections 6 and 7)
316(c) ....................................................... 3.6(e)
317(a) ....................................................... 3.8(h)
317(b) ....................................................... 3.8(i)
318(a) ....................................................... 2.1(c)
</TABLE>
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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TABLE OF CONTENTS
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions ........................................................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ................................................... 7
SECTION 2.2 Lists of Holders of Securities ..................................................... 7
SECTION 2.3 Reports by the Property Trustee .................................................... 7
SECTION 2.4 Periodic Reports to Property Trustee ............................................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent ................................... 8
SECTION 2.6 Events of Default; Waiver .......................................................... 8
SECTION 2.7 Event of Default; Notice ........................................................... 9
ARTICLE III
ORGANIZATION
SECTION 3.1 Name ............................................................................... 10
SECTION 3.2 Office ............................................................................. 10
SECTION 3.3 Purpose ............................................................................ 10
SECTION 3.4 Authority .......................................................................... 10
SECTION 3.5 Title to Property of the Trust ..................................................... 10
SECTION 3.6 Powers and Duties of the Administrative Trustees ................................... 10
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees ............................... 13
SECTION 3.8 Powers and Duties of the Property Trustee .......................................... 14
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee ........................ 16
SECTION 3.10 Certain Rights of Property Trustee ................................................. 17
SECTION 3.11 Delaware Trustee ................................................................... 19
SECTION 3.12 Execution of Documents ............................................................. 19
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities ............................. 19
SECTION 3.14 Duration of Trust .................................................................. 19
SECTION 3.15 Mergers ............................................................................ 19
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities ............................................ 21
SECTION 4.2 Responsibilities of the Sponsor .................................................... 21
SECTION 4.3 Right to Proceed ................................................................... 22
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee ...................................... 22
SECTION 5.2 Delaware Trustee ................................................................... 23
SECTION 5.3 Property Trustee; Eligibility ...................................................... 23
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally.... 24
SECTION 5.5 Administrative Trustees ............................................................ 24
SECTION 5.6 Delaware Trustee ................................................................... 24
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SECTION 5.7 Appointment, Removal and Resignation of Trustees ....................................24
SECTION 5.8 Vacancies among Trustees ............................................................26
SECTION 5.9 Effect of Vacancies .................................................................26
SECTION 5.10 Meetings ............................................................................26
SECTION 5.11 Delegation of Power .................................................................26
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business .........................27
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions .......................................................................27
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities .............................................27
SECTION 7.2 Execution and Authentication ........................................................28
SECTION 7.3 Form and Dating .....................................................................28
SECTION 7.4 Registrar and Paying Agent .........................................................30
SECTION 7.5 Paying Agent to Hold Money in Trust .................................................30
SECTION 7.6 Replacement Securities ..............................................................30
SECTION 7.7 Outstanding Preferred Securities ....................................................30
SECTION 7.8 Preferred Securities in Treasury ....................................................31
SECTION 7.9 Temporary Securities; Certificated Securities .......................................31
SECTION 7.10 Cancellation ........................................................................32
SECTION 7.11 CUSIP Numbers .......................................................................32
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust ................................................................32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities ..............................................................33
SECTION 9.2 Deemed Security Holders .............................................................34
SECTION 9.3 Book-Entry Interests ................................................................34
SECTION 9.4 Notices to Clearing Agency ..........................................................34
SECTION 9.5 Appointment of Successor Clearing Agency ............................................35
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability ...........................................................................35
SECTION 10.2 Exculpation .........................................................................35
SECTION 10.3 Fiduciary Duty ......................................................................36
SECTION 10.4 Indemnification and Expenses ........................................................36
SECTION 10.5 Outside Businesses ..................................................................39
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year .........................................................................39
SECTION 11.2 Certain Accounting Matters ..........................................................39
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SECTION 11.3 Banking ........................................................................ 40
SECTION 11.4 Withholding .................................................................... 40
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments ..................................................................... 41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent ............... 42
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee ............................. 44
SECTION 13.2 Representations and Warranties of Delaware Trustee ............................. 44
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices ........................................................................ 45
SECTION 14.2 Governing Law .................................................................. 46
SECTION 14.3 Intention of the Parties ....................................................... 46
SECTION 14.4 Headings ....................................................................... 46
SECTION 14.5 Successors and Assigns ......................................................... 46
SECTION 14.6 Partial Enforceability ......................................................... 46
SECTION 14.7 Counterparts ................................................................... 47
ANNEX I ..................................................................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE ........................................ A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE ........................................... A2-1
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AMERICAN GENERAL CAPITAL III
December 7, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of December 7, 2000, by the Trustees (as defined herein),
the Sponsor (as defined herein) and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust (as defined herein) to be issued
pursuant to this Declaration;
WHEREAS, the Delaware Trustee (as defined herein), the
Administrative Trustees (as defined herein) and the Sponsor established American
General Capital III (the "Trust"), a trust created under the Business Trust Act
(as defined herein) pursuant to a Declaration of Trust dated as of November 14,
1997 (the "Original Declaration"), and the Certificate of Trust for the Trust
(the "Certificate of Trust") filed with the Secretary of State of the State of
Delaware on November 14, 1997;
WHEREAS, the parties hereto, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of the Trust, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration and, in consideration of the
mutual covenants contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above or elsewhere herein have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration and each Annex and Exhibit hereto, as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
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(e) a term defined in the Trust Indenture Act (as defined
herein) has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or the context otherwise
requires;
(f) a term defined in the Indenture (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined
in this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" means each of Nicholas R. Rasmussen, C.
Jeffrey Gay and Gregory N. Picard, solely in such Person's capacity as
Administrative Trustee of the Trust created and continued hereunder and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.
"Book-Entry Interest" means a beneficial interest in a Global Preferred
Security registered in the name of a Clearing Agency or its nominee, ownership
and transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.3.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in The City of New York, New York are authorized
or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time or any
successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Preferred Security and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Time of Delivery", as such term is defined in
the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and
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performing the duties now assigned to it under applicable Federal securities
laws, then the body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Four Albany Street, New York, New York
10006, Attn: Corporate Trust and Agency Services - Corporate Market Services.
"Covered Person" means: (a) any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holders of the Securities.
"Debenture Issuer" means American General Corporation, a Texas
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the 8.05% Junior Subordinated Debentures due 2049 of
the Debenture Issuer issued pursuant to the Indenture.
"Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" has the meaning set forth in Section
7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.1(b).
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Global Preferred Securities" has the meaning set forth in Section
7.3(a).
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"Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Trustee
Indemnified Person.
"Indenture" means the Junior Subordinated Indenture, dated as of
November 15, 1997, between the Debenture Issuer and the Debenture Trustee, as
supplemented or amended from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation Amount" with respect to any Security means the amount
designated as such with respect thereto in Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of such Person. Any Officers' Certificate
delivered by the Trust shall be signed by at least one Administrative Trustee.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, acceptable to the Property Trustee.
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"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
"Preferred Securities Guarantee" means the guarantee agreement dated as
of the date hereof of the Sponsor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice president, any assistant vice president, any managing director, any
secretary, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means American General Corporation, a Texas corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b).
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"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Property Trustee" has the meaning set forth in Section
5.7(b).
"Successor Securities" has the meaning set forth in Section 3.15.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of 10% or more of the aggregate
Liquidation Amount (including the amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Tax Event" has the meaning set forth in Annex I.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and the Administrative Trustees), so long as such Person shall continue as
Trustee of the Trust in accordance with the terms hereof, and all other Persons
who may from time to time be duly appointed, qualified and serving as Trustees
in accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
"Trustee Indemnified Person" has the meaning set forth in Section
10.4(b).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Trustee Account and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of this
Declaration.
"Underwriting Agreement" means the Pricing Agreement dated November 30,
2000 among the Sponsor, the Trust, Salomon Smith Barney Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Prudential Securities Incorporated, UBS Warburg LLC, Banc of
America Securities LLC, Banc One Capital Markets, Inc. and First Union
Securities, Inc., as representatives of the several underwriters named therein
(including the form of Underwriting Agreement attached thereto) relating to the
initial offering and sale of the Preferred Securities.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable to such an indenture, be governed by
such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide the Property Trustee, unless the
Property Trustee is Registrar for the Securities, (i) within 14 days
after each record date for payment of Distributions, a list, in such
form as the Property Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of
such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Property
Trustee by the Sponsor and the Administrative Trustees on behalf of the
Trust and written notice of such fact is provided by an Administrative
Trustee to the Property Trustee, and (ii) at any other time, within 30
days of receipt by the Trust of a written request for a List of Holders
as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained
in Lists of Holders given to it or which it receives in the capacity as
Paying Agent (if acting in such capacity), provided that the Property
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after December 31 of each year, commencing December 31,
2001, the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information (if any) as are required by Section 314 of the Trust Indenture Act
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at The times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Sponsor or the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the holders of the
Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the
proportion in aggregate Liquidation Amount of the Preferred
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded
from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist,
and any Event of Default with respect to the Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose
of this Declaration, but no such waiver shall extend to any subsequent
or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default with respect
to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of
the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences, provided, that, if the
underlying Event of Default under the Indenture:
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(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the Common
Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in aggregate Liquidation Amount of the Common Securities that
the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, that each Holder of the Common Securities will be
deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences
until all Events of Default with respect to the Preferred Securities
have been cured, waived or otherwise eliminated, and until such Events
of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing
provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured
for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) Within five Business Days after the occurrence of any
Event of Default actually known to a Responsible Officer of the
Property Trustee, the Property Trustee shall transmit notice of such
Event of Default to the Holders of the Preferred Securities, the
Administrative Trustees and the Sponsor, unless such Event of Default
shall have been cured, waived or otherwise eliminated. The Sponsor and
the Administrative Trustees shall file annually with the Property
Trustee a certification as to whether or not they are in compliance
with all the conditions and covenants applicable to them under this
Declaration.
(b) For purposes of this Section 2.7, the Property Trustee
shall not be deemed to have knowledge of any default or Event of
Default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the
Indenture; or
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(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "American General Capital III", as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o American
General Corporation, 2929 Allen Parkway, Houston, Texas 77019-2155. On ten
Business Days' written notice to the Holders of the Securities and the Property
Trustee, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Trust Securities, (b) to use the proceeds from the sale of the
Securities to acquire the Debentures, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto.
SECTION 3.4 Authority.
Except as specifically provided in this Declaration, the Property
Trustee and the Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to execute, deliver, issue and sell the Preferred
Securities and the Common Securities in accordance with this
Declaration; provided, however, that (i) the Trust may issue no more
than one series of Preferred Securities and no more than one series of
Common Securities, (ii) there shall be
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no interests in the Trust other than the Securities, and (iii) the
issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities at the Closing Time;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) file with the Commission a registration statement
prepared by the Sponsor on the appropriate form in relation to
the Preferred Securities, including any amendments thereto and
including any supplements or amendments to the form of
prospectus included therein, as permitted by the rules and
regulations of the Commission;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Preferred Securities in any state in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) at the direction of the Sponsor, execute and
file an application, prepared by the Sponsor, to the New York
Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing or quotation of the
Preferred Securities;
(iv) to execute and deliver letters, documents, or
instruments with DTC and any other Clearing Agencies relating
to the Preferred Securities;
(v) if required, execute and file with the Commission
a registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration
of the Preferred Securities under Section 12(b) or 12(g) of
the Exchange Act; and
(vi) to cause the Trust to enter into such agreements
and arrangements as may be necessary or desirable in
connection with the sale of Preferred Securities to the
underwriters thereof and the consummation thereof, and to take
all action as may be necessary or desirable in connection with
the consummation thereof;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however,
that the Administrative Trustees shall cause legal title to the
Debentures to be held of record in the name of the Property Trustee for
the benefit of the Holders of the Preferred Securities and the Holders
of Common Securities;
(d) if applicable, to give the Sponsor and the Property
Trustee prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of the Preferred
Securities and the Holders of the Common Securities as to such actions
and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
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(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e),
the Property Trustee has the exclusive power to bring such Legal
Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may
be executed by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
for the Securities or to appoint a Paying Agent for the Securities as
provided in Section 7.4;
(m) to give prompt written notice to the Property Trustee and
to Holders of the Securities of any notice received from the Debenture
Issuer of its election to defer payments of interest on the Debentures
by extending the interest payment period under the Indenture;
(n) to take all action (provided that such action does not
materially adversely affect the interests of the Holders) that may be
necessary or appropriate for the preservation and the continuation of
the Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary to protect
the limited liability of the Holders of the Preferred Securities or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in
their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust not to be classified for
United States federal income tax purposes as an association
taxable as a corporation; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes;
(p) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the
Administrative Trustees, on behalf of the Trust; and
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(q) to execute, deliver and record, file or register, as
applicable, all documents, certificates, agreements or instruments,
perform all duties and powers, and do all things for and on behalf of
the Trust in all matters necessary, advisable or incidental to the
foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee and the Delaware Trustee) shall cause the Trust not
to, engage in any activity other than as required or authorized by this
Declaration. The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds
to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust Property for other than a Trust
purpose or execute any mortgage in respect of, or pledge, any
Trust Property;
(iv) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities in
any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Declaration, (A)
direct the time, method and place of conducting any proceeding
with respect to any remedy available to the Debenture Trustee,
or exercise any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any
right to rescind or annul any declaration that the principal
of all the Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of independent tax
counsel experienced in such matters to the effect that such
amendment, modification or termination will not cause the
Trust to be classified as an association taxable as a
corporation for United States federal income tax purposes.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the
benefit of the Trust and the Holders of the Securities. The right,
title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property
Trustee in accordance with Section 5.7. Such vesting and cessation of
title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property
Trustee, and maintained in the Property Trustee's trust
department, on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make or cause the Paying
Agent to make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds
in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. Unless the
Property Trustee Account is held as a trust account in the
corporate trust department of the Property Trustee, the
Property Trustee Account shall be an account that is
maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the
rating assigned to the Preferred Securities by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent
the Debentures are prepaid or mature; and
(iii) upon written notice of distribution issued by
the Administrative Trustees in accordance with the terms of
the Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the occurrence of
certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of
Default of which a Responsible Officer of the Property Trustee has
actual knowledge or the Property Trustee's duties and obligations under
this Declaration or the Trust Indenture Act; provided, however, that if
an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay the
principal of or premium, if any, or interest on the Debentures on the
date such principal, premium, if any, or interest is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder
of
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Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium,
if any, or interest on the Debentures having a principal amount equal
to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action") on or after the respective due date
specified in the Debentures. Notwithstanding any payments made to such
Holder by the Debenture Issuer in connection with such Direct Action,
the Debenture Issuer shall remain obligated to pay the principal of,
premium, if any, or interest on such Debentures, and the Debenture
Issuer shall be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed
and has accepted that appointment in accordance with Section
5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Property Trustee occurs and is
continuing, the Property Trustee shall, for the benefit of Holders of
the Securities, enforce its rights as holder of the Debentures subject
to the rights of the Holders pursuant to this Declaration and the terms
of such Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as
additional Paying Agents and to pay Distributions, redemption payments
or liquidation payments on behalf of the Trust with respect to all
Securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any such additional Paying Agent may be
removed by the Property Trustee at any time the Property Trustee
remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time
by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the Securities and no
implied covenants shall be read into this Declaration against the
Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property
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Trustee has actual knowledge, the Property Trustee shall exercise such
of the rights and powers vested in it by this Declaration, and use the
same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or
her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and in the
Securities and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration and in the Securities, and no implied
covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the
requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error or judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in Liquidation Amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account shall be to deal
with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
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(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the payment of
any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible
for monitoring the compliance by the Administrative Trustees
or the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable for any
default or misconduct of the Administrative Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may
be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that
a matter be established before undertaking, suffering or
omitting any action hereunder, the Property Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the
Administrative Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any-financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or reregistration thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice or opinion of
such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall have no duty to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless
such
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Holder shall have provided to the Property Trustee security
indemnity, reasonably satisfactory to the Property Trustee,
against the costs, expenses (including reasonable attorneys'
fees and expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Property Trustee, provided, that nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) the Property Trustee shall have no duty to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, approval,
bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as
it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through its agents, custodians,
nominees or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform any
such action and no third party shall be required to inquire as
to the authority of the Property Trustee to so act or as to
its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by
the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions shall be given by the Holders of
the same proportion in Liquidation Amount of the Securities as
would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be fully protected in conclusively
relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided in this
Declaration, the Property Trustee shall have no duty to take
any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such
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act or acts, or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Property Trustee
shall be construed to be a duty. Notwithstanding anything to the
contrary in this Declaration, in no event shall the Property Trustee be
deemed to be an ERISA fiduciary, and in the event that the Property
Trustee believes it appropriate to take or omit to take any action that
would cause it to be deemed an ERISA fiduciary, it shall obtain and
follow the direction of the Sponsor, Administrative Trustees or
Holders, as the case may be.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Administrative Trustees, the Property Trustee or of the Trustees generally
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act and taking such actions
as are required to be taken by the Delaware Trustee under the Business Trust
Act.
SECTION 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or applicable
law, any Administrative Trustee is authorized to execute on behalf of the Trust
any documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence up to September 30, 2052.
SECTION 3.15 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to any
Person, except as described in Section 3.15(b) and (c) hereof or in
Annex I.
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two,
a majority of the Administrative Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Property
Trustee, merge or convert with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
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(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the
Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as
the Property Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed or quoted,
or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or with
another organization on which the Preferred Securities are
then listed or quoted, if any;
(iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor
Securities) in any material respect (other than any dilution
of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) prior to such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Sponsor has received an opinion of an
independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to any
dilution of the Holders' interests in the new
entity); and
(B) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion,
consolidation, amalgamation, replacement, conveyance,
transfer, or lease, the Trust (or the Successor
Entity) will continue to be classified as a grantor
trust for United States federal income tax purposes;
and
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor
Entity and guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee.
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(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of all Holders of the Securities, consolidate,
amalgamate, merge or convert with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other
entity to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion,
replacement, conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsors Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are issued
and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust, execute and file with
the Commission a registration statement on the appropriate form in
relation to the Preferred Securities, the Preferred Securities
Guarantee and the Debentures, including any amendments or supplements
thereto and including any supplements or amendments to the form of
prospectus included therein, as permitted by the rules and regulations
of the Commission;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) if deemed necessary or advisable by the Sponsor, to
prepare for filing and request the Administrative Trustees to cause the
filing by the Trust of an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for
listing or quotation of the Preferred Securities;
(d) if required, to prepare for and execute for filing by the
Trust with the Commission a registration statement on Form 8-A relating
to the registration of the Preferred Securities under Section 12(b) or
12(g) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of, and execute and deliver on
behalf of the Trust, the Underwriting Agreement providing for the sale
of the Preferred Securities and any agreements or instruments
contemplated thereby.
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SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of the Preferred
Securities, in the event that a failure of the Trust to pay Distributions on the
Preferred Securities is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures, to institute Direct Actions against
the Debenture Issuer for enforcement of its payment obligations on the
Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of CoTrustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two (2); provided further, that (1) if required by the Business Trust
Act, one Trustee, in the case of a natural person, shall be a person
who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (2) at least one Trustee
shall be an employee or officer of, or affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property
Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an
Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust's
property may at the time be located, the Holders of a Majority in
Liquidation Amount of the Common Securities acting as a class at a
meeting of the Holders of the Common Securities shall have power to
appoint one or more persons either to act as a co-trustee, jointly with
the Property Trustee, of all or any part of the Trust's property, or to
act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest
in such person or persons in such capacity any property, title, right
or power deemed necessary or desirable, subject to the provisions of
this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any
such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided, that, if the Property Trustee
has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, then the Property
Trustee may also be the Delaware Trustee and Section 3.11 shall have no
application.
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SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an
indenture trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture
Act.
(e) The initial Property Trustee shall be:
Bankers Trust Company
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
Nicholas R. Rasmussen,
C. Jeffrey Gay, and
Gregory N. Picard
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(b) Except where a requirement for action by a specific number
of Administrative Trustees is expressly set forth in this Declaration
and except with respect to any action the taking of which is the
subject of a meeting of the Administrative Trustees, any action
required or permitted to be taken by the Administrative Trustees may be
taken by, and any power of the Administrative Trustees may be exercised
by, or with the consent of, any one such Administrative Trustee.
(c) Except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on
behalf of the Trust any documents which the Administrative Trustees
have the power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Bankers Trust (Delaware)
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after
the issuance of any Securities, by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting
as a class at a meeting of the Holders of the Common
Securities;
(iii) in the case of the Property Trustee and the
Delaware Trustee, unless an Event of Default shall have
occurred and be continuing after the issuance of any
Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the
Delaware Trustee, if an Event of Default shall have occurred
and be continuing after the issuance of the Securities, by
vote of Holders of a Majority in Liquidation Amount of the
Preferred Securities voting as a class at a meeting of Holders
of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Property Trustee under Section
5.3 (a "Successor Property Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.7(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Administrative Trustees
and the Sponsor.
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(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware
Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
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SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
and without prior notice by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any registration
statement or amendment thereto filed with the Commission, or making any
other governmental filing; and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust
the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which any Trustee (excluding any Administrative Trustee
that is a natural person) may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee hereunder, provided that such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the terms of
such Holder's Securities as set forth herein and in Annex I. If and to the
extent that the Debenture Issuer makes a payment of interest (including
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee or any other payments with respect
to the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders in accordance with the
respective terms of the Securities held by them.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided
beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Preferred Securities") and one class of
common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Preferred
Securities and the Common Securities.
(b) The Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata (as defined in Annex I hereto) with the
Common Securities except that, where an Event of Default has occurred
and is continuing, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of
the Holders of the Preferred Securities.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed
to the terms of, and shall be bound by, this Declaration.
(f) At the Closing Time, an Administrative Trustee, on behalf
of the Trust, shall subscribe to and purchase from the Debenture
Issuer, Debentures registered in the name of the Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to
the aggregate Liquidation Amount of the Preferred Securities and Common
Securities issued and sold on such date, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of
the Trust, shall deliver to the Debenture Issuer the amount received on
such date from the sale by the Trust of the Preferred Securities and
Common Securities issued on such date.
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SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by
one or more Administrative Trustees by manual or facsimile signature.
In case any Administrative Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Administrative Trustee
before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the person who
signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by
such persons who, at the actual date of execution of such Security,
shall be the Administrative Trustees of the Trust, although at the date
of the execution and delivery of the Declaration any such person was
not such an Administrative Trustee.
(b) A Common Security shall be valid upon execution by an
Administrative Trustee by manual or facsimile signature without any act
of the Property Trustee. A Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee, which signature shall be conclusive evidence that the
Preferred Security has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in Annex I hereto except as provided in
Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee hereunder with respect to the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be in definitive or global form and
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by one or more of them. The Securities may have letters, CUSIP
or other numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange or quotation system
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee, the Delaware Trustee, the Administrative
Trustees and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to be bound thereby.
(a) Global Securities. The Preferred Securities shall be
issued in the form of one or more permanent global Securities in
definitive, fully registered form without Distribution coupons with the
appropriate global legends set forth in Exhibit A-1 hereto (a "Global
Preferred Security"), which shall be deposited on behalf of the
purchasers of the Preferred Securities represented thereby with the
Property Trustee or the Registrar, at its New York office, as custodian
for the Clearing Agency, and
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registered in the name of the Clearing Agency or a nominee of the
Clearing Agency, duly executed by the Trust and authenticated by the
Property Trustee as hereinafter provided. The number of Preferred
Securities represented by the Global Preferred Security may from time
to time be increased or decreased by adjustments made on the records of
the Property Trustee and the Clearing Agency or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be
deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Global Preferred Securities that (i)
shall be registered in the name of Cede & Co. or other nominee of such
Clearing Agency and (ii) shall be delivered by the Trustee to such
Clearing Agency or pursuant to such Clearing Agency's written
instructions or held by the Property Trustee or the Registrar as
custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with
respect to any Global Preferred Security held on their behalf by the
Clearing Agency or by the Property Trustee or the Registrar as the
custodian of the Clearing Agency or under such Global Preferred
Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as
the absolute owner of such Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Trust, the Property Trustee or any agent of the Trust or the
Property Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Clearing Agency or impair, as
between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of
the rights of a holder of a beneficial interest in any Global Preferred
Security.
(c) Definitive Preferred Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Global Preferred
Security will not be entitled to receive physical delivery of
certificated Preferred Securities ("Definitive Preferred Securities").
SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"), and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Administrative Trustees may appoint the Registrar and Paying Agent
and may appoint one or more co-registrars and one or more additional paying
agents in such other locations as it shall determine. The term "Registrar"
includes any additional registrar, the term "Paying Agent" includes any
additional paying agent. The Administrative Trustees may change any Paying Agent
or Registrar without prior notice to any Holder. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Sponsor. The Administrative Trustees shall notify the Property
Trustee of the name and address of any Agent not a party to this Declaration. If
the Administrative Trustees fail to appoint or maintain another entity as
Registrar or Paying Agent, the Property Trustee shall act as such. The Trust or
any of its Affiliates may act as Paying Agent or Registrar. The Trust shall act
as Paying Agent and Registrar for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar and
Paying Agent for the Preferred Securities.
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The Registrar and Paying Agent shall be entitled to all of the rights,
protections, immunities and indemnities afforded to the Property Trustee
hereunder.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions on the Securities, and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. An indemnity bond must be provided by
the Holder which, in the judgment of the Property Trustee, is sufficient to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Trust may charge
such holder for its expenses in replacing a Security.
SECTION 7.7 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced pursuant to Section 7.6 hereof, it
ceases to be outstanding unless the Property Trustee receives proof satisfactory
to it that the replaced Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
Except as otherwise provided herein, a Preferred Security does not
cease to be outstanding because one of the Trustees, the Sponsor or an Affiliate
of the Sponsor holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.
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SECTION 7.9 Temporary Securities; Certificated Securities.
(a) Until Definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the
Property Trustee shall authenticate, temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities
but may have variations that the Trust considers appropriate for
temporary Securities. Without unreasonable delay, the Administrative
Trustees shall prepare and, in the case of the Preferred Securities,
the Property Trustee shall authenticate, Definitive Securities in
exchange for temporary Securities.
(b) A Global Preferred Security deposited with the Clearing
Agency or with the Property Trustee or the Registrar as custodian for
the Clearing Agency pursuant to Section 7.3 shall be transferred to the
beneficial owners thereof in the form of certificated Preferred
Securities only if (i) the Clearing Agency notifies the Company that it
is unwilling or unable to continue as Clearing Agency for such Global
Preferred Security or if at any time such Clearing Agency ceases to be
a "clearing agency" registered under the Exchange Act and a clearing
agency is not appointed by the Administrative Trustees within 90 days
of such notice, or (ii) the Administrative Trustees in their sole
discretion elect to cause the issuance of certificated Preferred
Securities.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred
Securities pursuant to this Section 7.9 shall be surrendered by the
Clearing Agency to the Property Trustee located in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from
time to time in part, without charge, and the Property Trustee shall
authenticate and make available for delivery, upon such transfer of
each portion of such Global Preferred Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the
form of certificated Preferred Securities. Any portion of a Global
Preferred Security transferred pursuant to this Section shall be
registered in such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Preferred Security may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interests
through Participants, to take any action which such Holder is entitled
to take under this Declaration or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to
the Property Trustee or the Registrar a reasonable supply of
certificated Preferred Securities in fully registered form without
distribution coupons.
SECTION 7.10 Cancellation.
The Administrative Trustees at any time may deliver the Securities to
the Property Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Property Trustee any Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Securities surrendered for registration of transfer,
redemption, exchange, payment, replacement or cancellation and shall dispose of
canceled Securities as the Administrative Trustees direct, provided that the
Property Trustee shall not be obligated to destroy Preferred Securities. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or redeemed or that have been delivered to the Property Trustee
for cancellation.
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SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically be dissolved and its affairs
wound up upon the earliest to occur of the following events:
(i) the bankruptcy of the Sponsor;
(ii) the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor,
upon the dissolution of the Trust after having obtained the
consent of at least a Majority in Liquidation Amount of the
Securities voting together as a class to dissolve the Trust,
or the revocation of the Sponsor's charter and the expiration
of 90 days after the date of revocation without a
reinstatement thereof;
(iii) the distribution, after satisfaction of the
liabilities of the Trust to the creditors of the Trust, of a
Like Amount of the Debentures to the Holders of the Securities
pursuant to the terms thereof upon receipt of a written
direction from the Sponsor (which shall be at its sole
discretion) while the Debentures are outstanding requiring the
Trustees to dissolve the Trust and distribute a Like Amount of
the Debentures to Holders of the Securities;
(iv) the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption
thereof shall, after satisfaction of the liabilities of the
Trust to the creditors of the Trust, have been paid to the
Holders in accordance with the terms of the Securities;
(vi) the expiration of the term of the Trust provided
in Section 3.14; or
(vii) before the issuance of any Securities, with the
consent of the Administrative Trustees and the Sponsor.
(b) As soon as is practicable upon completion of winding up of
the Trust following the occurrence of an event referred to in Section
8.1(a) and after satisfaction of all liabilities to creditors of the
Trust, the Administrative Trustees shall terminate the Trust by filing
a certificate of cancellation with the Secretary of State of the State
of Delaware in accordance with the Business Trust Act.
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(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. To the fullest extent
permitted by law, any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) The Sponsor may not transfer the Common Securities except
to an Affiliate of the Sponsor and except pursuant to any merger,
consolidation, sale of all or substantially all of its assets or other
transaction permitted pursuant to Article VIII of the Indenture.
(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities, which
will be effected without charge but only upon payment (with such
indemnity as the Trustees may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon
surrender for registration of transfer of any Securities, the Trustees
shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Administrative Trustees duly
executed by the Holder or such Holder's attorney duly authorized in
writing. Each Security surrendered for registration of transfer shall
be canceled by the Administrative Trustees. A transferee of a Security
shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
SECTION 9.2 Deemed Security Holders.
The Trust, the Trustees, the Paying Agent and the Registrar may treat
the Person in whose name any Security shall be registered on the books and
records of the Trust as the sole owner of such Security for purposes of
receiving Distributions and for all other purposes whatsoever and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Security on the part of any Person, whether or not the Trust, the Trustees,
the Paying Agent or the Registrar shall have actual or other notice thereof.
SECTION 9.3 Book-Entry Interests.
Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 7.9. Unless and until definitive, fully registered Preferred Securities
certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 7.9:
(a) the provisions of this Section 9.3 shall be in full force
and effect;
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(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Preferred Securities and
receiving approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Preferred
Security Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3
conflict with any other provisions of this Declaration, the provisions
of this Section 9.3 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants, including receiving and transmitting
payments of Distributions on the Global Preferred Securities to such
Clearing Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration,
so long as any Global Preferred Securities remain outstanding, the
Trustees may conclusively rely on, and shall be protected in relying
on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter
to any other Persons either in whole or in part.
SECTION 9.4 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Securities to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
SECTION 9.5 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Preferred Securities Guarantee and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities, which shall be made solely from
assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or
otherwise.
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(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to
the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust
or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to
the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Person and any Indemnified Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
each Covered Person or Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally accepted
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accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification and Expenses.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was an Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the
best interests of the Trust, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that he
is or was an Indemnified Person against expenses (including
attorneys' fees and expenses) actually and reasonably incurred
by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to
which such Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
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(iii) To the extent that an Indemnified Person shall
be successful on the merits or otherwise (including dismissal
of an action without prejudice or the settlement of an action
without admission of liability) in defense of any action, suit
or proceeding referred to in paragraphs (i) and (ii) of this
Section 10.4(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted
by law, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
(iv) Any indemnification of an Administrative Trustee
under paragraphs (i) and (ii) of this Section 10.4(a) (unless
ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees
by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such action,
suit or proceeding, (2) if such a Quorum is not obtainable,
or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses)
incurred by an Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this
Section 10.4(a) shall be paid by the Sponsor in advance of the
final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding
the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the
Administrative Trustees by a majority vote of a Quorum of
disinterested Administrative Trustees, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the
facts known to the Administrative Trustees, counsel or the
Common Security Holder, as the case may be, at the time such
determination is made, such Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in
or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Indemnified
Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in
instances where the Administrative Trustees, independent legal
counsel or Common Security Holder reasonably determine that
such Person deliberately breached his duty to the Trust or its
Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of
this Section 10.4(a) shall not be deemed exclusive of any
other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both
as to action in his official capacity and as to action in
another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to
be provided by a contract between the Sponsor and each
Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
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(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any Person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability
under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a
director, trustee, officer or employee of such constituent
entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a)
shall, unless otherwise provided when authorized or ratified,
continue as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors
and administrators of such a Person.
(b) To the fullest extent permitted by law, the Sponsor agrees
to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii)
any Affiliate of the Property Trustee and the Delaware Trustee, and
(iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Trustee Indemnified Person") for,
and to hold each Trustee Indemnified Person harmless against, any and
all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Trustee Indemnified Person)
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the earlier
resignation or removal of such Trustee Indemnified Person.
(c) The Sponsor agrees to pay to the Trustees from time to
time reasonable compensation for all services rendered by them
hereunder and, except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee, subject to Section 5.3(c), may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity
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to the Trust even if such opportunity is of a character that, if presented to
the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual
United States federal income tax information statement, required by the
Code, containing such information with regard to the Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Administrative Trustees shall endeavor to deliver
all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual
United States federal income tax return, on a Form 1041 or such other
form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrative
Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the
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Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Administrative Trustees on behalf of the Trust shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees on behalf
of the Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be
amended by a written instrument executed by the Administrative Trustees
(or if there are more than two Administrative Trustees, a majority of
them) together with:
(i) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee, the
Property Trustee;
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee; and
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Sponsor, the Sponsor.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
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(A) an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the terms
of this Declaration (including the terms of the
Securities),
provided, however, that the Property Trustee shall not be required to
sign any such amendment; or
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
rights, powers, duties or immunities of the Property
Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act.
(c) After the Trust has issued any Securities that remain
outstanding, any amendment that would materially adversely affect the
rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities.
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in Liquidation Amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with
any other provision of this Declaration or to make any other
provisions with respect to matters or questions arising under
this Declaration which shall not be inconsistent with the
other provisions of the Declaration;
(ii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iii) modify, eliminate or add to any provisions of
the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any
Securities are outstanding or to ensure that the Trust will
not be required to register as an Investment Company under the
Investment Company Act;
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provided that no such amendment may be made pursuant to this Section
12.1(g) that adversely affects the Holders of the Preferred Securities
in any material respect.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which
Holders of such class of Securities are entitled to act under the terms
of this Declaration, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or admitted
for trading. The Administrative Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least
10% in Liquidation Amount of such class of Securities. Such direction
shall be given by delivering to the Administrative Trustees one or more
notices in writing stating that the signing Holders of Securities wish
to call a meeting and indicating the general or specific purpose for
which the meeting is to be called. Any Holders of Securities calling a
meeting shall specify in writing the Security certificates held by the
Holders of Securities exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at
least seven days and not more than 60 days before the date of
such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in Liquidation Amount
that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented
in writing. The Administrative Trustees may specify that any
written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
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(iii) each meeting of the Holders of the Securities
shall be conducted by the Administrative Trustees or by such
other Person that the Administrative Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Preferred
Securities are at the time listed or trading, otherwise
provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, Quorum requirements, voting in
person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association or
a bank or trust company, duly organized, validly existing and in good
standing under the laws of the United States or a State of the United
States, as the case may be, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) No consent, approval or authorization of, or registration
with or notice to, any federal or New York State banking authority is
required for the execution, delivery or performance by the Property
Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the
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Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, with power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration and has its principal place of business in the State of
Delaware;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration; and
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware, and is a
person that satisfies the requirements of Section 3807(a) of the
Business Trust Act.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the
Securities):
American General Capital III
c/o American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Corporate Finance Department
Telecopy: (713) 522-3487
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
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Bankers Trust (Delaware)
E. A. Delle Donne Corporate Center
Montgomery Building
1011 Centre Road, Suite 200
Wilmington, Delaware 19805-1266
Attention: Elizabeth B. Ferry
Telecopy: (302) 636-3333
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Services -
Corporate Market Services
Telecopy: (212) 250-6961
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Corporate Finance Department
Telecopy: (713) 522-3487
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws. The provisions of Sections 3540 and 3561 of
Title 12 of the Delaware Code shall not apply to this Trust.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
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SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees and the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ NICHOLAS R. RASMUSSEN
----------------------------------------
Nicholas R. Rasmussen
not in his individual capacity but
solely as Administrative Trustee
/s/ C. JEFFREY GAY
----------------------------------------
C. Jeffrey Gay
not in his individual capacity but
solely as Administrative Trustee
/s/ GREGORY N. PICARD
----------------------------------------
Gregory N. Picard
not in his individual capacity but
solely as Administrative Trustee
BANKERS TRUST (DELAWARE)
not in its individual capacity but
solely as Delaware Trustee
By: /s/ ELIZABETH B. FERRY
-------------------------------------
Name: Elizabeth B. Ferry
-----------------------------------
BANKERS TRUST COMPANY
not in its individual capacity but
solely as Property Trustee
By: /s/ TARA NETHERTON
-------------------------------------
Name: Tara Netherton
-----------------------------------
AMERICAN GENERAL CORPORATION,
as Sponsor
By: /s/ C. JEFFREY GAY
-------------------------------------
C. Jeffrey Gay
Vice President and Assistant Treasurer
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ANNEX I
TERMS OF
8.05% TRUST PREFERRED SECURITIES
8.05% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of December 7, 2000 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration
or, if not defined in such Declaration, as defined in the Indenture):
1. Designation and Number.
(a) Preferred Securities. 4,000,000 Preferred Securities of
the Trust, with an aggregate Liquidation Amount with respect to the
assets of the Trust of ONE HUNDRED MILLION dollars ($100,000,000), and
with a Liquidation Amount with respect to the assets of the Trust of
$25.00 per security, are hereby designated for the purposes of
identification only as "8.05% Trust Preferred Securities" (the
"Preferred Securities"). The certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or quotation system on
which the Preferred Securities are listed or quoted.
(b) Common Securities. 123,712 Common Securities of the Trust
with an aggregate Liquidation Amount with respect to the assets of the
Trust of THREE MILLION NINETY-TWO THOUSAND EIGHT HUNDRED dollars
($3,092,800) and a Liquidation Amount with respect to the assets of the
Trust of $25.00 per security, are hereby designated for the purposes of
identification only as "8.05% Common Securities" (the "Common
Securities"). The certificates evidencing the Common Securities shall
be substantially in the form of Exhibit A-2 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount
of $25.00 per Security (the "Liquidation Amount"), such rate being the
rate of interest payable on the Debentures to be held by the Property
Trustee. Distributions in arrears for more than one quarterly period
will bear additional distributions thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes any such additional
distributions unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held
by the Property Trustee and to the extent the Property Trustee has
funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been
paid or, if no Distributions have been paid, from and including
December 7, 2000, to but excluding the related Distribution Date (as
defined below) or the date of redemption, and will be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on December 31, 2000, except as otherwise described
below. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year
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consisting of twelve 30-day months and for any period of less than a
full calendar month on the basis of the actual number of days elapsed
in such month. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution
payable on such date shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as
if made on the date such payment was originally payable (each date on
which Distributions are payable in accordance with the foregoing, a
"Distribution Date").
So long as no Event of Default (as defined in the Indenture)
has occurred and is continuing, the Debenture Issuer has the right
under the Indenture to defer the payment of interest on the Debentures
by extending the interest payment period at any time and from time to
time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each an
"Extension Period"), provided that no Extension Period shall extend
beyond the Maturity of the Debentures. Distributions will be deferred
during any Extension Period. Notwithstanding such deferral,
Distributions to which holders of Securities are entitled shall
continue to accumulate additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at
which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the
Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period,
together with all previous and further extensions, if any, within such
Extension Period, may not exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, or
extend beyond the Maturity of the Debentures. Upon the expiration of
any Extension Period (or any extension thereof) and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements. Payments of Distributions
that have accumulated but not been paid during any Extension Period
will be payable to Holders as they appear on the books and records of
the Trust on the record date for the first scheduled Distribution Date
following the expiration of such Extension Period and prior to the
commencement of any new Extension Period. As long as the Debentures are
held by the Property Trustee, the Debenture Issuer must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period or any extension thereof
at least five Business Days prior to the earlier of (i) the date the
Distributions on the Preferred Securities would have been payable
except for the election to begin or extend such Extension Period and
(ii) the date the Administrative Trustees are required to give notice
to any securities exchange on which the Preferred Securities are listed
(or any other applicable self regulatory organization) or to Holders of
the Preferred Securities of the record date or the date such
Distributions are payable. If the Property Trustee is not the sole
holder of the Debentures, the Debenture Issuer is required to give the
holders of the Debentures and the Debenture Trustee written notice of
its election of an Extension Period at least 10 Business days before
the earlier of (i) the next succeeding interest payment date on the
Debentures, or (ii) the date on which the Debenture Issuer is required
to give notice of the record or payment date of such interest payment
to any national securities exchange. There is no limitation on the
number of times that the Debenture Issuer may elect to begin an
Extension Period.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on
the record dates, which shall be the Business Day prior to the relevant
Distribution date as long as the Preferred Securities are held in
global form by a Clearing Agency, and the 15th day of the last month in
each quarterly distribution period (even if not a Business Day) if the
Preferred Securities are issued in certificated form. Subject to any
applicable laws and regulations and the provisions of the Declaration,
each such payment in respect of the
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<PAGE> 55
Preferred Securities will be made as follows: (i) if the Preferred
Securities are held in global form by a Clearing Agency (or its
nominee), in accordance with the procedures of the Clearing Agency; and
(ii) if the Preferred Securities are held in definitive form, by check
mailed to the address of the Holder thereof as reflected in the records
of the Registrar unless otherwise agreed by the Trust. The relevant
record dates for the Common Securities shall be the same as the record
dates for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution Date will
cease to be payable to the Holder on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the
Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
The Sponsor will have the right at any time to dissolve the Trust and
cause the Debentures to be distributed to the Holders of the Trust Securities in
Liquidation of the Trust.
In the event of any dissolution of the Trust pursuant to Sections
8.1(a)(i), (ii), (iv) or (vi) of the Declaration, the Trust shall be liquidated
by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
Distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for Distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount of $25.00 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the dissolution of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
On and from the date fixed by the Administrative Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding; (ii) the Clearing Agency or its
nominee, as the Holder of the Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution; and (iii) any Securities not held by the Clearing Agency or
its nominee will be deemed to represent beneficial interests in a Like Amount of
Debentures, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities, until such Securities
are presented to the Registrar or its agent for cancellation, whereupon the
Debenture Issuer will issue, and the Debenture Trustee will authenticate, a
certificate representing such Debentures. If the Debentures are distributed to
Holders of the Preferred Securities, pursuant to the terms of the Indenture, the
Debenture Issuer will use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities
were listed on immediately prior to the distribution of the Debentures.
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If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Maturity
thereof or the date of earlier redemption thereof prior thereto in
accordance with the terms thereof (such redemption being either at the
option of the Debenture Issuer on or after December 7, 2005 in whole or
in part or at the option of the Debenture Issuer in whole but not in
part prior to December 7, 2005 within 90 days after the occurrence of a
Special Event as described below), the proceeds from such repayment or
redemption shall be simultaneously applied by the Property Trustee
(subject to the Property Trustee having received notice no later than
30 days prior to such repayment or redemption) to redeem a Like Amount
of the Securities, on a Pro Rata basis in accordance with Section 9
hereof, at a redemption price equal to 100% of the Liquidation Amount
of the Securities to be redeemed, plus accumulated and unpaid
Distributions thereon, if any, to the date of redemption (the
"Redemption Price").
(b) If, at any time, a Tax Event or an Investment Company
Event (each as defined below, and each a "Special Event") shall occur
and be continuing the Debenture Issuer shall have the right, upon not
less than 30 nor more than 60 days notice, to redeem the Debentures in
whole but not in part before December 7, 2005, for cash within 90 days
following the occurrence of such Special Event, and, following such
redemption, Securities with an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis in
accordance with Section 9 hereof.
"Tax Event" means that the Administrative Trustees shall have
received an opinion of an independent tax counsel experienced in such
matters to the effect that, as a result of (i) any amendment to, or
change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority affecting taxation, or (ii) any
official or administrative pronouncement or action or judicial
decision, interpreting or applying such laws or regulations, which
amendment or change becomes effective or such pronouncement, action or
decision is announced or occurs on or after November 30, 2000, there is
more than an insubstantial risk that (A) the Trust is or, within 90
days of the date of such opinion, would be subject to United States
federal income tax with respect to interest accrued or received on the
Debentures, (B) interest payable by the Debenture Issuer on the
Debentures is not or, within 90 days of the date of such opinion, would
not be deductible, in whole or in part, by the Debenture Issuer for
United States federal income tax purposes, or (C) the Trust is or,
within 90 days of the date of such opinion, would be, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges.
"Investment Company Event" means that the Administrative
Trustees shall have received an opinion of an independent counsel
experienced in practice under the Investment Company Act to the effect
that, as a result of the occurrence of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk
that the Trust is or will be considered an "Investment Company" that is
required to be registered under the Investment Company Act, which
Change in 1940 Act Law becomes effective on or after November 30, 2000.
For the purpose of the preceding sentence, "Investment Company Act"
means the Investment Company Act of 1940, as amended from time to time,
or any successor legislation.
I-4
<PAGE> 57
(c) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been
paid on all Securities for all Distribution periods that expire on or
before the date of redemption.
(d) The procedure with respect to redemptions or distributions
of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for repayment or
redemption of the Debentures. For purposes of the calculation
of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(d)(i), a
Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Securities, it
being understood that, in respect of Preferred Securities
registered in the name of and held of record by a Clearing
Agency or its nominee, the distribution of the proceeds of
such redemption will be made to the Clearing Agency or its
nominee and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, such notice shall be
irrevocable and (A) with respect to Preferred Securities
registered in the name of or held of record by a Clearing
Agency or its nominee, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related maturity or redemption of the
Debentures by 10:00 a.m., New York City time, on the Maturity
Date or the date of redemption, as the case may be, the
Property Trustee or the Paying Agent will pay to the Clearing
Agency or its nominee funds sufficient to pay the Redemption
Price with respect to such Preferred Securities, and (B) with
respect to Preferred Securities issued in certificated form
and Common Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related maturity or redemption of the
Debentures, the Property Trustee or the Paying Agent will pay
the Redemption Price to the Holders of such Securities against
presentation to the Registrar of the certificates therefor. If
a Redemption/Distribution Notice shall have been given and
funds deposited with the Property Trustee to pay the
Redemption Price (including all unpaid Distributions) with
respect to the Securities called for redemption, then
immediately prior to the close of business on the redemption
date, Distributions will cease to accumulate on the Securities
so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the
right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
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<PAGE> 58
(iv) Payment of accumulated and unpaid Distributions
on the redemption date of any Securities will be subject to
the rights of Holders of such Securities on the close of
business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
(v) Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the
transfer of (A) any Securities beginning on the opening of
business 15 days before the day of mailing of a
Redemption/Distribution Notice or (B) any Securities selected
for redemption (except the unredeemed portion of any Security
being redeemed). If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with
the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of
any Securities is improperly withheld or refused and not paid
on the date fixed for redemption, either by the Property
Trustee or the Paying Agent or by the Sponsor as guarantor
pursuant to the Preferred Securities Guarantee, then (A)
Distributions on such Securities will continue to accumulate
from such redemption date to the actual date of payment, and
(B) the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption
Price.
(vi) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Sponsor or any of its Affiliates may at
any time and from time to time purchase outstanding Preferred
Securities by tender, in the open market or by private
agreement.
5. [Intentionally Omitted]
6. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 and as
otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in Liquidation Amount of the Preferred
Securities, voting separately as a class, may direct the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee, or direct the exercise of any trust or power
conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee, as Holder of the Debentures,
to (i) exercise the remedies available under the Indenture with respect
to the Debentures, (ii) waive any past default and its consequences
that are waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures
shall be due and payable, or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where
such consent would be required; provided that where a consent or action
under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected
thereby (a "Super Majority"), the Property Trustee may only give such
consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. In addition,
if the consent of the Property Trustee, as holder of the Debentures, is
required in connection with any amendment, modification or termination
of the Indenture or the Debentures, the Property Trustee will request
the direction of the Holders of the Preferred Securities and shall vote
with respect to such amendment, modification or termination as
I-6
<PAGE> 59
directed by Holders of a Majority in Liquidation Amount of the
Preferred Securities voting together as a single class, provided that
where a consent or action under the Indenture would require the consent
or act of a Super Majority, the Property Trustee may only give such
consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities. The Property
Trustee shall notify each Holder of Preferred Securities of any written
notice of default received from the Indenture Trustee with respect to
the Debentures. Other than with respect to directing the time, method
and place of conducting a proceeding for any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as an
association taxable as a corporation on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on
the Debentures on any due date (including any Interest Payment Date or
redemption date or the Maturity), then a Holder of Preferred Securities
may directly institute a legal proceeding against the Debenture Issuer
for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct
Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the Holders of the
Common Securities will be subrogated to such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action. Except as
provided in this paragraph, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the
holders of the Debentures.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities or pursuant to written consent. The Property Trustee will
cause a notice of any meeting at which Holders of Preferred Securities
are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of
record of Preferred Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is
sought, and (iii) instructions for the delivery of proxies or consent.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred
Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described
above, any of the Preferred Securities that are owned by the Sponsor or
any Affiliate of the Sponsor shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
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<PAGE> 60
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), 7(c), and 8 or as
otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. If an Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the Holders of a Majority in Liquidation Amount
of the outstanding Preferred Securities. In no event will the Holders
of the Preferred Securities have the right to vote to appoint, remove
or replace the Administrative Trustees, which voting rights are vested
exclusively in the Sponsor as the Holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Declaration.
(c) Subject to Section 2.6 of the Declaration and only after
any Event of Default with respect to the Preferred Securities has been
cured, waived or otherwise eliminated and subject to the requirements
set forth in this paragraph, the Holders of a Majority in Liquidation
Amount of the Common Securities, voting separately as a class, may
direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or direct the exercise of any
trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as
Holder of the Debentures, to (i) exercise the remedies available under
the Indenture with respect to the Debentures, (ii) waive any past
default and its consequences that are waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent would be required; provided that,
where a consent or action under the Indenture would require the consent
or act of a Super Majority of the Holders of the Debentures affected
thereby, the Property Trustee may only give such consent or take such
action at the written direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding. In addition, if the consent of the Property
Trustee, as holder of the Debentures, is required in connection with
any amendment, modification or termination of the Indenture or the
Debentures, the Property Trustee will request the direction of the
Holders of the Common Securities and shall vote with respect to such
amendment, modification or termination as directed by Holders of a
Majority in Liquidation Amount of the Common Securities voting together
as a single class, provided that where a consent or action under the
Indenture would require the consent or act of a Super Majority, the
Property Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Common Securities. The Property Trustee shall notify each Holder of
Common Securities of any written notice of default received from the
Indenture Trustee with respect to the Indentures. Other than with
respect to directing the time, method and place of conducting a
proceeding for any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the
Common Securities under this paragraph unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that for
the purposes of United States federal income tax the Trust will not be
classified as an association taxable as a corporation on account of
such action.
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<PAGE> 61
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on
the Debentures on the due date (including any Interest Payment Date or
redemption date or the Maturity), then a Holder of Common Securities
may institute a Direct Action for enforcement of payment to such Holder
of the principal of or premium, if any, or interest on a Like Amount of
Debentures on or after the respective due date specified in the
Debentures. Except as provided in this paragraph, the Holders of Common
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are
entitled to vote, or of any matter upon which action by written consent
of such Holders is to be taken, to be mailed to each Holder of record
of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption
at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for
the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities
or to distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
8. Amendments to Declaration.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended by the Trustees and the Sponsor with
(i) the consent of Holders representing a Majority in Liquidation Amount of all
outstanding Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an investment company under the Investment
Company Act, provided that, without the consent of each Holder of Securities,
the Declaration may not be amended to (i) change the amount or timing of any
Distribution or other payment on the Securities or otherwise adversely affect
the amount of any Distribution or other payment required to be made in respect
of the Securities as of a specified date, (ii) change the purpose of the Trust,
(iii) authorize the issuance of any additional beneficial interests in the
Trust, (iv) change the time or circumstances in which the Securities may be
redeemed or the amount payable upon such a redemption, (v) change the
Liquidation Distribution or other provisions relating to the timing or amount of
such distribution, (vi) affect the limited liability of any Holder of
Securities, or (vii) restrict the right of Holder of Securities to institute
suit for the enforcement of any such payment on or after such date.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to any payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Liquidation Amount of
Preferred Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Preferred Securities outstanding, and
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<PAGE> 62
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate Liquidation Amount of Common Securities held by the relevant Holder
relative to the aggregate Liquidation Amount of all Common Securities
outstanding.
10. Ranking.
The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.
11. Acceptance of Preferred Securities Guarantee and Indenture.
Each Holder of Preferred Securities by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture (including any supplemental indenture) to
a Holder without charge on written request to the Sponsor at its principal place
of business.
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<PAGE> 63
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS
A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE
CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ITS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities
CUSIP NO._______
Certificate Evidencing Preferred Securities
of
American General Capital III
8.05% Trust Preferred Securities
(Liquidation Amount $25.00 per Preferred Security)
American General Capital III, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that _______
(the "Holder") is the registered owner of _______ securities of the Trust
representing undivided preferred beneficial interests in the assets of the Trust
designated the 8.05% Trust Preferred Securities (Liquidation Amount $25.00 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are set forth herein, on the reverse hereof and in the
Amended and Restated Declaration of Trust of the Trust dated as of December 7,
2000, as the same may be amended from time to time
A1-1
<PAGE> 64
(the "Declaration"), and shall in all respects be subject to the provisions
thereof, including the designation of the terms of the Preferred Securities as
set forth in Annex I to the Declaration. Each capitalized term used but not
defined herein or in any legend, form or certificate hereon shall have the
meaning given to it in the Declaration. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to any Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _____________.
American General Capital III
By:
-------------------------------------
Name:
-----------------------------------
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
-------------------
Bankers Trust Company
as Property Trustee
By:
--------------------------------
Authorized Signatory
A1-2
<PAGE> 65
[FORM OF REVERSE OF PREFERRED SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount of $25.00
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will themselves accumulate distributions thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes any such additional
distributions payable for any period unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including December 7,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 2000,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the
Declaration on or after December 7, 2005 or earlier in certain circumstances
upon the occurrence of a Special Event.
A1-3
<PAGE> 66
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(Insert assignee's social security or tax identification number)
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------------
Signature:
------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:
---------------------------------------
----------
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-4
<PAGE> 67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY CERTIFICATE IS NOT TRANSFERABLE
EXCEPT AS SET FORTH IN THE DECLARATION REFERRED TO HEREIN
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
American General Capital III
8.05% Common Securities
(Liquidation Amount $25.00 per Common Security)
American General Capital III, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that American
General Corporation (the "Holder") is the registered owner of _______ common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 8.05% Common Securities (Liquidation Amount
$25.00 per Common Security) (the "Common Securities"). The Common Securities are
not transferable except as set forth in the Declaration described below. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are set forth herein, on
the reverse hereof and in the Amended and Restated Declaration of Trust of the
Trust dated as of December 7, 2000, as the same may be amended from time to time
(the "Declaration"), and shall in all respects be subject to the provisions
thereof, including the designation of the terms of the Common Securities as set
forth in Annex I to the Declaration. Each capitalized term used but not defined
herein or in any legend, form or certificate hereon shall have the meaning given
to it in the Declaration. The Sponsor will provide a copy of the Declaration and
the Indenture (including any supplemental indenture) to any Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder to the extent provided
therein.
By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
_________ day of _______________, _____.
AMERICAN GENERAL CAPITAL III
By:
-----------------------------------------
Name:
---------------------------------------
Administrative Trustee
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<PAGE> 68
[FORM OF REVERSE OF COMMON SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount of $25.00 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarterly period will themselves accumulate distributions thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes any such additional distributions
payable for any period unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
Distributions on the Common Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including December 7,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 2000,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration on or after December 7, 2005 or earlier in certain circumstances
upon the occurrence of a Special Event.
A2-2
