-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N+hf1JfoWSq1JyN5E90Td7XeB5y/2CjRqLkBeX6QQsnkeJZch5HfAALwvPZBh0Zg UFH+wR1L3uqQDSATUZTcJg== 0000950129-99-004019.txt : 19990909 0000950129-99-004019.hdr.sgml : 19990909 ACCESSION NUMBER: 0000950129-99-004019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990902 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL CORP /TX/ CENTRAL INDEX KEY: 0000005103 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 740483432 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07981 FILM NUMBER: 99707289 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135221111 8-K 1 AMERICAN GENERAL CORPORATION - DATED 09/02/1999 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 2, 1999 ---------- AMERICAN GENERAL CORPORATION (Exact name of registrant as specified in its charter) TEXAS 1-7981 74-0483432 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation or organization) Identification No.) 2929 ALLEN PARKWAY HOUSTON, TEXAS 77019 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (713) 522-1111 ================================================================================ 2 ITEM 5. OTHER EVENTS. On September 2, 1999, American General Corporation ("American General") priced the public offering of 8,000,000 7 7/8% Trust Originated Preferred Securities ("TOPrS") of American General Capital I, a subsidiary trust of American General, at $25 per security. Each TOPrS security will pay cumulative cash distributions at the annual rate of 7 7/8 percent of the stated $25 liquidation amount per security, payable quarterly commencing on September 30, 1999. Closing is scheduled for September 8, 1999, subject to customary closing conditions. Proceeds from the offering of approximately $193.2 million (after underwriting and other associated costs) will be used to repay indebtedness. In connection with the issuance of the TOPrS securities, American General will issue $206,185,575 principal amount of its 7 7/8% Junior Subordinated Debentures due 2048 to American General Capital I. The Preferred Securities will be issued pursuant to the shelf registration statement filed under the Securities Act of 1933, as amended, of American General, American General Capital I and certain other trusts (Registration Statement Nos. 333-40583, et seq.). ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 1.1 Underwriting Agreement for Preferred Securities of American General Capital I. 1.2 Pricing Agreement dated September 2, 1999. 4.1 Resolutions establishing terms of 7 7/8% Junior Subordinated Debentures due 2048. 4.2 Form of 7 7/8% Junior Subordinated Debentures due 2048 (included in Exhibit 4.1). 4.3 Form of Amended and Restated Declaration of Trust of American General Capital I among American General, as sponsor, the Trustees named therein and the holders from time to time of undivided beneficial interest in the assets of American General Capital I. 4.4 Form of Global Certificate for Preferred Securities of American General Capital I (included in Exhibit 4.3). 4.5 Preferred Securities Guarantee Agreement between American General, and Bankers Trust Company. 8.1 Opinion of Vinson & Elkins L.L.P. as to certain federal income tax matters. 23.1 Consent of Vinson & Elkins L.L.P. (included in Exhibit 8.1). -2- 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMERICAN GENERAL CORPORATION Date: September 8, 1999 By: /s/ JAMES L. GLEAVES ------------------------------------ Name: James L. Gleaves Title: Vice President and Treasurer 4 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1.1 Underwriting Agreement for Preferred Securities of American General Capital I. 1.2 Pricing Agreement dated September 2, 1999. 4.1 Resolutions establishing terms of 7 7/8% Junior Subordinated Debentures due 2048. 4.2 Form of 7 7/8% Junior Subordinated Debentures due 2048 (included in Exhibit 4.1). 4.3 Form of Amended and Restated Declaration of Trust of American General Capital I among American General, as sponsor, the Trustees named therein and the holders from time to time of undivided beneficial interest in the assets of American General Capital I. 4.4 Form of Global Certificate for Preferred Securities of American General Capital I (included in Exhibit 4.3). 4.5 Preferred Securities Guarantee Agreement between American General, and Bankers Trust Company. 8.1 Opinion of Vinson & Elkins L.L.P. as to certain federal income tax matters. 23.1 Consent of Vinson & Elkins L.L.P. (included in Exhibit 8.1).
EX-1.1 2 UNDERWRITING AGREEMENT 1 EXHIBIT 1.1 AMERICAN GENERAL CAPITAL I PREFERRED SECURITIES GUARANTEED TO THE EXTENT THAT AMERICAN GENERAL CAPITAL I HAS FUNDS AVAILABLE BY AMERICAN GENERAL CORPORATION UNDERWRITING AGREEMENT American General Capital I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), and American General Corporation, a Texas corporation, as sponsor of the Trust and as guarantor (the "Company"), propose to enter into a Pricing Agreement (the "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the Pricing Agreement (such firms constituting the "Underwriters") certain preferred securities representing beneficial interests in the assets of the Trust. The preferred securities representing undivided beneficial interests in the assets of the Trust specified in Schedule II to the Pricing Agreement as Initial Preferred Securities are referred to as the "Initial Preferred Securities". If specified in the Pricing Agreement, the Trust may grant the Underwriters the right to purchase at their election an additional number of preferred securities representing undivided beneficial interests in the assets of the Trust, specified as provided in the Pricing Agreement as provided in Section 2 hereof (the "Option Preferred Securities"). The Initial Preferred Securities and the Option Preferred Securities, if any, which the Underwriters elect to purchase pursuant to Section 2 hereof are herein collectively referred to as the "Preferred Securities". The Preferred Securities will be guaranteed by the Company as to the payment of distributions, and as to payments on liquidation or redemption, to the extent set forth in a guarantee agreement (the "Guarantee") between the Company and Bankers Trust Company, as trustee (the "Guarantee Trustee"). The proceeds of the sale of the Preferred Securities and of the Trust's common securities (the "Common Securities") will be invested by the Trust in Junior Subordinated Debentures (the "Junior Subordinated Debentures") of the Company to be issued pursuant to a Junior Subordinated Indenture, dated as of November 15, 1997 (the "Indenture"), between the Company and Bankers Trust Company, as trustee (the "Debenture Trustee"). The Preferred Securities may be exchangeable into such Junior Subordinated Debentures or other property or securities if so specified in Schedule II to the Pricing Agreement. The offer and sale of the Preferred Securities, the Guarantee and the Junior Subordinated Debentures (referred to herein, individually or together, as the "Securities") have been registered under the registration statement referred to in Section 1(a) below. 2 The representative or representatives of the Underwriters, if any, specified in the Pricing Agreement are referred to herein as the "Representatives"; provided, however, that if the Pricing Agreement does not specify any representative of the Underwriters, the term "Representatives" shall mean the Underwriters. The Pricing Agreement will incorporate by reference the provisions of this Agreement, except as otherwise provided therein. Section 1. Representations and Warranties. Each of the Trust and the Company, jointly and severally, represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement (Nos. 333-40583, 333-40583-01, 333-40583-02, 333-40583-03 and 333-40583-04) on Form S-3 relating to, among other securities, the Securities, and all post-effective amendments thereto required to the date of the Pricing Agreement, have been filed with the Securities and Exchange Commission (the "Commission") in the form heretofore delivered or to be delivered to the Representatives (and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein on or prior to the date of the Pricing Agreement, to the Representatives for each of the other Underwriters) and such registration statement and each such amendment thereto, if any, have been declared effective by the Commission and no stop order suspending the effectiveness thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. For purposes of this Agreement, (i) the term "Registration Statement" shall mean the foregoing registration statement, including all exhibits thereto and all documents incorporated by reference therein as of the effective date thereof; and any reference to the Registration Statement as amended (or similar wording) shall mean the Registration Statement, including all post-effective amendments thereto and all documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the effective date of the Registration Statement and that are deemed to be incorporated by reference in the Registration Statement upon the filing of such documents with the Commission and the information, if any, deemed to be a part thereof pursuant to Rule 434 under the Securities Act of 1933, as amended (the "Act"); (ii) the term "Prospectus" shall mean the prospectus, including all documents incorporated by reference therein as of the date thereof, relating to the Securities in the form included in the Registration Statement as of the effective date thereof or, if different, in the form in which it has most recently been filed or transmitted for filing with the Commission on or prior to the date of the Pricing Agreement, as amended or supplemented to reflect the terms of the offering of the Securities by (A) if the Company elects not to rely on Rule 434 under the Act, the Prospectus Supplement contemplated by Section 3(a) hereof, in the form in which such Prospectus Supplement is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 3(a) hereof or (B) if the Company elects to rely on Rule 434 under the Act, the Term Sheet contemplated by Section 3(a) hereof, in the form in which such Term Sheet is filed with the Commission pursuant to Rule 424(b) (7) under the Act in accordance with Section 3(a) hereof (and, in such case, the term "Prospectus" shall include such Term Sheet and the Rule 434(c) (2) Prospectus referred to in Section 3(a), if any, each individually and taken together); any reference to the date of the Prospectus shall be deemed to refer to the date of such Prospectus 2 3 Supplement or Term Sheet, as the case may be, and any reference to the Prospectus as amended or supplemented (or similar wording) shall mean the Prospectus, including all supplements thereto and all documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the Prospectus and that are deemed to be incorporated by reference in the Prospectus upon the filing of such documents with the Commission; and (iii) the term "Preliminary Prospectus" shall mean any preliminary prospectus relating to the Securities, including all documents incorporated by reference therein as of the date thereof, included in the registration statement prior to the effectiveness thereof or filed with the Commission pursuant to Rule 424(a) under the Act; and any reference to any Preliminary Prospectus as amended or supplemented (or similar wording) shall mean such Preliminary Prospectus, including all documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of such Preliminary Prospectus and that are deemed to be incorporated by reference in the Preliminary Prospectus upon the filing of such documents with the Commission. If the Company files a registration statement to register a portion of the Securities and relies on Rule 462(b) under the Act for such registration statement to become effective upon filing with the Commission (the "Rule 462 (b) Registration Statement"), then any reference to "Registration Statement" herein shall be deemed to be to both the registration statement referred to above (Nos. 333-40583, 333-40583-01, 333-40583-02, 333-40583-03 and 333-40583-04 (the "Original Registration Statement")) and the Rule 462 (b) Registration Statement, as each such registration statement may be amended pursuant to the Act; (b) The documents incorporated by reference in the Prospectus, as amended or supplemented, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and, when read together with the other information included or incorporated by reference in the Prospectus at the time the Registration Statement became effective, at the time any post-effective amendment thereto became effective and at the time any annual report on Form 10-K was filed by the Company and incorporated by reference into the Prospectus, none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed during the period during which delivery of a prospectus is required in connection with the offering or sale of the Preferred Securities, and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder and, when read together with the other information included or incorporated by reference in the Prospectus at the time such documents are filed with the Commission, none of such documents will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Trust or the Company by or on behalf of an Underwriter through the Representatives expressly for use in the Prospectus; (c) The Registration Statement, as amended, and the Prospectus, as amended, conform, and any amendments or supplements thereto filed during the period during 3 4 which delivery of a prospectus is required in connection with the offering or sale of the Securities will conform, in all material respects to the applicable requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Commission thereunder. The Registration Statement, as amended, and the Prospectus, as amended or supplemented, each as of the effective date of the Registration Statement, as of the effective date of each post-effective amendment to the Registration Statement, if any, and at the time any annual report on Form 10-K was filed by the Company and incorporated by reference into the Prospectus, did not, as of the date of the Pricing Agreement do not, and as of the Time of Delivery (as hereinafter defined) and during the period during which delivery of a prospectus is required in connection with the offering and sale of the Securities, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Trust or the Company by or on behalf of an Underwriter through the Representatives expressly for use in the Prospectus, or to the Statements of Eligibility on Form T-1 (the "Forms T-1"), except as to statements or omissions in such Forms T-1 made in reliance upon information furnished in writing to the Debenture Trustee or the Guarantee Trustee by or on behalf of the Trust or the Company for use therein; (d) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the business, financial condition, shareholders' equity (without considering the effect of unrealized gains and losses on debt and equity securities classified as "available for sale" under Statement of Financial Accounting Standards (SFAS) No. 115) or results of operations of the Trust or of the Company and its subsidiaries taken as a whole, other than as set forth or contemplated in the Prospectus as amended or supplemented, whether or not arising in the ordinary course of business; (e) The Trust has been duly created and is validly existing in good standing as a business trust under the Business Trust Act of the State of Delaware (the "Delaware Business Trust Act") with the power and authority to own its properties and conduct its business as described in the Prospectus, and the Trust has conducted no business to date, and it will conduct no business in the future that would be inconsistent with the description of the Trust set forth in the Prospectus; the Trust is not a party to or bound by any agreement or instrument other than this Agreement, the Declaration of Trust dated as of November 14, 1997 (the "Declaration") (and, at each Time of Delivery (as defined in Section 2), the Amended and Restated Declaration of Trust (the "Amended Declaration") among the Company , the trustees named therein (the "Trustees"), and the holders from time to time of undivided beneficial interests in the assets of the Trust), and the other agreements and instruments contemplated by the Declaration or the Amended Declaration; the Trust has no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement, the Declaration or the Amended Declaration and described in the Prospectus; based on expected operations and current law, the Trust is not and will not be classified as an association taxable as a corporation 4 5 for United States federal income tax purposes; and the Trust is not a party to or subject to any action, suit or proceeding of any nature; (f) The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Texas with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases substantial properties, or conducts business, and where the failure so to qualify and be in good standing would have a material adverse effect on the business of the Company and its subsidiaries taken as a whole; each of the Company's consolidated subsidiaries the consolidated assets of which constitute at least 15 percent of the consolidated assets of the Company (herein the "Selected Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, has corporate power and authority to own or lease its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases substantial properties, or conducts business, and where the failure so to qualify and be in good standing would have a material adverse effect on the business of the Company and its subsidiaries taken as a whole; and each of the Company and the Selected Subsidiaries has all required authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies (including, without limitation, each insurance regulatory authority having jurisdiction over the Company or any insurance subsidiary of the Company) to own or lease its properties and conduct its business as described in the Prospectus, except such authorizations, approvals, orders, licenses, certificates and permits which, if not obtained, would not have a material adverse effect on the business of the Company and its subsidiaries taken as a whole, and neither the Company nor any of the Selected Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such authorization, approval, order, license, certificate or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially adversely affect the business of the Company and its subsidiaries taken as a whole; (g) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus (except for subsequent issuances, if any, pursuant to employee benefit plans, dividend reinvestment plans, or the exercise of convertible securities or options referred to in the Prospectus or subsequent purchases, if any, pursuant to the Company's share buyback program); and all of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable, and conform in all material respects to the description thereof contained in the Prospectus; (h) All of the outstanding shares of capital stock of each of the Selected Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable, and (except for any directors' qualifying shares) are owned, directly or indirectly, by the Company, free and clear of all liens and encumbrances; 5 6 (i) The Preferred Securities have been duly and validly authorized by the Trust, and, when the Preferred Securities are issued and delivered against payment therefor as provided herein and in the Pricing Agreement, such Preferred Securities will be duly and validly issued and fully paid and non-assessable undivided beneficial interests in the assets of the Trust and will conform to the description of the Preferred Securities contained in the Prospectus; the issuance of the Preferred Securities is not subject to preemptive or other similar rights; the Preferred Securities will have the rights set forth in the Amended Declaration, and the terms of the Preferred Securities are valid and binding on the Trust; the Preferred Securities will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; (j) The Common Securities of the Trust have been duly and validly authorized by the Trust and upon delivery by the Trust to the Company against payment therefor as described in the Prospectus will be duly and validly issued undivided beneficial interests in the assets of the Trust and will conform to the description thereof contained in the Prospectus; the issuance of the Common Securities is not subject to preemptive or other similar rights; and at each Time of Delivery (as defined in Section 2 hereof), all of the issued and outstanding Common Securities of the Trust will be directly or indirectly owned by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; (k) The issue and sale of the Preferred Securities and the Common Securities by the Trust, the purchase of the Junior Subordinated Debentures by the Trust, the exchange by the Trust of Junior Subordinated Debentures for Preferred Securities, the compliance by the Trust with all of the provisions of this Agreement and the Pricing Agreement, and the consummation of the other transactions herein and therein contemplated will not conflict with or result in any violation of (i) the Declaration, the Amended Declaration or the Certificate of Trust dated November 14, 1997 (the "Certificate of Trust") or (ii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Trust or any of its properties, in any manner which, in the case of clause (ii), would have a material adverse effect on the Trust; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Preferred Securities and the Common Securities by the Trust, the purchase of the Junior Subordinated Debentures by the Trust, the exchange by the Trust of Junior Subordinated Debentures for Preferred Securities, or the consummation by the Trust of the other transactions contemplated by this Agreement or the Pricing Agreement, except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" or state insurance laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; (l) The issue and sale of the Preferred Securities and the Common Securities by the Trust, the issue by the Company of the Guarantee, the issue and sale by the Company of the Junior Subordinated Debentures, the exchange by the Trust of the Junior Subordinated Debentures for Preferred Securities, the compliance by each of the Trust 6 7 and the Company with all of the provisions of this Agreement, the Pricing Agreement, the Declaration, the Amended Declaration, the Certificate of Trust, the Guarantee, the Junior Subordinated Debentures and the Indenture, and the consummation of the other transactions contemplated herein and therein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument for money borrowed to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (ii) result in any violation of (x) the provisions of the Restated Articles of Incorporation, as amended, or the Amended and Restated Bylaws of the Company or (y) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of the Selected Subsidiaries or any of their properties, in any manner which, in the case of clauses (i) and (ii)(y), would have a material adverse effect on the business of the Company and its subsidiaries taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue by the Company of the Guarantee, the issue and sale by the Company of the Junior Subordinated Debentures, the exchange by the Trust of Junior Subordinated Debentures for Preferred Securities, or the consummation by the Company of the other transactions contemplated by this Agreement, the Pricing Agreement, the Declaration, the Amended Declaration, the Certificate of Trust, the Indenture or the Guarantee, except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws or state insurance laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; (m) Other than as set forth or contemplated in the Prospectus, there are no legal or governmental proceedings pending to which the Trust, the Company or any of its subsidiaries is a party or of which any property of the Trust, the Company or any of its subsidiaries is subject which, individually or in the aggregate, are expected to have a material adverse effect on the business, financial condition, or results of operations of the Trust or of the Company and its subsidiaries taken as a whole; and, to the best of the Trust's and the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (n) Neither the Trust nor the Company is or, after giving effect to the issue and sale of the Preferred Securities and the Junior Subordinated Debentures, respectively, will be, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (o) The Junior Subordinated Debentures have been duly and validly authorized and, when executed and authenticated pursuant to the Indenture, and issued and delivered against payment therefor as contemplated by this Agreement and the Pricing Agreement, will be duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of 7 8 general applicability relating to or affecting creditors' rights and to general equity principles; the Indenture has been duly and validly authorized by the Company and, when duly executed and delivered by the Company and the Debenture Trustee, will constitute a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Indenture has been duly qualified under the Trust Indenture Act; and the Junior Subordinated Debentures and the Indenture will conform in all material respects with the descriptions thereof contained in the Prospectus; (p) The Guarantee has been duly and validly authorized by the Company and, when executed and delivered by the Company as contemplated by this Agreement and the Pricing Agreement, will have been duly executed, issued and delivered, and assuming the valid execution and delivery by the Guarantee Trustee, will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Guarantee has been duly qualified under the Trust Indenture Act; and the Guarantee will conform in all material respects with the description thereof contained in the Prospectus; (q) The Amended Declaration has been duly and validly authorized and, when validly executed and delivered by the Company and the Trustees, will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Amended Declaration will conform in all material respects to the description thereof contained in the Prospectus; and (r) In connection with the offering of the Preferred Securities, neither the Trust nor the Company has taken or will take, directly or indirectly, any action designed to or which has constituted or which might reasonably be expected to cause or result in a violation of the anti-manipulation provisions under the Exchange Act, including Regulation M. Section 2. Purchase and Offering of Securities. The obligation of the Trust to issue and sell the Preferred Securities and the obligation of any of the Underwriters to purchase the Preferred Securities shall be evidenced by the Pricing Agreement, which shall specify the aggregate number of the Initial Preferred Securities, the maximum member of Option Preferred Securities, if any, the initial public offering price of such Initial Preferred Securities and Option Preferred Securities, if any, or the manner of determining such price, the variable terms of the Preferred Securities, including whether and the terms on which and terms of the Junior Subordinated Debentures into which the Preferred Securities may be exchangeable, the form of the Preferred Securities, the purchase price to the Underwriters of such Preferred Securities, the names of the Underwriters of such Preferred Securities (subject to substitution as provided by Section 7 herein), the names of the Representatives of such Underwriters, the number of such Preferred Securities to be purchased by each Underwriter and the commission payable to the Underwriters with respect thereto and shall set forth the date, time and manner of delivery of 8 9 such Initial Preferred Securities and Option Preferred Securities, if any, and payment therefor. The Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and the Pricing Agreement shall be several and not joint. Upon the execution of the Pricing Agreement and authorization by the Representatives of the release of the Initial Preferred Securities, the several Underwriters propose to offer the Initial Preferred Securities for sale upon the terms and conditions set forth in the Prospectus. The Trust may specify in the Pricing Agreement that the Trust thereby grants to the Underwriters the right (an "Over-allotment Option") to purchase at their election up to the number of Option Preferred Securities set forth in such Pricing Agreement, on the same terms as the Initial Preferred Securities, for the sole purpose of covering over-allotments in the sale of the Initial Preferred Securities. Any such election to purchase Option Preferred Securities may be exercised by written notice from the Representatives to the Trust, given within a period specified in the Pricing Agreement, setting forth the aggregate number of Option Preferred Securities to be purchased and the date on which such Option Preferred Securities are to be delivered, as determined by the Representatives but in no event earlier than the First Time of Delivery (as defined below) or, unless the Representatives and the Trust otherwise agree in writing, earlier than or later than the respective number of business days after the date of such notice set forth in the Pricing Agreement. The number of Option Preferred Securities to be added to the number of Initial Preferred Securities to be purchased by each Underwriter as set forth in Schedule I to the Pricing Agreement shall be, in each case, the number of Option Preferred Securities which the Trust has been advised by the Representatives have been attributed to such Underwriter; provided that, if the Trust has not been so advised, the number of Option Preferred Securities to be so added shall be, in each case, that proportion of Option Preferred Securities which the number of Initial Preferred Securities to be purchased by such Underwriter under the Pricing Agreement bears to the aggregate number of Initial Preferred Securities (rounded as the Representatives may determine to the nearest 100 shares). The total number of Preferred Securities to be purchased by all the Underwriters pursuant to the Pricing Agreement shall be the aggregate number of Initial Preferred Securities set forth in Schedule I to the Pricing Agreement plus the aggregate number of Option Preferred Securities which the Underwriters elect to purchase. As compensation to the Underwriters for their commitments hereunder, and in view of the fact that the proceeds of the sale of the Preferred Securities will be used by the Trust to purchase the Junior Subordinated Debentures, the Company hereby agrees to pay at each Time of Delivery to the Representatives, for the accounts of the several Underwriters, an amount per Preferred Security specified in the Pricing Agreement for the Preferred Securities to be delivered hereunder at such Time of Delivery. The Initial Preferred Securities and the Option Preferred Securities to be purchased by each Underwriter pursuant to the Pricing Agreement, in the form specified in the Pricing Agreement, shall be delivered by or on behalf of the Trust to the Representatives, through the facilities of The Depository Trust Company ("DTC"), for the account of each such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by wire 9 10 transfer to the account specified by the Trust in same day funds, (i) with respect to the Initial Preferred Securities, all in the manner and at the place and time and date specified in the Pricing Agreement or at such other place and time and date as the Representatives and the Trust may agree upon in writing (such time and date being herein called the "First Time of Delivery") and (ii) with respect to the Option Preferred Securities, if any, in the manner and at the time and date specified by the Representatives in the written notice given by the Representatives of the Underwriters' election to purchase such Option Preferred Securities, or at such other time and date as the Representatives and the Trust may agree upon in writing (such time and date, if not the First Time of Delivery, being herein called the "Second Time of Delivery"). Each such time and date for delivery is herein called a "Time of Delivery". At each Time of Delivery, the Company will pay, or cause to be paid, the compensation payable at such Time of Delivery to the Underwriters in the same funds and manner as the purchase price for the Preferred Securities to be paid by the Underwriters to the Trust (any such certified or official bank check or checks to be payable to the order of the Representatives and any such wire transfer to be to the account specified by the Representatives). Section 3. Certain Agreements of the Company. Each of the Trust and the Company, jointly and severally, agrees with each of the Underwriters: (a) Immediately following the execution of the Pricing Agreement, to prepare (i) if the Trust and the Company elect not to rely on Rule 434 under the Act, an amendment or supplement to the prospectus related to the Securities to reflect the terms of the offering of the Securities (the "Prospectus Supplement") in a form reasonably approved by the Representatives, and to file the Prospectus Supplement pursuant to Rule 424(b) (2) or (5) under the Act by 3:00 p.m., New York City time, on the business day immediately succeeding the date of the Pricing Agreement (or such other time as shall be specified in the Pricing Agreement), or (ii) if the Trust and the Company elect to rely on Rule 434 under the Act, (A) an abbreviated term sheet relating to the Preferred Securities, the Guarantee and the Junior Subordinated Debentures (the "Term Sheet") that complies with the requirements of Rule 434(c) (3) and (e) under the Act in a form reasonably approved by the Representatives, and (B) if required by Rule 434(c) (2) under the Act, a form of Prospectus relating to the Preferred Securities, the Guarantee and the Junior Subordinated Debentures (the "Rule 434(c) (2) Prospectus") complying with Rule 434(c) (2) under the Act in a form reasonably approved by the Representatives, and to file such Term Sheet pursuant to Rule 424(b) (7) under the Act, and any such Rule 434(c) (2) Prospectus pursuant to Rule 424(b) under the Act, in each case by 3:00 p.m., New York City time, on the business day immediately succeeding the date of the Pricing Agreement (or such other time as shall be specified in the Pricing Agreement); except as otherwise required by law, to make no amendment or supplement to the Registration Statement or Prospectus after the date of the Pricing Agreement and prior to any Time of Delivery which shall be reasonably disapproved by the Representatives promptly after reasonable notice thereof; for so long as the delivery of a prospectus is required in connection with the offering or sale of the Preferred Securities, to file promptly all reports and any definitive proxy or information statements required to be filed by the Trust or the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, and to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or 10 11 becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed or transmitted for filing with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of any of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Preferred Securities, the Guarantee and the Junior Subordinated Debentures, or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal. (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Securities for offering and sale under the securities and insurance laws of such jurisdictions as the Representatives may reasonably request and to comply with such laws to the extent necessary to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Preferred Securities; provided, however, that in connection therewith neither the Trust nor the Company shall be required to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Securities and if at such time any event shall have occurred or condition exist as a result of which the Prospectus, as it may then be amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period, in the opinion of the Representatives, the Trust or the Company, to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives of such event, condition, filing, amendment or supplement and upon the Representatives' request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) In the case of the Company, to make generally available to its security holders as soon as practicable, but in any event not later than 90 days following the close of the period covered thereby, an earnings statement, covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158 under the Act) of the Registration Statement, of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including Rule 158); 11 12 (e) During the period beginning from the date of the Pricing Agreement and continuing to and including the last Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of any Preferred Securities, any other beneficial interests of the Trust, or any preferred securities or any securities of the Trust or the Company, as the case may be, that are substantially similar to the Preferred Securities, including the Guarantee, and including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive Preferred Securities, preferred securities or any such substantially similar securities of either the Trust or the Company, without the prior consent of the Representatives; (f) Not to be or become, at any time prior to the expiration of three years after the Time of Delivery, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act; (g) To use the net proceeds received by it from the sale of the Preferred Securities, in the case of the Trust, and the Junior Subordinated Debentures, in the case of the Company, as contemplated in this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; (h) In the case of the Company, to issue and deliver the Guarantee and the Junior Subordinated Debentures concurrently with the issuance and sale of the Preferred Securities; and (i) If the Pricing Supplement specifies that the Preferred Securities are to be listed on a securities exchange, to use its best efforts to list on such securities exchange, subject to notice of issuance, (i) the Preferred Securities, and (ii) the Junior Subordinated Debentures, upon any distribution thereof to holders of the Preferred Securities. Section 4. Payment of Expenses. Each of the Trust and the Company jointly and severally covenants and agrees with the several Underwriters to pay or cause to be paid the following: (i) the fees, disbursements and expenses of their counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Pricing Agreement, the Declaration, the Amended Declaration, the Indenture, the Junior Subordinated Debentures, the Guarantee, any Blue Sky survey, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Preferred Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities and insurance laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) any fees charged by securities rating services for rating the Securities; (v) any filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Preferred Securities; (vi) any fees and expenses in connection with listing on one or more securities exchanges and under the Exchange Act of the Preferred Securities and, if applicable, any Junior Subordinated Debentures distributed to holders of the Preferred Securities; (vii) the cost of 12 13 preparing certificates, if any, for the Preferred Securities and any Junior Subordinated Debentures; (viii) the cost and charges of any transfer agent or registrar or dividend disbursing agent; (ix) the cost of qualifying the Preferred Securities and the Junior Subordinated Debentures with DTC; (x) the cost and charges of any conversion agent; (xi) the fees and expenses of the Debenture Trustee, the Guarantee Trustee and the trustees of the Trust and the fees and disbursements of their counsel; and (xii) all other costs and expenses incident to the performance of its obligations hereunder and under any Over-allotment Option which are not otherwise specifically provided for in this Section 4. It is understood, however, that, except as provided in this Section 4, Section 6 and Section 8 hereof, the Underwriters will pay all of their own costs and expenses, including the fees and disbursements of their own counsel, transfer taxes on resale of any of the Preferred Securities by them, and any advertising expenses connected with any offers they may make. Section 5. Conditions of Underwriters' Obligations. The several obligations of the Underwriters under the Pricing Agreement shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Trust and the Company in or incorporated by reference in the Pricing Agreement are, at and as of each Time of Delivery, true and correct, the condition that the Trust and the Company shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus Supplement or, if the Company shall have elected to rely on Rule 434 under the Act, the Term Sheet and any Rule 434 (c) (2) Prospectus required by Rule 434 (c) (2) under the Act, shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed therefor by Section 3(a) hereof; no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Brown & Wood LLP, counsel for the Underwriters, shall have furnished to the Representatives such opinion or opinions, dated each Time of Delivery, with respect to the incorporation of the Company and the formation of the Trust, the validity of the Preferred Securities and the Junior Subordinated Debentures being delivered at each Time of Delivery and with respect to the Registration Statement, the Prospectus and such other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters (in rendering such opinion or opinions, Brown & Wood LLP may rely as to matters of Texas law upon the opinions of Vinson & Elkins L.L.P. and of the General Counsel, the Deputy General Counsel or the Associate General Counsel - Corporate/Finance of the Company referred to in subsections 5(c) and 5(d), respectively, and as to matters of Delaware law upon the opinion of Richards, Layton & Finger, P.A., referred to in subsection 5(e)); (c) Vinson & Elkins L.L.P., counsel for the Company, shall have furnished to the Representatives their written opinion (in rendering such opinion, Vinson & Elkins L.L.P. may rely as to matters of Delaware law upon the opinion of Richards, Layton & 13 14 Finger, P.A., referred to in subsection 5(e)), dated each Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) The Declaration and the Amended Declaration have each been duly and validly authorized, executed and delivered by the Company and the Declaration and the Amended Declaration each conforms in all material respects to the description thereof contained in the Prospectus; (ii) All of the issued and outstanding Common Securities of the Trust are owned of record directly or indirectly by American General, free and clear of all liens and encumbrances known to such counsel; (iii) This Agreement and the Pricing Agreement have each been duly authorized, executed and delivered by each of the Trust and the Company; (iv) The issue and sale by the Trust of the Preferred Securities and Common Securities being delivered at such Time of Delivery, the purchase by the Trust of the Junior Subordinated Debentures being purchased at such Time of Delivery, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, the compliance by the Trust with all of the provisions of this Agreement and the Pricing Agreement, and the consummation of the other transactions contemplated herein and therein will not result in any violation of the provisions of this Agreement, the Pricing Agreement, the Amended Declaration or the Certificate of Trust or any statute, or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Trust or any of its properties (other than any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Trust or any of its properties solely as a result of the Trust's affiliation with the Company or its subsidiaries); and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale by the Trust of the Preferred Securities and the Common Securities being delivered at such Time of Delivery, the purchase by the Trust of the Junior Subordinated Debentures being purchased at such Time of Delivery, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, or the consummation by the Trust of the other transactions contemplated by this Agreement and the Pricing Agreement, other than any such consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body having jurisdiction over the Trust or any of its properties solely as a result of the Trust's affiliation with the Company or its subsidiaries and except such as have been obtained under the Act and the Trust Indenture Act prior to such Time of Delivery and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws or insurance laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; (v) The statements set forth in the Prospectus under the captions "Description of Junior Subordinated Debentures", "Description of Preferred Securities", "Description of Guarantees", "Relationship among the Preferred 14 15 Securities, the Corresponding Junior Subordinated Debentures and the Guarantee", "Description of Common Stock", "Description of Preferred Stock", and any similar caption in the Prospectus as amended with respect to the Preferred Securities, insofar as they purport to constitute a summary of the terms of the Junior Subordinated Debentures, the Preferred Securities, the Guarantee, the Common Stock, and the Preferred Stock, respectively, are accurate summaries in all material respects and fairly present in all material respects the information set forth therein; (vi) Such counsel confirms their opinion filed as Exhibit 8 to the Registration Statement and the information in the Prospectus under "Certain Federal Income Tax Consequences", to the extent that it constitutes matters of law, summaries of legal matters, documents or proceedings or legal conclusions, is correct in all material respects; (vii) The Junior Subordinated Debentures have been duly and validly authorized and, when executed and authenticated pursuant to the Indenture and issued and delivered against payment therefor as contemplated by this Agreement and the Pricing Agreement, will be duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles and will be entitled to the benefits provided by the Indenture; the Junior Subordinated Debentures are in the form authorized in or pursuant to the Indenture; the Indenture has been duly authorized, executed and delivered by the Company and (assuming the Indenture has been duly authorized, executed and delivered by the Debenture Trustee) constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Indenture has been duly qualified under the Trust Indenture Act; and the Junior Subordinated Debentures and the Indenture conform in all material respects to the description thereof contained in the Prospectus; (viii) The Guarantee has been duly and validly authorized by the Company and, when executed and delivered as contemplated by this Agreement and the Pricing Agreement, will have been duly executed, issued and delivered, and (assuming the Guarantee has been duly authorized, executed and delivered by the Guarantee Trustee) will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Guarantee conforms in all material respects to the description thereof contained in the Prospectus; 15 16 (ix) The Registration Statement is effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or threatened by the Commission; (x) The documents incorporated by reference in the Prospectus (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, appeared on their face to comply as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; (xi) The Registration Statement, at the time it became effective, and as amended or supplemented as of the date of the Pricing Agreement (or, if the Company shall have elected to rely on Rule 434 under the Act, as of the time the Term Sheet was filed with the Commission pursuant to Rule 434(b) (7) under the Act) (other than the financial statements and other financial information included therein or the Forms T-1, as to which no opinion or belief need be expressed), appeared on its face to be appropriately responsive in all material respects to the applicable requirements of the Act, the Trust Indenture Act and the respective rules and regulations of the Commission thereunder; and (xii) Neither the Trust nor the Company is or, after giving effect to the issue and sale of the Preferred Securities and the Junior Subordinated Debentures, will be, an "investment company" as such term is defined in the Investment Company Act. In addition, such opinion shall also contain a statement that no facts have come to such counsel's attention that lead them to believe that the Registration Statement (other than the financial statements and other financial data contained therein, as to which such counsel need not express any comment), at the time it became effective, and if an amendment to the Registration Statement or an annual report on Form 10-K has been filed by the Company with the Commission subsequent to the effectiveness of the Registration Statement, then at the time each such amendment became effective and the most recent such Form 10-K was filed, as the case may be, and as of the date of the Pricing Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (other than the financial statements and other financial data contained therein, as to which such counsel need not express any comment), as amended or supplemented to reflect the terms of the offering of the Securities by the Prospectus Supplement or Term Sheet, as the case may be, and as amended or supplemented at the Time of Delivery, contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (d) The General Counsel or an Associate General Counsel of the Company shall have furnished to the Representatives his or her written opinion, dated each Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: 16 17 (i) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Texas, with corporate power and authority to own its properties and conduct its business as described in the Prospectus; (ii) Each of the Selected Subsidiaries has been duly incorporated and is validly existing as a business corporation or an insurer, as the case may be, in good standing under the laws of its jurisdiction of incorporation, provided, however, that "good standing" means with respect to any corporation incorporated under the laws of the State of Indiana that such corporation has filed its most recent annual report required by the laws of the State of Indiana and Articles of Dissolution have not been filed in the State of Indiana with respect to such corporation; to the knowledge of such counsel, each of the Company and the Selected Subsidiaries has been duly qualified as a foreign corporation for the transaction of business or licensed to transact business as an insurance company, as the case may be, and is in good standing under the laws of each other jurisdiction in which it owns or leases substantial properties, or conducts business, and where the failure so to qualify would have a material adverse effect on the business of the Company and its subsidiaries taken as a whole; all of the outstanding shares of capital stock of each Selected Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable, and (except for any directors' qualifying shares) are owned, directly or indirectly, by the Company, free and clear of all liens and encumbrances; and, to the knowledge of such counsel, each of the Company and the Selected Subsidiaries has all required authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies (including, without limitation, each insurance regulatory authority having jurisdiction over the Company or any insurance subsidiary of the Company) to own or lease its properties and to conduct its business as described in the Prospectus, except such authorizations, approvals, orders, licenses, certificates and permits which, if not obtained, would not have a material adverse effect on the business of the Company and its subsidiaries taken as a whole (such counsel being entitled to rely in respect of the opinion in this clause (ii) upon opinions (in form and substance reasonably satisfactory to the Representatives) of local counsel and of counsel for the Selected Subsidiaries, such counsel being acceptable to counsel for the Underwriters, copies of which shall be furnished to the Representatives; and in respect of matters of fact upon certificates of officers of the Company or the Selected Subsidiaries, provided that such counsel shall state that he or she believes that he or she is justified in relying upon such opinions and certificates); (iii) To the knowledge of such counsel, there are no legal or governmental proceedings pending or threatened of a character that are required to be disclosed in the Registration Statement and Prospectus, other than as disclosed therein; and to the knowledge of such counsel, there are no contracts, indentures, mortgages, deeds of trust, loan agreements or other documents of a character required to be described in the Registration Statement or Prospectus (or required to be filed under the Exchange Act if upon such filing they would be 17 18 incorporated by reference therein) or to be filed as exhibits to the Registration Statement that are not described and filed as required; (iv) The issue and sale by the Trust of the Preferred Securities and Common Securities being delivered at such Time of Delivery, the purchase by the Trust of the Junior Subordinated Debentures being purchased at such Time of Delivery, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, the compliance by the Trust with all of the provisions of this Agreement and the Pricing Agreement, and the consummation of the other transactions contemplated herein and therein will not result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Trust or any of its properties solely as a result of the Trust's affiliation with the Company or its subsidiaries, which violation would have a material adverse effect on the business, financial condition, shareholders' equity or results of operations of the Company and its subsidiaries taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale by the Trust of the Preferred Securities and Common Securities being delivered at such Time of Delivery, the purchase by the Trust of the Junior Subordinated Debentures being purchased at such Time of Delivery, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, or the consummation by the Trust of the other transactions contemplated by this Agreement or the Pricing Agreement solely as a result of the Trust's affiliation with the Company or its subsidiaries, except such as have been obtained under the Act and the Trust Indenture Act prior to such Time of Delivery and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws or insurance laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; and (v) The issue and sale by the Trust of the Preferred Securities and Common Securities being delivered at such Time of Delivery, the issue by the Company of the Guarantee, the issue and sale by the Company of the Junior Subordinated Debentures, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, the compliance by each of the Trust and the Company with all of the provisions of this Agreement, the Pricing Agreement, the Declaration, the Amended Declaration, the Certificate of Trust, the Guarantee, the Junior Subordinated Debentures and the Indenture and the consummation of the other transactions herein and therein contemplated will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument for money borrowed to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (B) result in any violation of (x) the provisions of the Restated Articles of Incorporation or the Amended and Restated By-Laws of the Company or (y) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or 18 19 any of their properties, in any manner which, in the case of clauses (A) and (B)(y), would have a material adverse effect on the business of the Company and its subsidiaries taken as a whole (such counsel being entitled to rely in respect of the opinion in this clause (v) with respect to subsidiaries upon opinions (in form and substance reasonably satisfactory to the Representatives) of counsel for the subsidiaries, such counsel being acceptable to counsel for the Underwriters, copies of which shall be furnished to the Representatives, provided that such counsel shall state that he or she believes that he or she is justified in relying upon such opinions); and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue by the Company of the Guarantee, the issue and sale by the Company of the Junior Subordinated Debentures, the exchange by the Trust of Junior Subordinated Debentures for such Preferred Securities, or the consummation by the Company of the other transactions contemplated by this Agreement, the Pricing Agreement, the Indenture, the Amended Declaration, the Certificate of Trust or the Guarantee, except such as have been obtained under the Act and the Trust Indenture Act prior to such Time of Delivery and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws or insurance laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters; (e) Richards, Layton & Finger, P.A., special Delaware counsel to the Trust and the Company, shall have furnished to the Representatives their written opinion, dated each Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act, and, under the Amended Declaration and the Delaware Business Trust Act, has the trust power and authority to own its properties and conduct its business as described in the Prospectus; and all filings required under the laws of Delaware with respect to the creation and valid existence of the Trust as a business trust have been made; (ii) The Amended Declaration constitutes a valid and binding obligation of the Company and the trustees of the Trust and is enforceable against the Company and such trustees in accordance with its terms; and the Preferred Securities being delivered at such Time of Delivery have the rights set forth in the Amended Declaration subject to the effect upon the Amended Declaration of (a) bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent conveyance and transfer, and other similar laws relating to or affecting the rights and remedies of creditors generally, (b) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (c) the effect of applicable public policy on the enforceability of provisions relating to indemnification; (iii) Under the Amended Declaration and the Delaware Business Trust Act, the Trust has the trust power and authority to (a) execute and deliver, and to 19 20 perform its obligations under this Agreement and the Pricing Agreement and (b) issue and perform its obligations under the Preferred Securities and the Common Securities being delivered at such Time of Delivery; (iv) Under the Amended Declaration and the Delaware Business Trust Act, the execution and delivery by the Trust of this Agreement and the Pricing Agreement, and the performance by the Trust of its obligations hereunder, have been duly authorized by all necessary trust action on the part of the Trust; (v) The Common Securities of the Trust being delivered at such Time of Delivery have been duly authorized by the Amended Declaration and are validly issued undivided beneficial interests in the assets of the Trust; the Preferred Securities being delivered at such Time of Delivery have been duly and validly authorized by the Amended Declaration and are duly and validly issued and, subject to the qualifications set forth herein, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; the holders of such Preferred Securities, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; provided that such counsel may note that such holders may be obligated, pursuant to the Amended Declaration, to (a) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of certificates representing such Preferred Securities and the issuance of replacement certificates and (b) provide security and indemnity in connection with requests of or directions to the Property Trustee (as defined in the Amended Declaration) to exercise its rights and powers under the Amended Declaration; (vi) Under the Amended Declaration and the Delaware Business Trust Act, the issuance of the Preferred Securities and the Common Securities being delivered at such Time of Delivery is not subject to preemptive or other similar rights; (vii) The execution, delivery and performance of this Agreement, the Pricing Agreement, the Amended Declaration, the Preferred Securities and the Common Securities, the consummation of the transactions contemplated herein and therein, and the compliance by the Trust with its obligations hereunder and thereunder do not and will not result in any violation of the Amended Declaration, the Certificate of Trust or any applicable Delaware law or administrative regulation thereunder; (viii) Except as previously made or obtained, as the case may be, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Delaware court or Delaware governmental authority or agency is necessary or required to be obtained by the Trust solely in connection with the execution or delivery by the Trust of this Agreement or the Pricing Agreement, or the performance by the Trust of the transactions contemplated hereby or thereby, including the issuance and sale of the Preferred 20 21 Securities and the Common Securities being delivered at such Time of Delivery; and (ix) The holders of the Preferred Securities being delivered at such Time of Delivery (other than those holders who reside or are domiciled in the State of Delaware) will have no liability for income taxes imposed by the State of Delaware solely as a result of their participation in the Trust, and the Trust will not be liable for any income tax imposed by the State of Delaware. (f) Richards, Layton & Finger, P.A., special Delaware counsel to Bankers Trust (Delaware), as Delaware Trustee under the Amended Declaration, shall have furnished to the Representatives their written opinion, dated each Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that Bankers Trust (Delaware) has been duly incorporated and is validly existing in good standing as a banking corporation under the laws of the State of Delaware and has the corporate power to act as trustee of a Delaware business trust under the laws of the State of Delaware, 12 Del.C. ss.3801, et seq.; (g) On the date of the Pricing Agreement prior to the execution thereof and also at each Time of Delivery, the independent certified public accountants who have audited the consolidated financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter or letters dated such Time of Delivery, with respect to such consolidated financial statements, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Annex II hereto; (h) Since the date of the Pricing Agreement and since the respective dates as of which information is given in the Prospectus as amended prior to the date of the Pricing Agreement, there shall have been no material adverse change, nor any development or event involving a prospective material adverse change, in the business, financial condition, shareholders' equity or results of operations of the Trust or of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, the effect of which is, in the reasonable judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Preferred Securities on the terms and in the manner contemplated in the Prospectus; (i) On or after the date of the Pricing Agreement, no downgrading shall have occurred in the rating accorded the Preferred Securities or any of the Company's long-term debt securities or preferred stock by either Moody's Investors Service, Inc. or Standard & Poor's Ratings Services; (j) On or after the date of the Pricing Agreement, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or any other exchange on which application shall have been made to list the Preferred Securities; (ii) a suspension or material limitation in trading in the Preferred Securities or any of the Company's securities on the New York Stock Exchange or any other national securities exchange; (iii) a general moratorium on commercial banking activities in New York declared by 21 22 either Federal or New York State authorities; or (iv) an outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this subsection 5(i), in the reasonable judgment of the Representatives, makes it impracticable to proceed with the public offering or the delivery of the Initial Preferred Securities or the Option Preferred Securities, if any, or both on the terms and in the manner contemplated in the Prospectus; (k) The Amended Declaration, the Guarantee and the Indenture shall have been executed and delivered, in each case in a form reasonably satisfactory to the Representatives; (l) The Trust and the Company shall have furnished or caused to be furnished to the Representatives at each Time of Delivery, a certificate or certificates of the Trust and the Company satisfactory to the Representatives, signed by the administrative trustees of the Trust and the Chairman, the Vice Chairman, the President or a Vice President of the Company, as the case may be, as to the accuracy of the representations and warranties of the Trust and the Company herein at and as of such Time of Delivery, as to the performance by the Trust and the Company of all of their respective obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in the first two clauses of subsection 5(a) and in subsection 5(h) and as to such other matters as the Representatives may reasonably request; and (m) If the Pricing Supplement specifies that the Preferred Securities are to be listed on a securities exchange, the Preferred Securities, at each Time of Delivery, shall have been duly listed, subject to notice of issuance, on such securities exchange. Section 6. Indemnification. (a) The Trust and the Company, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, as incurred, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating, preparing for or defending against any such action or claim, commenced or threatened; provided, however, that neither the Trust nor the Company shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives expressly for use therein; and provided, further, that neither the Trust nor the Company shall be liable to any Underwriter under the indemnity agreement in this subsection (a) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such 22 23 Underwriter results from the fact that such Underwriter sold Preferred Securities to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus as then amended or supplemented (excluding documents incorporated by reference therein) in any case where such delivery is required by the Act if the Trust or the Company has previously furnished copies thereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission or alleged untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (or the Prospectus as amended or supplemented). (b) Each Underwriter will indemnify and hold harmless the Trust and the Company against any losses, claims, damages or liabilities, as incurred, to which the Trust or the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Trust and the Company by or on behalf of such Underwriter through the Representatives expressly for use therein, and will reimburse the Trust and the Company for any legal or other expenses reasonably incurred by the Trust or the Company in connection with investigating, preparing for or defending against any such action or claim, commenced or threatened. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement or threat of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under such subsection, notify such indemnifying party in writing of the commencement or threat thereof; but the omission so to notify such indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be commenced or threatened against any indemnified party and it shall notify the indemnifying party of the commencement or threat thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish and so elect within a reasonable time after receipt of such notification, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party and it being understood that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (provided that local counsel may be retained to the extent necessary) for all such indemnified parties (treating the indemnified party and the persons referred to in subsection (e) below to which the provisions of this Section 6 shall extend as a single indemnified party for such purpose)), and, after notice 23 24 from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Trust and the Company on the one hand and the Underwriters on the other hand from the offering of the Preferred Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above or is not entitled to receive the indemnification provided for in subsection (a) above because of the second proviso thereof, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Trust and the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Trust bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and the Company on the one hand or the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, including, with respect to any Underwriter, the extent to which such losses, claims, damages or liabilities (or actions in respect thereof) with respect to any Preliminary Prospectus result from the fact that such Underwriter sold Preferred Securities to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act, if either the Trust or the Company has previously furnished copies thereof to such Underwriter and the loss, 24 25 claim, damage or liability results from an untrue statement or omission or alleged untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (or the Prospectus as amended or supplemented). The Trust, the Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing for or defending against any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Preferred Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to the Preferred Securities and not joint. (e) The obligations of the Trust and the Company under this Section 6 shall be in addition to any liability which the Trust and the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 6 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer, trustee and director of the Trust and of the Company, as the case may be, and to each person, if any, who controls the Trust or the Company within the meaning of the Act. Section 7. Default of Underwriters. (a) If any Underwriter shall default in its obligation to purchase the Initial Preferred Securities or Option Preferred Securities which it has agreed to purchase under the Pricing Agreement, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Initial Preferred Securities or Option Preferred Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Initial Preferred Securities or Option Preferred Securities, as the case may be, then the Trust and the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Initial Preferred Securities or Option Preferred Securities on such terms. In the event that, within the respective prescribed periods, the Representatives notify the Trust and the Company that they have so arranged for the purchase of such Initial Preferred Securities or Option Preferred Securities, as the case may be, or the Trust and 25 26 the Company notify the Representatives that they have so arranged for the purchase of such Initial Preferred Securities or Option Preferred Securities, as the case may be, the Representatives or the Trust and the Company shall have the right to postpone the applicable Time of Delivery for such Initial Preferred Securities or Option Preferred Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Trust and the Company agree to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement and the Pricing Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement. (b) If, after giving effect to any arrangements for the purchase of the Initial Preferred Securities or Option Preferred Securities, as the case may be, of a defaulting Underwriter or Underwriters by the Representatives and the Trust and the Company as provided in subsection (a) above, the aggregate number of such Initial Preferred Securities or Option Preferred Securities which remains unpurchased does not exceed ten percent of the aggregate number of the Initial Preferred Securities or Option Preferred Securities, as the case may be, to be purchased at the respective Time of Delivery, then the Trust and the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Initial Preferred Securities or Option Preferred Securities, as the case may be, which such Underwriter agreed to purchase under the Pricing Agreement and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of the Initial Preferred Securities or Option Preferred Securities, as the case may be, which such Underwriter agreed to purchase under the Pricing Agreement) of the Initial Preferred Securities or Option Preferred Securities, as the case may be, of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Initial Preferred Securities or Option Preferred Securities, as the case may be, of a defaulting Underwriter or Underwriters by the Representatives and the Trust and the Company as provided in subsection (a) above, the aggregate number of Initial Preferred Securities or Option Preferred Securities, as the case may be, which remains unpurchased exceeds ten percent of the aggregate number of the Initial Preferred Securities or Option Preferred Securities, as the case may be, to be purchased at the respective Time of Delivery, as determined as set forth in subsection (b) above, or if the Trust and the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Initial Preferred Securities or Option Preferred Securities, as the case may be, of a defaulting Underwriter or Underwriters, then the Pricing Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Trust or the Company, except for the expenses to be borne by the Trust, the Company and the Underwriters as provided in Section 4 hereof and the indemnity and contribution agreements in Section 6 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 26 27 Section 8. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Trust and the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Trust or the Company, or any officer, trustee or director or controlling person of the Trust or the Company, and shall survive delivery of and payment for the Preferred Securities. If the Pricing Agreement shall be terminated pursuant to Section 7 hereof, neither the Trust nor the Company shall then be under any liability to any Underwriter except as provided in Section 4 and Section 6 hereof; but, if for any other reason Preferred Securities are not delivered by or on behalf of the Trust as provided herein, the Trust and the Company, jointly and severally, will reimburse the Underwriters through the Representatives for all reasonable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Preferred Securities not so delivered, but the Trust and the Company shall then be under no further liability to any Underwriter with respect to such Preferred Securities except as provided in Section 4 and Section 6 hereof. Section 9. Parties and Notices. (a) In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement; and (b) All statements, requests, notices and agreements hereunder shall be in writing, or by telegram or facsimile transmission if promptly confirmed in writing, and if to the Underwriters shall be sufficient in all respects if delivered or sent by registered mail to the Representatives, as such, at the address of the Representatives designated for such purpose as set forth in the Pricing Agreement; and if to the Trust or the Company shall be sufficient in all respects if delivered or sent by registered mail to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 6(c) hereof shall be delivered or sent by registered mail to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Trust and the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. Section 10. Successors. This Agreement and the Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Trust, the Company and, to the extent provided in Section 6 and Section 8 hereof, the officers, trustees and directors of the Trust and the Company and each person who controls the Trust, the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or the Pricing Agreement. No purchaser of any of the Preferred Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 27 28 Section 11. Governing Law. This Agreement and the Pricing Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed in such State. Section 12. Time of the Essence. Time shall be of the essence of the Pricing Agreement. Section 13. Counterparts. The Pricing Agreement may be executed by any one or more of the parties thereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 28 EX-1.2 3 PRICING AGREEMENT - DATED SEPTEMBER 2, 1999 1 EXHIBIT 1.2 PRICING AGREEMENT MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated MORGAN STANLEY & CO. INCORPORATED PAINEWEBBER INCORPORATED SALOMON SMITH BARNEY INC. THE ROBINSON-HUMPHREY COMPANY, LLC As Representatives of the several Underwriters named in Schedule I hereto, c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated World Financial Center North Tower New York, New York 10281 September 2, 1999 Ladies and Gentlemen: American General Capital I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), and American General Corporation, a Texas corporation, as sponsor of the Trust and as guarantor (the "Company"), propose, subject to the terms and conditions stated herein and in the Underwriting Agreement (a form of which was filed as an exhibit to the registration statement filed by the Trust, certain other trusts and the Company on Form S-3 (Nos. 333-40583, 333-40583-01, 333-40583-02, 333-40583-03 and 333-40583-04)) attached hereto (the "Underwriting Agreement"), to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Preferred Securities specified in Schedule II hereto, consisting of the Initial Preferred Securities and any Option Preferred Securities granted to the Underwriters which the Underwriters elect to purchase. If so specified in Schedule II hereto, the Preferred Securities are exchangeable into Junior Subordinated Debentures of the Company or other property or securities specified in Schedule II hereto. The Preferred Securities will be guaranteed by the Company on a limited basis as to the payment of Distributions and as to payments on liquidation or redemption (the "Guarantee"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Pricing Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 1 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), 2 and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented with respect to the offering of the Preferred Securities. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters pursuant to Section 9 of the Underwriting Agreement and the address of the Representatives referred to in such Section 9 are set forth in Schedule II hereto. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the offering of the Preferred Securities, in the form heretofore delivered to you, is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, (a) the Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the number of Initial Preferred Securities set forth opposite the name of such Underwriter in Schedule I hereto and, (b) in the event and to the extent that the Underwriters shall exercise the option, if any, to purchase Option Preferred Securities, as provided below, the Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust at the purchase price to the Underwriters set forth in Schedule II hereto that portion of the number of Option Preferred Securities as to which such option shall have been exercised. If so specified in Schedule II, the Trust hereby grants to each of the Underwriters the right to purchase at their option up to the number of Option Preferred Securities set forth opposite the name of such Underwriter in Schedule I hereto on the terms referred to in the preceding paragraph for the sole purpose of covering over-allotments, if any, in the sale of the Initial Preferred Securities. Any such option to purchase Option Preferred Securities may be exercised by written notice from the Representatives to the Trust given within a period of 30 calendar days after the date of this Pricing Agreement, setting forth the aggregate number of Option Preferred Securities to be purchased and the date on which such Option Preferred Securities are to be delivered, as determined by the Representatives, but in no event earlier than the First Time of Delivery or, unless the Representatives and the Trust otherwise agree in writing, no earlier than two or later than ten business days after the date of such notice. 2 3 If the foregoing is in accordance with your understanding, please sign and return to us one counterpart hereof for the Trust and one for the Company, one for each of the Representatives and one for each counsel, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Trust and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the Trust and the Company for examination, upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. Very truly yours, AMERICAN GENERAL CAPITAL I, By: AMERICAN GENERAL CORPORATION, as sponsor By: ----------------------------- Name: Title: AMERICAN GENERAL CORPORATION By: -------------------------------------- Name: Title: Accepted as of the date hereof: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated MORGAN STANLEY & CO. INCORPORATED PAINEWEBBER INCORPORATED SALOMON SMITH BARNEY INC. THE ROBINSON-HUMPHREY COMPANY, LLC As Representatives of the several Underwriters By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: ----------------------------------------------------- Authorized Signatory On behalf of themselves and the other several Underwriters 3 4 SCHEDULE I
NUMBER OF INITIAL PREFERRED SECURITIES TO BE UNDERWRITER PURCHASED - -------------------------------------------------------------------------------- --------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated ..................................................... 1,430,000 Morgan Stanley & Co. Incorporated .............................................. 1,320,000 PaineWebber Incorporated ....................................................... 1,320,000 Salomon Smith Barney Inc. ...................................................... 1,320,000 The Robinson-Humphrey Company, LLC ............................................. 660,000 ABN AMRO Incorporated .......................................................... 50,000 Robert W. Baird & Co. Incorporated ............................................. 50,000 Banc of America Securities LLC ................................................. 50,000 Banc One Capital Markets, Inc. ................................................. 50,000 Bear, Stearns & Co. Inc. ....................................................... 50,000 CIBC World Markets Corp. ....................................................... 50,000 Chase Securities Inc. .......................................................... 50,000 Dain Rauscher Incorporated ..................................................... 50,000 Deutsche Bank Securities Inc. .................................................. 50,000 Donaldson, Lufkin & Jenrette Securities Corporation ............................ 50,000 A.G. Edwards & Sons, Inc. ...................................................... 50,000 EVEREN Securities, Inc. ........................................................ 50,000 Fahnestock & Co. Inc. .......................................................... 50,000 Fifth Third Securities, Inc. ................................................... 50,000 First Union Capital Markets Corp. .............................................. 50,000 Fleet Securities, Inc. ......................................................... 50,000 Goldman, Sachs & Co. ........................................................... 50,000 Legg Mason Wood Walker, Incorporated ........................................... 50,000 J.P. Morgan Securities Inc. .................................................... 50,000 OLDE Discount Corporation ...................................................... 50,000 Prudential Securities Incorporated ............................................. 50,000 Raymond James & Associates, Inc. ............................................... 50,000 Schroder & Co. Inc. ............................................................ 50,000 SG Cowen Securities Corporation ................................................ 50,000 Tucker Anthony Incorporated .................................................... 50,000 U.S. Bancorp Piper Jaffray Inc. ................................................ 50,000 Warburg Dillon Read LLC ....................................................... 50,000 Advest, Inc. ................................................................... 25,000 BB&T Capital Markets, a division of Scott & Stringfellow ....................... 25,000
I-1 5 J.C. Bradford & Co. ............................................................ 25,000 Crowell, Weedon & Co. .......................................................... 25,000 D.A. Davidson & Co. ............................................................ 25,000 First Albany Corporation ....................................................... 25,000 Gibraltar Securities Co. ....................................................... 25,000 Gruntal & Co., L.L.C. .......................................................... 25,000 J.J. B. Hillard, W.L. Lyons, Inc. .............................................. 25,000 Howe Barnes Investments, Inc. .................................................. 25,000 Wayne Hummer Investments LLC ................................................... 25,000 Janney Montgomery Scott Inc. ................................................... 25,000 Kirkpatrick, Pettis, Smith, Polian Inc. ........................................ 25,000 McDonald Investments Inc. ...................................................... 25,000 Mesirow Financial, Inc. ........................................................ 25,000 Morgan Keegan & Company, Inc. .................................................. 25,000 David A. Noyes & Company ....................................................... 25,000 Parker/Hunter Incorporated ..................................................... 25,000 Stephens Inc. .................................................................. 25,000 Stifel, Nicolaus & Company, Incorporated ....................................... 25,000 Stone & Youngberg .............................................................. 25,000 TD Securities (USA) Inc. ....................................................... 25,000 Trilon International Inc. ...................................................... 25,000 Utendahl Capital Partners, L.P. ................................................ 25,000 --------------------- Total................................................ 8,000,000 =====================
I-2 6 SCHEDULE II PREFERRED SECURITIES Title of Preferred Securities: 7 7/8% Trust Originated Preferred Securities Filing Date of Prospectus Supplement Pursuant to Rule 424(b): September 3, 1999 Number of Preferred Securities: Number of Initial Preferred Securities: 8,000,000 Maximum Number of Option Preferred Securities, if any: None Distribution Payments: Quarterly, on the last day of March, June, September and December in each year, commencing September 30, 1999, at an annual rate of 7 7/8% of the liquidation amount of $25.00 per Preferred Security Record Dates: As long as the Preferred Securities are represented by a global security, the record date for the payment of distributions will be one business day before the relevant payment date. If the Preferred Securities are ever issued in certificated form, the record date for the payment of distributions will be the 15th day of the last month of each quarterly distribution period, even if that day is not a business day. Liquidation Amount: $25.00 per Preferred Security, plus accumulated and unpaid distributions to the date of payment Exchange Provisions: If the Company, as the sponsor of the Trust, exercises its right to dissolve the Trust at any time, the Trust will be liquidated by distribution of the Junior Subordinated Debentures to holders of the Preferred Securities and the Common Securities. Redemption Provisions: Redeemable when the Junior Subordinated Debentures are paid, either at maturity on September 30, 2048, or upon early redemption. Initial Offering Price to Public: $25.00 per Preferred Security, plus accumulated distributions from September 8, 1999, if settlement occurs after that date. Purchase Price by Underwriters: $25.00 per Preferred Security, plus accumulated distributions from September 8, 1999, if settlement occurs after that date. Underwriters' Compensation: $0.7875 per Preferred Security Method of and Specified Funds for Payment of Purchase Price and Underwriters' Compensation: By wire transfer to bank accounts specified by the Trust and the Representatives in same day funds II-1 7 Form of Preferred Securities: Book-entry-only form represented by one or more global securities deposited with The Depository Trust Company ("DTC") or its designated custodian, to be made available for checking by the Representatives at least twenty-four hours prior to each Time of Delivery at the office of DTC. Securities Exchange: NYSE Time of Delivery: 9:00 a.m. (New York City time), September 8, 1999 Closing Location: Brown & Wood LLP One World Trade Center New York, New York 10048 Representatives: Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated PaineWebber Incorporated Salomon Smith Barney Inc. The Robinson-Humphrey Company, LLC Designated Representative: Merrill Lynch, Pierce, Fenner & Smith Incorporated Address for Notices, etc.: World Financial Center North Tower New York, New York 10281 Attention: Dennis Kim JUNIOR SUBORDINATED DEBENTURES Title of Junior Subordinated Debentures: 7 7/8% Junior Subordinated Debenture due 2048 Aggregate Principal Amount: $206,185,575 Interest Payments: Quarterly, on the last day of March, June, September and December in each year, commencing September 30, 1999, at an annual rate of 7 7/8% Record Dates: As long as the Preferred Securities (or, if the Junior Subordinated Debentures are distributed to the holders of the Preferred Securities, then the Junior Subordinated Debentures) are represented by a global security, the record date for the payment of interest on the Junior Subordinated Debentures will be one business day before the relevant payment date. If the Preferred Securities (or, if the Junior II-2 8 Subordinated Debentures are distributed to the holders of the Preferred Securities, then the Junior Subordinated Debentures) are ever issued in certificated form, the record date for the payment of interest will be the 15th day of the last month of each quarterly interest period, even if that day is not a business day. Maturity Date: September 30, 2048 Redemption Provisions: Redeemable at 100% of principal amount plus accrued and unpaid interest to the date of redemption (i) in whole or in part on one or more occasions any time on or after September 8, 2004; and (ii) in whole but not in part before September 8, 2004, if certain changes in tax or investment company law occur or will occur within 90 days. Sinking Fund Provisions: None Extension Provisions: The Company may, on one or more occasions, defer interest payments on the Junior Subordinated Debentures for up to 20 consecutive quarterly periods (but not beyond September 30, 2048) unless an event of default under the Junior Subordinated Debentures has occurred and is continuing. II-3 EX-4.1 4 7 7/8% JUNIOR SUBORDINATED DEBENTURES DUE 2048 1 EXHIBIT 4.1 AMERICAN GENERAL CORPORATION: Terms Committee DATE: September 2, 1999 SUBJECT: 7 7/8% Trust Originated Preferred Securities of American General Capital I PURPOSE: The purpose of these resolutions is to authorize certain matters relating to the issuance and sale of 7 7/8% Trust Originated Preferred Securities of American General Capital I RESOLUTIONS AUTHORIZING CERTAIN MATTERS RELATING TO TRUST ORIGINATED PREFERRED SECURITIES WHEREAS, at a meeting on October 23, 1997, the Board of Directors of American General Corporation (the "Company") authorized the creation, issuance and sale of up to $1,500,000,000 aggregate offering price of securities; 7 7/8% JUNIOR SUBORDINATED DEBENTURES DUE 2048 WHEREAS, American General Capital I, a Delaware statutory business trust (the "Trust"), proposes to issue its 7 7/8% Trust Originated Preferred Securities (the "Preferred Securities") and its 7 7/8% Common Securities (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities") and use the proceeds from the sale of the Trust Securities to purchase junior subordinated debentures of the Company; and WHEREAS, this Committee desires to establish the terms of such junior subordinated debentures pursuant to Section 3.1 of the Junior Subordinated Indenture, dated as of November 15, 1997 (the "Indenture"), between the Company and Bankers Trust Company, as trustee (the "Trustee"); and WHEREAS, in connection with the issuance of the Preferred Securities, the Company and the Trust propose to file with the Commission a final prospectus supplement to the Registration Statement on Form S-3 (Registration Nos. 333-40583, et. seq.), as amended, previously filed by the Company, the Trust and certain other trusts with the Securities and Exchange Commission (the "Commission"), which prospectus supplement sets forth, among other things, information with respect to the terms of such Trust Securities and junior subordinated debentures; Now, therefore, be it: JUNIOR SUBORDINATED DEBENTURES RESOLVED, that, upon receipt of the purchase price therefor, the Company shall issue, sell and deliver a series of its junior subordinated debentures pursuant to the Indenture having an -1- 2 aggregate principal amount of $206,185,575 and, upon such issuance, such junior subordinated debentures shall be valid and binding obligations of the Company; and be it FURTHER RESOLVED, that the title, principal amount, interest rate, redemption provisions, and other terms of such junior subordinated debentures to be fixed pursuant to Section 3.1 of the Indenture shall be as follows (capitalized terms appearing below that are defined in the Indenture, but not defined herein, having the meanings ascribed to them in the Indenture): 1. TITLE. The junior subordinated debentures shall be designated as the "7 7/8% Junior Subordinated Debentures due 2048" (the "Debentures"). 2. PRINCIPAL AMOUNT. The aggregate principal amount of the Debentures which may be authenticated and delivered pursuant to these resolutions shall be limited to $206,185,575 (except for Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures of the same series pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.6 of the Indenture). 3. MATURITY DATE. The principal of the Debentures shall be payable (together with any accrued and unpaid interest thereon) on September 30, 2048 (the "Maturity Date"), subject to earlier redemption as set forth below in paragraphs 7 and 8. The Debentures will not be entitled to the benefit of any sinking fund prior to maturity. 4. INTEREST RATE; Interest Payment Dates. (a) The Debentures will bear interest on the principal amount thereof at the fixed rate of 7 7/8% per annum (the "Coupon Rate") from and including September 8, 1999 or from and including the most recent Interest Payment Date to which interest has been paid or duly provided for to but excluding the related Interest Payment Date (as defined below) until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of paragraph 5 below) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date"), commencing on September 30, 1999. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter on the basis of the actual number of days elapsed in such 90-day quarter. (b) Interest on the Debentures (except defaulted interest) shall be paid to the Persons in whose name the Debentures are registered at the close of business on the Regular Record Date for such interest installment (including Debentures that are canceled after the Regular Record Date and before the Interest Payment Date), which, with respect to any Debentures of which the Property Trustee of the Trust (the "Property Trustee") is the Holder or with respect to a Debenture in Global Security form, shall be the close of business on the Business Day next preceding that Interest Payment Date. If the Debentures are no longer held by the Property Trustee and the Debentures are not represented by a Debenture in Global Security form, the Regular -2- 3 Record Date for such interest installment shall be the 15th day of the last month of the quarterly interest period (even if not a Business Day). Notwithstanding the foregoing, any interest that is payable at maturity shall be payable to the Person to whom principal payable at maturity shall be payable. (c) If the Holder of a Debenture is the Property Trustee, the payment of the principal of and interest on such Debenture will be made by wire transfer in immediately available funds at such place and to such account as may be designated by the Property Trustee. (d) If, at any time while the Property Trustee is the Holder of any Debentures, the Trust is required to pay any taxes, duties, assessment or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any case, the Company will pay as additional interest on the Debentures held by the Property Trustee, such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust would have received had no such taxes, duties, assessments or other government charges been imposed. 5. EXTENSION OF AN INTEREST PAYMENT PERIOD. So long as no Event of Default under the Indenture has occurred and is continuing, the Company may defer the payment of interest on the Debentures at any time and from time to time for a period not exceeding 20 consecutive quarterly periods, including the first such quarterly period during such period (each, an "Extension Period"), provided that no Extension Period shall extend beyond the Maturity Date or the earlier date of redemption. No interest shall be due and payable on the Debentures until the end of the Extension Period unless the Debentures are redeemed prior to that date, in which event interest on the Debentures so redeemed shall be due and payable on the redemption date. At the end of the Extension Period, the Company shall pay all interest accrued and unpaid on the Debentures, which shall be payable to the Holders of the Debentures in whose names the Debentures are registered in the Securities Register as of the Regular Record Date relating to the Interest Payment Date that corresponds to the end of such Extension Period. Notwithstanding such deferral, interest shall accrue on the interest deferred (to the extent permitted by applicable law) at the Coupon Rate, compounded quarterly, from the relevant Interest Payment Dates during any Extension Period. Prior to the expiration of any Extension Period, the Company may further defer payments of interest by further extending such Extension Period; provided that such Extension Period, together with all previous and further extensions, if any, within such Extension Period, may not exceed 20 consecutive quarterly periods, including the first quarterly period during such Extension Period, or extend beyond the Maturity Date of the Debentures or the date of earlier redemption. Before the termination of any Extension Period, the Company may pay all or any portion of the interest accrued on the Debentures to the date of payment. Upon the expiration of any Extension Period and the payment of all amounts then due, the Company may commence a new Extension Period, subject to the above requirements. There is no limitation on the number of times that the Company may elect to begin an Extension Period. The Company will give notice of its commencement of an Extension Period as set forth in Section 3.11 of the Indenture. -3- 4 6. PLACE OF PAYMENT. The Trustee is hereby appointed as the initial sole Paying Agent for the Debentures. The principal of and interest on the Debentures shall be payable at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York; provided, however, that, at the option of the Company, payment of interest may be made (a) except in the case of Debentures in Global Security form, by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register or (b) if proper transfer instructions have been received by the Securities Registrar by the applicable Regular Record Date, by wire transfer to such account as may be designated by the Person entitled thereto as specified in the Securities Register. Notwithstanding the foregoing, so long as the Holder of any Debentures is the Property Trustee, the payment of the principal of and interest on such Debentures held by the Property Trustee will be made by wire transfer of immediately available funds at such place and to such account as may be designated by the Property Trustee. Payment of principal of the Debentures will only be made upon surrender of the Debentures to the Trustee. 7. SPECIAL EVENT REDEMPTION. (a) If a Tax Event or Investment Company Event (each as defined below, and each a "Special Event") has occurred and is continuing, then the Company shall have the right, upon no less than 30 days' nor more than 60 days' notice to the Holders of the Debentures, to redeem the Debentures, in whole but not in part, before September 8, 2004, for cash within 90 days following the occurrence of such Special Event at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon to the date of such redemption. The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Company determines and specifies in the notice of redemption. (b) "Tax Event" means that the Administrative Trustees of the Trust (the "Administrative Trustees") shall have received an opinion of an independent tax counsel experienced in such matters to the effect that, as a result of (i) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority affecting taxation, or (ii) any official or administrative pronouncement or action or judicial decision, interpreting or applying such laws or regulations, which amendment or change becomes effective or such pronouncement, action or decision is announced or occurs on or after September 2, 1999, there is more than an insubstantial risk that (A) the Trust is or, within 90 days of the date of such opinion, would be subject to United States federal income tax with respect to interest accrued or received on the Debentures, (B) interest payable by the Company on the Debentures is not or, within 90 days of the date of such opinion, would not be deductible, in whole or in part, by the Company for United States federal income tax purposes, or (C) the Trust is or, within 90 days of the date of such opinion, would be, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. (c) "Investment Company Event" means that the Administrative Trustees shall have received an opinion of an independent counsel experienced in practice under the Investment -4- 5 Company Act to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an "Investment Company" that is required to be registered under the Investment Company Act, which Change in 1940 Act Law becomes effective on or after September 2, 1999. For the purpose of the preceding sentence, "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. 8. OPTIONAL REDEMPTION. The Company shall have the right to redeem the Debentures, in whole or in part, at any time or from time to time, on or after September 8, 2004, at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon to the date of such redemption. Any redemption pursuant to this paragraph 8 shall be made upon no less than 30 days nor more than 60 days notice to the Holders of the Debentures. The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Company determines and specifies in the notice of redemption. 9. LISTING. If the Preferred Securities are listed on the New York Stock Exchange or another securities exchange at the time, if any, of the distribution of the Debentures to the holders of Preferred Securities in accordance with the Amended and Restated Declaration of Trust of the Trust among the Company, as sponsor, the Delaware Trustee, the Property Trustee and the Administrative Trustees referred to therein (the "Declaration"), then, prior to such distribution, the Company shall use its best efforts to cause the Debentures to be listed on the New York Stock Exchange or such other exchange on which the Preferred Securities were listed immediately prior to such distribution. 10. REGISTRAR. The Debentures may be surrendered for registration of transfer or exchange at the Corporate Trust Office of the Trustee and any notices or demands at or upon the Company in respect of the Debentures and the Indenture may be presented at that office. 11. FORM. (a) The certificate or certificates evidencing the Debentures shall be substantially in the form attached hereto as Annex A, with such changes as the officer executing the same shall approve, such approval to be evidenced by such officer's manual or facsimile signature. The terms of the Debentures are specified therein as well as in these resolutions. (b) Except as provided in (c) below, the Debentures shall be issued in fully registered certificated form, without interest coupons. (c) In connection with a distribution of the Debentures to the holders of the Preferred Securities pursuant to the Declaration: -5- 6 (i) the Debentures in certificated form to be distributed to the holders of Preferred Securities may be presented to the Trustee by the Property Trustee in exchange for a Debenture or Debentures in Global Security form in an aggregate principal amount equal to the aggregate principal amount of all Outstanding Debentures, to be registered in the name of The Depository Trust Company as initial Depository (the "Depository"), or its nominee, and delivered by the Trustee to the Depository for crediting to the accounts of its participants pursuant to the instructions of the Property Trustee. The Company upon any such presentation shall execute one or more Debentures in Global Security form in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Indenture and this resolution. Payments on the Debentures issued as a Global Security will be made to the Depository; and (ii) if any Preferred Securities are held in non book-entry certificated form, the Debentures in certificated form may be presented to the Trustee by the Property Trustee and any certificate which represents Preferred Securities ("Preferred Securities Certificate") other than Preferred Securities held by the Depository or its nominee ("Non Book-Entry Preferred Securities") will be deemed to represent a beneficial interest in Debentures presented to the Trustee by the Property Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book-Entry Preferred Securities until such Preferred Security Certificates are presented to the Securities Registrar for transfer or reissuance, at which time such Preferred Security Certificates will be canceled and a Debenture, registered in the name of the holder of the Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Security Certificate canceled, will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this resolution. On issuance of such Debentures, Debentures with an equivalent aggregate principal amount that were presented by the Property Trustee to the Trustee will be deemed to have been canceled. 12. TRANSFERABILITY. Prior to a distribution of the Debentures to the holders of Trust Securities pursuant to the Declaration, the Debentures may not be transferred by the Trust without the Company's prior consent. 13. DENOMINATION. The Debentures shall be issuable in denominations of $25 and any integral multiple thereof. 14. RANKING; SUBORDINATION. The Debentures will be unsecured and will be issued subject to the provisions of Article XIII of the Indenture. The Debentures will rank pari passu with all other series of Securities issued pursuant to the Indenture. 15. FORM OF AMENDED AND RESTATED DECLARATION OF TRUST AND GUARANTEE AGREEMENT. Pursuant to Section 3.1(18) of the Indenture, the form of Declaration and Preferred Securities -6- 7 Guarantee Agreement relating to the Debentures and the Trust Securities shall be in the forms attached hereto as Annexes B and C, respectively. -7- 8 ANNEX A [FORM OF FACE OF DEBENTURE] [If the Debenture is a Global Security insert the following: This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depository or a nominee of a Depository. This Security is exchangeable for the Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture and may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository. Unless this Debenture is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any Debenture issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as its requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] AMERICAN GENERAL CORPORATION 7 7/8% JUNIOR SUBORDINATED DEBENTURE DUE 2048 No. ___ REGISTERED $___________ American General Corporation, a Texas corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ____________________, the principal sum of _____________________ Dollars ($___________) on September 30, 2048 unless redeemed prior thereto in accordance with the provisions hereof, and to pay interest on such principal sum from and including September 8, 1999, or from and including the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year commencing September 30, 1999, at the rate of 7 7/8% per annum until the principal hereof shall have become due and payable, and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter on the basis of the actual number of days elapsed in such 90-day quarter. In the event that any date on which interest is payable on this Debenture is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day 9 is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Debenture is registered at the close of business on the regular record date for such interest installment, which shall be the [close of business on the Business Day next preceding such Interest Payment Date]/[fifteenth day of the last month of the quarterly interest period]. Notwithstanding the foregoing, any interest that is payable on the Maturity shall be payable to the Person to whom principal payable at the Maturity shall be payable. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such regular record date and may be paid to the Person in whose name this Debenture (or one or more Predecessor Security) is registered at the close of business on a special record date to be fixed in accordance with the provisions of Section 3.7 of the Indenture or may be paid in any other manner lawfully permitted by the Indenture. The principal of and the interest on this Debenture shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Securities Register or, subject to the provisions of the Indenture, by a transfer of funds to an account designated in the Securities Register. Notwithstanding the foregoing, so long as the Holder of this Debenture is the Property Trustee, the payment of the principal of and interest on this Debenture will be made by wire transfer in immediately available funds at such place and to such account as may be designated by the Property Trustee. Payment of principal of the Debentures will only be made upon surrender of the Debentures to the Trustee or Paying Agent. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness, and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Trustee. The provisions of this Debenture are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. -2- 10 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: AMERICAN GENERAL CORPORATION ------------------------------- By: ----------------------------- Attest: By: --------------------------------------- CERTIFICATE OF AUTHENTICATION This is one of the Debentures referred to in the within-mentioned Indenture. BANKERS TRUST COMPANY By: ----------------------------- Authorized Signatory -3- 11 [FORM OF REVERSE SIDE] This Debenture is one of a duly authorized series of Debentures of the Company (herein sometimes referred to as the "Debentures"), specified in and all issued or to be issued in one or more series under and pursuant to an Indenture, dated as of November 15, 1997, executed and delivered between the Company and Bankers Trust Company (as supplemented or amended from time to time, the "Indenture" which, for the purposes hereof, shall be deemed to include the Board Resolution dated September 2, 1999 establishing the terms of the Debentures in accordance with the Indenture), to which Indenture reference is hereby made for a description of the rights, limitations or rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Debentures, and to all of which provisions the Holder of this Debenture by acceptance hereof, assents and agrees. By the terms of the Indenture, the Debentures are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Debentures is limited in aggregate principal amount to $206,185,575 except as specified in the Indenture. Except as provided in the next paragraph with respect to the occurrence of a Special Event, the Debentures may not be redeemed by the Company prior to September 8, 2004. The Company shall have the right to redeem the Debentures in whole or in part at any time and from time to time on or after September 8, 2004 (an "Optional Redemption"), at a redemption price equal to 100% of the principal amount plus any accrued and unpaid interest, if any, to the date of such redemption (the "Redemption Price"). Any redemption pursuant to this paragraph will be made upon not less than 30 nor more than 60 days' notice. If, at any time, a Tax Event or an Investment Company Event (each, as defined below, a "Special Event") shall occur and be continuing, the Company shall have the right, upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in whole (but not in part) before September 8, 2004 for cash at the Redemption Price, within 90 days following the occurrence of such Special Event. "Tax Event" means that the Administrative Trustees of American General Capital I, a Delaware business trust (the "Trust"), shall have received an opinion of an independent tax counsel experienced in such matters to the effect that, as a result of (i) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority affecting taxation, or (ii) any official or administrative pronouncement or action or judicial decision, interpreting or applying such laws or regulations, which amendment or change becomes effective or such pronouncement, action or decision is announced or occurs on or after September 2, 1999, there is more than an insubstantial risk that (A) the Trust is or, within 90 days of the date of such opinion, would be subject to United States federal income tax with respect to interest accrued or received on the Debentures, (B) interest payable by the Company on the Debentures is not or, within 90 days of the date of such opinion, would not be deductible, in whole or in part, by the Company for United States federal income tax purposes, or (C) the Trust is or, within 90 days of the date of such opinion, would be, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. -4- 12 "Investment Company Event" means that such Administrative Trustees of the Trust shall have receive an opinion of an independent counsel experienced in practice under the Investment Company Act of 1940, as amended, to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an "Investment Company" that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after September 2, 1999. Unless the Company defaults in the payment of the Redemption Price, on and after the date of redemption, interest shall cease to accrue on the Debentures or portions thereof called for redemption. If the Debentures are only partially redeemed by the Company pursuant to an Optional Redemption, the Debentures will be redeemed by such method as the Trustee shall deem fair and appropriate. In the event of redemption of this Debenture in part only, a new Debenture or Debentures of this series (for the unredeemed portion hereof) will be issued in the name of the Holder hereof upon the cancellation hereof. The Indenture contains provisions that, if no Event of Default with respect to the Debentures shall have occurred and be continuing, permit the Company at any time, and from time to time, during the term of the Debentures, to extend the interest payment period of the Debentures for up to 20 consecutive quarters not to extend beyond the Maturity of the Debentures (an "Extension Period"), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Debentures to the extent that payment of such interest is enforceable under applicable law). At the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any additional amounts then due, and if no Event of Default with respect to the Debentures shall have occurred and be continuing, the Company may commence a new Extension Period. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Debentures of each series affected at the time outstanding, as defined in the Indenture, and subject to certain limitations, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Debentures. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Debentures of any series at any time outstanding, on behalf of all of the Holders of the Debentures of such series, to waive any past default with respect to such series, and its consequences, except a default in the payment of the principal of or interest on the Debentures or a default in respect of a covenant or provision of the Indenture or the Debentures of such series which cannot be modified or amended without the consent of each Holder of Debentures of such series affected. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon -5- 13 all future Holders and owners of this Debenture and of any Debentures issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Debenture. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the time, place and rate and in the coin or currency herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, this Debenture is transferable by the registered Holder hereof on the Securities Register of the Company, upon surrender of this Debenture for registration of transfer at the Corporate Trust Office of the Trustee duly endorsed by or accompanied by a written instrument of transfer in form satisfactory to the Company duly executed by the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Debentures of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Debenture, the Company, the Trustee, any paying agent and any Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Debenture shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Registrar) for the purpose of receiving payment of or on account of the principal hereof and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Debenture or any obligation of the Company under this Debenture or the Indenture or for any claim based hereon or thereon, against any incorporator, stockholder, officer, director or employee, past, present or future, as such, of the Company or of any predecessor or successor corporation, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. As provided in the Indenture and subject to certain limitations herein and therein set forth, Debentures of this series so issued are exchangeable for a like aggregate principal amount of Debentures of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Company and the Holder agree (i) that for United Stated federal, state and local tax purposes it is intended that the Debenture constitute indebtedness and (ii) to file all United States federal, state and local tax returns and reports on such basis (unless the Company or the Holder, as the case may be, shall have received an opinion of independent nationally recognized tax counsel -6- 14 to the effect that as a result of a change in law after the date of the issuance of the Debenture the Company or the Holder, as the case may be, is prohibited from filing on such basis). The Indenture and this Debenture shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of laws principles thereof. -7- 15 ABBREVIATIONS The following abbreviations, when used in the inscription on the first page of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. UNIF GIFT MIN ACT -- ------------------------------- (Cust) Custodian ------------------------------- (Minor) Under Uniform Gifts to Minors Act ------------------------------- (State) TEN COM -- as tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may be used though not in the above list. -------------------------------------------- -8- 16 ASSIGNMENT FORM FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and tranfer(s) unto: - ------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Insert address and zip code of assignee) the within Debenture and all rights thereunder, and hereby and irrevocably constitues and appoints , attorney to transfer this debenture on the books of the Company, with full power of substitution. Date: ------------------------------------------ Signature: ------------------------------------- (Sign exactly as your name appears on the face of the within Debenture) -9- EX-4.3 5 FORM OF AMENDED DECLARATION OF TRUST 1 EXHIBIT 4.3 ================================================================================ AMENDED AND RESTATED DECLARATION OF TRUST OF AMERICAN GENERAL CAPITAL I DATED AS OF SEPTEMBER 8, 1999 ================================================================================ 2 CROSS-REFERENCE TABLE*
Section of Trust Indenture Act Section of of 1939, as amended Declaration - ------------------- ----------- 310(a).......................................................................................................5.3(a) 310(b).......................................................................................................5.3(c) 310(c).................................................................................................Inapplicable 311(a) and (b)...............................................................................................5.3(c) 311(c).................................................................................................Inapplicable 312(a).......................................................................................................2.2(a) 312(b).......................................................................................................2.2(b) 313.............................................................................................................2.3 314(a)..........................................................................................................2.4 314(b).................................................................................................Inapplicable 314(c)..........................................................................................................2.5 314(d).................................................................................................Inapplicable 314(e).....................................................................................................1.1, 2.5 314(f).................................................................................................Inapplicable 315(a).......................................................................................................3.9(b) 315(b).......................................................................................................2.7(a) 315(c).......................................................................................................3.9(a) 315(d).......................................................................................................3.9(b) 316(a) and (b)...................................................................2.6 and Annex I (Sections 6 and 7) 316(c).......................................................................................................3.6(e) 317(a).......................................................................................................3.8(h) 317(b).......................................................................................................3.8(i) 318(a).......................................................................................................2.1(c)
* This Cross-Reference Table does not constitute part of the Declaration and shall not affect the interpretation of any of its terms or provisions. 3 TABLE OF CONTENTS
PAGE ---- ARTICLE I INTERPRETATION AND DEFINITIONS SECTION 1.1 Definitions.....................................................................................1 ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application................................................................6 SECTION 2.2 Lists of Holders of Securities..................................................................7 SECTION 2.3 Reports by the Property Trustee.................................................................7 SECTION 2.4 Periodic Reports to Property Trustee............................................................7 SECTION 2.5 Evidence of Compliance with Conditions Precedent................................................7 SECTION 2.6 Events of Default; Waiver.......................................................................7 SECTION 2.7 Event of Default; Notice........................................................................9 ARTICLE III ORGANIZATION SECTION 3.1 Name............................................................................................9 SECTION 3.2 Office..........................................................................................9 SECTION 3.3 Purpose.........................................................................................9 SECTION 3.4 Authority......................................................................................10 SECTION 3.5 Title to Property of the Trust.................................................................10 SECTION 3.6 Powers and Duties of the Administrative Trustees...............................................10 SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...........................................12 SECTION 3.8 Powers and Duties of the Property Trustee......................................................13 SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee....................................15 SECTION 3.10 Certain Rights of Property Trustee.............................................................16 SECTION 3.11 Delaware Trustee...............................................................................18 SECTION 3.12 Execution of Documents.........................................................................18 SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.........................................18 SECTION 3.14 Duration of Trust..............................................................................18 SECTION 3.15 Mergers........................................................................................19 ARTICLE IV SPONSOR SECTION 4.1 Sponsor's Purchase of Common Securities........................................................20 SECTION 4.2 Responsibilities of the Sponsor................................................................20 SECTION 4.3 Right to Proceed...............................................................................21
i 4 ARTICLE V TRUSTEES SECTION 5.1 Number of Trustees; Appointment of Co-trustee..................................................21 SECTION 5.2 Delaware Trustee...............................................................................21 SECTION 5.3 Property Trustee; Eligibility..................................................................22 SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally...............22 SECTION 5.5 Administrative Trustees........................................................................23 SECTION 5.6 Delaware Trustee...............................................................................23 SECTION 5.7 Appointment, Removal and Resignation of Trustees...............................................23 SECTION 5.8 Vacancies Among Trustees.......................................................................24 SECTION 5.9 Effect of Vacancies............................................................................25 SECTION 5.10 Meetings.......................................................................................25 SECTION 5.11 Delegation of Power............................................................................25 SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business....................................25 ARTICLE VI DISTRIBUTIONS SECTION 6.1 Distributions..................................................................................26 ARTICLE VII ISSUANCE OF SECURITIES SECTION 7.1 General Provisions Regarding Securities........................................................26 SECTION 7.2 Execution and Authentication...................................................................26 SECTION 7.3 Form and Dating................................................................................27 SECTION 7.4 Registrar and Paying Agent.....................................................................28 SECTION 7.5 Paying Agent to Hold Money in Trust............................................................28 SECTION 7.6 Replacement Securities.........................................................................29 SECTION 7.7 Outstanding Preferred Securities...............................................................29 SECTION 7.8 Preferred Securities in Treasury...............................................................29 SECTION 7.9 Temporary Securities...........................................................................29 SECTION 7.10 Cancellation...................................................................................30 SECTION 7.11 CUSIP Numbers..................................................................................30 ARTICLE VIII DISSOLUTION OF TRUST SECTION 8.1 Dissolution of Trust...........................................................................30 ARTICLE IX TRANSFER OF INTERESTS SECTION 9.1 Transfer of Securities.........................................................................31 SECTION 9.2 Deemed Security Holders........................................................................32 SECTION 9.3 Book-Entry Interests...........................................................................32 SECTION 9.4 Notices to Clearing Agency.....................................................................33 SECTION 9.5 Appointment of Successor Clearing Agency.......................................................33
ii 5 ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 10.1 Liability.............................................................................33 SECTION 10.2 Exculpation...........................................................................33 SECTION 10.3 Fiduciary Duty........................................................................34 SECTION 10.4 Indemnification.......................................................................34 SECTION 10.5 Outside Businesses....................................................................37 ARTICLE XI ACCOUNTING SECTION 11.1 Fiscal Year...........................................................................37 SECTION 11.2 Certain Accounting Matters............................................................37 SECTION 11.3 Banking...............................................................................38 SECTION 11.4 Withholding...........................................................................38 ARTICLE XII AMENDMENTS AND MEETINGS SECTION 12.1 Amendments............................................................................38 ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE SECTION 13.1 Representations and Warranties of Property Trustee....................................41 SECTION 13.2 Representations and Warranties of Delaware Trustee....................................41 ARTICLE XIV MISCELLANEOUS SECTION 14.1 Notices...............................................................................42 SECTION 14.2 Governing Law.........................................................................43 SECTION 14.3 Intention of the Parties..............................................................43 SECTION 14.4 Headings..............................................................................43 SECTION 14.5 Successors and Assigns................................................................43 SECTION 14.6 Partial Enforceability................................................................43 SECTION 14.7 Counterparts..........................................................................44
iii 6 AMENDED AND RESTATED DECLARATION OF TRUST OF AMERICAN GENERAL CAPITAL I September 8, 1999 AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated and effective as of September 8, 1999, by the Trustees (as defined herein), the Sponsor (as defined herein) and the holders, from time to time, of undivided beneficial interests in the assets of the Trust (as defined herein) to be issued pursuant to this Declaration; WHEREAS, the Delaware Trustee (as defined herein), the Administrative Trustees (as defined herein) and the Sponsor established American General Capital I (the "Trust"), a trust created under the Business Trust Act (as defined herein) pursuant to a Declaration of Trust dated as of November 14, 1997 (the "Original Declaration"), and the Certificate of Trust for the Trust (the "Certificate of Trust") filed with the Secretary of State of the State of Delaware on November 14, 1997; WHEREAS, the parties hereto, by this Declaration, amend and restate each and every term and provision of the Original Declaration; and NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a business trust under the Business Trust Act and that this Declaration constitute the governing instrument of the Trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the benefit of the holders, from time to time, of the securities representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration and, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:. ARTICLE I INTERPRETATION AND DEFINITIONS SECTION 1.1 Definitions. Unless the context otherwise requires: (a) capitalized terms used in this Declaration but not defined in the preamble above or elsewhere herein have the respective meanings assigned to them in this Section 1.1; (b) a term defined anywhere in this Declaration has the same meaning throughout; (c) all references to "the Declaration" or "this Declaration" are to this Declaration and each Annex and Exhibit hereto, as modified, supplemented or amended from time to time; (d) all references in this Declaration to Articles, Sections, Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to this Declaration unless otherwise specified; (e) a term defined in the Trust Indenture Act (as defined herein) has the same meaning when used in this Declaration unless otherwise defined in this Declaration or the context otherwise requires; 7 (f) a term defined in the Indenture (as defined herein) has the same meaning when used in this Declaration unless otherwise defined in this Declaration or the context otherwise requires; and (g) a reference to the singular includes the plural and vice versa. "Administrative Trustee" means each of Nicholas R. Rasmussen, James L. Gleaves and Gregory N. Picard, solely in such Person's capacity as Administrative Trustee of the Trust created and continued hereunder and not in such Person's individual capacity, or any successor Administrative Trustee appointed as herein provided. "Affiliate" has the same meaning as given to that term in Rule 405 under the Securities Act or any successor rule thereunder. "Agent" means any Paying Agent or Registrar. "Authorized Officer" of a Person means any other Person that is authorized to legally bind such former Person. "Book-Entry Interest" means a beneficial interest in a Global Preferred Security registered in the name of a Clearing Agency or its nominee, ownership and transfers of which shall be maintained and made through book entries by a Clearing Agency as described in Section 9.3. "Business Day" means any day other than a Saturday or a Sunday or a day on which banking institutions in The City of New York, New York are authorized or required by law or executive order to close. "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time or any successor legislation. "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary for the Preferred Securities and in whose name or in the name of a nominee of that organization shall be registered a Global Preferred Security and which shall undertake to effect book-entry transfers and pledges of the Preferred Securities. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Time" means the "Time of Delivery", as such term is defined in the Underwriting Agreement. "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. "Commission" means the United States Securities and Exchange Commission as from time to time constituted, or if any time after the execution of this Declaration such Commission is not existing and performing the duties now assigned to it under applicable Federal securities laws, then the body performing such duties at such time. "Common Securities" has the meaning specified in Section 7.1(a). 2 8 "Company Indemnified Person" means (a) any Administrative Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Administrative Trustee; or (d) any officer, employee or agent of the Trust or its Affiliates. "Corporate Trust Office" means the office of the Property Trustee at which the corporate trust business of the Property Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Agreement is located at Four Albany Street, New York, New York 10006, Attn: Corporate Trust and Agency Services - Corporate Market Services. "Covered Person" means: (a) any officer, director, trustee, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holders of the Securities. "Debenture Issuer" means American General Corporation, a Texas corporation, or any successor entity resulting from any consolidation, amalgamation, merger or other business combination, in its capacity as issuer of the Debentures under the Indenture. "Debenture Trustee" means Bankers Trust Company, a New York banking corporation, as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee. "Debentures" means the 7 7/8% Junior Subordinated Debentures due 2048 of the Debenture Issuer issued pursuant to the Indenture. "Default" means an event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default. "Definitive Preferred Securities" has the meaning set forth in Section 7.3(c). "Delaware Trustee" has the meaning set forth in Section 5.1(b). "Direct Action" has the meaning set forth in Section 3.8(e). "Distribution" means a distribution payable to Holders of Securities in accordance with Section 6.1. "DTC" means The Depository Trust Company, the initial Clearing Agency. "Event of Default" in respect of the Securities means an Event of Default (as defined in the Indenture) that has occurred and is continuing in respect of the Debentures. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation. "Fiduciary Indemnified Person" has the meaning set forth in Section 10.4(b). "Global Preferred Securities" has the meaning set forth in Section 7.3(a). "Holder" means a Person in whose name a Security is registered, such Person being a beneficial owner within the meaning of the Business Trust Act. "Indemnified Person" means a Company Indemnified Person or a Fiduciary Indemnified Person. 3 9 "Indenture" means the Junior Subordinated Indenture, dated as of November 15, 1997, between the Debenture Issuer and the Debenture Trustee, as supplemented or amended from time to time. "Investment Company" means an investment company as defined in the Investment Company Act. "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Investment Company Event" has the meaning set forth in Annex I. "Legal Action" has the meaning set forth in Section 3.6(g). "Liquidation Amount" with respect to any Security means the amount designated as such with respect thereto in Annex I hereto. "Majority in Liquidation Amount" means, with respect to the Trust Securities, except as provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together as a single class or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of more than 50% of the aggregate Liquidation Amount (including the amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman, a Vice Chairman, the President or a Vice President and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person. Any Officers' Certificate delivered by the Trust shall be signed by at least one Administrative Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of the Sponsor, acceptable to the Property Trustee. "Paying Agent" has the meaning specified in Section 7.4. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. 4 10 "Preferred Securities" has the meaning specified in Section 7.1(a). "Preferred Securities Guarantee" means the guarantee agreement dated as of the date hereof of the Sponsor in respect of the Preferred Securities. "Preferred Security Beneficial Owner" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Property Trustee" has the meaning set forth in Section 5.3(a). "Property Trustee Account" has the meaning set forth in Section 3.8(c). "Quorum" means a majority of the Administrative Trustees or, if there are only two Administrative Trustees, both of them. "Registrar" has the meaning set forth in Section 7.4. "Related Party" means, with respect to the Sponsor, any direct or indirect wholly owned subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the outstanding voting securities of the Sponsor. "Responsible Officer" means, with respect to the Property Trustee, any officer within the Corporate Trust Office of the Property Trustee, including any vice president, any assistant vice president, any managing director, any secretary, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of the Property Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Securities" or "Trust Securities" means the Common Securities and the Preferred Securities. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "Special Event" has the meaning set forth in Annex I hereto. "Sponsor" means American General Corporation, a Texas corporation, or any successor entity resulting from any merger, consolidation, amalgamation or other business combination, in its capacity as sponsor of the Trust. "Successor Delaware Trustee" has the meaning set forth in Section 5.7(b). "Successor Entity" has the meaning set forth in Section 3.15(b). "Successor Property Trustee" has the meaning set forth in Section 5.7(b). "Successor Securities" has the meaning set forth in Section 3.15. 5 11 "Super Majority" has the meaning set forth in Section 2.6(a)(ii). "10% in Liquidation Amount" means, with respect to the Trust Securities, except as provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holders of outstanding Trust Securities voting together as a single class or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of 10% or more of the aggregate Liquidation Amount (including the amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class. "Tax Event" has the meaning set forth in Annex I. "Treasury Regulations" means the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Trustee" or "Trustees" means each Person who has signed this Declaration as a trustee (including the Property Trustee, the Delaware Trustee and the Administrative Trustees), so long as such Person shall continue as Trustee of the Trust in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or owing to, the Property Trustee Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Declaration. "Underwriting Agreement" means the Pricing Agreement dated September 2, 1999 among the Sponsor, the Trust, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated, Salomon Smith Barney Inc. and The Robinson Humphrey Company, LLC, as representatives of the several underwriters named therein (including the form of Underwriting Agreement attached thereto) relating to the initial offering and sale of the Preferred Securities. ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application. (a) This Declaration is subject to the provisions of the Trust Indenture Act that are required to be part of this Declaration and shall, to the extent applicable to such an indenture, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act. 6 12 (c) If and to the extent that any provision of this Declaration limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. (d) The application of the Trust Indenture Act to this Declaration shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust. SECTION 2.2 Lists of Holders of Securities. (a) Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide the Property Trustee, unless the Property Trustee is Registrar for the Securities, (i) within 14 days after each record date for payment of Distributions, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Holders of the Securities ("List of Holders") as of such record date, provided that neither the Sponsor nor the Administrative Trustees on behalf of the Trust shall be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Property Trustee by the Sponsor and the Administrative Trustees on behalf of the Trust and written notice of such fact is provided by an Administrative Trustee to the Property Trustee, and (ii) at any other time, within 30 days of receipt by the Trust of a written request for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Property Trustee. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity), provided that the Property Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Property Trustee shall comply with its obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. SECTION 2.3 Reports by the Property Trustee. Within 60 days after December 31 of each year, commencing December 31, 1999, the Property Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.4 Periodic Reports to Property Trustee. Each of the Sponsor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information (if any) as are required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 2.5 Evidence of Compliance with Conditions Precedent. The Sponsor or the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent provided for in this Declaration that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officers' Certificate. 7 13 SECTION 2.6 Events of Default; Waiver. (a) The Holders of a Majority in Liquidation Amount of the Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, the Event of Default under the Declaration shall also not be waivable; or (ii) requires the consent or vote of greater than a majority in aggregate principal amount of the holders of the Debentures (a "Super Majority") to be waived under the Indenture, the Event of Default under the Declaration may only be waived by the vote of the Holders of at least the proportion in aggregate Liquidation Amount of the Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Event of Default with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or an Event of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote, or consent of the Holders of the Common Securities. (b) The Holders of a Majority in Liquidation Amount of the Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect to the Common Securities and its consequences, provided, that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b), the Event of Default under the Declaration shall also not be waivable; or (ii) requires the consent or vote of a Super Majority to be waived, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b), the Event of Default under the Declaration may only be waived by the vote of the Holders of at least the proportion in aggregate Liquidation Amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; provided further, that each Holder of the Common Securities will be deemed to have waived any such Event of Default and all Events of Default with respect to the Common Securities and its consequences until all Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Events of Default have been so cured, waived or 8 14 otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon. (c) A waiver of an Event of Default under the Indenture by the Property Trustee, at the direction of the Holders of the Preferred Securities, constitutes a waiver of the corresponding Event of Default under this Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. SECTION 2.7 Event of Default; Notice. (a) Within five Business Days after the occurrence of any Event of Default actually known to a Responsible Officer of the Property Trustee, the Property Trustee shall transmit notice of such Event of Default to the Holders of the Preferred Securities, the Administrative Trustees and the Sponsor, unless such Event of Default shall have been cured, waived or otherwise eliminated. The Sponsor and the Administrative Trustees shall file annually with the Property Trustee a certification as to whether or not they are in compliance with all the conditions and covenants applicable to them under this Declaration. (b) For purposes of this Section 2.7, the Property Trustee shall not be deemed to have knowledge of any default or Event of Default except: (i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or (ii) any default as to which the Property Trustee shall have received written notice or of which a Responsible Officer of the Property Trustee charged with the administration of the Declaration shall have actual knowledge. ARTICLE III ORGANIZATION SECTION 3.1 Name. The Trust is named "American General Capital I", as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Securities. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Administrative Trustees. 9 15 SECTION 3.2 Office. The address of the principal office of the Trust is c/o American General Corporation, 2929 Allen Parkway, Houston, Texas 77019-2155. On ten Business Days' written notice to the Holders of the Securities and the Property Trustee, the Administrative Trustees may designate another principal office. SECTION 3.3 Purpose. The exclusive purposes and functions of the Trust are (a) to issue and sell the Trust Securities, (b) to use the proceeds from the sale of the Securities to acquire the Debentures, and (c) except as otherwise limited herein, to engage in only those other activities necessary, advisable or incidental thereto. SECTION 3.4 Authority. Except as specifically provided in this Declaration, the Property Trustee and the Administrative Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by a Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration. SECTION 3.5 Title to Property of the Trust. Except as provided in Section 3.8 with respect to the Debentures and the Property Trustee Account or as otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust. SECTION 3.6 Powers and Duties of the Administrative Trustees. The Administrative Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities: (a) to execute, deliver, issue and sell the Preferred Securities and the Common Securities in accordance with this Declaration; provided, however, that (i) the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities, (ii) there shall be no interests in the Trust other than the Securities, and (iii) the issuance of Securities shall be limited to a simultaneous issuance of both Preferred Securities and Common Securities at the Closing Time; (b) in connection with the issue and sale of the Preferred Securities, at the direction of the Sponsor, to: (i) file with the Commission a registration statement prepared by the Sponsor on the appropriate form in relation to the Preferred Securities, including any amendments thereto and including any supplements or amendments to the form of prospectus included therein, as permitted by the rules and regulations of the Commission; (ii) execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary in order to qualify or register all or part of the 10 16 Preferred Securities in any state in which the Sponsor has determined to qualify or register such Preferred Securities for sale; (iii) at the direction of the Sponsor, execute and file an application, prepared by the Sponsor, to the New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing or quotation of the Preferred Securities; (iv) to execute and deliver letters, documents, or instruments with DTC and any other Clearing Agencies relating to the Preferred Securities; (v) if required, execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act; and (vi) to cause the Trust to enter into such agreements and arrangements as may be necessary or desirable in connection with the sale of Preferred Securities to the underwriters thereof and the consummation thereof, and to take all action as may be necessary or desirable in connection with the consummation thereof; (c) to acquire the Debentures with the proceeds of the sale of the Preferred Securities and the Common Securities; provided, however, that the Administrative Trustees shall cause legal title to the Debentures to be held of record in the name of the Property Trustee for the benefit of the Holders of the Preferred Securities and the Holders of Common Securities; (d) if applicable, to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; (e) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of the Preferred Securities and the Holders of the Common Securities as to such actions and applicable record dates; (f) to take all actions and perform such duties as may be required of the Administrative Trustees pursuant to the terms of the Securities; (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal Action; (h) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; (i) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act; (j) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the Property Trustee, which certificate may be executed by any Administrative Trustee; 11 17 (k) to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust; (l) to act as, or appoint another Person to act as, Registrar for the Securities or to appoint a Paying Agent for the Securities as provided in Section 7.4; (m) to give prompt written notice to the Property Trustee and to Holders of the Securities of any notice received from the Debenture Issuer of its election to defer payments of interest on the Debentures by extending the interest payment period under the Indenture; (n) to take all action (provided that such action does not materially adversely affect the interests of the Holders) that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Preferred Securities or to enable the Trust to effect the purposes for which the Trust was created; (o) to take any action, not inconsistent with this Declaration or with applicable law, that the Administrative Trustees determine in their discretion to be necessary or desirable in carrying out the activities of the Trust as set out in this Section 3.6, including, but not limited to: (i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act; (ii) causing the Trust not to be classified for United States federal income tax purposes as an association taxable as a corporation; and (iii) cooperating with the Debenture Issuer to ensure that the Debentures will be treated as indebtedness of the Debenture Issuer for United States federal income tax purposes; (p) to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Administrative Trustees, on behalf of the Trust; and (q) to execute, deliver and record, file or register, as applicable, all documents, certificates, agreements or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary, advisable or incidental to the foregoing. The Administrative Trustees must exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Administrative Trustees shall not take any action that is inconsistent with the purposes and functions of the Trust set forth in Section 3.3. Subject to this Section 3.6, the Administrative Trustees shall have none of the powers or the authority of the Property Trustee set forth in Section 3.8. Any expenses incurred by the Administrative Trustees pursuant to this Section 3.6 shall be reimbursed by the Sponsor. 12 18 SECTION 3.7 Prohibition of Actions by the Trust and the Trustees. (a) The Trust shall not, and the Trustees (including the Property Trustee and the Delaware Trustee) shall cause the Trust not to, engage in any activity other than as required or authorized by this Declaration. The Trust shall not, and the Trustees (including the Property Trustee) shall cause the Trust not to: (i) invest any proceeds received by the Trust from holding the Debentures, but shall distribute all such proceeds to Holders of Securities pursuant to the terms of this Declaration and of the Securities; (ii) acquire any assets other than as expressly provided herein; (iii) possess Trust Property for other than a Trust purpose or execute any mortgage in respect of, or pledge, any Trust Property; (iv) make any loans or incur any indebtedness other than loans represented by the Debentures; (v) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Securities in any way whatsoever; (vi) issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities; or (vii) other than as provided in this Declaration, (A) direct the time, method and place of conducting any proceeding with respect to any remedy available to the Debenture Trustee, or exercise any trust or power conferred upon the Debenture Trustee with respect to the Debentures, (B) waive any past default that is waivable under the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Debentures shall be due and payable, or (D) consent to any amendment, modification or termination of the Indenture or the Debentures where such consent shall be required unless the Trust shall have received an opinion of independent tax counsel experienced in such matters to the effect that such amendment, modification or termination will not cause the Trust to be classified as an association taxable as a corporation for United States federal income tax purposes. SECTION 3.8 Powers and Duties of the Property Trustee. (a) The legal title to the Debentures shall be owned by and held of record in the name of the Property Trustee in trust for the benefit of the Trust and the Holders of the Securities. The right, title and interest of the Property Trustee to the Debentures shall vest automatically in each Person who may hereafter be appointed as Property Trustee in accordance with Section 5.7. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered. (b) The Property Trustee shall not transfer its right, title and interest in the Debentures to the Administrative Trustees or to the Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee). (c) The Property Trustee shall: 13 19 (i) establish and maintain a segregated non-interest bearing trust account (the "Property Trustee Account") in the name of and under the exclusive control of the Property Trustee, and maintained in the Property Trustee's trust department, on behalf of the Holders of the Securities and, upon the receipt of payments of funds made in respect of the Debentures held by the Property Trustee, deposit such funds into the Property Trustee Account and make or cause the Paying Agent to make payments to the Holders of the Preferred Securities and Holders of the Common Securities from the Property Trustee Account in accordance with Section 6.1. Funds in the Property Trustee Account shall be held uninvested until disbursed in accordance with this Declaration. Unless the Property Trustee Account is held as a trust account in the corporate trust department of the Property Trustee, the Property Trustee Account shall be an account that is maintained with a banking institution the rating on whose long-term unsecured indebtedness is at least equal to the rating assigned to the Preferred Securities by a "nationally recognized statistical rating organization", as that term is defined for purposes of Rule 436(g)(2) under the Securities Act; (ii) engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Preferred Securities and the Common Securities to the extent the Debentures are prepaid or mature; and (iii) upon written notice of distribution issued by the Administrative Trustees in accordance with the terms of the Securities, engage in such ministerial activities as shall be necessary or appropriate to effect the distribution of the Debentures to Holders of Securities upon the occurrence of certain events. (d) The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Declaration and the Securities. (e) Subject to Section 3.9(a), the Property Trustee shall take any Legal Action which arises out of or in connection with an Event of Default of which a Responsible Officer of the Property Trustee has actual knowledge or the Property Trustee's duties and obligations under this Declaration or the Trust Indenture Act; provided, however, that if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay the principal of or premium, if any, or interest on the Debentures on the date such principal, premium, if any, or interest is otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may directly institute a proceeding for enforcement of payment to such Holder of the principal of or premium, if any, or interest on the Debentures having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities of such Holder (a "Direct Action") on or after the respective due date specified in the Debentures. Notwithstanding any payments made to such Holder by the Debenture Issuer in connection with such Direct Action, the Debenture Issuer shall remain obligated to pay the principal of, premium, if any, or interest on such Debentures, and the Debenture Issuer shall be subrogated to the rights of such Holder of Preferred Securities to the extent of any payment made by the Debenture Issuer to such Holder of Preferred Securities in such Direct Action. Except as provided in the preceding sentences, the Holders of Preferred Securities will not be able to exercise directly any other remedy available to the Holders of the Debentures. (f) The Property Trustee shall continue to serve as a Trustee until either: (i) the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of Securities pursuant to the terms of the Securities; or 14 20 (ii) a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 5.7. (g) The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Debentures under the Indenture and, if an Event of Default actually known to a Responsible Officer of the Property Trustee occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Securities, enforce its rights as holder of the Debentures subject to the rights of the Holders pursuant to this Declaration and the terms of such Securities. (h) The Property Trustee shall be authorized to undertake any actions set forth in Section 317(a) of the Trust Indenture Act. (i) For such time as the Property Trustee is the Paying Agent, the Property Trustee may authorize one or more Persons to act as additional Paying Agents and to pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect to all Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any such additional Paying Agent may be removed by the Property Trustee at any time the Property Trustee remains as Paying Agent and a successor Paying Agent or additional Paying Agents may be (but are not required to be) appointed at any time by the Property Trustee. (j) Subject to this Section 3.8, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Administrative Trustees set forth in Section 3.6. The Property Trustee must exercise the powers set forth in this Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Property Trustee shall not take any action that is inconsistent with the purposes and functions of the Trust set out in Section 3.3. SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee. (a) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration and in the Securities and no implied covenants shall be read into this Declaration against the Property Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) of which a Responsible Officer of the Property Trustee has actual knowledge, the Property Trustee shall exercise such of the rights and powers vested in it by this Declaration, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) No provision of this Declaration shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of an Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Declaration and in the Securities and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Declaration and in the Securities, 15 21 and no implied covenants or obligations shall be read into this Declaration against the Property Trustee; and (B) in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Property Trustee and conforming to the requirements of this Declaration; provided, however, that in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Declaration; (ii) the Property Trustee shall not be liable for any error or judgment made in good faith by a Responsible Officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts; (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration; (iv) no provision of this Declaration shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Declaration or indemnity reasonably satisfactory to the Property Trustee against such risk or liability is not reasonably assured to it; (v) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Property Trustee Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Declaration and the Trust Indenture Act; (vi) the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Debentures or the payment of any taxes or assessments levied thereon or in connection therewith; (vii) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Sponsor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Property Trustee Account maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise required by law; and (viii) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Sponsor with their respective duties under this Declaration, nor shall the Property Trustee be liable for any default or misconduct of the Administrative Trustees or the Sponsor. 16 22 SECTION 3.10 Certain Rights of Property Trustee. (a) Subject to the provisions of Section 3.9: (i) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Sponsor or the Administrative Trustees contemplated by this Declaration may be sufficiently evidenced by an Officers' Certificate; (iii) whenever in the administration of this Declaration, the Property Trustee shall deem it desirable that a matter be established before undertaking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Administrative Trustees; (iv) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any-financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or reregistration thereof; (v) the Property Trustee may consult with counsel or other experts of its selection and the advice or opinion of such counsel and experts with respect to legal matters or advice within the scope of such experts' area of expertise shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion, such counsel may be counsel to the Sponsor or any of its Affiliates, and may include any of its employees. The Property Trustee shall have the right at any time to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction; (vi) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request or direction of any Holder, unless such Holder shall have provided to the Property Trustee security indemnity, reasonably satisfactory to the Property Trustee, against the costs, expenses (including reasonable attorneys' fees and expenses and the expenses of the Property Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Property Trustee, provided, that nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Declaration; (vii) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; 17 23 (viii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents, custodians, nominees or attorneys and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (ix) any action taken by the Property Trustee or its agents hereunder shall bind the Trust and the Holders of the Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Property Trustee to so act or as to its compliance with any of the terms and provisions of this Declaration, both of which shall be conclusively evidenced by the Property Trustee's or its agent's taking such action; (x) whenever in the administration of this Declaration the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders of the Securities which instructions shall be given by the Holders of the same proportion in Liquidation Amount of the Securities as would be entitled to direct the Property Trustee under the terms of the Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be fully protected in conclusively relying on or acting in or accordance with such instructions; (xi) except as otherwise expressly provided in this Declaration, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration; and (xii) the Property Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith, without negligence, and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Declaration. (b) No provision of this Declaration shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty. SECTION 3.11 Delaware Trustee. Notwithstanding any other provision of this Declaration other than Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Administrative Trustees, the Property Trustee or of the Trustees generally described in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Business Trust Act and taking such actions as are required to be taken by the Delaware Trustee under the Business Trust Act. 18 24 SECTION 3.12 Execution of Documents. Except as otherwise required by the Business Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents that the Administrative Trustees have the power and authority to execute pursuant to Section 3.6. SECTION 3.13 Not Responsible for Recitals or Issuance of Securities. The recitals contained in this Declaration and the Securities shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration or the Securities. SECTION 3.14 Duration of Trust. The Trust, unless dissolved pursuant to the provisions of Article VIII hereof, shall have existence up to September 30, 2052. SECTION 3.15 Mergers. (a) The Trust may not merge or convert with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person, except as described in Section 3.15(b) and (c) hereof or in Annex I. (b) The Trust may, at the request of the Sponsor, with the consent of the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees and without the consent of the Holders of the Securities, the Delaware Trustee or the Property Trustee, merge or convert with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to, a trust organized as such under the laws of any State; provided that: (i) such successor entity (the "Successor Entity") either: (A) expressly assumes all of the obligations of the Trust under the Securities; or (B) substitutes for the Securities other securities having substantially the same terms as the Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Securities rank with respect to Distributions and payments upon liquidation, redemption and otherwise; (ii) the Sponsor expressly appoints a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Debentures; (iii) the Successor Securities are listed or quoted, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which the Preferred Securities are then listed or quoted, if any; 19 25 (iv) such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization; (v) such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than any dilution of such Holders' interests in the new entity); (vi) such Successor Entity has a purpose substantially identical to that of the Trust; (vii) prior to such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Sponsor has received an opinion of an independent counsel to the Trust experienced in such matters to the effect that: (A) such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interests in the new entity); and (B) following such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor the Successor Entity will be required to register as an Investment Company; and (C) following such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer, or lease, the Trust (or the Successor Entity) will continue to be classified as a grantor trust for United States federal income tax purposes; and (viii) the Sponsor or any permitted successor or assignee owns all of the common securities of such Successor Entity and guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Preferred Securities Guarantee. (c) Notwithstanding Section 3.15(b), the Trust shall not, except with the consent of all Holders of the Securities, consolidate, amalgamate, merge or convert with or into, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to, any other entity or permit any other entity to consolidate, amalgamate, merge or convert with or into, or replace it if such consolidation, amalgamation, merger, conversion, replacement, conveyance, transfer or lease would cause the Trust or the Successor Entity not to be classified as a grantor trust for United States federal income tax purposes. 20 26 ARTICLE IV SPONSOR SECTION 4.1 Sponsor's Purchase of Common Securities. At the Closing Time, the Sponsor will purchase all of the Common Securities then issued by the Trust, in an amount at least equal to 3% of the capital of the Trust, at the same time as the Preferred Securities are issued and sold. SECTION 4.2 Responsibilities of the Sponsor. In connection with the issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities: (a) to prepare for filing by the Trust, execute and file with the Commission a registration statement on the appropriate form in relation to the Preferred Securities, the Preferred Securities Guarantee and the Debentures, including any amendments or supplements thereto and including any supplements or amendments to the form of prospectus included therein, as permitted by the rules and regulations of the Commission; (b) to determine the states in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such states; (c) if deemed necessary or advisable by the Sponsor, to prepare for filing and request the Administrative Trustees to cause the filing by the Trust of an application to the New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing or quotation of the Preferred Securities; (d) if required, to prepare for and execute for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto; and (e) to negotiate the terms of, and execute and deliver on behalf of the Trust, the Underwriting Agreement providing for the sale of the Preferred Securities and any agreements or instruments contemplated thereby. SECTION 4.3 Right to Proceed. The Sponsor acknowledges the rights of the Holders of the Preferred Securities, in the event that a failure of the Trust to pay Distributions on the Preferred Securities is attributable to the failure of the Debenture Issuer to pay interest or principal on the Debentures, to institute Direct Actions against the Debenture Issuer for enforcement of its payment obligations on the Debentures. 21 27 ARTICLE V TRUSTEES SECTION 5.1 Number of Trustees; Appointment of Co-Trustee. The number of Trustees initially shall be five (5), and: (a) at any time before the issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and (b) after the issuance of any Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; provided, however, that, the number of Trustees shall in no event be less than two (2); provided further, that (1) if required by the Business Trust Act, one Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or that, if not a natural person, is an entity which has its principal place of business in the State of Delaware (the "Delaware Trustee"); (2) at least one Trustee shall be an employee or officer of, or affiliated with the Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the Property Trustee, and such Trustee may also serve as Delaware Trustee if it meets the applicable requirements. Notwithstanding the above, unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust's property may at the time be located, the Holders of a Majority in Liquidation Amount of the Common Securities acting as a class at a meeting of the Holders of the Common Securities shall have power to appoint one or more persons either to act as a co-trustee, jointly with the Property Trustee, of all or any part of the Trust's property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in such capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of this Declaration. In case an Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make any such appointment of a co-trustee. SECTION 5.2 Delaware Trustee. If required by the Business Trust Act, the Delaware Trustee shall be: (a) a natural person who is a resident of the State of Delaware; or (b) if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, provided, that, if the Property Trustee has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable law, then the Property Trustee may also be the Delaware Trustee and Section 3.11 shall have no application. SECTION 5.3 Property Trustee; Eligibility. (a) There shall at all times be one Trustee (the "Property Trustee") which shall act as Property Trustee and which shall: (i) not be an Affiliate of the Sponsor; and 22 28 (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Commission to act as an indenture trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 5.3(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Property Trustee shall cease to be eligible to so act under Section 5.3(a), the Property Trustee shall immediately resign in the manner and with the effect set forth in Section 5.7(c). (c) If the Property Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holder of the Common Securities (as if it were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. (d) The Preferred Securities Guarantee shall be deemed to be specifically described in this Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the Trust Indenture Act. (e) The initial Property Trustee shall be: Bankers Trust Company SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless the Property Trustee also acts as Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers. SECTION 5.5 Administrative Trustees. (a) The initial Administrative Trustees shall be: Nicholas R. Rasmussen, James L. Gleaves, and Gregory N. Picard (b) Except where a requirement for action by a specific number of Administrative Trustees is expressly set forth in this Declaration and except with respect to any action the taking of which is the subject of a meeting of the Administrative Trustees, any action required or permitted to be taken by the Administrative Trustees may be taken by, and any power of the Administrative Trustees may be exercised by, or with the consent of, any one such Administrative Trustee. 23 29 (c) Except as otherwise required by the Business Trust Act or applicable law, any Administrative Trustee is authorized to execute on behalf of the Trust any documents which the Administrative Trustees have the power and authority to cause the Trust to execute pursuant to Section 3.6. SECTION 5.6 Delaware Trustee. The initial Delaware Trustee shall be: Bankers Trust (Delaware) SECTION 5.7 Appointment, Removal and Resignation of Trustees. (a) Subject to Section 5.7(b), any Trustee may be appointed or removed without cause at any time: (i) until the issuance of any Securities, by written instrument executed by the Sponsor; (ii) in the case of Administrative Trustees, after the issuance of any Securities, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; (iii) in the case of the Property Trustee and the Delaware Trustee, unless an Event of Default shall have occurred and be continuing after the issuance of any Securities, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and (iv) in the case of the Property Trustee and the Delaware Trustee, if an Event of Default shall have occurred and be continuing after the issuance of the Securities, by vote of Holders of a Majority in Liquidation Amount of the Preferred Securities voting as a class at a meeting of Holders of the Preferred Securities. (b) (i) The Trustee that acts as Property Trustee shall not be removed in accordance with Section 5.7(a) until a successor Trustee possessing the qualifications to act as Property Trustee under Section 5.3 (a "Successor Property Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Administrative Trustees and the Sponsor; and (ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with Section 5.7(a) until a successor Trustee possessing the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Delaware Trustee and delivered to the Administrative Trustees and the Sponsor. (c) A Trustee appointed to office shall hold office until his successor shall have been appointed or until his death, removal or resignation. Any Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that: 24 30 (i) No such resignation of the Trustee that acts as the Property Trustee shall be effective: (A) until a Successor Property Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Property Trustee and delivered to the Trust, the Sponsor and the resigning Property Trustee; or (B) until the assets of the Trust have been completely liquidated and the proceeds thereof distributed to the holders of the Securities; and (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the resigning Delaware Trustee. (d) The Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as the case may be, if the Property Trustee or the Delaware Trustee delivers an instrument of resignation in accordance with this Section 5.7. (e) If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 5.7 within 60 days after delivery of an instrument of resignation or removal, the Property Trustee or Delaware Trustee resigning or being removed, as applicable, may petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper and prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be. (f) No Property Trustee or Delaware Trustee shall be liable for the acts or omissions to act of any Successor Property Trustee or Successor Delaware Trustee, as the case may be. SECTION 5.8 Vacancies among Trustees. If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by the Administrative Trustees or, if there are more than two, a majority of the Administrative Trustees, shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.7. SECTION 5.9 Effect of Vacancies. The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 5.7, the Administrative Trustees in office, regardless of their number, shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Declaration. 25 31 SECTION 5.10 Meetings. If there is more than one Administrative Trustee, meetings of the Administrative Trustees shall be held from time to time upon the call of any Administrative Trustee. Regular meetings of the Administrative Trustees may be held at a time and place fixed by resolution of the Administrative Trustees. Notice of any in-person meetings of the Administrative Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before such meeting. Notice of any telephonic meetings of the Administrative Trustees or any committee thereof shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of an Administrative Trustee at a meeting shall constitute a waiver of notice of such meeting except where an Administrative Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Declaration, any action of the Administrative Trustees may be taken at a meeting by vote of a majority of the Administrative Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter, provided that a Quorum is present, or without a meeting and without prior notice by the unanimous written consent of the Administrative Trustees. In the event there is only one Administrative Trustee, any and all action of such Administrative Trustee shall be evidenced by a written consent of such Administrative Trustee. SECTION 5.11 Delegation of Power. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) The Administrative Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. Section 5.12 Merger, Conversion, Consolidation or Succession to Business. Any Person into which any Trustee (excluding any Administrative Trustee that is a natural person) may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Trustee, shall be the successor of such Trustee hereunder, provided that such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VI DISTRIBUTIONS SECTION 6.1 Distributions. Each Holder shall receive Distributions in accordance with the terms of such Holder's Securities as set forth herein and in Annex I. If and to the extent that the Debenture Issuer makes a payment of interest (including Additional Interest (as defined in the Indenture)), premium and/or principal on the Debentures held 26 32 by the Property Trustee or any other payments with respect to the Debentures held by the Property Trustee (the amount of any such payment being a "Payment Amount"), the Property Trustee shall and is directed, to the extent funds are available for that purpose, to make a distribution (a "Distribution") of the Payment Amount to Holders in accordance with the respective terms of the Securities held by them. ARTICLE VII ISSUANCE OF SECURITIES SECTION 7.1 General Provisions Regarding Securities. (a) The Administrative Trustees shall on behalf of the Trust issue one class of preferred securities representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I (the "Preferred Securities") and one class of common securities representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I (the "Common Securities"). The Trust shall issue no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities. (b) The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata (as defined in Annex I hereto) with the Common Securities except that, where an Event of Default has occurred and is continuing, the rights of Holders of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred Securities. (c) The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. (d) Upon issuance of the Securities as provided in this Declaration, the Securities so issued shall be deemed to be validly issued, fully paid and non-assessable. (e) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration. SECTION 7.2 Execution and Authentication. (a) The Securities shall be signed on behalf of the Trust by one or more Administrative Trustees by manual or facsimile signature. In case any Administrative Trustee of the Trust who shall have signed any of the Securities shall cease to be such Administrative Trustee before the Securities so signed shall be delivered by the Trust, such Securities nevertheless may be delivered as though the person who signed such Securities had not ceased to be such Administrative Trustee; and any Securities may be signed on behalf of the Trust by such persons who, at the actual date of execution of such Security, shall be the Administrative Trustees of the Trust, although at the date of the execution and delivery of the Declaration any such person was not such an Administrative Trustee. (b) A Common Security shall be valid upon execution by an Administrative Trustee by manual or facsimile signature without any act of the Property Trustee. A Preferred Security shall not be valid until authenticated by the manual signature of an authorized signatory of the Property Trustee, which signature shall be conclusive evidence that the Preferred Security has been authenticated under this Declaration. 27 33 Upon a written order of the Trust signed by one Administrative Trustee, the Property Trustee shall authenticate the Preferred Securities for original issue. The aggregate number of Preferred Securities outstanding at any time shall not exceed the number set forth in Annex I hereto except as provided in Section 7.6. The Property Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Preferred Securities. An authenticating agent may authenticate Preferred Securities whenever the Property Trustee may do so. Each reference in this Declaration to authentication by the Property Trustee includes authentication by such agent. An authenticating agent has the same rights as the Property Trustee hereunder with respect to the Sponsor or an Affiliate. SECTION 7.3 Form and Dating. The Preferred Securities and the Property Trustee's certificate of authentication shall be substantially in the form of Exhibit A-1 and the Common Securities shall be substantially in the form of Exhibit A-2, each of which is hereby incorporated in and expressly made a part of this Declaration. Certificates representing the Securities may be in definitive or global form and printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by one or more of them. The Securities may have letters, CUSIP or other numbers, notations or other marks of identification or designation and such legends or endorsements required by law, stock exchange or quotation system rule, agreements to which the Trust is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Trust). The Trust at the direction of the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred Security shall be dated the date of its authentication. The terms and provisions of the Securities set forth in Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent applicable, the Property Trustee, the Delaware Trustee, the Administrative Trustees and the Sponsor, by their execution and delivery of this Declaration, expressly agree to be bound thereby. (a) Global Securities. The Preferred Securities shall be issued in the form of one or more permanent global Securities in definitive, fully registered form without Distribution coupons with the appropriate global legends set forth in Exhibit A-1 hereto (a "Global Preferred Security"), which shall be deposited on behalf of the purchasers of the Preferred Securities represented thereby with the Property Trustee or the Registrar, at its New York office, as custodian for the Clearing Agency, and registered in the name of the Clearing Agency or a nominee of the Clearing Agency, duly executed by the Trust and authenticated by the Property Trustee as hereinafter provided. The number of Preferred Securities represented by the Global Preferred Security may from time to time be increased or decreased by adjustments made on the records of the Property Trustee and the Clearing Agency or its nominee as hereinafter provided. (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the Global Preferred Securities and such other Preferred Securities in global form as may be authorized by the Trust to be deposited with or on behalf of the Clearing Agency. The Trust shall execute and the Property Trustee shall, in accordance with this Section 7.3, authenticate and make available for delivery initially one or more Global Preferred Securities that (i) shall be registered in the name of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be delivered by the Trustee to such Clearing Agency or pursuant to such Clearing Agency's written instructions or held by the Property Trustee or the Registrar as custodian for the Clearing Agency. 28 34 Members of, or participants in, the Clearing Agency ("Participants") shall have no rights under this Declaration with respect to any Global Preferred Security held on their behalf by the Clearing Agency or by the Property Trustee or the Registrar as the custodian of the Clearing Agency or under such Global Preferred Security, and the Clearing Agency may be treated by the Trust, the Property Trustee and any agent of the Trust or the Property Trustee as the absolute owner of such Global Preferred Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Trust, the Property Trustee or any agent of the Trust or the Property Trustee from giving effect to any written certification, proxy or other authorization furnished by the Clearing Agency or impair, as between the Clearing Agency and its Participants, the operation of customary practices of such Clearing Agency governing the exercise of the rights of a holder of a beneficial interest in any Global Preferred Security. (c) Definitive Preferred Securities. Except as provided in Section 7.9, owners of beneficial interests in a Global Preferred Security will not be entitled to receive physical delivery of certificated Preferred Securities ("Definitive Preferred Securities"). SECTION 7.4 Registrar and Paying Agent. The Trust shall maintain in the Borough of Manhattan, The City of New York, (i) an office or agency where Preferred Securities may be presented for registration of transfer ("Registrar"), and (ii) an office or agency where Preferred Securities may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Preferred Securities and of their transfer. The Administrative Trustees may appoint the Registrar and Paying Agent and may appoint one or more co-registrars and one or more additional paying agents in such other locations as it shall determine. The term "Registrar" includes any additional registrar, the term "Paying Agent" includes any additional paying agent. The Administrative Trustees may change any Paying Agent or Registrar without prior notice to any Holder. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Property Trustee and the Sponsor. The Administrative Trustees shall notify the Property Trustee of the name and address of any Agent not a party to this Declaration. If the Administrative Trustees fail to appoint or maintain another entity as Registrar or Paying Agent, the Property Trustee shall act as such. The Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust shall act as Paying Agent and Registrar for the Common Securities. The Trust initially appoints the Property Trustee as Registrar and Paying Agent for the Preferred Securities. The Registrar and Paying Agent shall be entitled to all of the rights, protections, immunities and indemnities afforded to the Property Trustee hereunder. SECTION 7.5 Paying Agent to Hold Money in Trust. The Trust shall require each Paying Agent other than the Property Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Property Trustee all money held by the Paying Agent for the payment of Liquidation Amounts or Distributions on the Securities, and will notify the Property Trustee if there are insufficient funds for such purpose. While any such insufficiency continues, the Property Trustee may require a Paying Agent to pay all money held by it to the Property Trustee. The Trust at any time may require a Paying Agent to pay all money held by it to the Property Trustee and to account for any money disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust) shall have no further liability for the money. If the Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. 29 35 SECTION 7.6 Replacement Securities. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken or if such Security is mutilated and is surrendered to the Trust or in the case of the Preferred Securities to the Property Trustee, the Trust shall issue and the Property Trustee shall authenticate a replacement Security if the Property Trustee's and the Trust's requirements, as the case may be, are met. An indemnity bond must be provided by the Holder which, in the judgment of the Property Trustee, is sufficient to protect the Trustees, the Sponsor or any authenticating agent from any loss which any of them may suffer if a Security is replaced. The Trust may charge such holder for its expenses in replacing a Security. SECTION 7.7 Outstanding Preferred Securities. The Preferred Securities outstanding at any time are all the Preferred Securities authenticated by the Property Trustee except for those canceled by it, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Preferred Security is replaced pursuant to Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee receives proof satisfactory to it that the replaced Preferred Security is held by a bona fide purchaser. If Preferred Securities are considered paid in accordance with the terms of this Declaration, they cease to be outstanding and Distributions on them shall cease to accumulate. Except as otherwise provided herein, a Preferred Security does not cease to be outstanding because one of the Trustees, the Sponsor or an Affiliate of the Sponsor holds the Security. SECTION 7.8 Preferred Securities in Treasury. In determining whether the Holders of the required amount of Securities have concurred in any direction, waiver or consent, Preferred Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded and deemed not to be outstanding, except that for the purposes of determining whether the Property Trustee shall be fully protected in relying on any such direction, waiver or consent, only Securities which a Responsible Officer of the Property Trustee actually knows are so owned shall be so disregarded. SECTION 7.9 Temporary Securities; Certificated Securities. (a) Until Definitive Securities are ready for delivery, the Trust may prepare and, in the case of the Preferred Securities, the Property Trustee shall authenticate, temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Trust considers appropriate for temporary Securities. Without unreasonable delay, the Administrative Trustees shall prepare and, in the case of the Preferred Securities, the Property Trustee shall authenticate, Definitive Securities in exchange for temporary Securities. (b) A Global Preferred Security deposited with the Clearing Agency or with the Property Trustee or the Registrar as custodian for the Clearing Agency pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in the form of certificated Preferred Securities only if (i) the Clearing Agency notifies the Company that it is unwilling or unable to continue as Clearing Agency for such Global Preferred Security or if at any time such Clearing Agency ceases to be a "clearing agency" registered under the Exchange Act and a clearing agency is not appointed by the 30 36 Administrative Trustees within 90 days of such notice, or (ii) the Administrative Trustees in their sole discretion elect to cause the issuance of certificated Preferred Securities. (c) Any Global Preferred Security that is transferable to the beneficial owners thereof in the form of certificated Preferred Securities pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the Property Trustee located in the Borough of Manhattan, The City of New York, to be so transferred, in whole or from time to time in part, without charge, and the Property Trustee shall authenticate and make available for delivery, upon such transfer of each portion of such Global Preferred Security, an equal aggregate Liquidation Amount of Securities of authorized denominations in the form of certificated Preferred Securities. Any portion of a Global Preferred Security transferred pursuant to this Section shall be registered in such names as the Clearing Agency shall direct. (d) Subject to the provisions of Section 7.9(c), the Holder of a Global Preferred Security may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which such Holder is entitled to take under this Declaration or the Securities. (e) In the event of the occurrence of any of the events specified in Section 7.9(b), the Trust will promptly make available to the Property Trustee or the Registrar a reasonable supply of certificated Preferred Securities in fully registered form without distribution coupons. SECTION 7.10 Cancellation. The Administrative Trustees at any time may deliver the Securities to the Property Trustee for cancellation. The Registrar and Paying Agent shall forward to the Property Trustee any Securities surrendered to them for registration of transfer, redemption, exchange or payment. The Property Trustee shall promptly cancel all Securities surrendered for registration of transfer, redemption, exchange, payment, replacement or cancellation and shall dispose of canceled Securities as the Administrative Trustees direct, provided that the Property Trustee shall not be obligated to destroy Preferred Securities. The Trust may not issue new Preferred Securities to replace Preferred Securities that it has paid or redeemed or that have been delivered to the Property Trustee for cancellation. SECTION 7.11 CUSIP Numbers. The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Property Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders of Preferred Securities; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Preferred Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Preferred Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Sponsor will promptly notify the Property Trustee of any change in the CUSIP numbers. ARTICLE VIII DISSOLUTION OF TRUST SECTION 8.1 Dissolution of Trust. (a) The Trust shall automatically be dissolved and its affairs wound up upon the earliest to occur of the following events: 31 37 (i) the bankruptcy of the Sponsor; (ii) the filing of a certificate of dissolution or liquidation or its equivalent with respect to the Sponsor, upon the dissolution of the Trust after having obtained the consent of at least a Majority in Liquidation Amount of the Securities voting together as a class to dissolve the Trust, or the revocation of the Sponsor's charter and the expiration of 90 days after the date of revocation without a reinstatement thereof; (iii) the distribution, after satisfaction of the liabilities of the Trust to the creditors of the Trust, of a Like Amount of the Debentures to the Holders of the Securities pursuant to the terms thereof upon receipt of a written direction from the Sponsor (which shall be at its sole discretion) while the Debentures are outstanding requiring the Trustees to dissolve the Trust and distribute a Like Amount of the Debentures to Holders of the Securities; (iv) the entry of a decree of judicial dissolution of the Trust by a court of competent jurisdiction; (v) when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof shall, after satisfaction of the liabilities of the Trust to the creditors of the Trust, have been paid to the Holders in accordance with the terms of the Securities; (vi) the expiration of the term of the Trust provided in Section 3.14; or (vii) before the issuance of any Securities, with the consent of the Administrative Trustees and the Sponsor. (b) As soon as is practicable upon completion of winding up of the Trust following the occurrence of an event referred to in Section 8.1(a) and after satisfaction of all liabilities to creditors of the Trust, the Administrative Trustees shall terminate the Trust by filing a certificate of cancellation with the Secretary of State of the State of Delaware in accordance with the Business Trust Act. (c) The provisions of Section 3.9 and Article X shall survive the termination of the Trust. ARTICLE IX TRANSFER OF INTERESTS SECTION 9.1 Transfer of Securities. (a) Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Securities. To the fullest extent permitted by law, any transfer or purported transfer of any Security not made in accordance with this Declaration shall be null and void. (b) Subject to this Article IX, Preferred Securities shall be freely transferable. (c) The Sponsor may not transfer the Common Securities except to an Affiliate of the Sponsor and except pursuant to any merger, consolidation, sale of all or substantially all of its assets or other transaction permitted pursuant to Article VIII of the Indenture. 32 38 (d) The Administrative Trustees shall provide for the registration of Securities and of the transfer of Securities, which will be effected without charge but only upon payment (with such indemnity as the Trustees may require) in respect of any tax or other governmental charges that may be imposed in relation to it. Upon surrender for registration of transfer of any Securities, the Trustees shall cause one or more new Securities to be issued in the name of the designated transferee or transferees. Every Security surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Administrative Trustees duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Security surrendered for registration of transfer shall be canceled by the Administrative Trustees. A transferee of a Security shall be entitled to the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee of a Security. By acceptance of a Security, each transferee shall be deemed to have agreed to be bound by this Declaration. SECTION 9.2 Deemed Security Holders. The Trust, the Trustees, the Paying Agent and the Registrar may treat the Person in whose name any Security shall be registered on the books and records of the Trust as the sole owner of such Security for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Security on the part of any Person, whether or not the Trust, the Trustees, the Paying Agent or the Registrar shall have actual or other notice thereof. SECTION 9.3 Book-Entry Interests. Global Preferred Securities shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of the Clearing Agency, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Preferred Securities, except as provided in Section 7.9. Unless and until definitive, fully registered Preferred Securities certificates have been issued to the Preferred Security Beneficial Owners pursuant to Section 7.9: (a) the provisions of this Section 9.3 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Declaration (including the payment of Distributions on the Global Preferred Securities and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole holder of the Global Preferred Security Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.3 conflict with any other provisions of this Declaration, the provisions of this Section 9.3 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants, including receiving and transmitting payments of Distributions on the Global Preferred Securities to such Clearing Agency Participants; provided, that solely for the purposes of determining whether the Holders of the requisite amount of Preferred Securities have voted on any matter provided for in this Declaration, so long as any Global Preferred Securities remain outstanding, the Trustees may conclusively rely on, and shall be protected in relying on, any written instrument (including a proxy) delivered to the Trustees by the Clearing Agency setting forth the Preferred Security Beneficial 33 39 Owners' votes or assigning the right to vote on any matter to any other Persons either in whole or in part. SECTION 9.4 Notices to Clearing Agency. Whenever a notice or other communication to the Preferred Security Holders is required under this Declaration, the Trustees shall give all such notices and communications specified herein to be given to the Holders of Global Preferred Securities to the Clearing Agency, and shall have no notice obligations to the Preferred Security Beneficial Owners. SECTION 9.5 Appointment of Successor Clearing Agency. If any Clearing Agency elects to discontinue its services as securities depositary with respect to the Preferred Securities, the Administrative Trustees may, in their sole discretion, appoint a successor Clearing Agency with respect to such Preferred Securities. ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 10.1 Liability. (a) Except as expressly set forth in this Declaration, the Preferred Securities Guarantee and the terms of the Securities, the Sponsor shall not be: (i) personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Securities, which shall be made solely from assets of the Trust; or (ii) required to pay to the Trust or to any Holder of Securities any deficit upon dissolution of the Trust or otherwise. (b) The Sponsor shall be liable for all of the debts and obligations of the Trust (other than with respect to the Securities) to the extent not satisfied out of the Trust's assets. (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of the Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. SECTION 10.2 Exculpation. (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence (or, in the case of the Property Trustee, negligence) or willful misconduct with respect to such acts or omissions. 34 40 (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid. SECTION 10.3 Fiduciary Duty. (a) To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Property Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person. (b) Unless otherwise expressly provided herein: (i) whenever a conflict of interest exists or arises between any Covered Person and any Indemnified Person; or (ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Securities, each Covered Person or Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (c) Whenever in this Declaration an Indemnified Person is permitted or required to make a decision: (i) in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or (ii) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Declaration or by applicable law. 35 41 SECTION 10.4 Indemnification and Expenses. (a) (i) The Sponsor shall indemnify, to the full extent permitted by law, any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was an Indemnified Person against expenses (including attorneys' fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (ii) The Sponsor shall indemnify, to the full extent permitted by law, any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was an Indemnified Person against expenses (including attorneys' fees and expenses) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper. (iii) To the extent that an Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim, issue or matter therein, he shall be indemnified, to the full extent permitted by law, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (iv) Any indemnification of an Administrative Trustee under paragraphs (i) and (ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Company Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (1) by the Administrative Trustees by a majority vote of a Quorum consisting of such Administrative Trustees who were not parties to such action, suit or proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion, or (3) by the Common Security Holder of the Trust. 36 42 (v) Expenses (including attorneys' fees and expenses) incurred by an Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as authorized in this Section 10.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor if a determination is reasonably and promptly made (i) by the Administrative Trustees by a majority vote of a Quorum of disinterested Administrative Trustees, (ii) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested Administrative Trustees so directs, by independent legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based upon the facts known to the Administrative Trustees, counsel or the Common Security Holder, as the case may be, at the time such determination is made, such Indemnified Person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Trust, or, with respect to any criminal proceeding, that such Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Administrative Trustees, independent legal counsel or Common Security Holder reasonably determine that such Person deliberately breached his duty to the Trust or its Common or Preferred Security Holders. (vi) The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Sponsor or Preferred Security Holders of the Trust or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 10.4(a) shall be deemed to be provided by a contract between the Sponsor and each Indemnified Person who serves in such capacity at any time while this Section 10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall not affect any rights or obligations then existing. (vii) The Sponsor or the Trust may purchase and maintain insurance on behalf of any Person who is or was a Company Indemnified Person against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Sponsor would have the power to indemnify him against such liability under the provisions of this Section 10.4(a). (viii) For purposes of this Section 10.4(a), references to "the Trust" shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any Person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 10.4(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued. (ix) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified, 37 43 continue as to a Person who has ceased to be an Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person. (b) To the fullest extent permitted by law, the Sponsor agrees to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware Trustee, and (iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Property Trustee and the Delaware Trustee (each of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified Person harmless against, any and all loss, liability, damage, claim or expense including taxes (other than taxes based on the income of such Fiduciary Indemnified Person) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 10.4(b) shall survive the satisfaction and discharge of this Declaration or the earlier resignation or removal of such Fiduciary Indemnified Person. (c) The Sponsor agrees to pay to the Trustees from time to time reasonable compensation for all services rendered by them hereunder and, except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Declaration (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith. SECTION 10.5 Outside Businesses. Any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee, subject to Section 5.3(c), may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates. ARTICLE XI ACCOUNTING SECTION 11.1 Fiscal Year. The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such other year as is required by the Code. 38 44 SECTION 11.2 Certain Accounting Matters. (a) At all times during the existence of the Trust, the Administrative Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified public accountants selected by the Administrative Trustees. (b) The Administrative Trustees shall cause to be prepared and delivered to each of the Holders of Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss. (c) The Administrative Trustees shall cause to be duly prepared and delivered to each of the Holders of Securities, any annual United States federal income tax information statement, required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Administrative Trustees shall endeavor to deliver all such information statements within 30 days after the end of each Fiscal Year of the Trust. (d) The Administrative Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Administrative Trustees on behalf of the Trust with any state or local taxing authority. SECTION 11.3 Banking. The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Property Trustee shall be made directly to the Property Trustee Account and no other funds of the Trust shall be deposited in the Property Trustee Account. The sole signatories for such accounts shall be designated by the Administrative Trustees; provided, however, that the Property Trustee shall designate the signatories for the Property Trustee Account. SECTION 11.4 Withholding. The Administrative Trustees on behalf of the Trust shall comply with all withholding requirements under United States federal, state and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Administrative Trustees on behalf of the Trust shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to Distributions or allocations to any Holder, the amount withheld shall be deemed to be a Distribution in the amount of the withholding to the Holder. In the event of any claimed over withholding, 39 45 Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding. ARTICLE XII AMENDMENTS AND MEETINGS SECTION 12.1 Amendments. (a) Except as otherwise provided in this Declaration or by any applicable terms of the Securities, this Declaration may only be amended by a written instrument executed by the Administrative Trustees (or if there are more than two Administrative Trustees, a majority of them) together with: (i) if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee; (ii) if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee; and (iii) if the amendment affects the rights, powers, duties, obligations or immunities of the Sponsor, the Sponsor. (b) No amendment shall be made, and any such purported amendment shall be void and ineffective: (i) unless, in the case of any proposed amendment, the Property Trustee shall have first received an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); (ii) unless, in the case of any proposed amendment which affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee shall have first received: (A) an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and (B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities), provided, however, that the Property Trustee shall not be required to sign any such amendment; or (iii) to the extent the result of such amendment would be to: (A) cause the Trust to fail to continue to be classified for purposes of United States federal income taxation as a grantor trust; 40 46 (B) reduce or otherwise adversely affect the rights, powers, duties or immunities of the Property Trustee in contravention of the Trust Indenture Act; or (C) cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act. (c) After the Trust has issued any Securities that remain outstanding, any amendment that would materially adversely affect the rights, privileges or preferences of any Holder of Securities may be effected only with such additional requirements as may be set forth in the terms of such Securities. (d) Section 10.1(c) and this Section 12.1 shall not be amended without the consent of all of the Holders of the Securities. (e) Article IV shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities. (f) The rights of the Holders of the Common Securities under Article V to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities. (g) Notwithstanding Section 12.1(c), this Declaration may be amended without the consent of the Holders of the Securities to: (i) cure any ambiguity, correct or supplement any provision in this Declaration that may be inconsistent with any other provision of this Declaration or to make any other provisions with respect to matters or questions arising under this Declaration which shall not be inconsistent with the other provisions of the Declaration; (ii) add to the covenants, restrictions or obligations of the Sponsor; and (iii) modify, eliminate or add to any provisions of the Declaration to such extent as shall be necessary to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust at all times that any Securities are outstanding or to ensure that the Trust will not be required to register as an Investment Company under the Investment Company Act; provided that no such amendment may be made pursuant to this Section 12.1(g) that adversely affects the Holders of the Preferred Securities in any material respect. SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent. (a) Meetings of the Holders of any class of Securities may be called at any time by the Administrative Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Declaration, the terms of the Securities or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading. The Administrative Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in Liquidation Amount of such class of Securities. Such direction shall be given by delivering to the Administrative Trustees one or more notices in writing stating that the signing Holders of Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of 41 47 Securities calling a meeting shall specify in writing the Security certificates held by the Holders of Securities exercising the right to call a meeting and only those Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met. (b) Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders of Securities: (i) notice of any such meeting shall be given to all the Holders of Securities having a right to vote thereat at least seven days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or required under this Declaration or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders of Securities owning not less than the minimum amount of Securities in Liquidation Amount that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Securities entitled to vote who have not consented in writing. The Administrative Trustees may specify that any written ballot submitted to the Security Holder for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Administrative Trustees; (ii) each Holder of a Security may authorize any Person to act for it by proxy on all matters in which a Holder of Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of Securities executing it. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation; (iii) each meeting of the Holders of the Securities shall be conducted by the Administrative Trustees or by such other Person that the Administrative Trustees may designate; and (iv) unless the Business Trust Act, this Declaration, the terms of the Securities, the Trust Indenture Act or the listing rules of any stock exchange on which the Preferred Securities are at the time listed or trading, otherwise provides, the Administrative Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, Quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote. 42 48 ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE SECTION 13.1 Representations and Warranties of Property Trustee. The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee's acceptance of its appointment as Property Trustee that: (a) The Property Trustee is a national banking association or a bank or trust company, duly organized, validly existing and in good standing under the laws of the United States or a State of the United States, as the case may be, with corporate power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration; (b) The execution, delivery and performance by the Property Trustee of the Declaration has been duly authorized by all necessary corporate action on the part of the Property Trustee. The Declaration has been duly executed and delivered by the Property Trustee and constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); (c) The execution, delivery and performance of this Declaration by the Property Trustee does not conflict with or constitute a breach of the charter or by-laws of the Property Trustee; and (d) No consent, approval or authorization of, or registration with or notice to, any federal or New York State banking authority is required for the execution, delivery or performance by the Property Trustee of this Declaration. SECTION 13.2 Representations and Warranties of Delaware Trustee. The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee that: (a) The Delaware Trustee is a Delaware banking corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration and has its principal place of business in the State of Delaware; (b) The execution, delivery and performance by the Delaware Trustee of this Declaration has been duly authorized by all necessary corporate action on the part of the Delaware Trustee. This Declaration has been duly executed and delivered by the Delaware Trustee and constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the 43 49 court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); (c) No consent, approval or authorization of, or registration with or notice to, any Delaware banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Declaration; and (d) The Delaware Trustee is a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware, and is a person that satisfies the requirements of Section 3807(a) of the Business Trust Act. ARTICLE XIV MISCELLANEOUS SECTION 14.1 Notices. All notices provided for in this Declaration shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows: (a) if given to the Trust, in care of the Administrative Trustees at the Trust's mailing address set forth below (or such other address as the Trust may give notice of to the Holders of the Securities): American General Capital I c/o American General Corporation 2929 Allen Parkway Houston, Texas 77019 Attention: Treasury Department Telecopy: (713) 522-3487 (b) if given to the Delaware Trustee, at the mailing address set forth below (or such other address as Delaware Trustee may give notice of to the Holders of the Securities): Bankers Trust (Delaware) E. A. Delle Donne Corporate Center Montgomery Building 1011 Centre Road, Suite 200 Wilmington, Delaware 19805-1266 Attention: M. Lisa Wilkins Telecopy: (302) 636-3222 (c) if given to the Property Trustee, at the Property Trustee's mailing address set forth below (or such other address as the Property Trustee may give notice of to the Holders of the Securities): Bankers Trust Company Four Albany Street New York, New York 10006 Attention: Corporate Trust and Agency Services - Corporate Market Services Telecopy: (212) 250-6961 44 50 (d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice to the Trust): American General Corporation 2929 Allen Parkway Houston, Texas 77019 Attention: Treasury Department Telecopy: (713) 522-3487 (e) if given to any other Holder, at the address set forth on the books and records of the Trust. All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 14.2 Governing Law. This Declaration and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. The provisions of Sections 3540 and 3561 of Title 12 of the Delaware Code shall not apply to this Trust. SECTION 14.3 Intention of the Parties. It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Declaration shall be interpreted to further this intention of the parties. SECTION 14.4 Headings. Headings contained in this Declaration are inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof. SECTION 14.5 Successors and Assigns. Whenever in this Declaration any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether or not so expressed. SECTION 14.6 Partial Enforceability. If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby. 45 51 SECTION 14.7 Counterparts. This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees and the Sponsor to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. 46 52 IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and year first above written. ----------------------------------------- Nicholas R. Rasmussen not in his individual capacity but solely as Administrative Trustee ----------------------------------------- James L. Gleaves not in his individual capacity but solely as Administrative Trustee ----------------------------------------- Gregory N. Picard not in his individual capacity but solely as Administrative Trustee BANKERS TRUST (DELAWARE) not in its individual capacity but solely as Delaware Trustee By: -------------------------------------- Name: ------------------------------------ BANKERS TRUST COMPANY not in its individual capacity but solely as Property Trustee By: -------------------------------------- Name: ------------------------------------ AMERICAN GENERAL CORPORATION, as Sponsor By: -------------------------------------- Nicholas R. Rasmussen Executive Vice President and Chief Financial Officer 47 53 ANNEX I TERMS OF 7 7/8% TRUST ORIGINATED PREFERRED SECURITIES 7 7/8% COMMON SECURITIES Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of September 8, 1999 (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and the Common Securities (collectively, the "Securities") are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the Indenture): 1. Designation and Number. (a) Preferred Securities. 8,000,000 Preferred Securities of the Trust, with an aggregate Liquidation Amount with respect to the assets of the Trust of TWO HUNDRED MILLION dollars ($200,000,000), and with a Liquidation Amount with respect to the assets of the Trust of $25.00 per security, are hereby designated for the purposes of identification only as "7 7/8% Trust Originated Preferred Securities" (the "Preferred Securities"). The certificates evidencing the Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange or quotation system on which the Preferred Securities are listed or quoted. (b) Common Securities. 247,423 Common Securities of the Trust with an aggregate Liquidation Amount with respect to the assets of the Trust of SIX MILLION ONE HUNDRED EIGHTY FIVE THOUSAND FIVE HUNDRED SEVENTY FIVE dollars ($6,185,575) and a Liquidation Amount with respect to the assets of the Trust of $25.00 per Security, are hereby designated for the purposes of identification only as "7 7/8% Common Securities" (the "Common Securities"). The certificates evidencing the Common Securities shall be substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. 2. Distributions. (a) Distributions payable on each Security will be fixed at a rate per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount of $25.00 per Security (the "Liquidation Amount"), such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarterly period will bear additional distributions thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions", as used herein, includes any such additional distributions unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds on hand legally available therefor. (b) Distributions on the Securities will be cumulative, will accumulate from the most recent date to which Distributions have been paid or, if no Distributions have been paid, from and including September 8, 1999, to but excluding the related Distribution Date (as defined below) or the date of redemption, and will be payable quarterly in arrears on March 31, June 30, September 30 and I-1 54 December 31 of each year, commencing on September 30, 1999, except as otherwise described below. The amount of Distributions payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months and for any period of less than a full calendar month on the basis of the actual number of days elapsed in such month. If any date on which Distributions are payable on the Securities is not a Business Day, then payment of the Distribution payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable (each date on which Distributions are payable in accordance with the foregoing, a "Distribution Date"). So long as no Event of Default (as defined in the Indenture) has occurred and is continuing, the Debenture Issuer has the right under the Indenture to defer the payment of interest on the Debentures by extending the interest payment period at any time and from time to time for a period not exceeding 20 consecutive quarterly periods, including the first such quarterly period during such period (each an "Extension Period"), provided that no Extension Period shall extend beyond the Maturity of the Debentures. Distributions will be deferred during any Extension Period. Notwithstanding such deferral, Distributions to which holders of Securities are entitled shall continue to accumulate additional Distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded quarterly from the relevant Distribution Dates during any Extension Period. Prior to the expiration of any Extension Period, the Debenture Issuer may further defer payments of interest by further extending such Extension Period; provided that such Extension Period, together with all previous and further extensions, if any, within such Extension Period, may not exceed 20 consecutive quarterly periods, including the first quarterly period during such Extension Period, or extend beyond the Maturity of the Debentures. Upon the expiration of any Extension Period (or any extension thereof) and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. Payments of Distributions that have accumulated but not been paid during any Extension Period will be payable to Holders as they appear on the books and records of the Trust on the record date for the first scheduled Distribution Date following the expiration of such Extension Period and prior to the commencement of any new Extension Period. As long as the Debentures are held by the Property Trustee, the Debenture Issuer must give the Property Trustee, the Administrative Trustees and the Debenture Trustee notice of its election of any Extension Period or any extension thereof at least five Business Days prior to the earlier of (i) the date the Distributions on the Preferred Securities would have been payable except for the election to begin or extend such Extension Period and (ii) the date the Administrative Trustees are required to give notice to any securities exchange on which the Preferred Securities are listed (or any other applicable self regulatory organization) or to Holders of the Preferred Securities of the record date or the date such Distributions are payable. If the Property Trustee is not the sole holder of the Debentures, the Debenture Issuer is required to give the holders of the Debentures and the Debenture Trustee written notice of its election of an Extension Period at least 10 Business days before the earlier of (i) the next succeeding interest payment date on the Debentures, or (ii) the date on which the Debenture Issuer is required to give notice of the record or payment date of such interest payment to any national securities exchange. There is no limitation on the number of times that the Debenture Issuer may elect to begin an Extension Period. (c) Distributions on the Securities will be payable to the Holders thereof as they appear on the books and records of the Trust on the record dates, which shall be the Business Day prior to the relevant Distribution date as long as the Preferred Securities are held in global form by a Clearing Agency, and the 15th day of the last month in each quarterly distribution period (even if not a I-2 55 Business Day) if the Preferred Securities are issued in certificated form. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment in respect of the Preferred Securities will be made as follows: (i) if the Preferred Securities are held in global form by a Clearing Agency (or its nominee), in accordance with the procedures of the Clearing Agency; and (ii) if the Preferred Securities are held in definitive form, by check mailed to the address of the Holder thereof as reflected in the records of the Registrar unless otherwise agreed by the Trust. The relevant record dates for the Common Securities shall be the same as the record dates for the Preferred Securities. Distributions payable on any Securities that are not punctually paid on any Distribution Date will cease to be payable to the Holder on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Securities are registered on the special record date or other specified date determined in accordance with the Indenture. (d) In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata (as defined herein) among the Holders of the Securities. 3. Liquidation Distribution Upon Dissolution. The Sponsor will have the right at any time to dissolve the Trust and cause the Debentures to be distributed to the Holders of the Trust Securities in Liquidation of the Trust. In the event of any dissolution of the Trust pursuant to Sections 8.1(a)(i), (ii), (iv) or (vi) of the Declaration, the Trust shall be liquidated by the Administrative Trustees as expeditiously as the Administrative Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to the Holders of the Securities a Like Amount (as defined below) of the Debentures, unless such Distribution is determined by the Property Trustee not to be practicable, in which event such Holders will be entitled to receive out of the assets of the Trust legally available for Distribution to Holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the aggregate of the Liquidation Amount of $25.00 per Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). "Like Amount" means (i) with respect to a redemption of the Securities, Securities having a Liquidation Amount equal to the principal amount of Debentures to be paid in accordance with their terms and (ii) with respect to a distribution of Debentures upon the dissolution of the Trust, Debentures having a principal amount equal to the Liquidation Amount of the Securities of the Holder to whom such Debentures are distributed. On and from the date fixed by the Administrative Trustees for any distribution of Debentures upon dissolution of the Trust: (i) the Securities will no longer be deemed to be outstanding; (ii) the Clearing Agency or its nominee, as the Holder of the Securities, will receive a registered global certificate or certificates representing the Debentures to be delivered upon such distribution; and (iii) any Securities not held by the Clearing Agency or its nominee will be deemed to represent beneficial interests in a Like Amount of Debentures, and bearing accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on such Securities, until such Securities are presented to the Registrar or its agent for cancellation, whereupon the Debenture Issuer will issue, and the Debenture Trustee will authenticate, a certificate representing such Debentures. If the Debentures are distributed to Holders of the Preferred Securities, pursuant to the terms of the Indenture, the Debenture Issuer will use its best efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange as the Preferred Securities were listed on immediately prior to the distribution of the Debentures. I-3 56 If, upon any such liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets on hand legally available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be paid on a Pro Rata basis. 4. Redemption and Distribution. (a) Upon the repayment of the Debentures on the Maturity thereof or the date of earlier redemption thereof prior thereto in accordance with the terms thereof (such redemption being either at the option of the Debenture Issuer on or after September 8, 2004 in whole or in part or at the option of the Debenture Issuer in whole but not in part prior to September 8, 2004 within 90 days after the occurrence of a Special Event as described below), the proceeds from such repayment or redemption shall be simultaneously applied by the Property Trustee (subject to the Property Trustee having received notice no later than 30 days prior to such repayment or redemption) to redeem a Like Amount of the Securities, on a Pro Rata basis in accordance with Section 9 hereof, at a redemption price equal to 100% of the Liquidation Amount of the Securities to be redeemed plus accumulated and unpaid Distributions thereon, if any, to the date of redemption (the "Redemption Price"). (b) If, at any time, a Tax Event or an Investment Company Event (each as defined below, and each a "Special Event") shall occur and be continuing the Debenture Issuer shall have the right, upon not less than 30 nor more than 60 days notice, to redeem the Debentures in whole but not in part before September 8, 2004, for cash within 90 days following the occurrence of such Special Event, and, following such redemption, Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis in accordance with Section 9 hereof. "Tax Event" means that the Administrative Trustees shall have received an opinion of an independent tax counsel experienced in such matters to the effect that, as a result of (i) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority affecting taxation, or (ii) any official or administrative pronouncement or action or judicial decision, interpreting or applying such laws or regulations, which amendment or change becomes effective or such pronouncement, action or decision is announced or occurs on or after September 2, 1999, there is more than an insubstantial risk that (A) the Trust is or, within 90 days of the date of such opinion, would be subject to United States federal income tax with respect to interest accrued or received on the Debentures, (B) interest payable by the Debenture Issuer on the Debentures is not or, within 90 days of the date of such opinion, would not be deductible, in whole or in part, by the Debenture Issuer for United States federal income tax purposes, or (C) the Trust is or, within 90 days of the date of such opinion, would be, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. "Investment Company Event" means that the Administrative Trustees shall have received an opinion of an independent counsel experienced in practice under the Investment Company Act to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an "Investment Company" that is required to be registered under the Investment Company Act, which Change in 1940 Act Law becomes effective on or after September 2, 1999. For the purpose of the preceding sentence, "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. I-4 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. I-5 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 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. I-7 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. I-8 61 If an Event of Default under the Declaration has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay principal of or premium, if any, or interest on the Debentures on the due date (including any Interest Payment Date or redemption date or the Maturity), then a Holder of Common Securities may institute a Direct Action for enforcement of payment to such Holder of the principal of or premium, if any, or interest on a Like Amount of Debentures on or after the respective due date specified in the Debentures. Except as provided in this paragraph, the Holders of Common Securities will not be able to exercise directly any other remedy available to the holders of the Debentures. Any approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent. The Administrative Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities. 8. Amendments to Declaration. In addition to the requirements set out in Section 12.1 of the Declaration, the Declaration may be amended by the Trustees and the Sponsor with (i) the consent of Holders representing a Majority in Liquidation Amount of all outstanding Securities, and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status as an investment company under the Investment Company Act, provided that, without the consent of each Holder of Securities, the Declaration may not be amended to (i) change the amount or timing of any Distribution or other payment on the Securities or otherwise adversely affect the amount of any Distribution or other payment required to be made in respect of the Securities as of a specified date, (ii) change the purpose of the Trust, (iii) authorize the issuance of any additional beneficial interests in the Trust, (iv) change the time or circumstances in which the Securities may be redeemed or the amount payable upon such a redemption, (v) change the Liquidation Distribution or other provisions relating to the timing or amount of such distribution, (vi) affect the limited liability of any Holder of Securities, or (vii) restrict the right of Holder of Securities to institute suit for the enforcement of any such payment on or after such date. 9. Pro Rata. A reference in these terms of the Securities to any payment, distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities according to the aggregate Liquidation Amount of the Securities held by the relevant Holder in relation to the aggregate Liquidation Amount of all Securities outstanding unless, in relation to any payment, an Event of Default under the Declaration has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate Liquidation Amount of Preferred Securities held by the relevant Holder relative to the aggregate Liquidation Amount of all Preferred Securities outstanding, and I-9 62 only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate Liquidation Amount of Common Securities held by the relevant Holder relative to the aggregate Liquidation Amount of all Common Securities outstanding. 10. Ranking. The Preferred Securities rank pari passu with the Common Securities and payment thereon shall be made Pro Rata with the Common Securities, except that, if an Event of Default under the Declaration occurs and is continuing, no payments in respect of Distributions on, or payments upon liquidation, redemption or otherwise with respect to, the Common Securities shall be made until the Holders of the Preferred Securities shall be paid in full the Distributions, Redemption Price, Liquidation Distribution and other payments to which they are entitled at such time. 11. Acceptance of Preferred Securities Guarantee and Indenture. Each Holder of Preferred Securities by the acceptance thereof, agrees to the provisions of the Preferred Securities Guarantee, including the subordination provisions therein and to the provisions of the Indenture. 12. No Preemptive Rights. The Holders of the Securities shall have no preemptive or similar rights to subscribe for any additional securities. 13. Miscellaneous. These terms constitute a part of the Declaration. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture (including any supplemental indenture) to a Holder without charge on written request to the Sponsor at its principal place of business. I-10 63 EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE [FORM OF FACE OF SECURITY] [IF THIS SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ITS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] Certificate Number Number of Preferred Securities CUSIP NO._______ Certificate Evidencing Preferred Securities of American General Capital I 7 7/8% Trust Originated Preferred Securities (Liquidation Amount $25.00 per Preferred Security) American General Capital I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that (the "Holder") is the registered owner of securities of the Trust representing undivided preferred beneficial interests in the assets of the Trust designated the 7 7/8% Trust Originated Preferred Securities (Liquidation Amount $25.00 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are set forth herein, on the reverse hereof and in the Amended and Restated Declaration of Trust of the Trust dated as of September 8, 1999, as the same may be amended from A1-1 64 time to time (the "Declaration"), and shall in all respects be subject to the provisions thereof, including the designation of the terms of the Preferred Securities as set forth in Annex I to the Declaration. Each capitalized term used but not defined herein or in any legend, form or certificate hereon shall have the meaning given to it in the Declaration. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to any Holder without charge upon written request to the Trust at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder and to the benefits of the Preferred Securities Guarantee to the extent provided therein. By its acceptance hereof, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial ownership in the Debentures. IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day of _____________. American General Capital I By: ------------------------------------ Name: ---------------------------------- Administrative Trustee PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Preferred Securities referred to in the within-mentioned Declaration. Dated: _________________ Bankers Trust Company as Property Trustee By: ------------------------------------ Authorized Signatory A1-2 65 [FORM OF REVERSE OF PREFERRED SECURITY] Distributions payable on each Preferred Security will be fixed at a rate per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount of $25.00 per Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarterly period will themselves accumulate distributions thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions", as used herein, includes any such additional distributions payable for any period unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds on hand legally available therefor. Distributions on the Preferred Securities will be cumulative, will accumulate from and including the most recent date to which Distributions have been paid or, if no Distributions have been paid, from and including September 8, 1999, to but excluding the related Distribution Date or any date fixed for redemption, and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 1999, except as otherwise described below and in the Declaration. Distributions payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any period of less than a full calendar month, the number of days elapsed in such month. So long as no Event of Default (as defined in the Indenture) has occurred and is continuing, the Debenture Issuer has the right under the Indenture to defer the payment of interest on the Debentures at any time and from time to time for a period not exceeding 20 consecutive quarterly periods, including the first such quarterly period during such period (each, an "Extension Period"), provided that no Extension Period shall extend beyond the Maturity of the Debentures. Distributions will be deferred during any Extension Period. Notwithstanding such deferral, Distributions to which holders of Securities are entitled shall continue to accumulate additional Distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded quarterly from the relevant Distribution Dates during any Extension Period. Prior to the expiration of any Extension Period, the Debenture Issuer may further defer payments of interest by further extending such Extension Period; provided that such Extension Period, together with all previous and further extensions, if any, within such Extension Period, may not exceed 20 consecutive quarterly periods, including the first quarterly period during such Extension Period, or extend beyond the Maturity of the Debentures. Upon the expiration of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. Subject to the conditions set forth in the Declaration and the Indenture, the Property Trustee shall, at the direction of the Sponsor, at any time dissolve the Trust and, after satisfaction of the liabilities to creditors of the Trust as provided by law, cause the Debentures to be distributed to the holders of the Securities in liquidation of the Trust or, simultaneously with any redemption of the Debentures, cause a Like Amount of the Securities to be redeemed by the Trust. The Preferred Securities shall be redeemable as provided in the Declaration on or after September 8, 2004 or earlier in certain circumstances upon the occurrence of a Special Event. A1-3 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 67 EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE THIS COMMON SECURITY CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS SET FORTH IN THE DECLARATION REFERRED TO HEREIN Certificate Number: Number of Common Securities: Certificate Evidencing Common Securities of American General Capital I 7 7/8% Common Securities (Liquidation Amount $25.00 per Common Security) American General Capital I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that American General Corporation (the "Holder") is the registered owner of _______common securities of the Trust representing undivided beneficial interests in the assets of the Trust designated the 7 7/8% Common Securities (Liquidation Amount $25.00 per Common Security) (the "Common Securities"). The Common Securities are not transferable except as set forth in the Declaration described below. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are set forth herein, on the reverse hereof and in the Amended and Restated Declaration of Trust of the Trust dated as of September 8, 1999, as the same may be amended from time to time (the "Declaration"), and shall in all respects be subject to the provisions thereof, including the designation of the terms of the Common Securities as set forth in Annex I to the Declaration. Each capitalized term used but not defined herein or in any legend, form or certificate hereon shall have the meaning given to it in the Declaration. The Sponsor will provide a copy of the Declaration and the Indenture (including any supplemental indenture) to any Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Sponsor is bound by the Declaration and is entitled to the benefits thereunder to the extent provided therein. By its acceptance hereof, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Securities as evidence of indirect beneficial ownership in the Debentures. IN WITNESS WHEREOF, the Trust has executed this certificate this _______ day of _____________, ___. AMERICAN GENERAL CAPITAL I By: ------------------------------------ Name: ---------------------------------- Administrative Trustee A2-1 68 [FORM OF REVERSE OF COMMON SECURITY] Distributions payable on each Common Security will be fixed at a rate per annum of 7 7/8% (the "Coupon Rate") of the Liquidation Amount of $25.00 per Common Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarterly period will themselves accumulate distributions thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions", as used herein, includes any such additional distributions payable for any period unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds on hand legally available therefor. Distributions on the Common Securities will be cumulative, will accumulate from and including the most recent date to which Distributions have been paid or, if no Distributions have been paid, from and including September 8, 1999, to but excluding the related Distribution Date or any date fixed for redemption, and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 1999, except as otherwise described below and in the Declaration. Distributions payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any period of less than a full calendar month, the number of days elapsed in such month. So long as no Event of Default (as defined in the Indenture) has occurred and is continuing, the Debenture Issuer has the right under the Indenture to defer the payment of interest on the Debentures at any time and from time to time for a period not exceeding 20 consecutive quarterly periods, including the first such quarterly period during such period (each, an "Extension Period"), provided that no Extension Period shall extend beyond the Maturity of the Debentures. Distributions will be deferred during any Extension Period. Notwithstanding such deferral, Distributions to which holders of Securities are entitled shall continue to accumulate additional Distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded quarterly from the relevant Distribution Dates during any Extension Period. Prior to the expiration of any Extension Period, the Debenture Issuer may further defer payments of interest by further extending such Extension Period; provided that such Extension Period, together with all previous and further extensions, if any, within such Extension Period, may not exceed 20 consecutive quarterly periods, including the first quarterly period during such Extension Period, or extend beyond the Maturity of the Debentures. Upon the expiration of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. Subject to the conditions set forth in the Declaration and the Indenture, the Property Trustee shall, at the direction of the Sponsor, at any time dissolve the Trust and, after satisfaction of the liabilities to creditors of the Trust as provided by law, cause the Debentures to be distributed to the holders of the Securities in liquidation of the Trust or, simultaneously with any redemption of the Debentures, cause a Like Amount of the Securities to be redeemed by the Trust. The Common Securities shall be redeemable as provided in the Declaration on or after September 8, 2004 or earlier in certain circumstances upon the occurrence of a Special Event. EX-4.5 6 PREFERRED SECURITIES GUARANTEE AGREEMENT 1 EXHIBIT 4.5 ================================================================================ ---------------------- PREFERRED SECURITIES GUARANTEE AGREEMENT between AMERICAN GENERAL CORPORATION (as Guarantor) and Bankers Trust Company (as Preferred Securities Guarantee Trustee) Relating to Preferred Securities of AMERICAN GENERAL CAPITAL I Dated as of September 8, 1999 ---------------------- ================================================================================ 2 CROSS-REFERENCE TABLE* Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - -------------------------------------------------------------------------------- 310(a)....................................................................4.1(a) 310(b).............................................................. 4.1(c), 2.8 310(c) .............................................................Inapplicable 311(a) ...................................................................2.2(b) 311(b) ...................................................................2.2(b) 311(c) .............................................................Inapplicable 312(a) ...................................................................2.2(a) 312(b) ...................................................................2.2(b) 313 .........................................................................2.3 314(a) ......................................................................2.4 314(b) ............................................................ Inapplicable 314(c) ......................................................................2.5 314(d) ............................................................ Inapplicable 314(e) ............................................................1.1, 2.5, 3.2 314(f) .................................................................2.1, 3.2 315(a) .................................................................. 3.1(d) 315(b) ......................................................................2.7 315(c) ......................................................................3.1 315(d) .......................................... ........................3.1(d) 316(a) ............................................................1.1, 2.6, 5.4 316(b) ......................................................................5.3 316(c) .............................................................Inapplicable 317(a) ............................................................ Inapplicable 317(b) ............................................................ Inapplicable 318(a) .................................................................. 2.1(b) 318(b) ......................................................................2.1 318(c) ...................................................................2.1(b) * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. 3 TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS AND INTERPRETATION SECTION 1.1 Definitions and Interpretation.......................................................-1- ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application.....................................................-4- SECTION 2.2 Lists of Holders of Preferred Securities.............................................-4- SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee................................-5- SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee...........................-5- SECTION 2.5 Evidence of Compliance with Conditions Precedent.....................................-5- SECTION 2.6 Events of Default; Waiver............................................................-5- SECTION 2.7 Event of Default; Notice.............................................................-6- SECTION 2.8 Conflicting Interests................................................................-6- ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee......................-6- SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee.............................-8- SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee...........................................................................-10- ARTICLE IV PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility.................................-10- SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities Guarantee Trustee.............................................................................-11- ARTICLE V GUARANTEE SECTION 5.1 Guarantee...........................................................................-12- SECTION 5.2 Waiver of Notice and Demand.........................................................-12- SECTION 5.3 Obligations Not Affected............................................................-12- SECTION 5.4 Rights of Holders...................................................................-13- SECTION 5.5 Guarantee of Payment................................................................-14- SECTION 5.6 Subrogation.........................................................................-14- SECTION 5.7 Independent Obligations.............................................................-14- ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.1 Limitation of Transactions..........................................................-14- SECTION 6.2 Ranking.............................................................................-15-
i 4 ARTICLE VII TERMINATION SECTION 7.1 Termination.........................................................................-15- ARTICLE VIII INDEMNIFICATION SECTION 8.1 Exculpation.........................................................................-16- SECTION 8.2 Indemnification.....................................................................-16- ARTICLE IX MISCELLANEOUS SECTION 9.1 Successors and Assigns..............................................................-16- SECTION 9.2 Amendments..........................................................................-17- SECTION 9.3 Notices.............................................................................-17- SECTION 9.4 Benefit.............................................................................-18- SECTION 9.5 Governing Law.......................................................................-18- SECTION 9.6 Counterparts........................................................................-18-
ii 5 PREFERRED SECURITIES GUARANTEE AGREEMENT THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as of September 8, 1999, is executed and delivered by American General Corporation, a Texas corporation (the "Guarantor"), and Bankers Trust Company, a New York banking corporation, as trustee (the "Preferred Securities Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of American General Capital I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of the date hereof, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof 8,000,000 preferred securities, having an aggregate liquidation amount of $200,000,000, such preferred securities being designated the 7 7/8% Trust Originated Preferred Securities (the "Preferred Securities"). WHEREAS, as incentive for the Holders to purchase the Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Preferred Securities Guarantee, to pay to the Holders of the Preferred Securities the Guarantee Payments (as defined below) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the Guarantor executes and delivers this Preferred Securities Guarantee for the benefit of the Holders. ARTICLE I DEFINITIONS AND INTERPRETATION SECTION 1.1 Definitions and Interpretation In this Preferred Securities Guarantee, unless the context otherwise requires: (a) capitalized terms used in this Preferred Securities Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1; (b) terms defined in the Declaration as at the date of execution of this Preferred Securities Guarantee have the same meaning when used in this Preferred Securities Guarantee unless otherwise defined in this Preferred Securities Guarantee; (c) a term defined anywhere in this Preferred Securities Guarantee has the same meaning throughout; (d) all references to "the Preferred Securities Guarantee" or "this Preferred Securities Guarantee" are to this Preferred Securities Guarantee as modified, supplemented or amended from time to time; -1- 6 (e) all references in this Preferred Securities Guarantee to Articles and Sections are to Articles and Sections of this Preferred Securities Guarantee, unless otherwise specified; (f) a term defined in the Trust Indenture Act has the same meaning when used in this Preferred Securities Guarantee, unless otherwise defined in this Preferred Securities Guarantee or unless the context otherwise requires; and (g) a reference to the singular includes the plural and vice versa. "Affiliate" has the same meaning as given to that term in Rule 405 under the Securities Act of 1933, as amended, or any successor rule thereunder. "Business Day" means any day other than a Saturday or a Sunday or a day on which banking institutions in New York, New York are authorized or required by law or executive order to close. "Corporate Trust Office" means the office of the Preferred Securities Guarantee Trustee at which the corporate trust business of the Preferred Securities Guarantee Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Agreement is located at Four Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency Group - Corporate Market Services. "Covered Person" means any Holder or beneficial owner of Preferred Securities. "Debentures" means the series of junior subordinated debt securities of the Guarantor designated the 7 7/8% Junior Subordinated Debentures due 2048 held by the Property Trustee (as defined in the Declaration) of the Issuer. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Preferred Securities Guarantee. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as defined in the Declaration) that are required to be paid on such Preferred Securities, to the extent the Issuer has funds on hand legally available therefor, (ii) the redemption price with respect to any Preferred Securities called for redemption by the Issuer, including all accumulated and unpaid Distributions to the date of redemption (the "Redemption Price"), to the extent the Issuer has funds on hand legally available therefor, and (iii) upon a voluntary or involuntary termination and liquidation of the Issuer (other than in connection with the distribution of Debentures to the Holders in exchange for Preferred Securities as provided in the Declaration), the lesser of (a) the Liquidation Distribution (as defined in the Declaration), and (b) the amount of assets of the Issuer remaining available for distribution to Holders of Preferred Securities. -2- 7 "Holder" shall mean any holder, as registered on the books and records of the Issuer, of any Preferred Securities; provided, however, that, in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indemnified Person" means the Preferred Securities Guarantee Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Preferred Securities Guarantee Trustee. "Indenture" means the Junior Subordinated Indenture, dated as of November 15, 1997, between the Guarantor (the "Debenture Issuer") and Bankers Trust Company, as trustee, as amended or supplemented, pursuant to which the Debentures are to be issued to the Property Trustee of the Issuer. "List of Holders" has the meaning set forth in Section 2.2. "Majority in Liquidation Amount of the Preferred Securities" means, except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred Securities, voting separately as a class, of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) of all Preferred Securities. "Officers' Certificate" means a certificate signed by the Chairman, any Vice Chairman, the President, any Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Preferred Securities Guarantee shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (c) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Other Guarantees" means (i) guarantees issued by the Guarantor with respect to preferred securities (if any) similar to the Preferred Securities issued by other trusts established or to be established by the Guarantor (if any), in each case similar to the Issuer, including the guarantees issued by the Guarantor with respect to the preferred securities issued by American General Institutional Capital A and American General Institutional Capital B and (ii) guarantees by the Guarantor relating to the preferred securities of American General Capital, L.L.C. and American General Delaware, L.L.C. -3- 8 "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, government or any agency or political subdivision thereof, or any other entity of whatever nature. "Preferred Securities Guarantee Trustee" means Bankers Trust Company, a New York banking corporation, until a Successor Preferred Securities Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Preferred Securities Guarantee and thereafter means each such Successor Preferred Securities Guarantee Trustee. "Responsible Officer" means, with respect to the Preferred Securities Guarantee Trustee, any officer within the Corporate Trust Office of the Preferred Securities Guarantee Trustee, including any vice president, any assistant vice president, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of the Preferred Securities Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Successor Preferred Securities Guarantee Trustee" means a successor Preferred Securities Guarantee Trustee possessing the qualifications to act as Preferred Securities Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application (a) This Preferred Securities Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Preferred Securities Guarantee and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Preferred Securities Guarantee limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.2 Lists of Holders of Preferred Securities (a) The Guarantor shall provide the Preferred Securities Guarantee Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the registrar of the Preferred Securities) with a list, in such form as the Preferred Securities Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Preferred Securities ("List of Holders"), (i) within 14 days after each record date for the payment of Distributions on the Preferred Securities as of such date, and (ii) at any other time within 30 days of receipt -4- 9 by the Guarantor of a written request for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Preferred Securities Guarantee Trustee; provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Preferred Securities Guarantee Trustee by the Guarantor. The Preferred Securities Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Preferred Securities Guarantee Trustee shall comply with its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act. SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee Within 60 days after December 31 of each year, commencing December 31, 1999, the Preferred Securities Guarantee Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee The Guarantor shall provide to the Preferred Securities Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 2.5 Evidence of Compliance with Conditions Precedent The Guarantor shall provide to the Preferred Securities Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Preferred Securities Guarantee that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. SECTION 2.6 Events of Default; Waiver The Holders of a Majority in Liquidation Amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. -5- 10 SECTION 2.7 Event of Default; Notice (a) The Preferred Securities Guarantee Trustee shall, within 90 days after the occurrence of a default with respect to this Preferred Securities Guarantee, mail by first class postage prepaid, to all Holders of the Preferred Securities, notices of all defaults actually known to a Responsible Officer of the Preferred Securities Guarantee Trustee, unless such defaults have been cured before the giving of such notice; provided that except in the case of default in the payment of any Guarantee Payment, the Preferred Securities Guarantee Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Preferred Securities Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities. (b) The Preferred Securities Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Preferred Securities Guarantee Trustee shall have received written notice, or a Responsible Officer of the Preferred Securities Guarantee Trustee charged with the administration of this Preferred Securities Guarantee shall have obtained actual knowledge, of such Event of Default. SECTION 2.8 Conflicting Interests The Declaration shall be deemed to be specifically described in this Preferred Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee (a) This Preferred Securities Guarantee shall be held by the Preferred Securities Guarantee Trustee for the benefit of the Holders of the Preferred Securities, and the Preferred Securities Guarantee Trustee shall not transfer this Preferred Securities Guarantee to any Person except a Holder of Preferred Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Preferred Securities Guarantee Trustee on acceptance by such Successor Preferred Securities Guarantee Trustee of its appointment to act as Successor Preferred Securities Guarantee Trustee. The right, title and interest of the Preferred Securities Guarantee Trustee shall automatically vest in any Successor Preferred Securities Guarantee Trustee, and such vesting and succession of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Preferred Securities Guarantee Trustee. (b) If an Event of Default actually known to a Responsible Officer of the Preferred Securities Guarantee Trustee has occurred and is continuing, the Preferred -6- 11 Securities Guarantee Trustee shall enforce this Preferred Securities Guarantee for the benefit of the Holders of the Preferred Securities. (c) The Preferred Securities Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants shall be read into this Preferred Securities Guarantee against the Preferred Securities Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known to a Responsible Officer of the Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee Trustee shall exercise such of the rights and powers vested in it by this Preferred Securities Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Preferred Securities Guarantee shall be construed to relieve the Preferred Securities Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Preferred Securities Guarantee Trustee shall be determined solely by the express provisions of this Preferred Securities Guarantee, and the Preferred Securities Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants or obligations shall be read into this Preferred Securities Guarantee against the Preferred Securities Guarantee Trustee; and (B) in the absence of bad faith on the part of the Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Preferred Securities Guarantee Trustee and conforming to the requirements of this Preferred Securities Guarantee; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Preferred Securities Guarantee; (ii) the Preferred Securities Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Securities Guarantee Trustee, unless it shall be proved that the Preferred Securities -7- 12 Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Preferred Securities Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Securities Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Securities Guarantee Trustee under this Preferred Securities Guarantee; and (iv) no provision of this Preferred Securities Guarantee shall require the Preferred Securities Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Preferred Securities Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Preferred Securities Guarantee or indemnity, reasonably satisfactory to the Preferred Securities Guarantee Trustee, against such risk or liability is not reasonably assured to it. SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee (a) Subject to the provisions of Section 3.1: (i) the Preferred Securities Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Guarantor contemplated by this Preferred Securities Guarantee shall be sufficiently evidenced by an Officers' Certificate; (iii) whenever, in the administration of this Preferred Securities Guarantee, the Preferred Securities Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Preferred Securities Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor; (iv) the Preferred Securities Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or registration thereof); -8- 13 (v) the Preferred Securities Guarantee Trustee may consult with legal counsel of its selection, and the written advice or opinion of such legal counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Preferred Securities Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Preferred Securities Guarantee from any court of competent jurisdiction; (vi) the Preferred Securities Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Preferred Securities Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Preferred Securities Guarantee Trustee such security and indemnity, reasonably satisfactory to the Preferred Securities Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses and the expenses of the Preferred Securities Guarantee Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Preferred Securities Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Preferred Securities Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Preferred Securities Guarantee; (vii) the Preferred Securities Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Preferred Securities Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (viii) the Preferred Securities Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Preferred Securities Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (ix) any action taken by the Preferred Securities Guarantee Trustee or its agents hereunder shall bind the Holders of the Preferred Securities, and the signature of the Preferred Securities Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Preferred Securities Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Preferred Securities Guarantee, both of which shall be conclusively evidenced by the Preferred Securities Guarantee Trustee's or its agent's taking such action; -9- 14 (x) whenever in the administration of this Preferred Securities Guarantee the Preferred Securities Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Preferred Securities Guarantee Trustee (i) may request instructions from the Holders of a Majority in Liquidation Amount of the Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (iii) shall be protected in conclusively relying on or acting in accordance with such instructions; and (xi) the Preferred Securities Guarantee Trustee shall not be liable for any action taken or omitted to be taken by it in good faith, without negligence, and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Preferred Securities Guarantee. (b) No provision of this Preferred Securities Guarantee shall be deemed to impose any duty or obligation on the Preferred Securities Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Preferred Securities Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Preferred Securities Guarantee Trustee shall be construed to be a duty. SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee The recitals contained in this Preferred Securities Guarantee shall be taken as the statements of the Guarantor, and the Preferred Securities Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Securities Guarantee Trustee makes no representation as to the validity or sufficiency of this Preferred Securities Guarantee. ARTICLE IV PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility (a) There shall at all times be a Preferred Securities Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to -10- 15 supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Preferred Securities Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Securities Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Preferred Securities Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities Guarantee Trustee (a) Subject to Section 4.2(b), the Preferred Securities Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor except during an Event of Default. (b) The Preferred Securities Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Securities Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Securities Guarantee Trustee and delivered to the Guarantor. (c) The Preferred Securities Guarantee Trustee shall hold office until a Successor Preferred Securities Guarantee Trustee shall have been appointed or until its removal or resignation. The Preferred Securities Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Preferred Securities Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Securities Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Securities Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Securities Guarantee Trustee. (d) If no Successor Preferred Securities Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery of an instrument of removal or resignation, the Preferred Securities Guarantee Trustee resigning or being removed may petition any court of competent jurisdiction for appointment of a Successor Preferred Securities Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Securities Guarantee Trustee. -11- 16 (e) No Preferred Securities Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Preferred Securities Guarantee Trustee. (f) Upon termination of this Preferred Securities Guarantee or removal or resignation of the Preferred Securities Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Preferred Securities Guarantee Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to the date of such termination, removal or resignation. ARTICLE V GUARANTEE SECTION 5.1 Guarantee The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim that the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.2 Waiver of Notice and Demand The Guarantor hereby waives notice of acceptance of this Preferred Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.3 Obligations Not Affected The obligations, covenants, agreements and duties of the Guarantor under this Preferred Securities Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation -12- 17 Distribution or other sum payable that results from the extension of any interest payment period on the Debentures permitted by the Indenture); (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor with respect to the Guarantee Payments shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.4 Rights of Holders (a) The Holders of a Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Securities Guarantee Trustee in respect of this Preferred Securities Guarantee or exercising any trust or power conferred upon the Preferred Securities Guarantee Trustee under this Preferred Securities Guarantee. (b) Any Holder of Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce the Preferred Securities Guarantee Trustee's rights under this Preferred Securities Guarantee, without first instituting a legal proceeding against the Issuer, the Preferred Securities Guarantee Trustee or any other person or entity. The Guarantor waives any right or remedy to require that any action be brought first against the Issuer or any other person or entity before proceeding directly against the Guarantor. -13- 18 SECTION 5.5 Guarantee of Payment This Preferred Securities Guarantee creates a guarantee of payment and not of collection. This Preferred Securities Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of Debentures to Holders as provided in the Declaration. SECTION 5.6 Subrogation The Guarantor shall be subrogated to all (if any) rights of the Holders of Preferred Securities against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Preferred Securities Guarantee; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Preferred Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Preferred Securities Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.7 Independent Obligations The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof. ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.1 Limitation of Transactions So long as any Preferred Securities remain outstanding, the Guarantor shall not, and shall not permit any subsidiary of the Guarantor to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Guarantor's capital stock, (ii) make any payment of principal, interest or premium, if any, on, or repay or repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the Debentures or (iii) make any guarantee payments with respect to any guarantee by the Guarantor of the debt securities of any subsidiary of the Guarantor if such guarantee ranks pari passu or junior in interest to the Debentures (other than (a) dividends or distributions in shares of, or options, warrants, rights to subscribe for or purchase shares of, common stock of the Guarantor, (b) any declaration of a dividend in connection with the implementation or extension of a stockholder's rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under this Preferred Securities Guarantee, (d) as a result of a reclassification of the Guarantor's capital stock or the -14- 19 exchange or the conversion of one class or series of the Guarantor's capital stock for another class or series of the Guarantor's capital stock, (e) the purchase of fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, and (f) acquisitions of common stock of the Guarantor in connection with the satisfaction of its obligations under any benefit plan for its directors, officers or employees), if at such time (i) there shall have occurred and be continuing any event of which the Guarantor has actual knowledge (a) that is, or with the giving of notice or the lapse of time, or both, would be an Event of Default under the Indenture and (b) in respect of which the Guarantor shall not have taken reasonable steps to cure, (ii) the Guarantor shall be in default with respect to its payment of any obligations under this Preferred Securities Guarantee or (iii) the Guarantor shall have given notice of its election of an Extension Period (as defined in the Indenture) pursuant to the terms of the Debentures and shall not have rescinded such notice, and any such Extension Period, or any extension thereof, shall be continuing. SECTION 6.2 Ranking This Preferred Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to Senior Indebtedness (as defined in the Indenture), to the same extent and in the same manner that the Debentures are subordinated to Senior Indebtedness pursuant to the Indenture, it being understood that the terms of Article XIII of the Indenture shall apply to the obligations of the Guarantor under this Preferred Securities Guarantee as if (x) such Article XIII were set forth herein in full and (y) such obligations were substituted for the term "Securities" appearing in such Article XIII, and (ii) pari passu with the Debentures and with any Other Guarantee. ARTICLE VII TERMINATION SECTION 7.1 Termination This Preferred Securities Guarantee shall terminate and be of no further force and effect upon (i) full payment of the Redemption Price (as defined in the Declaration) of all Preferred Securities, (ii) the distribution of the Debentures to the Holders of all of the Preferred Securities, or (iii) full payment of the amounts payable in accordance with the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Preferred Securities must restore payment of any sums paid under the Preferred Securities or under this Preferred Securities Guarantee. -15- 20 ARTICLE VIII INDEMNIFICATION SECTION 8.1 Exculpation (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Preferred Securities Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Preferred Securities might properly be paid. SECTION 8.2 Indemnification The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this Preferred Securities Guarantee or resignation or removal of the Preferred Securities Guarantee Trustee. ARTICLE IX MISCELLANEOUS SECTION 9.1 Successors and Assigns All guarantees and agreements contained in this Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. -16- 21 SECTION 9.2 Amendments Except with respect to any changes that do not materially adversely affect the rights of Holders (in which case no consent of Holders will be required), this Preferred Securities Guarantee may only be amended with the prior approval of the Holders of a Majority in Liquidation Amount of the Preferred Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders of the Preferred Securities apply to the giving of such approval. SECTION 9.3 Notices All notices provided for in this Preferred Securities Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows: (a) If given to the Issuer, in care of the Administrative Trustees at the Issuer's mailing address set forth below: American General Capital I c/o American General Corporation 2929 Allen Parkway Houston, Texas 77019-2155 Attention: Treasury Department Telecopy: (713) 522-3847 (b) If given to the Preferred Securities Guarantee Trustee, at the Preferred Securities Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Securities Guarantee Trustee may give notice of to the Holders of the Preferred Securities): Bankers Trust Company Four Albany Street New York, New York 10006 Attention: Corporate Trust and Agency Services - Corporate Market Services Telecopy: (212) 250-6961 (c) If given to the Guarantor, at the Guarantor's mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders of the Preferred Securities): American General Corporation 2929 Allen Parkway Houston, Texas 77019-2155 Attention: Treasury Department Telecopy: (713) 522-3847 -17- 22 (d) If given to any Holder of Preferred Securities, at the address set forth on the books and records of the Issuer. All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 9.4 Benefit This Preferred Securities Guarantee is solely for the benefit of the Holders of the Preferred Securities and, subject to Section 3.1(a), is not separately transferable from the Preferred Securities. SECTION 9.5 Governing Law THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. SECTION 9.6 Counterparts. This Preferred Securities Guarantee may contain more than one counterpart of the signature page and this Preferred Securities Guarantee may be executed by the affixing of the signature of each of the parties to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. -18- 23 THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year first above written. AMERICAN GENERAL CORPORATION, as Guarantor By: -------------------------------------- Name: Nicholas R. Rasmussen Title: Executive Vice President and Chief Financial Officer BANKERS TRUST COMPANY, as Preferred Securities Guarantee Trustee By: -------------------------------------- Name: ------------------------------------ Title: ----------------------------------- -19- EX-8.1 7 OPINION OF VINSON & ELKIN L.L.P. 1 EXHIBIT 8.1 [LETTERHEAD OF VINSON & ELKINS L.L.P.] September 8, 1999 American General Corporation 2929 Allen Parkway Houston, Texas 77019-2155 Ladies and Gentlemen: We have acted as counsel to American General Corporation, a Texas corporation ("American General"), and American General Capital I, a Delaware statutory business trust (the "Trust") in connection with the registration statement under the Securities Act of 1933, as amended, of American General and the Trust (and other trusts) on Form S-3 (Registration Nos. 333-40583, et. seq.) filed with the Securities and Exchange Commission (the "Commission") and declared effective by the Commission on February 10, 1998 (as amended, the "Registration Statement"). In that connection, reference is made to a prospectus dated February 10, 1998 (the "Prospectus") constituting a part of the Registration Statement relating to, among other things, junior subordinated debentures of American General and a prospectus supplement to the Prospectus dated September 2, 1999 (the "Prospectus Supplement") describing the 7 7/8% Trust Originated Preferred Securities of the Trust (the "Preferred Securities") and the 7 7/8% Junior Subordinated Debentures due 2048 of American General (the "Junior Subordinated Debentures"). Capitalized terms not otherwise defined herein have the meaning specified in the Prospectus and the Prospectus Supplement. We have examined the Prospectus, the Prospectus Supplement, and such other documents and corporate records as we have deemed necessary or appropriate for purposes of this opinion, and we have assumed that the Junior Subordinated Debentures and the Preferred Securities will be issued in full compliance with the operative documents described in the Prospectus and the Prospectus Supplement. Based on the facts and assumptions contained in the Prospectus Supplement, in our opinion (i) the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation, (ii) the Junior Subordinated Debentures will be classified for United States federal income tax purposes as indebtedness of American General, and (iii) the statements of legal conclusion set forth under the heading "Certain United States Federal Income Tax Consequences" in the Prospectus Supplement reflect our opinions 2 American General Corporation Page 2 September 8, 1999 with respect to the material United States federal income tax consequences of the ownership and disposition of the Preferred Securities. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this Firm in the section captioned "Certain United States Federal Income Tax Consequences" in the Prospectus Supplement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder. Very truly yours, VINSON & ELKINS L.L.P. -----END PRIVACY-ENHANCED MESSAGE-----