-----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, RBAl2C7HZ8Cj7evsH15plG4OoPqP5RLu9Fq3eccflaahTRNmpsfKFtUfHR/Jtcqt J1D9+yJB0H/BZtGM5OBl2w== 0000950103-96-001181.txt : 19961107 0000950103-96-001181.hdr.sgml : 19961107 ACCESSION NUMBER: 0000950103-96-001181 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19961031 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961106 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA INC CENTRAL INDEX KEY: 0000054727 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 860176061 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04618 FILM NUMBER: 96655308 BUSINESS ADDRESS: STREET 1: 1 SUNAMERICA CENTER CITY: LOS ANGELES STATE: CA ZIP: 90067-6022 BUSINESS PHONE: 3107726000 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD INC DATE OF NAME CHANGE: 19890515 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD BUILDING CO DATE OF NAME CHANGE: 19711006 8-K 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) October 31, 1996 SUNAMERICA INC. (Exact name of registrant as specified in charter) Maryland 1-4618 86-0176061 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1 SunAmerica Center, Los Angeles, California 90067-6022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 772-6000 ============================================================================== ITEM 5. Other Events. Exhibits are filed herewith in connection with (A) the issuance by SunAmerica Inc. (the "Company") pursuant to the Company's Registration Statement on Form S-3 (File No. 333-14201) of (i) 11,500,000 Premium Equity Redemption Cumulative Security Units, 8 1/2% PERCS Units (the "PERCS Units"), (ii) $375,000,000 principal amount of 6.20% Notes due October 31, 1999 (the "Series 1 Notes") and (iii) $56,250,000 principal amount of 6.20% Notes due October 31, 1999, Series 2 (the "Series 2 Notes") and (B) the execution and delivery of an indenture supplement to the Junior Subordinated Indenture dated March 15, 1995 between the Company and The First National Bank of Chicago as Trustee. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. EXHIBITS Exhibit 1.1 - Underwriting Agreement dated October 31, 1996 among the Company and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and Smith Barney Inc., as representatives of the Underwriters named therein, relating to the PERCS Units Exhibit 1.2 - First Amendment to the Underwriting Agreement filed as Exhibit 1.1 Exhibit 1.3 - Underwriting Agreement dated October 31, 1996 among the Company and Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated relating to the Series 1 Notes. Exhibit 1.4 - Underwriting Agreement dated November 4, 1996 among the Company and Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated relating to the Series 2 Notes Exhibit 4.1 - Form of Series 1 Note Exhibit 4.2 - Form of Series 2 Note Exhibit 4.3 - Purchase Contract Agreement dated November 6, 1996 between the Company and The Bank of New York, as Purchase Contract Agent (including Form of Security Certificate) Exhibit 4.4 - Pledge Agreement dated November 6, 1996 among the Company, The First National Bank of Chicago, as Collateral Agent, and The Bank of New York, as Purchase Contract Agent Exhibit 4.5 - Prepaid Securities Indenture dated November 1, 1996 between the Company and The Bank of New York, as Trustee Exhibit 4.6 - Supplemental Indenture dated November 6, 1996 to the Prepaid Securities Indenture (including Form of Certificate for the Prepaid Securities) Exhibit 4.7 - Supplemental Indenture dated October 28, 1996 to the Senior Indenture dated April 15, 1993, as amended by the indenture supplement dated June 28, 1993, between the Company and The First National Bank of Chicago, as Trustee Exhibit 4.8 - Supplemental Indenture dated October 28, 1996 to the Junior Subordinated Indenture dated March 15, 1995 between the Company and The First National Bank of Chicago, as Trustee. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUNAMERICA INC. Date: October 31, 1996 By: /s/ Susan L. Harris Susan L. Harris Senior Vice President and Secretary EX-1.1 2 EXHIBIT 1.1 SunAmerica Inc. 8.5% Premium Equity Redemption Cumulative Security Units - PERCS Units (Stated Amount $37.50 Per Security) UNDERWRITING AGREEMENT October 31, 1996 Morgan Stanley & Co. Incorporated Merrill Lynch, Pierce, Fenner & Smith Incorporated Goldman, Sachs & Co. Smith Barney Inc. As Representatives (the "Representatives") of the several Underwriters c/o Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs: SunAmerica Inc., a Maryland corporation (the "Company") confirms its agreement to sell, subject to the terms and conditions stated herein, to the several Underwriters named in Schedule I hereto (the "Underwriters"), and the Underwriters, subject to the terms and conditions stated herein, have agreed to purchase from the Company, 10,000,000 8.5% Premium Equity Redemption Cumulative Security Units - PERCS Units (the "Firm Securities") of the Company. Each Security will consist of (a) a stock purchase contract ("Purchase Contract") under which (i) the holder will purchase from the Company on the Final Settlement Date or an earlier Acceleration Date, for an amount equal to the Stated Amount, initially one share of Common Stock of the Company, subject to adjustment under certain circumstances, if such purchase occurs on the Final Settlement Date or Mandatory Acceleration Date, or such lesser number of shares of Common Stock as may be payable if such purchase occurs on a Company Acceleration Date and (ii) the Company will pay the holder the Contract Fees, and (b) 7.5 % United States Treasury Notes ("Treasury Notes") having a principal amount equal to $37.50 per Security and maturing on the Final Settlement Date. In connection therewith, the Underwriters propose, subject to the terms and conditions stated herein, to purchase and Pledge to The First National Bank of Chicago, as collateral agent for the Company (the "Collateral Agent") Treasury Notes bearing interest at the rate of 7.5% per annum and maturing on October 31, 1999, having an aggregate principal amount of $375,000,000. The Company proposes to grant the Underwriters an option to purchase, subject to the terms and conditions stated herein, up to 1,500,000 additional 8.5% Premium Equity Redemption Cumulative Security Units - PERCS Units (the "Optional Securities") and, in the event any such Optional Securities are purchased, the Underwriters propose to purchase and Pledge to the Collateral Agent the additional Treasury Notes (having a principal amount equal to the Stated Amount times the number of Optional Securities to be purchased by the Underwriters upon the exercise of such option, and bearing an identical interest rate and maturity date) underlying such Optional Securities. The Firm Securities and any Optional Securities are herein called the "Securities." Capitalized terms used herein without definition shall be used as defined in the Purchase Contract Agreement to be dated as of the First Date of Delivery (the "Purchase Contract Agreement"), between the Company and The Bank of New York, as Purchase Contract Agent (the "Agent"). SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica Capital Trust V and SunAmerica Capital Trust VI (collectively, the "SunAmerica Trusts") and the Company have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (Nos. 333-14201, 333-14201-01, 333-14201-02, 333-14201-03 and 333-14201-04) and pre-effective Amendment Nos. 1 and 2 thereto, including a prospectus and prospectus supplement, covering the registration of securities of the Company and the SunAmerica Trusts (including the Securities and the Purchase Contracts and shares of Common Stock underlying the Purchase Contracts and certain prepaid stock purchase contracts of the Company (the "Prepaid Securities") to be issued pursuant to a Prepaid Securities Indenture to be dated as of the First Time of Delivery, as amended by a Supplemental Indenture to be dated as of November 6, 1996 specifically relating to the Prepaid Securities (as so amended, the "Prepaid Securities Indenture") between the Company and The Bank of New York, as trustee), under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement, as so amended, has been declared effective by the Commission. Such registration statement, as so amended, including the exhibits thereto and the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") is referred to herein as the "Registration Statement;" and the final prospectus and the prospectus supplement relating to the offering of the Securities, in the form first furnished to the Underwriters by the Company for confirming sales of the Securities, are collectively referred to herein as the "Prospectus;" provided, however, that all references to the "Registration Statement" and the "Prospectus" shall be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement; provided, further, that if the Company files a registration statement with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such filing, all references to "Registration Statement" shall be deemed to include the Rule 462(b) Registration Statement. As used herein, the term "preliminary prospectus" shall be deemed to refer to the preliminary prospectus supplement specifically relating to the Securities and the prospectus used before the registration statement became effective. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be. 1. Representations and Warranties. (a) The Company represents and warrants to each of the Underwriters as follows: (i) The Registration Statement (including the most recent post-effective amendment thereto, if any) has been declared effective by the Commission; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (ii) (a) Each document filed or to be filed pursuant to the 1934 Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the 1934 Act and the applicable rules and regulations of the Commission thereunder, (b) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any 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, and the Registration Statement, since the later of the date it became effective and the date of the most recent post-effective amendment, if any, will not fail to reflect any facts or events which individually or in the aggregate represent a fundamental change in the information set forth in the Registration Statement as of such date, (c) the Registration Statement and the Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the 1933 Act and the applicable Regulations of the Commission thereunder and 1933 Act (d) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 1(ii) do not apply to (A) statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by the Representatives expressly for use therein or (B) to that part of the Registration Statement that constitutes the Statement of Eligibility and qualification (Form T-1) under the Trust Indenture Act of 1939 as amended (the "Trust Indenture Act"), of the Trustees thereunder. (iii) This Agreement and the transactions contemplated hereby have been duly authorized, and this Agreement has been duly executed and delivered by the Company. (iv) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (v) Each of SunAmerica Life Insurance Company, Anchor National Life Insurance Company, Resources Trust Company and Ford Life Insurance Company (together, the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned (except for directors qualifying shares) directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (vi) The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and Prospectus (except for subsequent issuances, if any, pursuant to reservations, stock option agreements, employee benefit plans or the exercise of convertible securities which may be referred to in the Registration Statement and Prospectus); all of the issued and outstanding shares of capital stock have been duly authorized and validly issued and are fully paid, nonassessable and not subject to any preemptive or similar rights. (vii) None of the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws, as applicable, or in default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or of any of the Subsidiaries is subject, or in violation of any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement to be dated as of the First Time of Delivery among the Company, The First National Bank of Chicago, as collateral agent for the Company, and the Agent (the "Pledge Agreement"), and the Prepaid Securities Indenture and the issuance and sale of the Securities, the issuance of the Prepaid Securities and the issuance and sale of the Common Stock upon settlement of the Securities and the Prepaid Securities, will not conflict with or constitute a breach of, or a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the articles of incorporation or bylaws of the Company or any of the Subsidiaries or any applicable law, administrative regulation or administrative or court decree and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement and the Prepaid Securities Indenture or the issuance and sale of the Securities, the issuance of the Prepaid Securities or the issuance and sale of the Common Stock upon settlement of the Securities and the Prepaid Securities, except such as may be required by the securities or Blue Sky laws or insurance securities laws of the various states in connection with the offer and sale of the Securities or such as have been obtained. (viii) There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or which are reasonably likely to result in any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, or which would be reasonably likely to materially and adversely affect a material portion of the properties or assets thereof or which is reasonably likely to materially and adversely affect the consummation of this Agreement, the Purchase Contracts, the Purchase Contract Agreements or the Pledge Agreement or the transactions contemplated hereby or thereby; all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business of the Company or any of its subsidiaries, are, considered in the aggregate, not material; and there are no contracts or documents that are required to be filed as exhibits to the Registration Statement, by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations thereunder, that have not been filed as required, except that by the First Time of Delivery (as defined herein) the Company will file on Form 8-K this Agreement and certain other agreements relating to the Securities and the transactions contemplated hereby. (ix) The accountants who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement and Prospectus are independent public accountants with respect to the Company and the subsidiaries of the Company as required by the 1933 Act and the 1933 Act Regulations promulgated thereunder. (x) The financial statements of the Company included or incorporated by reference in the Registration Statement or Prospectus present fairly the financial position of the Company and the consolidated subsidiaries of the Company as of the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the Registration Statement and Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; the ratios of earnings to fixed charges and earnings to combined fixed charges (including preferred stock dividends) included in the Registration Statement or Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K of the Commission; and the supporting schedules included or incorporated by reference in the Registration Statement or Prospectus present fairly the information required to be included therein. (xi) Since the respective dates as of which information is given in the Registration Statement and Prospectus, and except as otherwise stated or contemplated therein, (a) there has been no material adverse change and no development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (b) there have been no transactions entered into by the Company or any of its subsidiaries which are material to the Company and its subsidiaries, considered as one enterprise, other than those entered into in the ordinary course of business and (c) except for regular quarterly dividends on Common Stock of the Company, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (xii) The Company and the Subsidiaries possess such certificates, authorizations or permits issued by the appropriate state or federal regulatory agencies or bodies as are necessary to conduct the business as now conducted by them and as described in the Registration Statement or Prospectus, except where the failure to so possess such certificates, authorizations or permits would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (xiii) There are no holders of securities of the Company with currently exercisable registration rights to have any securities registered as part of the Registration Statement or included in the offering contemplated by this Agreement. (xiv) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (xv) The Securities, including the Purchase Contracts constituting a part of the Securities, conform in all material respects to all statements relating to the Securities contained in the Prospectus and the Registration Statement and have been duly authorized by the Company and at the Time of Delivery will have been duly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the Treasury Notes constituting part of the Securities are obligations of the United States Government and not of the Company, and except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (xvi) The shares (the "Shares") of Common Stock to be issued and sold by the Company pursuant to the Purchase Contracts or the Prepaid Securities upon settlement thereof, have been duly and validly authorized and reserved for issuance; such Shares, when issued and delivered in accordance with the provisions of (a) the Purchase Contract Agreement and the Pledge Agreement or (b) the Prepaid Securities Indenture, will be duly authorized, validly issued and fully paid and nonassessable and will conform in all material respects to the descriptions of the Common Stock contained in the Prospectus and the Registration Statement; and the issuance of such Shares are not subject to preemptive or other rights to subscribe for purchase of such Common Stock. (xvii) The Prepaid Securities have been duly and validly authorized by the Company for issuance; such Prepaid Securities, when issued, executed, authenticated and delivered in accordance with the provisions of the Purchase Contract Agreement, the Pledge Agreement and the Prepaid Securities Indenture will be valid and binding agreements of the Company, enforceable in accordance with their terms except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). The Prepaid Securities Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. (xviii) The Pledge Agreement, the Purchase Contract Agreement, and the Prepaid Securities Indenture have been duly authorized, and at the Time of Delivery will have been duly executed and delivered by the Company, and, as of the Time of Delivery, assuming due authorization, execution and delivery by parties other than the Company thereunder, the Pledge Agreement, the Purchase Contract Agreement and the Prepaid Securities Indenture will be valid and binding agreements of the Company, enforceable in accordance with their terms except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). The Pledge Agreement, the Purchase Contract Agreement and the Prepaid Securities Indenture will conform in all material respects to the descriptions thereof contained in the Prospectus and the Registration Statement. (xix) No "forward looking statement" (as defined in Rule 175 under the Act) contained in the Registration Statement, any Preliminary Prospectus or the Prospectus was made or reaffirmed without a reasonable basis or was disclosed other than in good faith. (xx) The Company recognizes and acknowledges for all purposes of this Agreement that the only information relating to any Underwriter furnished to the Company in writing by the Underwriters expressly for use in the Registration Statement or the Prospectus consists of the last paragraph on the cover page of the Prospectus Supplement, and the names of the Underwriters, the second paragraph and the last paragraph under the caption "Underwriters" in the Prospectus Supplement. 2. Public Offering. The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after this Agreement has been entered into as in the Representatives' judgment is advisable. The terms of the public offering of the Securities are set forth in the Prospectus. 3. Purchase and Sale. Subject to the terms and conditions herein set forth, (a) the Company agrees to sell to the Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase, the Firm 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 election to purchase Optional Securities, the Company agrees to sell, and each of the Underwriters, severally and not jointly, agrees to purchase, that number of additional Optional Securities as to which such election has been exercised (to be adjusted by you to eliminate fractional Securities) determined by multiplying such number of additional Securities by a fraction, the numerator of which is the maximum number of Optional Securities set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Securities set forth in total opposite the names of all such Underwriters in Schedule I hereto. The Company hereby grants to the Underwriters the right to purchase at their election up to 1,500,000 additional Securities, for the sole purpose of covering overallotments in the sale by such Underwriters of Firm Securities. Any such election to purchase such Optional Securities may be exercised only by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of such Optional Securities to be purchased and the date on which the Optional Securities are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. The Underwriters agree to purchase at the direction of the Company the Treasury Notes underlying the Securities to be purchased by the Underwriters. The Treasury Notes will be pledged to the Collateral Agent to secure the holders' obligations to purchase Common Stock under the Purchase Contracts. Such Pledge shall be effected by the transfer to the Collateral Agent by Federal Reserve Bank-Wire of the Treasury Notes to be Pledged at the appropriate Time of Delivery (as defined below) in accordance with the Pledge Agreement. 4. Purchase and Delivery. Certificates in definitive or temporary form for the Securities to be purchased by the Underwriters hereunder, and in such denominations and registered in such names as Morgan Stanley & Co. Incorporated ("Morgan Stanley") may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to you for the account of such Underwriter, against the delivery to the Collateral Agent of the Treasury Notes relating to such Securities by such Underwriter or on its behalf. At such same time the Company will pay to you Underwriters' commissions in the amount of $1.03 per Security plus $1.6808722 per Security, resulting in a net payment of $2.7108722 per Security, plus, in the case of Optional Securities, any accrued interest from the First Time of Delivery to the Second Time of Delivery, in same-day funds, all at the office of Morgan Stanley, 1585 Broadway, New York, New York 10036. The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30 a.m., New York time, on November 6, 1996, or such other time and date as you and the Company may agree upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New York time, on the date specified by you in the written notice given by you of the Underwriters' election to purchase additional Optional Securities, or such other time and date as you and the Company may agree upon in writing. Such time and date for delivery of the Firm Securities is herein called the "First Time of Delivery," such time and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called the "Second Time of Delivery," and each such time and date of delivery is herein called a "Time of Delivery." Unless otherwise instructed by Morgan Stanley in the request referred to above, such certificates will be made available for checking and packaging at least twenty-four hours prior to each Time of Delivery at the office of Morgan Stanley, 1585 Broadway, New York, New York 10036. 5. Covenants of the Company. In further consideration of the agreements of the Underwriters contained herein, the Company covenants as follows: (a) To furnish the Representatives, without charge, a conformed copy of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and, prior to 5:00 p.m. New York City time on the Business Day next succeeding this Agreement and during the period mentioned in paragraph (c) below, in each case without charge, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as the Representatives may reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus with respect to the Securities, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Representatives reasonably objects. (c) If, during such period after the first date of the public offering of the Securities as the Prospectus is required by law to be delivered in connection with sales by an Underwriter or a dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters, and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Securities may have been sold by the Representatives on behalf of the Underwriters and to any other dealer upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as so amended or supplemented, will comply with law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws or insurance securities laws of such jurisdictions as the Underwriters shall reasonably request and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with any review of the offering of the Securities by the National Association of Securities Dealers, Inc., if any. (e) To make generally available to the Company's security holders and to the Underwriters as soon as practicable an earnings statement covering a twelve-month period beginning on the first day of the first full fiscal quarter after the date of this Agreement, which earning statement shall satisfy the provisions of Section 11(a) of the 1933 Act and the 1933 Act Regulations. (f) During the period mentioned in paragraph (c) above, to advise the Underwriters promptly of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose. (g) To use its best efforts to list, subject to notice of issuance, the Securities and the Shares on the New York Stock Exchange and to cause the Securities to be registered under the 1934 Act. (h) To reserve and keep available at all times, free of liens and adverse claims, sufficient shares of Common Stock to satisfy any obligations to issue Shares upon settlement of the Purchase Contracts and pursuant to the Prepaid Securities Indenture. (i) Not to, and to cause its subsidiaries not to, without the prior written consent of the Representatives, directly or indirectly, for a period of 60 days after the date of the Prospectus, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, or enter into any agreement to sell, any Securities, Purchase Contracts, Prepaid Securities or Common Stock or any Securities of the Company similar to the Securities, Purchase Contracts, Prepaid Securities or Common Stock or any securities convertible into or exchangeable or exercisable for any Securities, Purchase Contracts, Prepaid Securities or Common Stock; provided, however, that such restrictions shall not affect the ability of the Company or its subsidiaries to take any such action (i) as a consequence of obligations under securities outstanding prior to the date of the Prospectus, (ii) in connection with any employee benefit or incentive plan of the Company or its subsidiaries or (iii) in connection with the offering of the Securities. 6. Expenses. The Company will pay (i) all expenses incident to the performance of its obligations under this Agreement, (ii) the expenses of printing all documents relating to the offering and of the mailing and delivering of copies thereof to the Underwriters, (iii) any fees charged by investment rating agencies for rating the Securities and (iv) the fees and expenses incurred in connection with the listing of the Securities, and the Shares on the New York Stock Exchange. 7. Conditions to Closing. The obligations of the Underwriters hereunder, as to the Securities to be delivered at each Time of Delivery, shall be subject to the condition that all representations and warranties and other statements of the Company herein are, at and as of such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) Subsequent to the execution and delivery of this Agreement and prior to the Time of Delivery, there shall not have occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (c) The Representatives shall have received on the Time of Delivery a certificate, dated the Time of Delivery and signed by an executive officer of the Company, to the effect set forth in clauses (a) and (b) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Time of Delivery and that the Company has complied with all of the agreements and satisfied all of the obligations on its part to be performed or satisfied on or before the Time of Delivery. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (d) The Representatives shall have received on the Time of Delivery opinions of Piper & Marbury L.L.P., Maryland counsel to the Company, Susan L. Harris, Esq., Senior Vice President and General Counsel--Corporate Affairs for the Company, and Davis Polk & Wardwell, special counsel to the Company, dated the Closing Date, to the effect set forth in Exhibits A, B and C, respectively. In giving such opinion, Ms. Harris may rely, as to matters governed by laws other than the laws of the State of California and the federal law of the United States of America, on an opinion or opinions of Davis Polk & Wardwell and Piper & Marbury L.L.P., and Davis Polk & Wardwell may rely, as to matters governed by laws other than the laws of the State of New York and the federal law of the United States of America, on an opinion of Piper & Marbury L.L.P., in each case so long as such opinion shall be dated the Time of Delivery and in form and substance satisfactory to the Representatives, and shall expressly permit the Underwriters to rely thereon as if such opinion were addressed to Underwriters. (e) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated such Time of Delivery, as you may reasonably request, and the Company shall have furnished to such counsel such documents as they may request for the purpose of enabling them to pass upon such matters. (f) The Representatives shall have received on the date hereof and at each Time of Delivery a letter, dated the date hereof or the Time of Delivery, respectively, in form and substance satisfactory to the Representatives, from the Company's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters in accordance with AICPA standards, with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus. (g) The Securities and the Shares to be issued pursuant to the Purchase Contract Agreement or the Prepaid Securities Indenture shall have been approved for listing on the New York Stock Exchange upon notice of issuance. (h) On each Time of Delivery, (i) the Securities shall have a rating of at least "Baa2" from Moody's Investors Service, Inc. and at least "A-" from Standard & Poor's Corporation as evidenced in a letter from such rating agencies or by other evidence satisfactory to the Underwriters and (ii) no securities of the Company shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization and the Company shall have delivered to the Representatives a letter from such rating agency (or other evidence satisfactory to the Representatives), confirming that the Securities have such ratings. (i) The Representatives shall have received a letter from Mr. Eli Broad, substantially as set forth in the Prospectus in the last sentence of the fourth paragraph under the caption "Underwriting," and such letter shall remain in effect and no terms thereof shall have been violated. 8. Indemnification and Contribution. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities, joint or several (including, without limitation, any legal or other expenses reasonably incurred by any Underwriter or any such controlling person in connection with defending or investigating any such action or claim), caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished to the Company by any Underwriter in writing through the Representatives expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting such losses, claims, damages or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented, if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to such purchase, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. This indemnity will be in addition to any liability which the Company may otherwise have. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only to the extent that any untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company by any Underwriter in writing through the Representatives expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. This indemnity will be in addition to any liability which the Underwriters may otherwise have. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley, in the case of parties indemnified pursuant to the second preceding paragraph, and by the Company, in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first or second paragraph in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as (i) in the case of the Company, the Price to Public less Underwriting Discounts and Commissions (before deducting expenses) or (ii) in the case of the Underwriters, the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus Supplement, bears to the aggregate public offering price of the Securities. The relative fault of the Company on the one hand and of the Underwriters on the other hand 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 Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective number of Securities purchased by each of such Underwriters and not joint. The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 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 that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that 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 remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 8 and the representations and warranties of the Company contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Securities. 9. Termination. This Agreement (or, in the case of any Time of Delivery subsequent to the First Time of Delivery, the parties obligations with respect to the Optional Securities pursuant to Section 4 hereof) shall be subject to termination, by notice given by the Representatives to the Company, if (a) after the execution and delivery of this Agreement and prior to any Time of Delivery (i) trading generally shall have been suspended or materially limited on or by, as the case may be, the New York Stock Exchange or the American Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Representatives, is material and adverse, or (iv) a general moratorium on commercial banking activities in New York shall have been declared by either federal or New York State authorities, and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event, singly or together with any other such event, makes it, in the judgment of the Representatives, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. 10. Defaulting Underwriters. If, on any Time of Delivery, any one or more of the Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Securities set forth opposite their respective names set forth in Schedule I hereto above bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Securities that any Underwriter has agreed to purchase pursuant to this Agreement on a Time of Delivery be increased pursuant to this Section 10 by a number in excess of one-ninth of such number of Securities without the written consent of such Underwriter. If, on the First Time of Delivery, any Underwriter or Underwriters shall fail or refuse to purchase Securities to be purchased on such date and the aggregate number of Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representatives or the Company shall have the right to postpone the First Time of Delivery but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. If, on the Second Time of Delivery, any Underwriter or Underwriters shall fail or refuse to purchase Securities to be purchased on such date and the aggregate number of Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Securities to be purchased on such date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase Securities to be purchased on such date or (ii) purchase not less than the number of Securities that such non-defaulting Underwriters would have been obligated to purchase on such date in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering of the Securities. Nothing in the foregoing sentence shall limit the Company's obligations to pay expenses as provided in Section 6. 11. Notices. In all dealings hereunder, you 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 Morgan Stanley as the lead Representative of the Underwriters. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail to Morgan Stanley as the lead representative, at 1585 Broadway, New York, N.Y. 10036, Attention: Legal Department; and if to the Company shall be delivered or sent by mail or facsimile transmission to it at SunAmerica Inc., 1 SunAmerica Center, 1999 Avenue of the Stars, Century City, Los Angeles, California 90067-6022; Attention: Susan Harris; provided, however, that any notice to an Underwriter pursuant to Section 8 hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 12. Parties. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters and the Company and, to the extent provided in Sections 9 hereof, the officers and directors of the Company and each person who controls 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. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 14. Counterparts. This Agreement may be executed by any one or more of the parties hereto 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. 15. Acknowledgment. The Company and the Underwriters acknowledge that Davis Polk & Wardwell, which is acting as special counsel to the Company in connection with the offer and sale of the Securities, also acts as counsel from time to time to one or more of the Underwriters in connection with unrelated matters. The Company and the Underwriters consent to Davis Polk & Wardwell so acting as special counsel to the Company. The Company and the Underwriters also acknowledge that Skadden, Arps, Slate, Meagher & Flom LLP, which is acting as counsel to the Underwriters in connection with the offer and sale of the Securities, also acts as counsel from time to time to the Company and certain of its affiliates in connection with unrelated matters. The Company and the Underwriters consent to Skadden, Arps, Slate, Meagher & Flom LLP so acting as counsel to the Underwriters. 16. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, SUNAMERICA INC. By: /s/ James Belardi ------------------------------- Name: James Belardi Title: Executive Vice President The foregoing Agreement is hereby confirmed and accepted as of the date first above written. MORGAN STANLEY & CO. INCORPORATED MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED GOLDMAN, SACHS & CO. SMITH BARNEY INC. Acting severally on behalf of themselves and the several Underwriters named on Schedule I hereto By: Morgan Stanley & Co. Incorporated By: /s/ Glen Robson ------------------------------- Vice President SCHEDULE I NUMBER OF OPTIONAL TOTAL NUMBER SECURITIES TO OF FIRM BE DELIVERED SECURITIES IF MAXIMUM TO BE OPTION Underwriter DELIVERED EXERCISED - ----------- ------------ ------------- Morgan Stanley & Co. Incorporated 1,518,150 227,724 Merrill Lynch, Pierce, Fenner & Smith 1,518,150 227,722 Incorporated Goldman, Sachs & Co. 1,518,150 227,722 Smith Barney Inc. 1,518,150 227,722 Advest, Inc. 178,500 26,775 Sanford C. Bernstein & Co., Inc. 178,500 26,775 Dain Bosworth Incorporated 178,500 26,775 Dean Witter Reynolds Inc. 357,100 53,565 Donaldson, Lufkin & Jenrette Securities Corporation 357,100 53,565 A.G. Edwards & Sons, Inc. 357,100 53,565 EVEREN Securities, Inc. 178,500 26,775 First Albany Corporation 178,500 26,775 Interstate/Johnson Lane Corporation 178,500 26,775 Janney Montgomery Scott Inc. 178,500 26,775 Legg Mason Wood Walker, Incorporated 178,500 26,775 McDonald & Company Securities, Inc. 178,500 26,775 Morgan Keegan & Company, Inc. 178,500 26,775 Oppenheimer & Co., Inc. 357,100 53,565 Piper Jaffray Inc. 178,500 26,775 The Robinson-Humphrey Company, Inc. 178,500 26,775 Wedbush Morgan Securities 178,500 26,775 Wheat, First Securities, Inc. 178,500 26,775 ---------- --------- Total 10,000,000 1,500,000 ========== ========= Exhibit A Opinion of Maryland Counsel for the Company The opinion of Piper & Marbury L.L.P., Maryland counsel for the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be limited to the laws of the State of Maryland and shall be to the effect that: (i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws under the State of Maryland; and the Company has the corporate power under the laws of the State of Maryland and under its charter to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus; (ii) each of the Purchase Contract Agreement, the Purchase Contracts, the Pledge Agreement, the Prepaid Securities Indenture, the Prepaid Securities and the Underwriting Agreement has been duly authorized and each of the Purchase Contract Agreement, the Purchase Contracts, the Pledge Agreement, the Prepaid Securities Indenture and the Underwriting Agreement has been duly executed by the Company; (iii) the Securities, including the Purchase Contracts constituting a part of the Securities, have been duly authorized, executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the Treasury Notes constituting part of the Securities are obligations of the United States Government and not of the Company, and except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity); (iv) the statements in the Prospectus under the caption "Description of Capital Stock" insofar as such statements constitute summaries of the legal matters or charter documents referred to therein, fairly present the matters referred to therein; (v) the execution and delivery of each of the Underwriting Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement and the Prepaid Securities Indenture, and the consummation of the transactions contemplated therein, will not result in any violation of the provisions of the charter or by-laws of the Company or, any material applicable law, administrative regulations or administrative or court decree applicable to the Company (except that no opinion need be expressed with respect to Maryland securities or Blue Sky laws); (vi) the Prepaid Securities have been duly authorized by the Company and, when issued, executed, authenticated and delivered in accordance with the Prepaid Securities Indenture the Purchase Contract Agreement and the Pledge Agreement, will be valid and binding agreements of the Company, enforceable in accordance with their terms, except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (vii) the shares of Common Stock issuable upon settlement of the Securities and the Prepaid Securities have been duly authorized and reserved for issuance and such shares, when issued and delivered by the Company in accordance with the provisions of the Purchase Contract Agreement and the Pledge Agreement, in the case of the Securities, or the Prepaid Securities Indenture, in the case of the Prepaid Securities, will be validly issued, fully paid and nonassessable and the issuance of such shares is not subject to any preemptive or other similar rights arising by law; (viii) the forms of certificates used to evidence the Securities, the Prepaid Securities and the Shares comply with all applicable statutory requirements; and (ix) the Company's Restated Articles of Incorporation filed with the Maryland State Department of Assessments and Taxation on October 3, 1991 represented on such date the true, correct and complete articles of incorporation, as amended, governing the Company. Exhibit B Opinion of Counsel for the Company The opinion of Susan L. Harris, Senior Vice President and General Counsel--Corporate Affairs of the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement shall be to the effect that: (i) to the best of such counsel's knowledge and information, the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, on the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; (ii) the authorized, issued and outstanding capital stock of the Company is correctly set forth in the Prospectus under "Description of Capital Stock" as of September 30, 1996; (iii) each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, it being understood that, as to each Subsidiary the foregoing opinion is based solely on a certificate dated as of a recent date of an appropriate official of the jurisdiction of incorporation of such subsidiary and, as applicable, a letter from CT Corporation System dated as of a recent date as to the good standing of such Subsidiary in such jurisdiction, copies of which will be delivered to the Representatives on the date of such opinion; nothing has come to the attention of such counsel to lead such counsel to believe that any of SunAmerica Life Insurance Company or Anchor National Life Insurance Company is not duly qualified as a foreign corporation to transact business or is not in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; to the best of such counsel's knowledge and information, all of the issued and outstanding capital stock of each Subsidiary is owned (except for directors qualifying shares), directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; (iv) to the best of such counsel's knowledge and information, the issuance and delivery of the Securities and the Prepaid Securities and the Common Stock issuable upon settlement of the Securities and the Prepaid Securities, the execution and delivery of this Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement, and the Prepaid Securities Indenture and the consummation of the transactions contemplated herein and therein, will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the charter or by-laws of the Company and the Subsidiaries or any material applicable law, administrative regulation or administrative or court decree; and, to the best of such counsel's knowledge and information, no authorization, consent, or approval of, or other order by any court or administrative or governmental authority or agency is required for the performance by the Company of its obligations under the Underwriting Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement and Prepaid Securities Indenture, or for the issuance and sale of the Securities or the Prepaid Securities, except such as may be required by the 1933 Act or the 1933 Act Regulations, the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained; (v) to the best of such counsel's knowledge and information, there are no statutes or regulations that are required to be described in the Registration Statement or the Prospectus that are not described as required and there are no legal or governmental proceedings pending or threatened which are required to be described in the Registration Statement or the Prospectus, other than those disclosed therein; (vi) to the best of such counsel's knowledge and information there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto, other than those described or referred to therein or filed as exhibits thereto, the descriptions thereof or references thereto are correct in all material respects and, to the best of such counsel's knowledge and information, no default exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage loan agreement, note, lease or other instrument so described, referred to or filed, which default could have a material adverse effect on the Company and its subsidiaries considered as one enterprise; (vii) (1) such counsel is of the opinion that each document, if any, filed pursuant to the 1934 Act and incorporated by reference in the Prospectus at the time it was filed or last amended (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein, as to which such counsel need not express any opinion) appeared on its face to be appropriately responsive in all material respects to the requirements of the 1934 Act and the applicable rules and regulations of the Commission thereunder, (2) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and as of the date of this Agreement contained any 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, (3) such counsel is of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of the Time of Delivery (except in each case for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any opinion), appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (4) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered 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; and (viii) the Registration Statement is effective under the 1933 Act, and to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. With respect to the foregoing paragraph, such counsel may state that her opinion and belief are based upon her participation in the preparation of the Registration Statement and Prospectus and any amendments, supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. Exhibit C Opinion of Special Counsel for the Company The opinion of Davis Polk & Wardwell, special counsel to the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be to the effect that: (i) The statements in the Prospectus under the captions "Description of the Securities," "Description of the Purchase Contracts," "Certain Provisions of the Purchase Contract Agreement and the Pledge Agreement," "Description of the Prepaid Securities," "Certain United States Federal Income Tax Considerations," and "United States State and Local Tax Considerations," insofar as such statements constitute summaries of the legal matters or documents referred to therein, fairly summarize, in all material respects, such legal matters or documents. (ii) Nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and as of the date of this Agreement contained any 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, (2) such counsel is of the opinion that the Registration Statement as of its effective date and the Prospectus as of the date of such opinion (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein, and except for those parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any opinion) appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (3) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered contains any 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. (iii) The Prepaid Securities Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Registration Statement is effective under the 1933 Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. (iv) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (v) To the best of such counsel's knowledge and information, no authorization, consent or approval of, or other order by, any New York State or federal court or New York State or federal administrative or governmental authority or agency is required for the issuance and sale of the Securities and the issuance of the Prepaid Securities or the issuance and sale of the Shares by the Company pursuant to the terms of the Prepaid Securities Indenture or the Pledge Agreement and Purchase Contract Agreement, except such as may be required under the 1933 Act, the 1934 Act or by the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained. (vi) Assuming that the Purchase Contract Agreement, the Pledge Agreement, the Purchase Contracts underlying the Securities being delivered at the Time of Delivery, the Securities, the Prepaid Securities Indenture and the issuance of the Prepaid Securities in accordance with the terms of the Prepaid Securities Indenture or the Purchase Contract Agreement, have been duly authorized, executed and delivered by the Company under Maryland law, each is a valid and binding agreement of the Company (and together the Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts create, to the extent provided therein, a valid interest of the holders of the Securities in the Treasury Notes) enforceable against the Company in accordance with its terms, except (a) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability; provided, however, that based on a review of applicable case law, upon the occurrence of a Termination Event, Section 365(e)(2) of the Bankruptcy Code (11 U.S.C. Section Section 101-1330, as amended) should not substantively limit the provisions of Sections 4.02 and 5.09 of the Purchase Contract Agreement and Section 4(a) of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent's security interest in the Treasury Notes; provided, however, that procedural restrictions respecting relief from the automatic stay under Section 362 of the Code may affect the timing of the exercise of such rights and remedies. (vii) Assuming that (1) the Pledge Agreement has been duly authorized, executed and delivered by the Agent on behalf of each of the holders of the Securities ("Holders"), (2) the Agent is duly incorporated and validly existing under the laws of the state of its incorporation, (3) the Agent and each of the Holders has full power, authority and legal right (including, without limitation, any legal right dependent upon there being no necessary governmental approvals or filings and no conflict with laws, governing documents or contracts) to make and perform its obligations under the Pledge Agreement, (4) the Pledge Agreement is the legal, valid, binding and enforceable obligation of the Agent on behalf of each of the Holders, and (5) the Agent and each Holder has sufficient rights in the Treasury Notes for the security interest of the Collateral Agent for the benefit of the Company to attach, the "transfer" (within the meaning of Section 8-313 of the UCC) of the Treasury Notes to the Collateral Agent for the benefit of the Company, together with the Pledge Agreement, will create a valid and perfected Security interest in such Treasury Notes to secure the obligations of the Holders under the Purchase Contracts, subject to customary qualifications reasonably acceptable to the Representatives. References to (x) the "UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in the State of New York and (y) "Financial Intermediary" shall mean The First National Bank of Chicago acting solely in its capacity as a "depositary" as defined in 31 C.F.R. Section 306 or similar federal regulations governing the transfer of U.S. Government book-entry securities. "Transfer" of the Treasury Notes to the Collateral Agent for the benefit of the Company will occur upon the latest of (1) the making by The Federal Reserve Bank of New York of appropriate entries transferring such Treasury Notes on its books and records to the book-entry account of the Financial Intermediary at The Federal Reserve Bank of New York and (2) the sending of a confirmation by the Financial Intermediary to the Collateral Agent for the benefit of the Company of the purchase by the Collateral Agent for the benefit of the Company of such Treasury Notes and the identification by book-entry by the Financial Intermediary of such Treasury Notes as belonging to the Collateral Agent for the benefit of the Company. With respect to the opinion set forth in paragraph (ii), such counsel may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendments or supplements thereto (other than the documents incorporated by reference) and upon review and discussion of the contents thereof (including documents incorporated by reference) but are without independent check or verification, except as specified. EX-1.2 3 EXHIBIT 1.2 SunAmerica Inc. 8.5% Premium Equity Redemption Cumulative Security Units - PERCS Units (Stated Amount $37.50 Per Security) FIRST AMENDMENT TO UNDERWRITING AGREEMENT THIS FIRST AMENDMENT, dated as of November 1, 1996 (the "First Amendment"), between SunAmerica Inc., a Maryland corporation (the "Company"), and the several Underwriters named in Schedule I hereto (the "Underwriters") amends, to the extent set forth herein, the Underwriting Agreement dated as of October 31, 1996 between the Company and the underwriters named therein (the "Underwriting Agreement"). The Company and the Underwriters desire to change the composition of the underwriters set forth in Schedule I of the Underwriting Agreement, and agree that Schedule IA attached hereto is to be substituted for Schedule I to the Underwriting Agreement and that no other change shall be made to the Underwriting Agreement. This First Amendment shall from and after the date hereof be deemed to be part of the terms and conditions of the Underwriting Agreement. The Underwriting Agreement as amended by this First Amendment is in all respects confirmed and preserved. This First Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. This First Amendment shall be governed by and construed in accordance with the internal laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of November 1, 1996. SUNAMERICA INC. By: /s/ James Belardi ------------------------------- Name: James Belardi Title: Executive Vice President MORGAN STANLEY & CO. INCORPORATED MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED GOLDMAN, SACHS & CO. SMITH BARNEY INC. Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto By: Morgan Stanley & Co. Incorporated By: /s/ Glenn Robson ------------------------------- Vice President SCHEDULE IA NUMBER OF OPTIONAL TOTAL NUMBER SECURITIES TO OF FIRM BE DELIVERED SECURITIES IF MAXIMUM TO BE OPTION Underwriter DELIVERED EXERCISED - ----------- ------------ ------------- Morgan Stanley & Co. Incorporate 1,607,425 241,116 Merrill Lynch, Pierce, Fenner & Smith 1,607,425 241,113 Incorporated Goldman, Sachs & Co. 1,607,425 241,113 Smith Barney Inc. 1,607,425 241,113 Advest, Inc. 178,500 26,775 Sanford C. Bernstein & Co., Inc. 178,500 26,775 Dain Bosworth Incorporated 178,500 26,775 Dean Witter Reynolds Inc. 357,100 53,565 A.G. Edwards & Sons, Inc. 357,100 53,565 EVEREN Securities, Inc. 178,500 26,775 First Albany Corporation 178,500 26,775 Interstate/Johnson Lane Corporation 178,500 26,775 Janney Montgomery Scott Inc. 178,500 26,775 Legg Mason Wood Walker, Incorporated 178,500 26,775 McDonald & Company Securities, Inc. 178,500 26,775 Morgan Keegan & Company, Inc. 178,500 26,775 Oppenheimer & Co., Inc. 357,100 53,565 Piper Jaffray Inc. 178,500 26,775 The Robinson-Humphrey Company, Inc. 178,500 26,775 Wedbush Morgan Securities 178,500 26,775 Wheat, First Securities, Inc. 178,500 26,775 ---------- --------- Total 10,000,000 1,500,000 ========== ========= EX-1.3 4 EXHIBIT 1.3 SunAmerica Inc. $375,000,000 6.20% Notes due October 31, 1999 UNDERWRITING AGREEMENT October 31, 1996 Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated J.P. Morgan Securities Inc. Morgan Stanley & Co. Incorporated c/o Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Dear Sirs: SunAmerica Inc., a Maryland corporation (the "Company"), confirms its agreement to sell, subject to the terms and conditions stated herein, to the several Underwriters named in Schedule I hereto (the "Underwriters") $375 million principal amount of 6.20% Notes due October 31, 1999 (the "Securities") of the Company. The Securities will be issued pursuant to the provisions of a Senior Indenture (the "Senior Indenture"), dated as of April 15, 1993, as supplemented by indenture supplements dated June 28, 1993 and October 28, 1996 (collectively with the Senior Indenture the "Indenture"), between the Company and The First National Bank of Chicago, as Trustee (the "Trustee"). SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica Capital Trust V and SunAmerica Capital Trust VI (collectively, the "SunAmerica Trusts") and the Company have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (Nos. 333-14201, 333-14201-01, 333-14201-02, 333-14201-03 and 333-14201-04) and pre-effective Amendment Nos. 1 and 2 thereto, including a prospectus, covering the registration of securities of the Company and the SunAmerica Trusts (including the Securities) under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement, as so amended, has been declared effective by the Commission. Such registration statement, as so amended, including the exhibits thereto and the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") is referred to herein as the "Registration Statement;" and the final prospectus and the prospectus supplement relating to the offering of the Securities, in the form first furnished to the Underwriters by the Company for confirming sales of the Securities, are collectively referred to herein as the "Prospectus;" provided, however, that all references to the "Registration Statement" and the "Prospectus" shall be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement; provided, further, that if the Company files a registration statement with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such filing, all references to "Registration Statement" shall be deemed to include the Rule 462(b) Registration Statement. As used herein, the term "preliminary prospectus" shall be deemed to refer to the preliminary prospectus supplement specifically relating to the Securities and the prospectus used before the registration statement became effective. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be. 1. Representations and Warranties. (a) The Company represents and warrants to each of the Underwriters as follows: (i) The Registration Statement (including the most recent post-effective amendment thereto, if any) has been declared effective by the Commission; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (ii) (a) Each document filed or to be filed pursuant to the 1934 Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the 1934 Act and the applicable rules and regulations of the Commission thereunder, (b) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any 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, and the Registration Statement, since the later of the date it became effective and the date of the most recent post-effective amendment, if any, will not fail to reflect any facts or events which individually or in the aggregate represent a fundamental change in the information set forth in the Registration Statement as of such date, (c) the Registration Statement and the Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the 1933 Act and the applicable 1933 Act Regulations and (d) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 1(ii) do not apply to (A) statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein or (B) to that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the trustee thereunder. (iii) This Agreement and the transactions contemplated hereby have been duly authorized, and this Agreement has been duly executed and delivered by the Company. (iv) The Senior Indenture has been duly qualified under the Trust Indenture Act and the Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (v) The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (vi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (vii) Each of SunAmerica Life Insurance Company, Anchor National Life Insurance Company, Resources Trust Company and Ford Life Insurance Company (together, the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned (except for directors qualifying shares) directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (viii) The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and Prospectus (except for subsequent issuances, if any, pursuant to reservations, stock option agreements, employee benefit plans or the exercise of convertible securities which may be referred to in the Registration Statement and Prospectus); all of the issued and outstanding shares of capital stock have been duly authorized and validly issued and are fully paid, nonassessable and not subject to any preemptive or similar rights. (ix) None of the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws, as applicable, or in default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or of any of the Subsidiaries is subject, or in violation of any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Securities and the issuance and sale of the Securities will not conflict with or constitute a breach of, or a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries ia a party or by which any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the articles of incorporation or bylaws of the Company or any of the Subsidiaries or any applicable law, administrative regulation or administrative or court decree; and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture and the Securities, or the issuance and sale of the Securities, except such as may be required by the securities or Blue Sky laws or insurance securities laws of the various states in connection with the offer and sale of the Securities or such as have been obtained. (x) There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or which are reasonably likely to result in any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, or which would be reasonably likely to materially and adversely affect a material portion of the properties or assets thereof or which is reasonably likely to materially and adversely affect the consummation of this Agreement, the Indenture or the Notes or the transactions contemplated hereby or thereby; all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business of the Company or any of its subsidiaries, are, considered in the aggregate, not material; and there are no contracts or documents that are required to be filed as exhibits to the Registration Statement, by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations thereunder that have not been filed as required, except that by the Time of Delivery (as defined herein) the Company will file on Form 8-K this Agreement and certain other agreements relating to the Securities and the transactions contemplated hereby. (xi) The accountants who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement and Prospectus are independent public accountants with respect to the Company and the subsidiaries of the Company as required by the 1933 Act and the 1933 Act Regulations promulgated thereunder. (xii) The financial statements of the Company included or incorporated by reference in the Registration Statement or Prospectus present fairly the financial position of the Company and the consolidated subsidiaries of the Company as of the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the Registration Statement and Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; the ratios of earnings to fixed charges and earnings to combined fixed charges (including preferred stock dividends) included in the Registration Statement or Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K of the Commission; and the supporting schedules included or incorporated by reference in the Registration Statement or Prospectus present fairly the information required to be included therein. (xiii) Since the respective dates as of which information is given in the Registration Statement and Prospectus, and except as otherwise stated or contemplated therein, (a) there has been no material adverse change and no development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (b) there have been no transactions entered into by the Company or any of its subsidiaries which are material to the Company and its subsidiaries, considered as one enterprise, other than those entered into in the ordinary course of business and (c) except for regular quarterly dividends on common stock of the Company, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (xiv) The Company and the Subsidiaries possess such certificates, authorizations or permits issued by the appropriate state or federal regulatory agencies or bodies as are necessary to conduct the business as now conducted by them and as described in the Registration Statement or Prospectus, except where the failure to so possess such certificates, authorizations or permits would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (xv) There are no holders of securities of the Company with currently exercisable registration rights to have any securities registered as part of the Registration Statement or included in the offering contemplated by this Agreement. (xvi) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (xvii) The Securities conform in all material respects to all statements relating to the Securities contained in the Prospectus and the Registration Statement. (xviii) No "forward looking statement" (as defined in Rule 175 under the Act) contained in the Registration Statement, any Preliminary Prospectus or the Prospectus was made or reaffirmed without a reasonable basis or was disclosed other than in good faith. (xix) The Company recognizes and acknowledges for all purposes of this Agreement that the only information relating to any Underwriter furnished to the Company in writing by the Underwriters expressly for use in the Registration Statement or the Prospectus consists of the last paragraph on the cover page of the Prospectus Supplement, and the names of the Underwriters and the second sentence of the fourth paragraph and the entire third paragraph under the caption "Underwriting" in the Prospectus Supplement. 2. Public Offering. The Company is advised by the Underwriters that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after this Agreement has been entered into as in the Underwriters' judgment is advisable. The terms of the public offering of the Securities are set forth in the Prospectus. 3. Purchase and Sale. Subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase the Securities set forth opposite the name of such Underwriter in Schedule I hereto. 4. Purchase and Delivery. Certificates in definitive or temporary form for the Securities to be purchased by the Underwriters hereunder, and in such denominations and registered in such names as Goldman, Sachs & Co. ("Goldman") may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to you against the delivery to the Company, by wire transfer of same day funds to the account designated in writing by the Company, of the purchase price for the Securities. The purchase price payable by the Underwriters for the Securities shall be 99.567% of the principal amount thereof. The time and date of such delivery and payment shall be 9:30 a.m., New York time, on November 6, 1996, or such other time and date as you and the Company may agree upon in writing. Such time and date for delivery of the Securities is herein called the "Time of Delivery." Unless otherwise instructed by Goldman in the request referred to above, such certificates will be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery at the offices of Goldman in New York set forth on the first page hereof. 5. Covenants of the Company. In further consideration of the agreements of the Underwriters contained herein, the Company covenants as follows: (a) To furnish the Underwriters, without charge, a conformed copy of the Registration Statement (including exhibits thereto) and, prior to 5:00 p.m. New York City time on the Business Day next succeeding this Agreement during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement, as the Underwriters may reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus with respect to the Securities, to furnish to the Underwriters a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Underwriters reasonably object. (c) If, during such period after the first date of the public offering of the Securities as the Prospectus is required by law to be delivered in connection with sales by an Underwriter or a dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters, and to the dealers (whose names and addresses the Underwriters will furnish to the Company) to which Securities may have been sold by the Underwriters and to any other dealer upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as so amended or supplemented, will comply with law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws or insurance securities laws of such jurisdictions as the Underwriters shall reasonably request and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with any review of the offering of the Securities by the National Association of Securities Dealers, Inc., if any. (e) To make generally available to the Company's security holders and to the Underwriters as soon as practicable an earnings statement covering a twelve-month period beginning on the first day of the first full fiscal quarter after the date of this Agreement, which earning statement shall satisfy the provisions of Section 11(a) of the 1933 Act and the 1933 Act Regulations. (f) During the period mentioned in paragraph (c) above, to advise the Underwriters promptly of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose. (g) Not to, and to cause its subsidiaries not to, without the prior written consent of the Underwriters, directly or indirectly, prior to the First Time of Delivery, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, or enter into any agreement to sell, any Securities, or any securities of the Company substantially similar to the Securities or any securities convertible into or exchangeable or exercisable for any Securities or substantially similar securities; provided, however, that such restrictions shall not affect the ability of the Company or its subsidiaries to take any such action (i) as a consequence of obligations under securities outstanding prior to the date of the Prospectus, (ii) in connection with any employee benefit or incentive plan of the Company or its subsidiaries or (iii) in connection with the offering of the Securities. 6. Expenses. The Company will pay (i) all expenses incident to the performance of its obligations under this Agreement, (ii) the expenses of printing all documents relating to the offering and of the mailing and delivering of copies thereof to the Underwriters and (iii) any fees charged by investment rating agencies for rating the Securities. 7. Conditions to Closing. The obligations of the Underwriters hereunder, as to the Securities to be delivered at the Time of Delivery, shall be subject to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) Subsequent to the execution and delivery of this Agreement and prior to the Time of Delivery, there shall not have occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (c) The Underwriters shall have received on the Time of Delivery a certificate, dated the Time of Delivery and signed by an executive officer of the Company, to the effect set forth in clauses (a) and (b) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Time of Delivery and that the Company has complied with all of the agreements and satisfied all of the obligations on its part to be performed or satisfied on or before the Time of Delivery. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (d) The Underwriters shall have received on the Time of Delivery opinions of Piper & Marbury L.L.P., Maryland counsel to the Company, Susan L. Harris, Esq., Senior Vice President and General Counsel--Corporate Affairs for the Company, and Davis Polk & Wardwell, special counsel to the Company, dated the Closing Date, to the effect set forth in Exhibits A, B and C, respectively. In giving such opinion, Ms. Harris may rely, as to matters governed by laws other than the laws of the State of California and the federal law of the United States of America, on an opinion or opinions of Davis Polk & Wardwell and Piper & Marbury L.L.P., and Davis Polk & Wardwell may rely, as to matters governed by laws other than the laws of the State of New York and the federal law of the United States of America, on an opinion of Piper & Marbury L.L.P., in each case so long as such opinion shall be dated the Time of Delivery and in form and substance satisfactory to the Underwriters, and shall expressly permit the Underwriters to rely thereon as if such opinion were addressed to the Underwriters. (e) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated such Time of Delivery, as you may reasonably request, and the Company shall have furnished to such counsel such documents as they may request for the purpose of enabling them to pass upon such matters. (f) The Underwriters shall have received on the date hereof and the Time of Delivery a letter, dated the date hereof or the Time of Delivery, respectively, in form and substance satisfactory to the Underwriters, from the Company's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters in accordance with AICPA standards, with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus. (g) On the Time of Delivery, (i) the Securities shall have a rating of at least "Baa1" from Moody's Investors Service, Inc. and at least "A" from Standard & Poor's Corporation as evidenced in a letter from such rating agencies or by other evidence satisfactory to the Underwriters and (ii) no securities of the Company shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization and the Company shall have delivered to the Underwriters a letter from such rating agency (or other evidence satisfactory to the Underwriters), confirming that the Securities have such ratings. 8. Indemnification and Contribution. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities, joint or several (including, without limitation, any legal or other expenses reasonably incurred by any Underwriter or any such controlling person in connection with defending or investigating any such action or claim), caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished to the Company by such Underwriter in writing expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting such losses, claims, damages or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented, if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to such purchase, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. This indemnity will be in addition to any liability which the Company may otherwise have. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only to the extent that any untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company by any Underwriter in writing expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. This indemnity will be in addition to any liability which the Underwriters may otherwise have. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Goldman, in the case of parties indemnified pursuant to the second preceding paragraph, and by the Company, in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first or second paragraph in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus Supplement, bears to the aggregate public offering price of the Securities. The relative fault of the Company on the one hand and of the Underwriters on the other hand 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 Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amount of Securities purchased by each of such Underwriters and not joint. The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 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 that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that 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 remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 8 and the representations and warranties of the Company contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Securities. 9. Termination. This Agreement shall be subject to termination, by notice given by the Underwriters to the Company, if (a) after the execution and delivery of this Agreement and prior to the Time of Delivery (i) trading generally shall have been suspended or materially limited on or by, as the case may be, the New York Stock Exchange or the American Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Representatives, is material and adverse, or (iv) a general moratorium on commercial banking activities in New York shall have been declared by either federal or New York State authorities, and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event, singly or together with any other such event, makes it, in the judgment of any of the Underwriters, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering of the Securities. Nothing in the foregoing sentence shall limit the Company's obligations to pay expenses as provided in Section 6. 10. Defaulting Underwriters. If, on the Time of Delivery, any Underwriter or Underwriters shall fail or refuse to purchase Securities to be purchased on such date and the aggregate number of Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representatives or the Company shall have the right to postpone the Time of Delivery but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 11. Notices. In all dealings hereunder, 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 Goldman on behalf of the Underwriters. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail to Goldman Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Izzy Goncalves; and if to the Company shall be delivered or sent by mail or facsimile transmission to it at SunAmerica Inc., 1 SunAmerica Center, 1999 Avenue of the Stars, Century City, Los Angeles, California 90067-6022; Attention: Susan Harris. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 12. Parties. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters and the Company and, to the extent provided in Sections 8 hereof, the officers and directors of the Company and each person who controls 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. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 14. Counterparts. This Agreement may be executed by any one or more of the parties hereto 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. 15. Acknowledgment. The Company and the Underwriters acknowledge that Davis Polk & Wardwell, which is acting as special counsel to the Company in connection with the offer and sale of the Securities, also acts as counsel from time to time to one or more of the Underwriters in connection with unrelated matters. The Company and the Underwriters consent to Davis Polk & Wardwell so acting as special counsel to the Company. The Company and the Underwriters also acknowledge that Skadden, Arps, Slate, Meagher & Flom LLP, which is acting as counsel to the Underwriters in connection with the offer and sale of the Securities, also acts as counsel from time to time to the Company and certain of its affiliates in connection with unrelated matters. The Company and the Underwriters consent to Skadden, Arps, Slate, Meagher & Flom LLP so acting as counsel to the Underwriters. 16. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, SUNAMERICA INC. By: /s/ James Belardi -------------------------- Name: James Belardi Title: Exec. Vice President The foregoing Agreement is hereby confirmed and accepted as of the date first above written. GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED By: Goldman, Sachs & Co. By: /s/ Goldman, Sachs & Co. -------------------------- SCHEDULE I PRINCIPAL AMOUNT UNDERWRITER OF NOTES ----------- ---------------- GOLDMAN, SACHS & CO........................ $93,750,000 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED............................. 93,750,000 J.P. MORGAN SECURITIES, INC................ 93,750,000 MORGAN STANLEY & CO. INCORPORATED............................... 93,750,000 ____________ Total.................................... $375,000,000 ============ Exhibit A Opinion of Maryland Counsel for the Company The opinion of Piper & Marbury L.L.P., Maryland counsel for the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be limited to the laws of the State of Maryland and shall be to the effect that: (i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws under the State of Maryland; and the Company has the corporate power under the laws of the State of Maryland and under its charter to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus; (ii) each of the Agreement, and the Indenture has been duly authorized and duly executed by the Company; (iii) the Securities have been duly authorized and executed by the Company; (iv) the execution and delivery of the Agreement, the Indenture and the Securities, and the consummation of the transactions contemplated therein, will not result in any violation of the provisions of the charter or by-laws of the Company or any material applicable law, administrative regulations or administrative or court decree applicable to the Company (except that no opinion need be expressed with respect to Maryland securities or Blue Sky laws); (v) the forms of certificates used to evidence the Securities comply with all applicable statutory requirements; and (vi) the Company's Restated Articles of Incorporation filed with the Maryland State Department of Assessments and Taxation on October 3, 1991 represented on such date the true, correct and complete articles of incorporation, as amended, governing the Company. Exhibit B Opinion of Counsel for the Company The opinion of Susan L. Harris, Senior Vice President and General Counsel--Corporate Affairs of the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement shall be to the effect that: (i) to the best of such counsel's knowledge and information, the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, on the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; (ii) the authorized, issued and outstanding capital stock of the Company is correctly set forth in the Prospectus under "Description of Capital Stock" as of September 30, 1996; (iii) each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, it being understood that, as to each Subsidiary the foregoing opinion is based solely on a certificate dated as of a recent date of an appropriate official of the jurisdiction of incorporation of such subsidiary and, as applicable, a letter from CT Corporation System dated as of a recent date as to the good standing of such Subsidiary in such jurisdiction, copies of which will be delivered to the Underwriters on the date of such opinion; nothing has come to the attention of such counsel to lead such counsel to believe that any of SunAmerica Life Insurance Company or Anchor National Life Insurance Company is not duly qualified as a foreign corporation to transact business or is not in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; to the best of such counsel's knowledge and information, all of the issued and outstanding capital stock of each Subsidiary is owned (except for directors qualifying shares), directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; (iv) to the best of such counsel's knowledge and information, the issuance and delivery of the Securities, the execution and delivery of this Agreement, the Indenture and the consummation of the transactions contemplated herein and therein, will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the charter or by-laws of the Company and the Subsidiaries or any material applicable law, administrative regulation or administrative or court decree; and, to the best of such counsel's knowledge and information, no authorization, consent, or approval of, or other order by, any court or administrative or governmental authority or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture, or for the issuance and sale of the Securities, except such as may be required by the 1933 Act or the 1933 Act Regulations, the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained; (v) to the best of such counsel's knowledge and information, there are no statutes or regulations that are required to be described in the Registration Statement or the Prospectus that are not described as required and there are no legal or governmental proceedings pending or threatened which are required to be described in the Registration Statement or the Prospectus, other than those disclosed therein; (vi) to the best of such counsel's knowledge and information there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto, other than those described or referred to therein or filed as exhibits thereto, the descriptions thereof or references thereto are correct in all material respects and, to the best of such counsel's knowledge and information, no default exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage loan agreement, note, lease or other instrument so described, referred to or filed, which default could have a material adverse effect on the Company and its subsidiaries considered as one enterprise; (vii) (1) such counsel is of the opinion that each document, if any, filed pursuant to the 1934 Act and incorporated by reference in the Prospectus at the time it was filed or last amended (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein, as to which such counsel need not express any opinion) appeared on its face to be appropriately responsive in all material respects to the requirements of the 1934 Act and the applicable rules and regulations of the Commission thereunder, (2) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and, as of the date of this Agreement contained any 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, (3) such counsel is of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of the Time of Delivery (except in each case for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any opinion), appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (4) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered 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; and (viii) the Registration Statement is effective under the 1933 Act, and to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. With respect to the foregoing paragraph (vii), such counsel may state that her opinion and belief are based upon her participation in the preparation of the Registration Statement and Prospectus and any amendments, supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. Exhibit C Opinion of Special Counsel for the Company The opinion of Davis Polk & Wardwell, special counsel to the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be to the effect that: (i) The statements in the Prospectus under the captions "Description of the Notes," and "Description of the Senior Debt Securities and Subordinated Debt Securities" insofar as such statements constitute summaries of the legal matters or documents referred to therein, fairly summarize, in all material respects, such legal matters or documents. (ii) Nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and as of the date of this Agreement contained any 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, (2) such counsel is of the opinion that the Registration Statement as of its effective date and the Prospectus as of the date of such opinion (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s as to which such counsel need not express any opinion) appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (3) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s and, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered contains any 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. (iii) The Senior Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Registration Statement is effective under the 1933 Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. (iv) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (v) To the best of such counsel's knowledge and information, no authorization, consent or approval of, or other order by, any New York State or federal court or New York State or federal administrative or governmental authority or agency is required for the issuance and sale of the Securities, except such as may be required under the 1933 Act, the 1934 Act or by the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained. (vi) Assuming that each of the Indenture, and the Securities have been duly authorized, executed and delivered by the Company under Maryland law, each is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms (and, in the case of the Securities, entitled to the benefits of the Indenture), except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity); With respect to the opinion set forth in paragraph (ii), such counsel may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendments or supplements thereto (other than the documents incorporated by reference) and upon review and discussion of the contents thereof (including documents incorporated by reference) but are without independent check or verification, except as specified. EX-1.4 5 EXHIBIT 1.4 SunAmerica Inc. $56,250,000 6.20% Notes due October 31, 1999, Series 2 UNDERWRITING AGREEMENT November 4, 1996 Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated J.P. Morgan Securities Inc. Morgan Stanley & Co. Incorporated c/o Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Dear Sirs: SunAmerica Inc., a Maryland corporation (the "Company"), confirms its agreement to sell, subject to the terms and conditions stated herein, to the several Underwriters named in Schedule I hereto (the "Underwriters") $56,250,000 principal amount of 6.20% Notes due October 31, 1999, Series 2 (the "Securities") of the Company. The Securities will be issued pursuant to the provisions of a Senior Indenture (the "Senior Indenture"), dated as of April 15, 1993, as supplemented by indenture supplements dated June 28, 1993 and October 28, 1996 (collectively with the Senior Indenture the "Indenture"), between the Company and The First National Bank of Chicago, as Trustee (the "Trustee"). SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica Capital Trust V and SunAmerica Capital Trust VI (collectively, the "SunAmerica Trusts") and the Company have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (Nos. 333-14201, 333-14201-01, 333-14201-02, 333-14201-03 and 333-14201-04) and pre-effective Amendment Nos. 1 and 2 thereto, including a prospectus, covering the registration of securities of the Company and the SunAmerica Trusts (including the Securities) under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement, as so amended, has been declared effective by the Commission. Such registration statement, as so amended, including the exhibits thereto and the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") is referred to herein as the "Registration Statement;" and the final prospectus and the prospectus supplement relating to the offering of the Securities, in the form first furnished to the Underwriters by the Company for confirming sales of the Securities, are collectively referred to herein as the "Prospectus;" provided, however, that all references to the "Registration Statement" and the "Prospectus" shall be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement; provided, further, that if the Company files a registration statement with the Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such filing, all references to "Registration Statement" shall be deemed to include the Rule 462(b) Registration Statement. As used herein, the term "preliminary prospectus" shall be deemed to refer to the preliminary prospectus supplement specifically relating to the Securities and the prospectus used before the registration statement became effective. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be. 1. Representations and Warranties. (a) The Company represents and warrants to each of the Underwriters as follows: (i) The Registration Statement (including the most recent post-effective amendment thereto, if any) has been declared effective by the Commission; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (ii) (a) Each document filed or to be filed pursuant to the 1934 Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the 1934 Act and the applicable rules and regulations of the Commission thereunder, (b) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any 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, and the Registration Statement, since the later of the date it became effective and the date of the most recent post-effective amendment, if any, will not fail to reflect any facts or events which individually or in the aggregate represent a fundamental change in the information set forth in the Registration Statement as of such date, (c) the Registration Statement and the Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the 1933 Act and the applicable 1933 Act Regulations and (d) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 1(ii) do not apply to (A) statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter expressly for use therein or (B) to that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the trustee thereunder. (iii) This Agreement and the transactions contemplated hereby have been duly authorized, and this Agreement has been duly executed and delivered by the Company. (iv) The Senior Indenture has been duly qualified under the Trust Indenture Act and the Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (v) The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). (vi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (vii) Each of SunAmerica Life Insurance Company, Anchor National Life Insurance Company, Resources Trust Company and Ford Life Insurance Company (together, the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned (except for directors qualifying shares) directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (viii) The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and Prospectus (except for subsequent issuances, if any, pursuant to reservations, stock option agreements, employee benefit plans or the exercise of convertible securities which may be referred to in the Registration Statement and Prospectus); all of the issued and outstanding shares of capital stock have been duly authorized and validly issued and are fully paid, nonassessable and not subject to any preemptive or similar rights. (ix) None of the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws, as applicable, or in default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or of any of the Subsidiaries is subject, or in violation of any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Indenture and the Securities and the issuance and sale of the Securities will not conflict with or constitute a breach of, or a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the articles of incorporation or bylaws of the Company or any of the Subsidiaries or any applicable law, administrative regulation or administrative or court decree; and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture and the Securities, or the issuance and sale of the Securities, except such as may be required by the securities or Blue Sky laws or insurance securities laws of the various states in connection with the offer and sale of the Securities or such as have been obtained. (x) There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or which are reasonably likely to result in any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, or which would be reasonably likely to materially and adversely affect a material portion of the properties or assets thereof or which is reasonably likely to materially and adversely affect the consummation of this Agreement, the Indenture or the Securities or the transactions contemplated hereby or thereby; all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement or the Prospectus, including ordinary routine litigation incidental to the business of the Company or any of its subsidiaries, are, considered in the aggregate, not material; and there are no contracts or documents that are required to be filed as exhibits to the Registration Statement, by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations thereunder that have not been filed as required, except that by the Time of Delivery (as defined herein) the Company will file on Form 8-K this Agreement and certain other agreements relating to the Securities and the transactions contemplated hereby. (xi) The accountants who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement and Prospectus are independent public accountants with respect to the Company and the subsidiaries of the Company as required by the 1933 Act and the 1933 Act Regulations promulgated thereunder. (xii) The financial statements of the Company included or incorporated by reference in the Registration Statement or Prospectus present fairly the financial position of the Company and the consolidated subsidiaries of the Company as of the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the Registration Statement and Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; the ratios of earnings to fixed charges and earnings to combined fixed charges (including preferred stock dividends) included in the Registration Statement or Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K of the Commission; and the supporting schedules included or incorporated by reference in the Registration Statement or Prospectus present fairly the information required to be included therein. (xiii) Since the respective dates as of which information is given in the Registration Statement and Prospectus, and except as otherwise stated or contemplated therein, (a) there has been no material adverse change and no development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (b) there have been no transactions entered into by the Company or any of its subsidiaries which are material to the Company and its subsidiaries, considered as one enterprise, other than those entered into in the ordinary course of business and (c) except for regular quarterly dividends on common stock of the Company, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (xiv) The Company and the Subsidiaries possess such certificates, authorizations or permits issued by the appropriate state or federal regulatory agencies or bodies as are necessary to conduct the business as now conducted by them and as described in the Registration Statement or Prospectus, except where the failure to so possess such certificates, authorizations or permits would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (xv) There are no holders of securities of the Company with currently exercisable registration rights to have any securities registered as part of the Registration Statement or included in the offering contemplated by this Agreement. (xvi) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (xvii) The Securities conform in all material respects to all statements relating to the Securities contained in the Prospectus and the Registration Statement. (xviii) No "forward looking statement" (as defined in Rule 175 under the Act) contained in the Registration Statement, any Preliminary Prospectus or the Prospectus was made or reaffirmed without a reasonable basis or was disclosed other than in good faith. (xix) The Company recognizes and acknowledges for all purposes of this Agreement that the only information relating to any Underwriter furnished to the Company in writing by the Underwriters expressly for use in the Registration Statement or the Prospectus consists of the last paragraph on the cover page of the Prospectus Supplement, and the names of the Underwriters and the second sentence of the fourth paragraph and the entire third paragraph under the caption "Underwriting" in the Prospectus Supplement. 2. Public Offering. The Company is advised by the Underwriters that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after this Agreement has been entered into as in the Underwriters' judgment is advisable. The terms of the public offering of the Securities are set forth in the Prospectus. 3. Purchase and Sale. Subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase the Securities set forth opposite the name of such Underwriter in Schedule I hereto. 4. Purchase and Delivery. Certificates in definitive or temporary form for the Securities to be purchased by the Underwriters hereunder, and in such denominations and registered in such names as Goldman, Sachs & Co. ("Goldman") may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to you against the delivery to the Company, by wire transfer of same day funds to the account designated in writing by the Company, of the purchase price for the Securities. The purchase price payable by the Underwriters for the Securities shall be 99.567% of the principal amount thereof. The time and date of such delivery and payment shall be 9:30 a.m., New York time, on November 6, 1996, or such other time and date as you and the Company may agree upon in writing. Such time and date for delivery of the Securities is herein called the "Time of Delivery." Unless otherwise instructed by Goldman in the request referred to above, such certificates will be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery at the offices of Goldman in New York set forth on the first page hereof. 5. Covenants of the Company. In further consideration of the agreements of the Underwriters contained herein, the Company covenants as follows: (a) To furnish the Underwriters, without charge, a conformed copy of the Registration Statement (including exhibits thereto) and, prior to 5:00 p.m. New York City time on the Business Day next succeeding this Agreement during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement, as the Underwriters may reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus with respect to the Securities, to furnish to the Underwriters a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Underwriters reasonably object. (c) If, during such period after the first date of the public offering of the Securities as the Prospectus is required by law to be delivered in connection with sales by an Underwriter or a dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters, and to the dealers (whose names and addresses the Underwriters will furnish to the Company) to which Securities may have been sold by the Underwriters and to any other dealer upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as so amended or supplemented, will comply with law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws or insurance securities laws of such jurisdictions as the Underwriters shall reasonably request and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with any review of the offering of the Securities by the National Association of Securities Dealers, Inc., if any. (e) To make generally available to the Company's security holders and to the Underwriters as soon as practicable an earnings statement covering a twelve-month period beginning on the first day of the first full fiscal quarter after the date of this Agreement, which earning statement shall satisfy the provisions of Section 11(a) of the 1933 Act and the 1933 Act Regulations. (f) During the period mentioned in paragraph (c) above, to advise the Underwriters promptly of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose. (g) Not to, and to cause its subsidiaries not to, without the prior written consent of the Underwriters, directly or indirectly, prior to the First Time of Delivery, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, or enter into any agreement to sell, any Securities, or any securities of the Company substantially similar to the Securities or any securities convertible into or exchangeable or exercisable for any Securities or substantially similar securities; provided, however, that such restrictions shall not affect the ability of the Company or its subsidiaries to take any such action (i) as a consequence of obligations under securities outstanding prior to the date of the Prospectus, (ii) in connection with any employee benefit or incentive plan of the Company or its subsidiaries or (iii) in connection with the offering of the Securities. 6. Expenses. The Company will pay (i) all expenses incident to the performance of its obligations under this Agreement, (ii) the expenses of printing all documents relating to the offering and of the mailing and delivering of copies thereof to the Underwriters and (iii) any fees charged by investment rating agencies for rating the Securities. 7. Conditions to Closing. The obligations of the Underwriters hereunder, as to the Securities to be delivered at the Time of Delivery, shall be subject to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) Subsequent to the execution and delivery of this Agreement and prior to the Time of Delivery, there shall not have occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (c) The Underwriters shall have received on the Time of Delivery a certificate, dated the Time of Delivery and signed by an executive officer of the Company, to the effect set forth in clauses (a) and (b) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Time of Delivery and that the Company has complied with all of the agreements and satisfied all of the obligations on its part to be performed or satisfied on or before the Time of Delivery. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (d) The Underwriters shall have received on the Time of Delivery opinions of Piper & Marbury L.L.P., Maryland counsel to the Company, Susan L. Harris, Esq., Senior Vice President and General Counsel--Corporate Affairs for the Company, and Davis Polk & Wardwell, special counsel to the Company, dated the Closing Date, to the effect set forth in Exhibits A, B and C, respectively. In giving such opinion, Ms. Harris may rely, as to matters governed by laws other than the laws of the State of California and the federal law of the United States of America, on an opinion or opinions of Davis Polk & Wardwell and Piper & Marbury L.L.P., and Davis Polk & Wardwell may rely, as to matters governed by laws other than the laws of the State of New York and the federal law of the United States of America, on an opinion of Piper & Marbury L.L.P., in each case so long as such opinion shall be dated the Time of Delivery and in form and substance satisfactory to the Underwriters, and shall expressly permit the Underwriters to rely thereon as if such opinion were addressed to the Underwriters. (e) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated such Time of Delivery, as you may reasonably request, and the Company shall have furnished to such counsel such documents as they may request for the purpose of enabling them to pass upon such matters. (f) The Underwriters shall have received on the date hereof and the Time of Delivery a letter, dated the date hereof or the Time of Delivery, respectively, in form and substance satisfactory to the Underwriters, from the Company's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters in accordance with AICPA standards, with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus. (g) On the Time of Delivery, (i) the Securities shall have a rating of at least "Baa1" from Moody's Investors Service, Inc. and at least "A" from Standard & Poor's Corporation as evidenced in a letter from such rating agencies or by other evidence satisfactory to the Underwriters and (ii) no securities of the Company shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization and the Company shall have delivered to the Underwriters a letter from such rating agency (or other evidence satisfactory to the Underwriters), confirming that the Securities have such ratings. 8. Indemnification and Contribution. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities, joint or several (including, without limitation, any legal or other expenses reasonably incurred by any Underwriter or any such controlling person in connection with defending or investigating any such action or claim), caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished to the Company by such Underwriter in writing expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting such losses, claims, damages or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented, if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to such purchase, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities. This indemnity will be in addition to any liability which the Company may otherwise have. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only to the extent that any untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company by any Underwriter in writing expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. This indemnity will be in addition to any liability which the Underwriters may otherwise have. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Goldman, in the case of parties indemnified pursuant to the second preceding paragraph, and by the Company, in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first or second paragraph in this Section 8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus Supplement, bears to the aggregate public offering price of the Securities. The relative fault of the Company on the one hand and of the Underwriters on the other hand 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 Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amount of Securities purchased by each of such Underwriters and not joint. The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 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 that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that 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 remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 8 and the representations and warranties of the Company contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Securities. 9. Termination. This Agreement shall be subject to termination, by notice given by the Underwriters to the Company, if (a) after the execution and delivery of this Agreement and prior to the Time of Delivery (i) trading generally shall have been suspended or materially limited on or by, as the case may be, the New York Stock Exchange or the American Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Representatives, is material and adverse, or (iv) a general moratorium on commercial banking activities in New York shall have been declared by either federal or New York State authorities, and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event, singly or together with any other such event, makes it, in the judgment of any of the Underwriters, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering of the Securities. Nothing in the foregoing sentence shall limit the Company's obligations to pay expenses as provided in Section 6. 10. Defaulting Underwriters. If, on the Time of Delivery, any Underwriter or Underwriters shall fail or refuse to purchase Securities to be purchased on such date and the aggregate number of Securities with respect to which such default occurs is more than one-tenth of the aggregate number of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Representatives or the Company shall have the right to postpone the Time of Delivery but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 11. Notices. In all dealings hereunder, 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 Goldman on behalf of the Underwriters. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail to Goldman Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Izzy Goncalves; and if to the Company shall be delivered or sent by mail or facsimile transmission to it at SunAmerica Inc., 1 SunAmerica Center, 1999 Avenue of the Stars, Century City, Los Angeles, California 90067-6022; Attention: Susan Harris. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 12. Parties. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters and the Company and, to the extent provided in Sections 8 hereof, the officers and directors of the Company and each person who controls 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. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 14. Counterparts. This Agreement may be executed by any one or more of the parties hereto 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. 15. Acknowledgment. The Company and the Underwriters acknowledge that Davis Polk & Wardwell, which is acting as special counsel to the Company in connection with the offer and sale of the Securities, also acts as counsel from time to time to one or more of the Underwriters in connection with unrelated matters. The Company and the Underwriters consent to Davis Polk & Wardwell so acting as special counsel to the Company. The Company and the Underwriters also acknowledge that Skadden, Arps, Slate, Meagher & Flom LLP, which is acting as counsel to the Underwriters in connection with the offer and sale of the Securities, also acts as counsel from time to time to the Company and certain of its affiliates in connection with unrelated matters. The Company and the Underwriters consent to Skadden, Arps, Slate, Meagher & Flom LLP so acting as counsel to the Underwriters. 16. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, SUNAMERICA INC. By: /s/ James Belardi --------------------------- Name: James Belardi Title: Exec. Vice President The foregoing Agreement is hereby confirmed and accepted as of the date first above written. GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED By: Goldman, Sachs & Co. By: /s/ Goldman, Sachs & Co. ------------------------ SCHEDULE I PRINCIPAL AMOUNT UNDERWRITER OF NOTES ----------- ---------------- GOLDMAN, SACHS & CO.................................. $14,100,000 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED............................. 14,050,000 J.P. MORGAN SECURITIES, INC.......................... 14,050,000 MORGAN STANLEY & CO. INCORPORATED......................................... 14,050,000 ___________ Total.............................................. $56,250,000 =========== Exhibit A Opinion of Maryland Counsel for the Company The opinion of Piper & Marbury L.L.P., Maryland counsel for the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be limited to the laws of the State of Maryland and shall be to the effect that: (i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws under the State of Maryland; and the Company has the corporate power under the laws of the State of Maryland and under its charter to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus; (ii) each of the Agreement, and the Indenture has been duly authorized and duly executed by the Company; (iii) the Securities have been duly authorized and executed by the Company; (iv) the execution and delivery of the Agreement, the Indenture and the Securities, and the consummation of the transactions contemplated therein, will not result in any violation of the provisions of the charter or by-laws of the Company or any material applicable law, administrative regulations or administrative or court decree applicable to the Company (except that no opinion need be expressed with respect to Maryland securities or Blue Sky laws); (v) the forms of certificates used to evidence the Securities comply with all applicable statutory requirements; and (vi) the Company's Restated Articles of Incorporation filed with the Maryland State Department of Assessments and Taxation on October 3, 1991 represented on such date the true, correct and complete articles of incorporation, as amended, governing the Company. Exhibit B Opinion of Counsel for the Company The opinion of Susan L. Harris, Senior Vice President and General Counsel--Corporate Affairs of the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement shall be to the effect that: (i) to the best of such counsel's knowledge and information, the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, on the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; (ii) the authorized, issued and outstanding capital stock of the Company is correctly set forth in the Prospectus under "Description of Capital Stock" as of September 30, 1996; (iii) each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement and Prospectus, it being understood that, as to each Subsidiary the foregoing opinion is based solely on a certificate dated as of a recent date of an appropriate official of the jurisdiction of incorporation of such subsidiary and, as applicable, a letter from CT Corporation System dated as of a recent date as to the good standing of such Subsidiary in such jurisdiction, copies of which will be delivered to the Underwriters on the date of such opinion; nothing has come to the attention of such counsel to lead such counsel to believe that any of SunAmerica Life Insurance Company or Anchor National Life Insurance Company is not duly qualified as a foreign corporation to transact business or is not in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; to the best of such counsel's knowledge and information, all of the issued and outstanding capital stock of each Subsidiary is owned (except for directors qualifying shares), directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; (iv) to the best of such counsel's knowledge and information, the issuance and delivery of the Securities, the execution and delivery of this Agreement, the Indenture and the consummation of the transactions contemplated herein and therein, will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the charter or by-laws of the Company and the Subsidiaries or any material applicable law, administrative regulation or administrative or court decree; and, to the best of such counsel's knowledge and information, no authorization, consent, or approval of, or other order by, any court or administrative or governmental authority or agency is required for the performance by the Company of its obligations under this Agreement, the Indenture, or for the issuance and sale of the Securities, except such as may be required by the 1933 Act or the 1933 Act Regulations, the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained; (v) to the best of such counsel's knowledge and information, there are no statutes or regulations that are required to be described in the Registration Statement or the Prospectus that are not described as required and there are no legal or governmental proceedings pending or threatened which are required to be described in the Registration Statement or the Prospectus, other than those disclosed therein; (vi) to the best of such counsel's knowledge and information there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto, other than those described or referred to therein or filed as exhibits thereto, the descriptions thereof or references thereto are correct in all material respects and, to the best of such counsel's knowledge and information, no default exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage loan agreement, note, lease or other instrument so described, referred to or filed, which default could have a material adverse effect on the Company and its subsidiaries considered as one enterprise; (vii) (1) such counsel is of the opinion that each document, if any, filed pursuant to the 1934 Act and incorporated by reference in the Prospectus at the time it was filed or last amended (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein, as to which such counsel need not express any opinion) appeared on its face to be appropriately responsive in all material respects to the requirements of the 1934 Act and the applicable rules and regulations of the Commission thereunder, (2) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and, as of the date of this Agreement contained any 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, (3) such counsel is of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of the Time of Delivery (except in each case for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any opinion), appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (4) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for the parts of the Registration Statement that constitute the Form T-1s, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered 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; and (viii) the Registration Statement is effective under the 1933 Act, and to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. With respect to the foregoing paragraph (vii), such counsel may state that her opinion and belief are based upon her participation in the preparation of the Registration Statement and Prospectus and any amendments, supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. Exhibit C Opinion of Special Counsel for the Company The opinion of Davis Polk & Wardwell, special counsel to the Company, to be delivered pursuant to Section 7(d) of the Underwriting Agreement, shall be to the effect that: (i) The statements in the Prospectus under the captions "Description of the Notes," and "Description of the Senior Debt Securities and Subordinated Debt Securities" insofar as such statements constitute summaries of the legal matters or documents referred to therein, fairly summarize, in all material respects, such legal matters or documents. (ii) Nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s, as to which such counsel need not express any belief) each part of the Registration Statement, when such part became effective and as of the date of this Agreement contained any 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, (2) such counsel is of the opinion that the Registration Statement as of its effective date and the Prospectus as of the date of such opinion (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s as to which such counsel need not express any opinion) appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder and (3) nothing has come to the attention of such counsel that would lead such counsel to believe that (except for financial statements, supporting schedules and other financial data included or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1s and, as to which such counsel need not express any belief) the Prospectus as of the date such opinion is delivered contains any 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. (iii) The Senior Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Registration Statement is effective under the 1933 Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for such purpose are pending before or threatened by the Commission. (iv) The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (v) To the best of such counsel's knowledge and information, no authorization, consent or approval of, or other order by, any New York State or federal court or New York State or federal administrative or governmental authority or agency is required for the issuance and sale of the Securities, except such as may be required under the 1933 Act, the 1934 Act or by the securities or Blue Sky laws or insurance securities laws of the various states or except such as have been obtained. (vi) Assuming that each of the Indenture, and the Securities have been duly authorized, executed and delivered by the Company under Maryland law, each is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms (and, in the case of the Securities, entitled to the benefits of the Indenture), except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity); With respect to the opinion set forth in paragraph (ii), such counsel may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendments or supplements thereto (other than the documents incorporated by reference) and upon review and discussion of the contents thereof (including documents incorporated by reference) but are without independent check or verification, except as specified. EX-4.1 6 EXHIBIT 4.1 FORM OF NOTE FRONT SIDE OF NOTE SUNAMERICA INC. 6.20% Note Due October 31, 1999 Number R__________ CUSIP 866930 AA8 Unless and until this certificate is exchange in whole or in part for Notes in definitive registered form, this Note may not be transferred except as a whole by The Depository Trust Company, a New York corporation ("DTC"), to its nominee or by its nominee to DTC or another nominee of DTC or by DTC or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any certificate issued in exchange herefor shall be registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment in respect hereof shall be made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC). SUNAMERICA INC., a Maryland corporation (the "Issuer", which term includes any successor corporation under the Senior Indenture hereafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, the principal sum of THREE HUNDRED AND SEVENTY FIVE MILLION DOLLARS on October 31, 1999, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semi-annually on April 30 and October 31 of each year, commencing April 30, 1997, on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the April 30 or the October 31, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or unless no interest has been paid on this Note or duly provided for, in which case from November 6, 1996, until payment of said principal sum has been made or duly provided for; provided, that payment of interest may be made at the option of the Issuer by check mailed by first class mail to the address of the person entitled thereto as such address shall appear on the Security register. Notwithstanding the foregoing, if the date hereof is after April 15 or October 15 as the case may be, and before the following April 30 or October 31, this Note shall bear interest from such April 30 or October 31; provided, that if the Issuer shall default in the payment of interest due on such April 30 or October 31, then this Note shall bear interest from the next preceding April 30 or October 31, to which interest has been paid or duly provided for or, if no interest has been paid on this Note or duly provided for, from November 6, 1996. The interest so payable on any April 30 or October 31, will, subject to certain exceptions provided in the Senior Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such April 30 or October 31. Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Trustee under the Senior Indenture referred to on the reverse hereof by manual signature. IN WITNESS WHEREOF, SunAmerica Inc. has caused this instrument to be signed by facsimile by one of its duly authorized officers and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. TRUSTEE'S CERTIFICATE SUNAMERICA INC. OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Senior Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee AUTHORIZED SIGNATORY _________________________________ CHAIRMAN AND CHIEF EXECUTIVE OFFICER [REVERSE OF NOTE] SUNAMERICA INC. 6.20% Note Due October 31, 1999 This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Issuer (hereinafter called the "Securities") of the series hereinafter specified, all issued or to be issued under and pursuant to a Senior Indenture dated as of April 15, 1993, as amended by indenture supplement dated June 28, 1993 and October 31, 1996 (herein called the "Senior Indenture"), duly executed and delivered by the Issuer to The First National Bank of Chicago, as Trustee (herein called the "Trustee"), to which Senior Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders of the Securities. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any) and may otherwise vary as provided in the Senior Indenture. This Note is one of a series designated as the 6.20% Notes due 1999 (the "Notes") of the Issuer, limited in aggregate principal amount to $375,000,000. Except as otherwise provided in the Senior Indenture, this Note will be issued in global form only registered in the name of the depositary or its nominee. This Note will not be issued in definitive form, except as otherwise provided in the Senior Indenture, and ownership of this Note shall be maintained in book-entry form by the Depositary for the accounts of participating organizations of the Depositary. In case an Event of Default with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Senior Indenture. The Senior Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Senior Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Senior Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Senior Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Senior Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Senior Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution hereof or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Senior Indenture and no provision of this Note or of the Senior Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. The Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, and in the manner and subject to the limitations provided in the Senior Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations. The Notes are not redeemable or repayable prior to maturity and are not entitled to any sinking fund. Upon due presentment for registration of transfer of this Note at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Senior Indenture, without charge except for any tax or other governmental charge imposed in connection therewith. The Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment of, or on account of, the principal hereof and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and none of the Issuer, the Trustee or any authorized agent of the Issuer or the Trustee shall be affected by any notice to the contrary. No recourse under or upon any obligation, covenant or agreement of the Issuer in the Senior Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholders, officer or director, as such, of the Issuer or of any successor corporation, either directly or through the Issuer or any successor corporation, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof. This Note shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. Terms used herein which are defined in the Senior Indenture shall have the respective meanings assigned thereto in the Senior Indenture. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common UNIF GIFT MIN ACT- ________Custodian______ TEN ENT - as tenants by the (Cust) (Minor) entireties JT TEN - as joint tenants Under Uniform Gifts to Minors with right of Act_______________________________ survivorship and not (State) as tenants in common Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------ the within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorney to transfer such note on the books of the Issuer, with full power of substitution in the premises. Dated:___________________ Signed: _______________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Note in every particular without attention or enlargement or any change whatsoever. Signature Guarantee: _________________________ EX-4.2 7 EXHIBIT 4.2 FORM OF NOTE FRONT SIDE OF NOTE SUNAMERICA INC. 6.20% Note Due October 31, 1999, Series 2 Number R__________ CUSIP 866930 AF7 Unless and until this certificate is exchanged in whole or in part for Notes in definitive registered form, this Note may not be transferred except as a whole by The Depositary Trust Company, a New York corporation ("DTC"), to its nominee or by its nominee to DTC or another nominee of DTC or by DTC or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any certificate issued in exchange herefor shall be registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment in respect hereof shall be made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC). SUNAMERICA INC., a Maryland corporation (the "Issuer", which term includes any successor corporation under the Senior Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, the principal sum of FIFTY SIX MILLION TWO HUNDRED AND FIFTY THOUSAND DOLLARS on October 31, 1999, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semi-annually on April 30 and October 31 of each year, commencing April 30, 1997, on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the April 30 or the October 31, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or unless no interest has been paid on this Note or duly provided for, in which case from November 6, 1996, until payment of said principal sum has been made or duly provided for; provided, that payment of interest may be made at the option of the Issuer by check mailed by first class mail to the address of the person entitled thereto as such address shall appear on the Security register. Notwithstanding the foregoing, if the date hereof is after April 15 or October 15 as the case may be, and before the following April 30 or October 31, this Note shall bear interest from such April 30 or October 31; provided, that if the Issuer shall default in the payment of interest due on such April 30 or October 31, then this Note shall bear interest from the next preceding April 30 or October 31, to which interest has been paid or duly provided for or, if no interest has been paid on this Note or duly provided for, from November 6, 1996. The interest so payable on any April 30 or October 31, will, subject to certain exceptions provided in the Senior Indenture referred to on the reverse hereof, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such April 30 or October 31. Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by the Trustee under the Senior Indenture referred to on the reverse hereof by manual signature. IN WITNESS WHEREOF, SunAmerica Inc. has caused this instrument to be signed by facsimile by one of its duly authorized officers and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. TRUSTEE'S CERTIFICATE SUNAMERICA INC. OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Senior Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee AUTHORIZED SIGNATORY _________________________________ CHAIRMAN AND CHIEF EXECUTIVE OFFICER [REVERSE OF NOTE] SUNAMERICA INC. 6.20% Note Due October 31, 1999, Series 2 This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Issuer (hereinafter called the "Securities") of the series hereinafter specified, all issued or to be issued under and pursuant to a Senior Indenture dated as of April 15, 1993, as amended by indenture supplements dated June 28, 1993 and October 31, 1996 (herein called the "Senior Indenture"), duly executed and delivered by the Issuer to The First National Bank of Chicago, as Trustee (herein called the "Trustee"), to which Senior Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders of the Securities. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any) and may otherwise vary as provided in the Senior Indenture. This Note is one of a series designated as the 6.20% Notes due October 31, 1999, Series 2 (the "Notes") of the Issuer, limited in aggregate principal amount to $56,250,000. Except as otherwise provided in the Senior Indenture, this Note will be issued in global form only registered in the name of the Depositary or its nominee. This Note will not be issued in definitive form, except as otherwise provided in the Senior Indenture, and ownership of this Note shall be maintained in book-entry form by the Depositary for the accounts of participating organizations of the Depositary. In case an Event of Default with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Senior Indenture. The Senior Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series issued under such Senior Indenture then Outstanding and affected, voting as one class, to add any provisions to, or change in any manner or eliminate any of the provisions of, such Senior Indenture or modify in any manner the rights of the Holders of the Securities of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the Holder of each outstanding Security affected thereby, (i) extend the stated maturity of the principal of any Security, or reduce the principal amount thereof or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or change the currency in which the principal thereof (including any amount in respect of original issue discount) or interest thereon is payable or reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy or impair the right to institute suit for the enforcement of any payment on any Security when due or (ii) reduce the aforesaid percentage in principal amount of Securities of any series issued under such Senior Indenture, the consent of the Holders of which is required for any such modification. It is also provided in the Senior Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain defaults or Events of Default, all or certain series of the Securities) may on behalf of the Holders of all the Securities of such series (or all or certain series of the Securities, as the case may be) waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal or interest on any of the Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Senior Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution hereof or on registration of transfer hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Senior Indenture and no provision of this Note or of the Senior Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. The Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, and in the manner and subject to the limitations provided in the Senior Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations. The Notes are not redeemable or repayable prior to maturity and are not entitled to any sinking fund. Upon due presentment for registration of transfer of this Note at the office or agency of the Issuer in the Borough of Manhattan, The City of New York, or at such other locations as the Issuer may from time to time designate, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Senior Indenture, without charge except for any tax or other governmental charge imposed in connection therewith. The Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment of, or on account of, the principal hereof and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and none of the Issuer, the Trustee or any authorized agent of the Issuer or the Trustee shall be affected by any notice to the contrary. No recourse under or upon any obligation, covenant or agreement of the Issuer in the Senior Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholders, officer or director, as such, of the Issuer or of any successor corporation, either directly or through the Issuer or any successor corporation, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof. This Note shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. Terms used herein which are defined in the Senior Indenture shall have the respective meanings assigned thereto in the Senior Indenture. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common UNIF GIFT MIN ACT-_________Custodian________ TEN ENT - as tenants by the (Cust) (Minor) entireties JT TEN - as joint tenants Under Uniform Gifts to Minors with right of Act___________________________________ survivorship and not (State) as tenants in common Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------ the within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorney to transfer such note on the books of the Issuer, with full power of substitution in the premises. Dated:_____________________ Signed: ______________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Note in every particular without attention or enlargement or any change whatsoever. Signature Guarantee: - --------------------------- EX-4.3 8 EXBHIBIT 4.3 ============================================================================== SUNAMERICA INC. AND THE BANK OF NEW YORK, AS PURCHASE CONTRACT AGENT PURCHASE CONTRACT AGREEMENT DATED AS OF NOVEMBER 6, 1996 ============================================================================== TABLE OF CONTENTS Page ==== ARTICLE 1 Definitions and Other Provisions of General Application Section 1.01. Definitions.............................................1 Section 1.02. Compliance Certificates and Opinions....................9 Section 1.03. Form of Documents Delivered to Agent...................10 Section 1.04. Acts of Holders; Record Dates..........................11 Section 1.05. Notices, Etc., to Agent and the Company................12 Section 1.06. Notice to Holders; Waiver..............................13 Section 1.07. Effect of Headings and Table of Contents...............13 Section 1.08. Successors and Assigns.................................14 Section 1.09. Separability Clause....................................14 Section 1.10. Benefits of Agreement..................................14 Section 1.11. Governing Law..........................................14 Section 1.12. Legal Holidays.........................................14 Section 1.13. Counterparts...........................................15 Section 1.14. Inspection of Agreement................................15 Section 1.15. Appointment of Financial Institution as Agent for the Company ...........................................15 ARTICLE 2 Security Certificate Forms Section 2.01. Forms of Security Certificates Generally; Book-Entry...15 Section 2.02. Form of Agent's Certificate of Authentication..........18 ARTICLE 3 The Securities Section 3.01. Title and Terms; Denominations.........................18 Section 3.02. Rights and Obligations Evidenced by the Security Certificates .................................18 Section 3.03. Execution, Authentication, Delivery and Dating.........19 Section 3.04. Temporary Security Certificates........................20 Section 3.05. Registration; Registration of Transfer and Exchange....20 Section 3.06. Mutilated, Destroyed, Lost and Stolen Security Certificates...........................................22 Section 3.07. Persons Deemed Owners..................................23 Section 3.08. Cancellation...........................................24 Section 3.09. Securities Not Separable...............................25 Section 3.10. No Consent to Assumption...............................25 Section 3.11. Cusip Numbers..........................................25 ARTICLE 4 The Treasury Notes Section 4.01. Payment of Interest; Interest Rights Preserved.........25 Section 4.02. Transfer of Treasury Notes upon Certain Events or Sale of Treasury Notes.................................26 ARTICLE 5 The Purchase Contracts Section 5.01. Purchase of Shares of Common Stock on the Final Settlement Date........................................28 Section 5.02. Contract Fees..........................................29 Section 5.03. Deferral of Payment Dates for Contract Fees............30 Section 5.04. Payment of Purchase Price..............................31 Section 5.05. Issuance of Common Stock...............................31 Section 5.06. Settlement Rate; Adjustment of Settlement Rate for Dividends, Distributions, Stock Splits, Etc............32 Section 5.07. Notice of Adjustments and Certain Other Events.........38 Section 5.08. Acceleration; Notice...................................39 Section 5.09. Bankruptcy Event or Sale of Assets; Notice.............42 Section 5.10. Holder's Early Settlement..............................43 Section 5.11. No Fractional Shares...................................44 Section 5.12. Charges and Taxes......................................45 ARTICLE 6 Remedies Section 6.01. Unconditional Right of Holders to Receive Contract Fees and Purchase Common Stock.........................45 Section 6.02. Restoration of Rights and Remedies.....................46 Section 6.03. Rights and Remedies Cumulative.........................46 Section 6.04. Delay or Omission Not Waiver...........................46 Section 6.05. Undertaking for Costs..................................46 Section 6.06. Waiver of Stay or Extension Laws.......................47 ARTICLE 7 The Agent Section 7.01. Certain Duties and Responsibilities....................47 Section 7.02. Notice of Default......................................48 Section 7.03. Certain Rights of Agent................................48 Section 7.04. Not Responsible for Recitals or Issuance of Securities.50 Section 7.05. May Hold Securities....................................50 Section 7.06. Money Held in Custody..................................50 Section 7.07. Compensation and Reimbursement.........................50 Section 7.08. Corporate Agent Required; Eligibility..................51 Section 7.09. Resignation and Removal; Appointment of Successor......52 Section 7.10. Acceptance of Appointment by Successor.................53 Section 7.11. Preservation of Information; Communications to Holders.53 Section 7.12. No Obligations of Agent................................54 Section 7.13. Tax Compliance.........................................54 Section 7.14. Merger, Conversion, Consolidation or Succession to Business of Agent......................................55 ARTICLE 8 Supplemental Agreements Section 8.01. Supplemental Agreements Without Consent of Holders.....55 Section 8.02. Supplemental Agreements with Consent of Holders........56 Section 8.03. Execution of Supplemental Agreements...................57 Section 8.04. Effect of Supplemental Agreements......................57 Section 8.05. Reference to Supplemental Agreements...................57 ARTICLE 9 Covenants Section 9.01. Performance under Purchase Contracts...................58 Section 9.02. Maintenance of Office or Agency........................58 Section 9.03. Company to Reserve Common Stock........................59 Section 9.04. Covenants as to Common Stock...........................59 Section 9.05. Statements of Officers of the Company as to Default....59 PURCHASE CONTRACT AGREEMENT, dated as of November 6, 1996, between SunAmerica Inc., a Maryland corporation (the "Company"), and The Bank of New York, a New York banking corporation, acting as purchase contract agent for the Holders of Securities from time to time (the "Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Security Certificates evidencing the Securities. All things necessary to make the Company's obligations under the Securities, when the Security Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent, as in this Agreement provided, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done. WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed as follows: ARTICLE 1 Definitions and Other Provisions of General Application Section 1.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; and (2) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" when used with respect to any Holder, has the meaning specified in Section 1.04(a). "Acceleration" means either a "Company Acceleration" or a "Mandatory Acceleration." "Acceleration Date" means either a "Company Acceleration Date" or a "Mandatory Acceleration Date." "Acceleration Settlement Fund" has the meaning specified in Section 5.5. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means the Person named as the "Agent" in the first paragraph of this instrument until a successor Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Agent" shall mean the Person who is then the Agent hereunder. "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "applicants" has the meaning specified in Section 7.11.0 "Authorized Newspaper" has the meaning set forth in Section 5.08(c). "Bankruptcy Code" means title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "Bankruptcy Date" means the date, if any, on which a Bankruptcy Event occurs. "Bankruptcy Event" means the occurrence of any of the following events (whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order rule or regulation of any administration or governmental body): (i) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (ii) the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors. "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). "Board of Directors" means the board of directors of the Company or a duly authorized committee of that board. "Board Resolution" means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Agent. "Book Entry Interest" means a beneficial interest in a Global Security Certificate registered in the name of a Clearing Agency or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Clearing Agency as described in Section 2.1.0 "Business Day" means any day that is not a Saturday, Sunday or a day on which the NYSE or banking institutions or trust companies in The City of New York are authorized or obligated by law or executive order to be closed. "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as depository for the Securities and in whose name or in the name of a nominee of that organization, shall be registered a Global Security Certificate and which shall undertake to effect book entry transfers and pledges of the 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 Price"means on any day the closing sales price regular way on such day or, in case no such sale takes place on such day, the average of the reported closing bid and asked prices regular way, in each case on the New York Stock Exchange, or, if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices of the Common Stock on the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated, or a similarly generally accepted reporting service, or if not so available in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors of the Company for that purpose. "Collateral Agent" means The First National Bank of Chicago, as Collateral Agent under the Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. "Common Stock" means the Common Stock, par value $1.000 per share, of the Company. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Company" shall mean such successor. "Company Acceleration" has the meaning specified in Section 5.8. "Company Acceleration Date" has the meaning specified in Section 5.8. "Company Acceleration Price" shall mean the per share price (payable in shares of Common Stock) at which the Company may accelerate settlement of the Securities, which shall be initially $59.289, declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $51.01081 on August 31, 1999 and equal to $50.625 thereafter. "Contract Fees" means the fees payable by the Company on each Payment Date in respect of each Purchase Contract, equal to 1.00% per annum of the Stated Amount plus any Deferred Contract Fees accrued pursuant to Section 5.3, computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be, except that the Contract Fees payable on the first Payment Date will be adjusted so that the Contract Fees payable on such date will be $.122243 per Security. "Corporate Trust Office" means the principal corporate trust office of the Agent at which, at any particular time, its corporate trust business shall be administered, which office at the date hereof is located at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust Trustee Administration. "Current Market Price" has the meaning specified in Section 5.6(g). "Deferred Contract Fees" has the meaning specified in Section 5.3. "Depositary" means a clearing agency registered under the Exchange Act that is designated to act as Depositary for the Securities as contemplated by Section 3.5. "DTC" has the meaning specified in Section 2.1.0 "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Expiration Date" has the meaning specified in Section 1.04(e). "Expiration Time" has the meaning specified in Section 5.6(f). "Final Settlement Date" means October 31, 1999. "Final Settlement Fund" has the meaning specified in Section 5.5. "Global Security Certificate" means a Security Certificate that evidences all or part of the Securities and is registered in the name of a Depositary or a nominee thereof. "Holder" when used with respect to a Security Certificate (or a Security), means a Person in whose name the Security evidenced by such Security Certificate (or the Security Certificate evidencing such Security) is registered in the Security Register, subject to Section 3.7. "Holder's Early Settlement" has the meaning specified in Section 5.10(a). "Holder's Early Settlement Amount" has the meaning specified in Section 5.10(a). "Holder's Early Settlement Date" has the meaning specified in Section 5.10(a). "Indenture" means the Prepaid Securities Indenture between the Company and The Bank of New York, as Trustee, dated as of November 1, 1996 as amended by the First Supplemental Indenture between the Company and The Bank of New York, as Trustee, dated as of November 6, 1996 specifically relating to the Prepaid Securities, as amended from time to time. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by its Chairman of the Board, any Vice Chairman, its President, any Vice President or any Treasurer and delivered to the Agent. "Mandatory Acceleration" has the meaning specified in Section 5.8. "Mandatory Acceleration Date" has the meaning specified in Section 5.8. "Merger or Consolidation" has the meaning specified in Section 5.8. "Notice Date" has the meaning specified in Section 5.8. "NYSE" means the New York Stock Exchange. "Officers' Certificate" means a certificate signed by the Chairman of the Board, any Vice Chairman of the Board, the President, any Vice President or any Treasurer and delivered to the Agent. "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company and who shall be reasonably acceptable to the Agent. "Outstanding Securities" means, as of the date of determination, all Securities evidenced by then Outstanding Security Certificates, except: (i) If a Bankruptcy Event has occurred, Securities for which the underlying Treasury Notes have been theretofore deposited with the Agent in trust for the Holders of such Securities; and (ii) On and after a Company Acceleration Date, Securities as to which the Company has elected to effect a Company Acceleration; provided, however, that in determining whether the Holders of the requisite number of Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Agent knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Agent the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any Affiliate of the Company. "Outstanding Security Certificates" means, as of the date of determination, all Security Certificates theretofore authenticated, executed and delivered under this Agreement, except: (i) Security Certificates theretofore canceled by the Agent or delivered to the Agent for cancellation; and (ii) Security Certificates in exchange for or in lieu of which other Security Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Security Certificate in respect of which there shall have been presented to the Agent proof satisfactory to it that such Security Certificate is held by a bona fide purchaser in whose hands the Securities evidenced by such Security Certificate are valid obligations of the Company. "Payment Date" means each April 30 and October 31commencing April 30, 1997. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Pledge" means the pledge under the Pledge Agreement of the Treasury Notes constituting a part of the Securities. "Pledge Agreement" means the Pledge Agreement, dated as of the date hereof, among the Company, the Collateral Agent and the Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Securities. "Predecessor Security Certificate" of any particular Security Certificate means every previous Security Certificate evidencing all or a portion of the rights and obligations of the Holder under the Securities evidenced thereby; and, for the purposes of this definition, any Security Certificate authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security Certificate shall be deemed to evidence the same rights and obligations of the Holder as the mutilated, destroyed, lost or stolen Security Certificate. "Prepaid Securities" means the series of securities issued under the Indenture and designated the "8.5% Prepaid Premium Equity Redemption Cumulative Securities" to be issued upon a Holder's Early Settlement. "Purchase Contract," when used with respect to any Security, means the contract obligating the Company to sell and the Holder of such Security to purchase Common Stock and to pay Contract Fees and Deferred Contract Fees, if any, on the terms and subject to the conditions set forth in Article 5 hereof. "Purchased Shares" has the meaning specified in Section 5.6(g). "Record Date" for the interest and Contract Fees payable on any Payment Date means, as to any Global Security Certificate, the Business Day next preceding such Payment Date, and as to any other Security Certificate, the 15th day of the month preceding such Payment Date. "Responsible Officer," when used with respect to the Agent, means any officer of the Agent assigned by the Agent to administer its corporate trust matters. "Sale of Assets" means a sale, assignment, transfer, lease or conveyance of all or substantially all of the properties and assets of the Company to any Person which results in a voluntary liquidation, dissolution or winding up of the Company. "Sale of Assets Date" means the date upon which a Sale of Assets is approved by the Board of Directors. "Security" means the collective rights and obligations of a Holder of a Security Certificate in respect of Treasury Notes with a principal amount equal to the Stated Amount, subject to the Pledge thereof, and a Purchase Contract. "Security Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Securities specified on such certificate. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5. "Settlement Date" means an Acceleration Date, a Holder's Early Settlement Date, a Sale of Assets Date or the Final Settlement Date, as applicable. "Settlement Rate" has the meaning specified in Article 5. "Stated Amount" means $37.50. "TIA" means the Trust Indenture Act of 1939, as amended, or any successor statute. "Trading Day" has the meaning specified in Section 5.6(g). "Treasury Notes" means 7.5% United States Treasury Notes due October 31, 1999. "Underwriting Agreement" means the Purchase Agreement dated October 31, 1996 between the Company and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and Smith Barney Inc., as representatives of the several Underwriters named therein (collectively, the "Underwriters"), as amended by the First Amendment to the Underwriting Agreement dated November 1, 1996 between the Company and the Underwriters. "Vice President" means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president." Section 1.02. Compliance Certificates and Opinions. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Agent to take any action under any provision of this Agreement, the Company shall furnish to the Agent an Officers' Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him 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 individual, such condition or covenant has been complied with. Section 1.03. Form of Documents Delivered to Agent. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. Section 1.04. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Agent deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security Certificate evidencing such Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security Certificate. (e) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite number of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Agent in writing and to each Holder of Securities in the manner set forth in Section 1.06. With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Agent in writing, and to each Holder of Securities in the manner set forth in Section 1.06, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. Section 1.05. Notices, Etc., to Agent and the Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with, (a) the Agent by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, to the Agent at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust Trustee Administration, or at any other address previously furnished in writing by the Agent to the Holders and the Company, or (b) the Company by the Agent or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, to the Company at 1 SunAmerica Center, Los Angeles, California 90067-6022, Attention: Susan L. Harris, or at any other address previously furnished in writing to the Agent by the Company. Section 1.06. Notice to Holders; Waiver. Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Agent shall constitute a sufficient notification for every purpose hereunder. Section 1.07. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.08. Successors and Assigns. All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not. Section 1.09. Separability Clause. In case any provision in this Agreement or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. Section 1.10. Benefits of Agreement. Nothing in this Agreement or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Securities evidenced by their Security Certificates by their acceptance of delivery thereof. Section 1.11. Governing Law. This Agreement and the Securities shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of laws. Section 1.12. Legal Holidays. In any case where any Payment Date or any Settlement Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or of the Securities) payment in respect of interest on Treasury Notes or Contract Fees or settlement of Purchase Contracts shall not be made, Purchase Contracts shall not be performed and settlement shall not be effected on such date, but such payments shall be made, or the Purchase Contracts shall be performed or settlement effected, as applicable, on the next succeeding Business Day with the same force and effect as if made on such Payment Date or Settlement Date, as the case may be; provided, that no interest shall accrue or be payable by the Company or any Holder for the period from and after any such Payment Date or Settlement Date, as the case may be. Section 1.13. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Section 1.14. Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times at the Corporate Trust Office for inspection by any Holder. Section 1.15. Appointment of Financial Institution as Agent for the Company . The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations, and in accepting and enforcing performance of the obligations of the Agent and the Holders, under this Agreement and the Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.05 hereof. Any such appointment shall not relieve the Company in any way from its obligations hereunder. ARTICLE 2 Security Certificate Forms Section 2.01. Forms of Security Certificates Generally; Book-Entry. The Security Certificates (including the form of Purchase Contracts forming part of the Securities evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Securities are listed or Depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Security Certificates, as evidenced by their execution of the Security Certificates. The definitive Security Certificates (if any) shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Security Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. Every Global Security Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY 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., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. The Securities will be issued in the form of one or more, fully registered Global Security Certificates, to be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Company. Such Global Security Certificates shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of DTC, and no Holder will receive a definitive Security Certificate representing such Holder's interests in such Global Security Certificates, except as provided in this Section 2.01. Unless and until definitive, fully registered Security Certificates have been issued to a Holder pursuant to the provisions of this Section 2.01: (i) the provisions of this Section 2.001 shall be in full force and effect; (ii) the Company and the Agent shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including the payment of any amounts on the Global Security Certificates and receiving approvals, votes or consents hereunder) as the Holder and the sole holder of the Global Security Certificates and shall have no obligation to the Beneficial Owner; (iii) to the extent that the provisions of this Section 2.001 conflict with any other provisions of this Agreement or the Purchase Contracts, the provisions of this Section 2.001 shall control; and (iv) the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will make book entry transfers among the Clearing Agency Participants and receive and transmit payments of amounts on the Global Security Certificates to such Clearing Agency Participants. Whenever a notice or other communication to the Holders is required to be given under this Agreement, unless and until definitive Security Certificates shall have been issued, the Company and the Agent shall give all such notices and communications, specified herein to be given to Holders, to the Clearing Agency and, with respect to any Security Certificate registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Company and the Agent shall have no notice obligations to the Holder. If any Clearing Agency elects to discontinue its services as securities depositary with respect to the Securities, the Company may, in their sole discretion, appoint a successor Clearing Agency with respect to the Securities. If (i) a Clearing Agency elects to discontinue its services as securities depositary with respect to the Securities and a successor Clearing Agency is not appointed within 90 days after such discontinuance or (ii) the Company elects after consultation with the Agent to terminate the book entry system through the Clearing Agency with respect to the Securities, then (x) definitive Security Certificates shall be prepared by the Agent on behalf of the Company with respect to such Securities and (y) upon surrender of the Global Security Certificates by the Clearing Agency, accompanied by registration instructions, the Agent shall cause definitive Security Certificates to be delivered to Holders in accordance with the instructions of the Clearing Agency. Neither the Agent nor the Company shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on and shall be protected in relying on, such instructions. Section 2.02.0 Form of Agent's Certificate of Authentication. The form of the Agent's certificate of authentication of the Securities shall be in substantially the form set forth on the form of the Security Certificates. ARTICLE 3 The Securities Section 3.01. Title and Terms; Denominations. The aggregate number of Securities evidenced by Security Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to 11,500,000, with a Stated Amount of $37.50 per Security, except for Security Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Security Certificates pursuant to Section 3.04, 3.05, 3.06, 5.10 or 8.5. The Security Certificates shall be issuable only in registered form and only in denominations of a single Security and any integral multiple thereof. Section 3.02. Rights and Obligations Evidenced by the Security Certificates. Each Security Certificate shall evidence the number of Securities specified therein, with each such Security representing the ownership by the Holder thereof of Treasury Notes with a principal amount equal to the Stated Amount, subject to the Pledge of such Treasury Notes by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder shall pledge, pursuant to the Pledge Agreement, dated as of the date hereof, the Treasury Notes to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title, and interest of such Holders in the Treasury Notes, for the benefit of the Company, to secure the obligation of the Holders under the Purchase Contracts to purchase the Common Stock of the Company. Prior to the purchase, if any, of shares of Common Stock under the Purchase Contracts, the Securities shall not entitle the Holders to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as stockholders of the Company, except to the extent otherwise expressly provided in this Agreement. Section 3.03 Execution, Authentication, Delivery and Dating. Upon the execution and delivery of this Agreement, at any time and from time to time thereafter, the Company may deliver Security Certificates executed by the Company to the Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Security Certificates, and the Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holder and make available for delivery such Security Certificates. The Security Certificates shall be executed on behalf of the Company by its Chairman of the Board, any Vice Chairman of the Board, its President or any Vice President or its Treasurer, under its corporate seal which may, but need not, be attested. The signature of any of these officers on the Security Certificates may be manual or facsimile. Security Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Security Certificates or did not hold such offices at the date of such Security Certificates. No Purchase Contract underlying a Security evidenced by a Security Certificate shall be valid until such Security Certificate has been executed on behalf of the Holder by the manual signature of an authorized signatory of the Agent, as such Holder's attorney-in-fact. Such signature by an authorized signatory of the Agent shall be conclusive evidence that the Holder of such Security Certificate has entered into the Purchase Contracts underlying the Securities evidenced by such Security Certificate. Each Security Certificate shall be dated the date of its authentication. No Security Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Security Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Agent by manual signature, and such certificate upon any Security Certificate shall be conclusive evidence, and the only evidence, that such Security Certificate has been duly authenticated and made available for delivery hereunder. Section 3.04. Temporary Security Certificates. Pending the preparation of definitive Security Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Security Certificates, temporary Security Certificates which are in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Securities are listed, or as may, consistently herewith, be determined by the officers of the Company executing such Security Certificates, as evidenced by their execution of the Security Certificates. If temporary Security Certificates are issued, the Company will cause definitive Security Certificates to be prepared without unreasonable delay. After the preparation of definitive Security Certificates, the temporary Security Certificates shall be exchangeable for definitive Security Certificates upon surrender of the temporary Security Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Security Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Security Certificates of authorized denominations and evidencing a like number of Securities as the temporary Security Certificate or Security Certificates so surrendered. Until so exchanged, the temporary Security Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Securities evidenced thereby as definitive Security Certificates. Section 3.05. Registration; Registration of Transfer and Exchange. The Agent shall keep at the Corporate Trust Office a register (the register maintained in such office being herein referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of Security Certificates and of transfers of Security Certificates (the Agent, in such capacity, the "Security Registrar"). Upon surrender for registration of transfer of any Security Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Security Certificates of any authorized denominations and evidencing a like number of Securities. At the option of the Holder, if definitive Security Certificates are issued, Security Certificates may be exchanged for other Security Certificates, of any authorized denominations and evidencing a like number of Securities, upon surrender of the Security Certificates to be exchanged at the Corporate Trust Office. Whenever any Security Certificates are so surrendered for exchange, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver the Security Certificates which the Holder making the exchange is entitled to receive. All Security Certificates issued upon any registration of transfer or exchange of a Security Certificate shall evidence the ownership of the same number of Securities and be entitled to the same benefits and subject to the same obligations, under this Agreement as the Securities evidenced by the Security Certificate surrendered upon such registration of transfer or exchange. Every Security Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by the Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Agent duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of a Security Certificate, but the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Security Certificates, other than any exchanges pursuant to Sections 3.04, 3.06, 5.10, and 8.5 not involving any transfer. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Security Certificate presented or surrendered for registration of transfer or for exchange on or after the Final Settlement Date, an earlier Acceleration Date with respect to the Securities evidenced by such Certificates, a Holder's Early Settlement Date with respect to the Securities evidenced by such Certificates or after the Purchase Contracts have terminated. In lieu of the delivery of a replacement Security Certificate following the Final Settlement Date or an earlier Acceleration Date with respect to the Securities evidenced by such Certificates, the Agent, upon satisfaction of any conditions set forth herein, will deliver the Common Stock issuable pursuant to the Purchase Contracts included in the Securities evidenced by such Certificate, or, if the Purchase Contracts have terminated prior to the Final Settlement Date or a Holder's Early Settlement Date has occurred, upon satisfaction of any conditions set forth herein, transfer the Treasury Notes included in the Securities evidenced by such Certificate. The provisions of Clauses (a), (b), (c) and (d) below shall apply only to Global Security Certificates: (a) Each Global Security Certificate authenticated and executed on behalf of the Holders under this Agreement shall be registered in the name of Cede & Co., as nominee of DTC as set forth in Section 2.1. (b) Notwithstanding any other provision in this Agreement, no Global Security Certificate may be exchanged in whole or in part for Security Certificates registered, and no transfer of a Global Security Certificate in whole or in part may be registered, in the name of any Person other than DTC for such Global Security Certificate or a nominee thereof unless (A) DTC (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security Certificate or (ii) has ceased to be a Clearing Agency registered under the Exchange Act or (B) there shall have occurred and be continuing a default by the Company in respect to its obligations under one or more Purchase Contracts. (c) Subject to clause (b) above, any exchange of a Global Security Certificate for other Security Certificates may be made in whole or in part, and all Security Certificates issued in exchange for a Global Security Certificate or any portion thereof shall be registered in such names as DTC shall direct. (d) Every Security Certificate authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security Certificate or any portion thereof, whether pursuant to this Section, Section 3.04, 3.06, 5.10 or 8.5 or otherwise, shall be authenticated, executed on behalf of the Holders and delivered in the form of, and shall be, a Global Security Certificate, unless such Security Certificate is registered in the name of a Person other than the Depositary for such Global Security Certificate or a nominee thereof. Section 3.06. Mutilated, Destroyed, Lost and Stolen Security Certificates. If any mutilated Security Certificate is surrendered to the Agent, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and make available for delivery in exchange therefor, a new Security Certificate, evidencing the same number of Securities and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Security Certificate, and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Agent that such Security Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and make available for delivery to the Holder, in lieu of any such destroyed, lost or stolen Security Certificate, a new Security Certificate, evidencing the same number of Securities and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Security Certificate on or after a Bankruptcy Date or a Settlement Date. Upon the issuance of any new Security Certificate under this Section, the Company and the Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Agent) connected therewith. Every new Security Certificate issued pursuant to this Section 3.004 in lieu of any destroyed, lost or stolen Security Certificate shall constitute an original additional contractual obligation of the Company and of the Holder, whether or not the destroyed, lost or stolen Security Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Security Certificates delivered hereunder. The provisions of this Section 3.004 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or settlement of mutilated, destroyed, lost or stolen Security Certificates. Section 3.07. Persons Deemed Owners. Prior to due presentment of a Security Certificate for registration of transfer, the Company and the Agent, and any agent of the Company or the Agent, may treat the Person in whose name such Security Certificate is registered as the owner of the Securities evidenced thereby, for the purpose of receiving payments of interest on the Treasury Notes, receiving payments of Contract Fees and any Deferred Contract Fees, delivery of the Treasury Notes, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not the payment of interest on the Treasury Notes or any Contract Fees payable in respect of the Purchase Contracts constituting a part of the Securities evidenced thereby shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Agent, nor any agent of the Company or the Agent, shall be affected by notice to the contrary. Notwithstanding the foregoing, with respect to any Global Security Certificate, nothing herein shall prevent the Company, the Agent or any agent of the Company or the Agent, from giving effect to any written certification, proxy or other authorization furnished by DTC, as a Holder, with respect to such Global Security Certificate or impair, as between DTC and the Beneficial Owners, the operation of customary practices governing the exercise of rights of DTC as Holder of such Global Security Certificate. Section 3.08. Cancellation. All Security Certificates surrendered for delivery of shares of Common Stock on or after the Final Settlement Date or an earlier Acceleration Date, transfer of Treasury Notes after the occurrence of a Bankruptcy Event or Sale of Assets or pursuant to a Holder's Early Settlement or registration of transfer or exchange shall, if surrendered to any Person other than the Agent, be delivered to the Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Agent for cancellation any Security Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Security Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the Agent. No Security Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Security Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Security Certificates held by the Agent shall be disposed of as directed by Issuer Order, except the Agent itself shall not be required to destroy the Security Certificates. If the Company or any Affiliate of the Company shall acquire any Security Certificate, such acquisition shall not operate as a cancellation of such Security Certificate unless and until such Security Certificate is delivered to the Agent cancelled or for cancellation. Section 3.09. Securities Not Separable. Notwithstanding anything contained herein or in the Security Certificates to the contrary, for so long as the Purchase Contract comprising a portion of a Security remains in effect, such Security shall not be separable into its constituent parts, for purposes of transfer or exchange of such Security, and the rights and obligations of the Holder of such Security in respect of the Treasury Notes and Purchase Contracts comprising such Security may be acquired, and may be transferred and exchanged, only as a Security. Other than a Security Certificate evidencing a Security, no Holder of a Security, or any transferee thereof, shall be entitled to receive a certificate evidencing the ownership of Treasury Notes or the rights and obligations of the Holder and the Company under a Purchase Contract for so long as the Purchase Contract underlying the Security remains in effect. Section 3.10. No Consent to Assumption. Each Holder of a Security, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its trustee in the event that the Company becomes the debtor under the Bankruptcy Code. Section 3.11. Cusip Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Agent shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of Acceleration and that reliance may be placed only on the other identification numbers printed on the Securities, and any such Acceleration shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Agent of any change in the CUSIP numbers. ARTICLE 4 The Treasury Notes Section 4.01. Payment of Interest; Interest Rights Preserved. Interest on any Treasury Note which is paid on any Payment Date shall, subject to receipt thereof by the Agent from the Collateral Agent as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the Security Certificate (or one or more Predecessor Security Certificates) of which such Treasury Note is a part is registered at the close of business on the Record Date next preceding such Payment Date. On the first Payment Date, the Agent shall pay, subject to receipt from the Collateral Agent, to the Holders the accrued interest on the Treasury Notes for the period from November 1, 1996 to November 6, 1996 as part of the interest payment on the Treasury Notes. Each Security Certificate evidencing Treasury Notes delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Security Certificate shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by the Treasury Notes underlying such other Security Certificate. In the case of any Security with respect to which settlement of the underlying Purchase Contract is effected on a Settlement Date after any Record Date and on or prior to the next succeeding Payment Date, interest on the Treasury Notes underlying such Security otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such settlement, and such interest shall, subject to receipt thereof by the Agent, be paid to the Person in whose name the Security Certificate (or one or more Predecessor Security Certificates) is registered at the close of business on the Record Date. Section 4.02. Transfer of Treasury Notes upon Certain Events or Sale of Treasury Notes. (a) Upon the occurrence of a Bankruptcy Event or Sale of Assets and the transfer to the Agent of the Treasury Notes underlying the Securities pursuant to the terms of the Pledge Agreement, the Agent shall request transfer instructions with respect to such Treasury Notes from each Holder of Securities by written request mailed to such Holder at his address as it appears in the Security Register, in respect of the Treasury Notes underlying the Security Certificate held by such Holder. Upon surrender to the Agent of a Security Certificate with such transfer instructions in proper form for transfer of the Treasury Notes by Federal Reserve Bank-Wire or other appropriate procedure, subject to the receipt of the Treasury Notes, the Agent shall transfer the Treasury Notes evidenced by such Security Certificate to such Holder in accordance with such instructions within three Business Days. If a Security Certificate is not duly surrendered to the Agent with appropriate transfer instructions, the Agent shall hold the Treasury Notes evidenced by such Security Certificate as custodian for the Holder of such Security Certificate. (b) In the event of an Acceleration of Securities, Holders of Securities so accelerated may elect to pay to the Company through the Agent by no later than 5:00 p.m., New York City time on the third Business Day immediately preceding the Acceleration Date in immediately available funds an amount in U.S. dollars equal to the Stated Amount per Security so accelerated. Holders may make the election provided in this paragraph (b) only in integral multiples of 400 Securities. Upon Surrender to the Agent of a Security Certificate with such transfer instructions in proper form for transfer of the Treasury Notes by Federal Reserve Bank-Wire or other appropriate procedure, along with the payment described in the previous sentence, subject to receipt from the Collateral Agent, the Agent shall transfer the Treasury Notes evidenced by such Security Certificate to such Holder in accordance with such instructions within three Business Days of such payment. If payment is made in accordance with the first sentence of this paragraph (b), the Company will issue the number of shares of Common Stock equal to the Stated Amount for the Securities accelerated on the Acceleration Date. The Company will also pay in cash on the Acceleration Date accrued Contract Fees and Deferred Contract Fees, if any, to holders of Securities who elect to pay the Stated Amount in cash upon an Acceleration as provided in this Section. (c) Because Holders may only elect to make a payment in cash pursuant to paragraph (b) above in integral multiples of 400 Securities, Treasury Notes shall be transferred only in denominations of $15,000 and integral multiples thereof. Any Securities accelerated which are not in integral multiples of 400 shall be settled in shares of Common Stock pursuant to Section 5.8. (d) In the case of an Acceleration of Securities, the Agent on behalf of each Holder (other than Holders that, pursuant to an election made in accordance with paragraph (b) of this Section, have paid the Stated Amount in immediately available funds not later than 5:00 p.m., New York City time on the third Business Day immediately preceding the Acceleration Date) will sell on the second Business Day immediately preceding the Acceleration Date the Treasury Notes underlying each such Holder's Securities to or through one or more U.S. government securities dealers selected by the Company at the then prevailing prices and automatically apply on the Acceleration Date, out of the proceeds of such sale (excluding premium and accrued interest on the Treasury Notes), an amount equal to the Stated Amount to satisfy in full each such Holder's obligation to purchase the Common Stock from the Company on the Acceleration Date. Any excess proceeds (in respect of premium on the sale of the Treasury Notes) will be paid to such Holder. In the event that the proceeds from the sale of such Treasury Notes (exclusive of accrued interest on the Treasury Notes) is less than the Stated Amount, such proceeds nevertheless will satisfy in full each such Holder's obligation to purchase the Common Stock from the Company on the Acceleration Date. Amounts in respect of accrued interest on the Treasury Notes will be paid to each such Holder on the Acceleration Date. The proceeds of such sales shall be after deduction by the Agent of all commissions and other out-of-pocket transaction costs incurred in connection with the sale of such Treasury Notes and, until the net proceeds of such sale or sales have been distributed to Holders of the Securities, the Agent shall hold such proceeds as custodian for the Holders of Securities. Such proceeds shall be held by the Agent uninvested without liability to any Person for interest or other compensation thereon. ARTICLE 5 The Purchase Contracts Section 5.01. Purchase of Shares of Common Stock on the Final Settlement Date. Each Purchase Contract shall obligate the Holder of the related Security to purchase, and the Company to sell, on the Final Settlement Date at a price equal to the Stated Amount, a number of shares of Common Stock equal to the Settlement Rate on the Final Settlement Date, unless, on or prior to the Final Settlement Date, there shall have occurred a Bankruptcy Event , Sale of Assets, an Acceleration or a Holder's Early Settlement with respect to the Security of which such Purchase Contract is a part. Each Holder of a Security Certificate evidencing Securities, by his acceptance thereof, authorizes the Agent to enter into and perform the related Purchase Contracts on his behalf as his attorney-in-fact, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions hereof, authorizes the Agent as his attorney-in-fact to enter into and perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Treasury Notes underlying such Security Certificate pursuant to the Pledge Agreement. Each Holder of a Security, by his acceptance thereof, further covenants and agrees, that, to the extent and in the manner provided in Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments in respect of principal of the Treasury Notes on the Final Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Upon registration of transfer of a Security Certificate evidencing Purchase Contracts, the transferee shall be bound (without the necessity of any other action on the part of such transferee), under the terms of this Agreement, the Purchase Contracts evidenced thereby and the Pledge Agreement and the transferor shall be released from the obligations under the Purchase Contracts evidenced by the Security Certificates so transferred. The Company covenants and agrees, and each Holder of a Security Certificate, by his acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. Section 5.02. Contract Fees. Subject to Section 5.3, the Company shall pay by 12:00 noon New York City time to the Agent, on each Payment Date, the Contract Fees payable in respect of each Purchase Contract for the benefit of the Person in whose name the Security Certificate (or one or more Predecessor Security Certificates) evidencing such Purchase Contract is registered at the close of business on the Record Date next preceding such Payment Date. The Contract Fees will be payable at the office of the Agent in The City of New York maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Security Register. Each Security Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Security Certificate shall carry the rights to Contract Fees accrued and unpaid, and to accrue, which were carried by the Purchase Contracts evidenced by such other Security Certificate. In the case of any Security with respect to which settlement of the underlying Purchase Contract is effected on a Settlement Date after any Record Date and on or prior to the next succeeding Payment Date, Contract Fees otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such settlement, and such Contract Fees shall be paid to the Person in whose name the Security Certificate evidencing such Security (or one or more Predecessor Security Certificates) is registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security with respect to which settlement of the underlying Purchase Contract is effected on a Settlement Date (other than a Holder's Early Settlement Date), Contract Fees that would otherwise be payable after such Settlement Date with respect to the Purchase Contract underlying such Security shall not be payable. The right to receive Contract Fees including accrued and unpaid Contract Fees and Deferred Contract Fees, if any, shall terminate upon the occurrence of a Bankruptcy Event, and the Company shall have no further obligations with respect thereto. The Company's obligations with respect to Contract Fees shall rank equally and pari passu with all other senior and unsubordinated liabilities of the Company. Section 5.03. Deferral of Payment Dates for Contract Fees. The Company shall have the right, at any time prior to the Final Settlement Date, an Acceleration Date applicable to a Holder's Securities or Sale of Assets Date, to defer the payment of any or all of the Contract Fees otherwise payable on any Payment Date (on a pro rata basis among all Outstanding Securities), but only if the Company shall give the Holders and the Agent written notice of its election to defer such payment (specifying the amount to be deferred and the period of deferment) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the Company is required to give notice of the Record Date or Payment Date with respect to payment of such Contract Fees to the NYSE or other applicable self-regulatory organization or to Holders of the Securities, but in any event not less than two Business Days prior to such Record Date. Any Contract Fees so deferred shall bear additional Contract Fees thereon at the rate of 1.0% per annum (computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Fees together with the additional Contract Fees accrued thereon, are referred to herein as the "Deferred Contract Fees"). Deferred Contract Fees shall be due on the next succeeding Payment Date except to the extent that payment is deferred further in the notice of election pursuant to this Section. The Company may pay Deferred Contract Fees in whole or in part on any Payment Date (on a pro rata basis among all Outstanding Securities). No Contract Fees or Deferred Contract Fees may be deferred to a date that is after the Final Settlement Date or a Sale of Assets Date or, with respect to any particular Purchase Contract, the Acceleration thereof. In the event the Company elects to defer the payment of Contract Fees on the Purchase Contract until the Final Settlement Date, a Sale of Assets Date, a Company Acceleration Date or a Mandatory Acceleration Date (or a date prior to such dates as set forth in its written notice referred to in the preceding paragraph) the Company shall make a cash payment, on the date such Deferred Contract Fees become due and payable, equal to the aggregate amount of Deferred Contract Fees payable to a Holder. In the event the Company exercises its option to defer the payment of Contract Fees, then, until the Deferred Contract Fees have been paid in full, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (i) purchase or acquisitions of shares of Common Stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans now or hereafter in effect or the satisfaction by the Company of its obligations pursuant to any contract or security now or hereafter outstanding requiring the Company to purchase shares of Common Stock, (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock (iii) the purchase of fractional shares in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iv) the payment of accrued dividends (and cash in lieu of fractional shares) upon the conversion of any shares of preferred stock of the Company as may be outstanding from time to time, in accordance with the terms of such stock or (v) dividends on its capital stock paid in shares of capital stock) or make any guarantee payments with respect to the foregoing. Section 5.04. Payment of Purchase Price. Unless a Holder settles the underlying Purchase Contract through the early delivery of cash to the Agent in the manner described in Sections 4.2(b), 5.08 or 5.10, the purchase price for the shares of Common Stock purchased pursuant to a Purchase Contract shall be paid by application of payments received by the Company on the Final Settlement Date or an earlier Acceleration Date from, as the case may be, either (i) the Collateral Agent pursuant to the Pledge Agreement in respect of the principal of the Treasury Notes Pledged to secure the obligations of the relevant Holder under such Purchase Contract or (ii) the proceeds of the sale of the Treasury Notes underlying the Holder's Securities pursuant to Section 4.02(d). Such application shall satisfy in full (whether or not the principal amount of the Treasury Notes then equals the Stated Amount) the obligations under such Purchase Contract of the Holder of the Security of which such Purchase Contract is a part. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Section 5.05. Issuance of Common Stock. Unless a Bankruptcy Event or Sale of Assets shall have occurred on or prior to the Final Settlement Date or an earlier Acceleration Date, on the Final Settlement Date or an earlier Acceleration Date, upon the Company's receipt of payment in full of the purchase price for the shares of Common Stock purchased by the Holders (whether by application of the principal of the Treasury Notes on the Final Settlement Date or the proceeds of the sale of Treasury Notes as provided in Section 4.02(d) or the Holder's election to pay the Stated Amount for such Holder's Securities in cash pursuant to Section 4.02(b)), and in payment of consideration set forth in Section 5.8(b)(iii), if any, and, if the Company has elected to make such payment in shares of Common Stock to the Holders, the Company shall issue and deposit with the Agent, for the benefit of the Holders, one or more certificates representing the shares of Common Stock registered in the name of the Agent (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Final Settlement Fund" or "Acceleration Settlement Fund" as applicable) to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Security Certificate to the Agent on or after the Final Settlement Date or earlier Acceleration Date, together with settlement instructions thereon duly completed and executed, the Holder of such Security Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article Five (after taking into account all Securities then held by such Holder) together with cash in lieu of fractional shares as provided in Section 5.11 or any other cash payments and any dividends or distributions with respect to such shares constituting part of the Final Settlement Fund or Acceleration Settlement Fund, as applicable, but without any interest thereon, and the Security Certificate so surrendered shall forthwith be canceled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions on the Security Certificate. If any shares of Common Stock issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Security Certificate evidencing such Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Security Certificate evidencing such Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable. Section 5.06. Settlement Rate; Adjustment of Settlement Rate for Dividends, Distributions, Stock Splits, Etc. (a) The Settlement Rate to be used to determine the number of shares of Common Stock to be delivered on the Final Settlement Date or a Mandatory Acceleration Date pursuant to Sections 5.01 and 5.08(b), respectively, shall be initially one share of Common Stock for each Purchase Contract, provided however, that such Settlement Rate shall be subject to adjustment from time to time as provided below in this Section 5.06. All adjustments to the Settlement Rate shall be calculated to the nearest 1/100th of a share of Common Stock (with 5/1000th of a share being rounded to the next lower 1/100th of a share). Such rate in effect at any time is herein called the "Settlement Rate". (b) If the Company shall either: (i) pay a dividend or make a distribution with respect to Common Stock in shares of Common Stock, (ii) subdivide or split its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification of its shares of Common Stock any shares of Common Stock of the Company then, in any such event, the Settlement Rate in effect immediately prior thereto shall be adjusted so that the holder of a Security shall be entitled to receive on settlement of a Security, the number of shares of Common Stock which such Holder would have owned or been entitled to receive after the happening of any of the events described above had such Security been settled at the Settlement Rate in effect immediately prior to such time. Such adjustment shall become effective at the opening of business on the Business Day next following the record date for determination of stockholders entitled to receive such dividend or distribution in the case of a dividend or distribution and shall become effective immediately after the effective time in case of a subdivision, split, combination or reclassification. Any shares of Common Stock issuable in payment of a dividend or distribution shall be deemed to have been issued immediately prior to the close of business on the record date for such dividend or distribution for purposes of calculating the number of outstanding shares of Common Stock under clauses (c) and (d) below. (c) If the Company shall issue rights or warrants to all holders of its Common Stock entitling them (for a period not exceeding 45 days from the date of such issuance) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the record date for the determination of stockholders entitled to receive such rights or warrants, then in each case the Settlement Rate shall be adjusted by multiplying the Settlement Rate in effect immediately prior thereto by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants immediately prior to such issuance, plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the denominator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants, immediately prior to such issuance, plus the number of shares which the aggregate offering price of the total number of shares so offered for subscription or purchase would purchase at the Current Market Price per share of the Common Stock on the record date for determining stockholders entitled to receive such right or warrants (determined by multiplying such total number of shares by the exercise price of such rights or warrants and dividing the product so obtained by such Current Market Price). Shares of Common Stock owned by or held for the account of the Company or another company of which a majority of the shares entitled to vote in the election of directors are held, directly or indirectly, by the Company shall not be deemed to be outstanding for purposes of such computation. Such adjustment shall become effective at the opening of business on the Business Day next following the record date for the determination of stockholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Settlement Rate shall be readjusted to the Settlement Rate which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made upon the basis of delivery of only the number of shares of Common Stock actually delivered. (d) If the Company shall pay a dividend or make a distribution to all holders of its Common Stock of evidences of its indebtedness or other assets (including shares of capital stock of the Company but excluding any cash dividends or any distributions and dividends referred to in clause (b) above), or shall distribute to all holders of its Common Stock rights or warrants to subscribe for or purchase securities of the Company or any of its subsidiaries (other than those referred to in clause (c) above), then in each such case the Settlement Rate shall be adjusted by multiplying the Settlement Rate in effect immediately prior to the date of such dividend or distribution by a fraction, of which the numerator shall be the Current Market Price per share of Common Stock on the record date for the determination of stockholders entitled to receive such dividend or distribution, and of which the denominator shall be such Current Market Price per share of Common Stock less the fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) as of such record date of the portion of the assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, applicable to one share of Common Stock. Such adjustment shall become effective on the opening of business on the Business Day next following the record date for the determination of stockholders entitled to receive such dividend or distribution. (e) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding (x) any quarterly cash dividend on the Common Stock to the extent that the aggregate cash dividend per share of Common Stock in any fiscal quarter does not exceed the greater of (A) the amount per share of Common Stock of the next preceding quarterly cash dividend on the Common Stock to the extent that such preceding quarterly dividend did not require an adjustment of the Settlement Rate pursuant to this Section 5.06(e) (as adjusted to reflect subdivisions or combinations of the Common Stock), and (B) 3.75% of the arithmetic average of the Closing Price of the Common Stock during the ten consecutive Trading Days immediately prior to the date of declaration of such dividend, and (y) any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary), then, in such case, the Settlement Rate shall be increased so that the same shall equal the rate determined by multiplying the Settlement Rate in effect immediately prior to the close of business on such record date by a fraction of which the numerator shall be the Current Market Price of the Common Stock, and the denominator shall be the Current Market Price of the Common Stock on the record date less the amount of cash so distributed (and not excluded as provided above) applicable to one share of Common Stock, such increase to be effective immediately prior to the opening of business on the day following the record date; provided, however, that in the event the portion of the cash so distributed applicable to one share of Common Stock of the Company is equal to or greater than the Current Market Price of the Common Stock of the Company on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of a Security shall have the right to receive upon settlement of the Securities the amount of cash such Holder would have received had such Holder settled each Security on the record date. In the event that such dividend or distribution is not so paid or made, the Settlement Rate shall again be adjusted to be the Settlement Rate which would then be in effect if such dividend or distribution had not been declared. If any adjustment is required to be made as set forth in this Section 5.06(e) as a result of a distribution that is a quarterly dividend, such adjustment shall be based upon the amount by which such distribution exceeds the amount of the quarterly cash dividend permitted to be excluded pursuant hereto. If an adjustment is required to be made as set forth in this Section 5.06(e) above as a result of a distribution that is not a quarterly dividend, such adjustment shall be based upon the full amount of the distribution. (f)In case of a tender or exchange offer made by a Person other than the Company or any subsidiary of the Company for an amount which increases the offeror's ownership of Common Stock of the Company to more than 25% of the Common Stock outstanding and shall involve the payment by such Person of consideration per share of Common Stock having a fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive, and described in a Board Resolution) at the last time (the "Expiration Time") tenders or exchanges may be made pursuant to such tender or exchange offer (as it shall have been amended) that exceeds the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time, and in which, as of the Expiration Time, the Board of Directors of the Company is recommending acceptance of the offer, the Settlement Rate shall be increased so that the same shall equal the price determined by multiplying the Settlement Rate in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock of the Company outstanding (less any Purchased Shares) on the Expiration Time and the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time, and the denominator shall be the number of shares of Common Stock of the Company outstanding (including any tendered or exchanged shares) on the Expiration Time multiplied by the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time, such increase to become effective immediately prior to the opening of business on the day following the Expiration Time. In the event that such Person is obligated to purchase shares pursuant to any such tender or exchange offer, but such Person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Settlement Rate shall again be adjusted to be the Settlement Rate which would then be in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section 5.06(f) shall not be made if, as of the Expiration Time, the offering documents with respect to such offer disclose a plan or intention to cause the Company to engage in a consolidation or merger of the Company or a sale of all or substantially all of the assets of the Company. (g) The "Current Market Price" per share of Common Stock on any date of determination means the average of the daily Closing Prices for the five consecutive Trading Days ending on and including the date of determination of the Current Market Price (appropriately adjusted to take into account the occurrence during said five-day period of any event that results in an adjustment of the Settlement Rate); provided, however, that if the Closing Price for the Trading Day next following such five-day period (the "next-day closing price") is less than 95% of such average, then the Current Market Price per share of Common Stock on such date of determination will be the next-day closing price; and provided, further, that, for purposes of calculating the Current Market Price in connection with any settlement of Securities or any determination of an amount in cash payable in lieu of a fraction of a share of Common Stock, if any adjustment of the Settlement Rate pursuant to this Section 5.06 is effective as of any date during the period beginning during the period beginning on the day after the date of determination of the Current Market Price and ending on the date on which Securities are to be settled with Common Stock, then the Current Market Price as determined pursuant to the foregoing will be appropriately adjusted to reflect such adjustment. If the Current Market Price is adjusted pursuant to the immediately preceding proviso as a result of the effectiveness of an adjustment to the Settlement Rate but the event requiring an adjustment of the Settlement Rate does not occur prior to the settlement of the Securities, then the Company may in its sole discretion elect to defer the following until after the occurrence of such event: (1) issuing to the Holder of any Securities settled the additional shares of Common Stock issuable upon such settlement over and above the shares of Common Stock issuable upon such settlement on the basis of the Current Market Price prior to adjustment; and (2) paying to such Holder any amount in cash in lieu of a fractional share of Common Stock pursuant to this Section 5.11. Notwithstanding the foregoing provision of this Section 5.08(g) for purposes of any computation under Section 5.6(f), the Current Market Price of the Common Stock of the Company on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for such day and the next two succeeding Trading Days. A "Trading Day" means a day on which the Common Stock (i) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (ii) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. (h) Anything in this Section 5.06 notwithstanding, the Company shall be entitled to make such upward adjustments in the Settlement Rate, in addition to those required by this Section 5.06, as the Company in its discretion shall determine to be advisable, in order that any stock dividends, subdivision of shares, distribution of rights to purchase stock or securities, or a distribution of securities convertible into or exchangeable for stock (or any transactions which could be treated as any of the foregoing transactions pursuant to Section 305 of the Internal Revenue Code of 1986, as amended) hereafter made by the Company to its stockholders shall not be taxable. (i) In any case in which this Section 5.06 shall require that an adjustment in the Settlement Rate as a result of any event become effective at the opening of business on the Business Day next following a Record Date and Mandatory Acceleration Date or the Final Settlement Date pursuant to Sections 5.08(b) and 5.01, respectively, occurs after such Record Date, but before the occurrence of such event, the Company may in its sole discretion elect to defer the following until after the occurrence of such event: (i) issuing to the Holder of any Securities settled the additional shares of Common Stock issuable upon such settlement over and above the shares of Common Stock issuable upon such settlement on the basis of the Settlement Rate prior to adjustment; and (ii) paying to such holder any amount in cash in lieu of a fractional share of Common Stock pursuant to Section 5.11. Section 5.07. Notice of Adjustments and Certain Other Events. (a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall: (i) forthwith compute the adjusted Settlement Rate in accordance with Section 5.06 and prepare a certificate signed by the Chief Executive Officer, the Chairman, the President, any Vice President or the Treasurer of the Company setting forth the adjusted Settlement Rate, the method of calculation thereof in reasonable detail and the facts requiring such adjustment and upon which such adjustment is based, and file such certificate forthwith with the Agent for the Securities and the transfer agent or agents for the Common Stock; and (ii) mail a notice stating that the Settlement Rate has been adjusted, the facts requiring such adjustment and upon which such adjustment is based and setting forth the adjusted Settlement Rate to the Agent and the Holders of record of the outstanding Securities at or prior to the time the Company mails an interim statement to its stockholders covering the quarter-yearly period during which the facts requiring such adjustment occurred, but in any event within 45 days of the end of such quarter-yearly period. (b) The Agent shall not at any time be under any duty or responsibility to any holder of Securities to determine whether any facts exist which may require any adjustment of the Settlement Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at the time be issued or delivered with respect to any Purchase Contract; and the Agent makes no representation with respect thereto. The Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Section 5.08. Acceleration; Notice. (a) Prior to a Mandatory Acceleration Date, a Bankruptcy Event Date, Sale of Assets Date or the Final Settlement Date, the Company shall have the right at any time or from time to time to accelerate, in whole or in part, the outstanding Securities (a "Company Acceleration") (subject to the notice provisions set forth in this Section). The Company may not exercise its right to accelerate the Securities unless the Current Market Price determined as of the second Business Day immediately preceding the Notice Date is equal to or exceeds the Company Acceleration Price applicable to such Notice Date. Upon the effective date of such acceleration ( a "Company Acceleration Date"), the Agent shall sell, pursuant to Section 4.02(d), at the direction of the Company subject to receipt thereof, the Treasury Notes underlying the Securities accelerated unless the Holder has paid the Stated Amount in cash in accordance with an election made pursuant to Section 4.2(b). The Company shall then deliver to the Agent for the benefit of the Holders thereof in exchange for each such Security accelerated, (i) a number of fully paid and non-assessable shares of Common Stock determined by dividing the Company Acceleration Price in effect on the Company Acceleration Date by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Company Acceleration Date and (ii) an amount in cash equal to all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, on such Security to and including such Company Acceleration Date (and Contract Fees and Deferred Contract Fees, if any, shall cease to accrue on each Security accelerated as of such date). Accrued interest on the Treasury Notes (and premium in respect of the sale of Treasury Notes) shall be paid to Holders as provided in Section 4.02(d). (b) Immediately prior to the effectiveness of a merger or consolidation of, or a statutory share exchange involving, the Company that results in the conversion or exchange of the Common Stock into, or the right to receive, other securities or other property (whether of the Company or any other entity) (any such merger, consolidation or share exchange being referred to herein as a "Merger or Consolidation"), each outstanding Security shall automatically be settled for (a "Mandatory Acceleration"), unless sooner accelerated: (i) fully paid and non-assessable shares of Common Stock at the Settlement Rate in effect on the effective time on the date of any Merger or Consolidation (the "Mandatory Acceleration Date"); plus (ii) an amount in cash equal to all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, on such Securities to but excluding the Mandatory Acceleration Date (and Contract Fees and Deferred Contract Fees shall cease to accrue as of the Mandatory Acceleration Date); plus (iii) an amount in cash (except as provided below) initially equal to $8.664, declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $.4831 on August 31, 1999 and equal to zero thereafter, in each case determined with reference to the Mandatory Acceleration Date. Accrued interest on the Treasury Notes shall be paid to Holders as provided in Section 4.02(d). At the option of the Company and provided that the Company has sufficient authorized and reserved shares of Common Stock, it may deliver to the Agent, for the benefit of the Holders, on the Mandatory Acceleration Date in lieu of some or all of the cash consideration described in clause (iii) above, fully paid and non-assessable shares of Common Stock. The number of shares of Common Stock to be delivered in lieu of any cash consideration described in such clause (iii) shall be determined by dividing the amount of cash consideration that the Company has elected to deliver in Common Stock by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Mandatory Acceleration Date. (c) The Company will provide notice of the Final Settlement Date or any earlier Acceleration of Securities (including any potential acceleration upon the effectiveness of a Merger or Consolidation) to the Agent and Holders of record of the Securities to be accelerated not less than 30 nor more than 60 days prior to the Final Settlement Date or the date fixed for such Acceleration; provided, however, that if the effectiveness of a Merger or Consolidation makes it impracticable to provide at least 30 days' notice, the Company shall provide such notice as soon as practicable prior to such effectiveness. Such notice shall be provided by mailing notice of the Final Settlement Date or any earlier Acceleration first class postage prepaid, to each Holder of record of the Securities to be accelerated, at such Holder's address as it appears on the Security Register of the Company, and by publishing notice thereof in The Wall Street Journal or The New York Times or, if neither such newspaper is then being published, any other daily newspaper of national circulation (each, an "Authorized Newspaper"). Each such mailed or published notice shall state, as appropriate, the following: (i) the Final Settlement Date or the Acceleration Date; (ii) the number of Securities to be accelerated and, if less than all the Securities held by any Holder are to be accelerated, the number of such Securities to be accelerated; (iii) the Settlement Rate or the Company Acceleration Price, as applicable, and, if applicable, the Current Market Price to be used to calculate the number of shares of Common Stock deliverable upon Acceleration; (iv) whether the Company is exercising any option to deliver shares of Common Stock in lieu of any cash (in the case of a Mandatory Acceleration) and the Current Market Price to be used to calculate the number of such shares of Common Stock; (v) the place or places where certificates for such Securities are to be surrendered for Acceleration; (vi) whether the Company is depositing with a bank or trust company on or before the Acceleration Date, the shares of Common Stock, and cash, if any, payable by the Company pursuant to this Section 5.08 and the proposed date of such deposit; and (vii) the amount of accrued and unpaid Contract Fees (and Deferred Contract Fees, if any) payable per Security to be accelerated, and that Contract Fees and Deferred Contract Fees on Securities to be accelerated will cease to accrue on such Acceleration Date. (d)The Company's obligation to deliver shares of Common Stock and provide funds in accordance with this Section 5.8 shall be deemed fulfilled if, on or before an Acceleration Date, the Company shall deposit, with a bank or trust company having an office or agency and doing business in the Borough of Manhattan in The City of New York and having a capital and surplus of at least $50,000,000, such number of shares of Common Stock and funds as are required to be delivered by the Company pursuant to this Section 5.8 upon the occurrence of the related Acceleration (including the payment of fractional share amounts), together with funds sufficient to pay all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, to be settled as required by this Section 5.08, in trust for the account of the Holders of the Securities to be settled (and so as to be and continue to be available therefor), with irrevocable written instructions and authority to such bank or trust company that such shares and funds be delivered upon settlement of the Securities. Any shares of Common Stock and funds so deposited and unclaimed by Holders of Securities at the end of six years after such Acceleration Date (together with any interest thereon which shall be allowed by the bank or trust company with which such deposit was made) shall be paid by such bank or trust company to the Company, after which the Holder or Holders of such Securities so settled shall look only to the Company for delivery of such shares of Common Stock or funds. Each holder of Securities to be settled shall surrender the certificates evidencing such shares to the Company at the place designated in the notice of such Acceleration and shall thereupon be entitled to receive certificates evidencing shares of Common Stock, and cash, if any, payable pursuant to this Section 5.8, following such surrender and following the date of such Acceleration. In case fewer than all the Securities represented by any such surrendered certificate are accelerated, a new certificate shall be issued at the expense of the Company representing the unaccelerated Securities. If such notice of Acceleration shall have been duly given, and if on the date fixed for Acceleration, shares of Common Stock and funds, if any, necessary for the settlement of Securities on such date shall have been either set aside by the Company separate and apart from its other funds or assets in trust for the account of the Holders of the Securities so to be settled (and so as to be and continue to be available therefor) or deposited with a bank or trust company as provided above, then, notwithstanding that the certificates evidencing any Securities settled shall not have been surrendered, the Securities represented thereby so settled shall be deemed no longer outstanding, Contract Fees and Deferred Contract Fees, if any, with respect to the Securities so settled shall cease to accrue after the date fixed for Acceleration and all rights with respect to the Securities so settled shall forthwith after such date cease and terminate, except for the right of the Holders to receive the shares of Common Stock and cash, if any, payable pursuant to this Section 5.8, without interest upon surrender of their certificates therefor. (e) If fewer than all outstanding Securities are to be accelerated, the Securities to be accelerated shall be selected by the Agent by lot. Section 5.09. Bankruptcy Event or Sale of Assets; Notice. The Purchase Contracts and the obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Fees or any Deferred Contract Fees, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Final Settlement Date or an earlier Acceleration Date with respect to any particular Security, a Bankruptcy Event or Sale of Assets shall have occurred; provided that, in the event of a Sale of Assets, the Company will pay all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, to Holders on the tenth Business Day following the Sale of Assets Date. Upon and after the occurrence of a Bankruptcy Event or Sale of Assets, the Securities shall thereafter represent the right to receive and take possession of the Treasury Notes forming a part of such Securities in accordance with the provisions of Section 4.2(a) and the Pledge Agreement. Upon the occurrence of a Bankruptcy Event or Sale of Assets, the Company shall promptly but in no event after two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Security Register. Section 5.10. Holder's Early Settlement. (a) Subject to and upon compliance with the provisions of this Section 5.10, at the option of the Holder thereof, any Purchase Contracts in integral multiples of 400 Securities may be settled early ("Holder's Early Settlement") as provided herein. In order to exercise the right to effect Holder's Early Settlement, the Holder of the Security Certificate shall deliver such Security Certificate to the Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form (or a writing substantially similar to the form) of Election to Settle Early on the reverse thereof duly completed and accompanied by payment in the form of a certified or cashier's check payable to the order of the Company in immediately available funds in a U.S. dollar amount or by wire transfer of Federal funds (the "Holder's Early Settlement Amount") equal to the product of (A) the Stated Amount times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Holder's Early Settlement. If such delivery is made with respect to any Securities during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, the amount equal to the sum of (x) the Contract Fees and Deferred Contract Fees, if any, payable on such Payment Date with respect to such Purchase Contracts plus (y) the interest on the related Treasury Notes payable on such Payment Date shall be paid on the next succeeding Payment Date applicable to the Prepaid Securities. If the foregoing requirements are first satisfied with respect to Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New York City time, on a Business Day, such day shall be the "Holder's Early Settlement Date" with respect to such Securities and if such requirements are first satisfied after 5:00 p.m., New York City time, on a Business Day or on a day that is not a Business Day, the "Holder's Early Settlement Date" with respect to such Securities shall be the next succeeding Business Day. (b) The Company shall cause the Treasury Notes deliverable upon a Holder's Early Settlement to be released from the Pledge by the Collateral Agent and transferred to the Agent, for delivery to the Holder thereof or its designee, no later than 5:00 p.m. on the third Business Day after the applicable Holder's Early Settlement Date. (c) Upon Holder's Early Settlement and subject to receipt from the Collateral Agent of the Treasury Notes, the Agent shall, in accordance with the written instructions provided by the Holder thereof on the form (or a writing substantially similar to the form) of Election to Settle Early on the reverse of the Security Certificate evidencing the related Securities, transfer the Treasury Notes forming a part of such Securities to the applicable Holder as provided in paragraph (b) above. (d)Upon a Holder's Early Settlement, the Company shall issue and deliver to the Agent at the Corporate Trust Office a certificate or certificates representing a face amount of Prepaid Securities equal to the aggregate Stated Amount of the Securities subject to such Holder's Early Settlement and bearing all rights in respect of accrued and unpaid Contract Fees and Deferred Contract Fees, if any; and the Agent shall transfer such Prepaid Securities to the Holders no later than 5:00 p.m. on the third Business Day after the applicable Holder's Early Settlement Date. (e) Upon the transfer of Treasury Notes as provided in paragraph (c) of this Section and the delivery of Prepaid Securities as provided in paragraph (d) of this Section, the Purchase Contract which has been thereby settled shall cease to be in effect. (f) In the event that a Holder's Early Settlement is effected with respect to less than all the Securities evidenced by a Security Certificate upon such Holder's Early Settlement, the Company shall execute and the Agent shall authenticate, countersign and deliver to the Holder thereof, at the expense of the Company, a Security Certificate evidencing the Securities as to which Holder's Early Settlement was not effected. Section 5.11. No Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered on the Final Settlement Date or earlier Acceleration Date upon settlement of the Purchase Contracts or with respect to the payment of any amounts in shares of Common Stock pursuant to clause (iii) of Section 5.8(b) on a Mandatory Acceleration (if the Company elects to pay such amounts in shares of Common Stock in lieu of cash). If Security Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts evidenced by the Security Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Purchase Contracts on the Final Settlement Date or an earlier Acceleration Date or with respect to the payment of any amounts in shares of Common Stock pursuant to clause (iii) of Section 5.8(b) on a Mandatory Acceleration (if the Company elects to pay such amounts in shares of Common Stock in lieu of cash), the Company, through the Agent, shall make a cash payment in respect of such fractional interest in an amount equal to the value of such fractional shares at the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the relevant Notice Date or Final Settlement Date, as applicable. The Company shall provide the Agent from time to time with sufficient funds to permit the Agent to make all cash payments required by this Section 5.11 in a timely manner. Section 5.12. Charges and Taxes. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Purchase Contracts and in payment of any amounts in shares of Common Stock pursuant to clause (iii) of Section 5.8(b) (in the case of the Company's election to pay such amounts in Common Stock upon a Mandatory Acceleration) or the Company Acceleration Prices; provided, however, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Security Certificate evidencing a Purchase Contract or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Security Certificate surrendered in respect of the Purchase Contracts evidenced thereby, other than in the name of the Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such share certificates or Security Certificates unless or until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. ARTICLE 6 Remedies Section 6.01. Unconditional Right of Holders to Receive Contract Fees and Purchase Common Stock. The Holder of any Security shall have the right, which is absolute and unconditional (subject to the right of the Company to defer payment thereof pursuant to Section 5.3), to receive payment of each installment of the Contract Fees with respect to the Purchase Contract constituting a part of such Security on the respective Payment Date for such Security and to purchase Common Stock pursuant to the terms of such Purchase Contract and, in each such case, to institute suit for the enforcement of any such payment and right to purchase Common Stock, and such rights shall not be impaired without the consent of such Holder. Section 6.02. Restoration of Rights and Remedies. If any Holder of Securities has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. Section 6.03. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement of mutilated, destroyed, lost or stolen Security Certificates in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.04. Delay or Omission Not Waiver. No delay or omission of any Holder to exercise any right or remedy shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. Section 6.5. Undertaking for Costs. All parties to this Agreement agree, and each Holder of any Security by his acceptance of the Security Certificate evidencing such Security shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Agent for any action taken, suffered or omitted by it as Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Agent, to any suit instituted by any Holder of Securities, or group of Holders, holding in the aggregate more than 10% of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the interest on any Treasury Note or the Contract Fees or Deferred Contract Fees, if any, on any Purchase Contract on or after the respective Payment Date therefor constituting a part of the Securities held by such Holder, or for enforcement of the right to purchase shares of Common Stock under the Purchase Contracts constituting a part of the Securities held by such Holder. Section 6.06. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 7 The Agent Section 7.01. Certain Duties and Responsibilities. (a) (i) The Agent undertakes to perform, with respect to the Securities, such duties and only such duties as are specifically set forth in this Agreement and those duties which relate to the Agent in the Pledge Agreement, and no implied covenants or obligations shall be read into this Agreement against the Agent; (ii) in the absence of bad faith or negligence on its part, the Agent may, with respect to the Securities, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent and conforming to the requirements of this Agreement, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Agent, the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement (but need not confirm or investigate the accuracy of mathematical calculations stated therein); and (iii) in case of a Bankruptcy Event, the Agent shall exercise such of the rights and powers vested in it by this Agreement, 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 Agreement shall be construed to relieve the Agent from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that (i) this subsection shall not be construed to limit the effect of subsection (a) of this Section; (ii) the Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Agent was negligent in ascertaining the pertinent facts; and (iii) no provision of this Agreement shall require the Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it. (c) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Agent shall be subject to the provisions of this Section. Section 7.02. Notice of Default. Within 30 days after the occurrence of any default by the Company hereunder, of which a Responsible Officer of the Agent has actual knowledge, the Agent shall transmit by mail to all Holders of Securities, as their names and addresses appear in the Security Register, notice of such default hereunder, unless such default shall have been cured or waived. Section 7.03. Certain Rights of Agent. Subject to the provisions of Section 7.10: (a) the Agent may rely and shall be 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 or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Agreement the Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate of the Company; (d) the Agent may consult with counsel and the written advice of such counsel or any Opinion of Counsel 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 reliance thereon; (e) the Agent 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 Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the issuance of the Securities and the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Agent shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and promises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (f) the Agent may execute any of its powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or an Affiliate and the Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder; (g) the Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; and (h) the Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement. Section 7.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Security Certificates shall be taken as the statements of the Company and the Agent assumes no responsibility for their accuracy. The Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Securities, or of the Pledge Agreement or the Pledge. The Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Purchase Contracts. Section 7.05. May Hold Securities. Any Security Registrar or any other agent of the Company, or the Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Security Registrar or such other agent, or the Agent. Section 7.06. Money Held in Custody. Money held by the Agent in custody hereunder need not be segregated from the other funds except to the extent required by law. The Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except pursuant to the provisions of Section 4.1 or as otherwise agreed in writing with the Company. Section 7.07. Compensation and Reimbursement. The Company agrees: (a) to pay to the Agent from time to time reasonable compensation for all services rendered by it hereunder as the Company and the Agent shall, from time to time, agree in writing (which compensation shall be limited by any applicable provisions of law); (b) except as otherwise expressly provided herein, to reimburse the Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Agent in accordance with any provision of this Agreement (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; (c) to indemnify the Agent and any predecessor Agent for, and to hold each of them harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder; (d) anything in this Agreement to the contrary notwithstanding, in no event shall the Agent or its officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Agent, or any of them, incurred without any act or deed that is found to be attributable to negligence on the part of the Agent; and (e) The provisions of this Section 7.07 shall survive the termination of this Agreement. Section 7.08. Corporate Agent Required; Eligibility. There shall at all times be an Agent hereunder which shall be a Company organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a Corporate Trust Office in the Borough of Manhattan, The City of New York, if there be such a corporation in the Borough of Manhattan, The City of New York qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, 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. If at any time the Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 7.09. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Agent and no appointment of a successor Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Agent in accordance with the applicable requirements of Section 7.10. (b) The Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Agent required by Section 7.10 shall not have been delivered to the Agent within 30 days after the giving of such notice of resignation, the resigning Agent may petition any court of competent jurisdiction for the appointment of a successor Agent. (c) The Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Securities delivered to the Agent and the Company. (d) If at any time (i) the Agent fails to comply with Section 310(b) of the TIA, as if the Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any holder who has been a bona fide Holder of a Security for at least six months, or (ii) the Agent shall cease to be eligible under Section 7.8 and shall fail to resign after written request therefor by the Company or by any such Holder, or (iii) the Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Agent or of its property shall be appointed or any public officer shall take charge or control of the Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Agent and the appointment of a successor Agent. (e) If the Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Agent and shall comply with the applicable requirements of Section 7.10. If no successor Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Agent. (f) The Company shall give, or shall cause such successor Agent to give, notice of each resignation and each removal of the Agent and each appointment of a successor Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Agent and the address of its Corporate Trust Office. Section 7.10. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Agent, every such successor Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Agent shall become effective and such successor Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Agent; but, on the request of the Company or the successor Agent, such retiring Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Agent all the rights, powers and trusts of the retiring Agent and shall duly assign, transfer and deliver to such successor Agent all property and money held by such retiring Agent hereunder. (b) Upon request of any such successor Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Agent all such rights, powers and agencies referred to in paragraph (a) of this Section. (c) No successor Agent shall accept its appointment unless at the time of such acceptance such successor Agent shall be qualified and eligible under this Article. Section 7.11. Preservation of Information; Communications to Holders. (a) The Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Agent in its capacity as Security Registrar. (b) If three or more Holders (herein referred to as "applicants") apply in writing to the Agent, and furnish to the Agent reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Agent shall, within five Business Days after the receipt of such application, afford such applicants access to the information preserved at the time by the Agent in accordance with Section 7.11(a). (c) Every Holder of Securities, by receiving and holding the Security Certificates evidencing the same, agrees with the Company and the Agent that none of the Company, the Agent nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.11(b), regardless of the source from which such information was derived. Section 7.12. No Obligations of Agent. Except to the extent otherwise provided in this Agreement, the Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Purchase Contract in respect of the obligations of the Holder of any Security thereunder. The Company agrees, and each Holder of a Security Certificate, by his acceptance thereof, shall be deemed to have agreed, that the Agent's execution of the Security Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article 5 hereof. Section 7.13. Tax Compliance. (a) The Agent, at the direction of the Company, will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Securities or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Securities. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b) The Agent shall comply with any direction received from the Company with respect to the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement rely on any such direction in accordance with the provisions of Section 7.1(a)(ii) hereof. (c) The Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or to its authorized representative within a reasonable period of time after receipt of such request. Section 7.14. Merger, Conversion, Consolidation or Succession to Business of Agent. Any corporation into which the Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Agent shall be a party or any corporation succeeding to all or substantially all of the corporate trust business of the Agent, shall be the successor of the Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article 7, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Agent then in office, any successor by merger, conversion or consolidation to such authenticating Agent may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Agent had itself authenticated such Securities. ARTICLE 8 Supplemental Agreements Section 8.01. Supplemental Agreements Without Consent of Holders. Without the consent of any Holders, the Company and the Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Agent, for any of the following purposes: (a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the obligations of the Company herein and in the Security Certificates; or (b) to add covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (c) to evidence and provide for the acceptance of appointment hereunder by a successor Agent or Collateral Agent; or (d) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. Section 8.02. Supplemental Agreements with Consent of Holders. With the consent of the Holders of not less than 66 2/3% of the Outstanding Securities, by Act of said Holders delivered to the Company and the Agent, the Company when authorized by a Board Resolution, and the Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Securities, or the provisions of this Agreement or the Pledge Agreement or the rights of the Holders in respect of the Securities; provided, however, that no such supplemental agreement shall, without the consent of the Holder of each Outstanding Security affected thereby, (a) change any Payment Date; (b) change the amount or type of Treasury Notes underlying a Security, impair the right of the Holder of any Security to receive interest payments on the underlying Treasury Notes or otherwise adversely affect the Holder's rights in or to such Treasury Notes; (c) change the place or currency of payment or reduce any Contract Fees or any Deferred Contract Fees; (d) impair the right to institute suit for the enforcement of any Purchase Contract; (e) reduce the amount of Common Stock purchasable on settlement of any Purchase Contract, increase the price to purchase shares of Common Stock upon settlement of any Purchase Contract, or change the Company Acceleration Price or change the Final Settlement Date; or (f) reduce the above-stated percentage of the Outstanding Securities the consent of whose Holders is required for the modification or amendment of the provisions of the Purchase Contracts, this Agreement or the Pledge Agreement. It shall not be necessary for any Act of Holders under this Section 8.2 to approve the particular form of any proposed modification or amendment, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.03. Execution of Supplemental Agreements. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Agent shall be entitled to receive and (subject to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement. The Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Agent's own rights, duties or immunities under this Agreement or otherwise. Section 8.04. Effect of Supplemental Agreements. Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Security Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder shall be bound thereby. Section 8.05. Reference to Supplemental Agreements. Security Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Agent, bear a notation in form approved by the Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Security Certificates so modified as to conform, in the opinion of the Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent in exchange for Outstanding Security Certificates. ARTICLE 9 Covenants Section 9.01. Performance under Purchase Contracts. The Company covenants and agrees for the benefit of the Holders from time to time of the Securities that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. Section 9.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York an office or agency where Security Certificates may be presented or surrendered for acquisition of shares of Common Stock upon the Final Settlement Date or earlier Acceleration Date and for transfer of Treasury Notes upon occurrence of a Bankruptcy Event, Sale of Assets or a Holder's Early Settlement, where Security Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Agreement may be served. The Company will give prompt written notice to the Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Agent as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Security Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Securities the Corporate Trust Office and appoints the Agent at its Corporate Trust Office as paying agent in such city. Section 9.03. Company to Reserve Common Stock. The Company shall at all times prior to the Final Settlement Date or an applicable Acceleration Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts constituting a part of the Securities evidenced by Outstanding Security Certificates. Section 9.04. Covenants as to Common Stock. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Securities will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. Section 9.05. Statements of Officers of the Company as to Default. The Company will deliver to the Agent, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SUNAMERICA INC. Attested by: By:___________________________________ _____________________________ Name: Title Title: THE BANK OF NEW YORK By:___________________________________ Name: Title: EXHIBIT A SUNAMERICA INC. 8.5% PREMIUM EQUITY REDEMPTION CUMULATIVE SECURITY UNITS (STATED AMOUNT $37.50 PER SECURITY) CUSIP NO. 866930860 No. Securities This Security Certificate certifies that is the registered Holder of the number of Securities set forth above. Each Security represents (i) ownership by the Holder of 7.5% United States Treasury Notes due October 31, 1999 ("Treasury Notes") with a principal amount equal to the Stated Amount, subject to the Pledge of such Treasury Notes by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with SunAmerica Inc., a Maryland corporation (the "Company"). The Treasury Notes represented by this Security Certificate were acquired by the Underwriters on behalf of the Holders with the proceeds of the offering of this Security Certificate and other funds provided by the Company and are being conveyed to the Holder of this Security Certificate and pledged pursuant to the Pledge Agreement simultaneously therewith. Pursuant to the Pledge Agreement, the Treasury Notes constituting part of each Security evidenced hereby have been pledged to the Collateral Agent to secure the obligations of the Holder under the Purchase Contract comprising a portion of such Security. The Pledge Agreement provides that all payments of principal of, or interest on, any Treasury Notes comprising a portion of the Securities received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds no later than 12:00 noon, New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day, then such payment shall be made no later than 10:00 a.m., New York City time, on the next succeeding Business Day) (i) in the case of (A) interest payments and (B) any principal payments with respect to any Treasury Notes that have been released from the Pledge pursuant to the Pledge Agreement, to the Agent to the account designated by it for such purpose and (ii) in the case of principal payments on any Pledged Treasury Notes (as defined in the Pledge Agreement), to the Company, in full satisfaction of the respective obligations of the Holders of the Securities of which such Pledged Treasury Securities are a part under the Purchase Contracts forming a part of such Securities. Interest on any Treasury Note forming part of a Security evidenced hereby which is paid on any April 30 or October 31, commencing April 30, 1997 (a "Payment Date"), shall, subject to receipt thereof by the Agent from the Collateral Agent, be paid to the Person in whose name this Security Certificate (or a Predecessor Security Certificate) is registered at the close of business on the Record Date next preceding such Payment Date. On the first Payment Date, the Agent shall pay, subject to receipt from the Collateral Agent, to the Holders the accrued interest on the Treasury Notes for the period from November 1, 1996 to November 6, 1996 as part of the interest payment on the Treasury Notes. Each Purchase Contract evidenced hereby obligates the Holder of this Security Certificate to purchase, and the Company to sell, on October 31, 1999 (the "Final Settlement Date"), at a price equal to $37.50 (the "Stated Amount"), a number of shares of Common Stock, par value $1.00 per share ("Common Stock"), of the Company, equal to the Settlement Rate on the Final Settlement Date, unless on or prior to the Final Settlement Date, there shall have occurred a Bankruptcy Event, Sales of Assets, an Acceleration or a Holder's Early Settlement with respect to the Security of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier pursuant to the terms of the Purchase Contract Agreement, shall be paid on the Final Settlement Date by application of payment received in respect of the principal of the Treasury Notes pledged to secure the obligations under such Purchase Contract of the Holder of the Security of which such Purchase Contract is a part. The Company shall pay or accrue, on each Payment Date, in respect of each Purchase Contract forming part of a Security evidenced hereby an amount (the "Contract Fees") equal to 1.0% per annum of the Stated Amount, computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be, subject to deferral at the option of the Company as provided in the Purchase Contract Agreement and more fully described on the reverse hereof; except that the Contract Fees payable on the first Payment Date will be adjusted so that the Contract Fees payable on such date will be $.122243 per Security. Subject to the provisions of the Purchase Contract Agreement, such Contract Fees shall be payable to the Person in whose name this Security Certificate (or a Predecessor Security Certificate) is registered at the close of business on the Record Date next preceding such Payment Date. Interest on the Treasury Notes and the Contract Fees will be payable at the office of the Agent in The City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Security Register. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Security Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. SUNAMERICA INC. By:_________________________ Name: Title: Attested by: _________________________________ Dated: This is one of the Securities Certificates referred to in the within mentioned Purchase Contract Agreement. THE BANK OF NEW YORK as Agent By:_______________________________ Authorized Signatory (Form of Reverse of Security Certificate] Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of November 6, 1996 (the "Purchase Contract Agreement"), between the Company and The Bank of New York, as Purchase Contract Agent (herein called the "Agent"), to which Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company, and the Holders and of the terms upon which the Security Certificates are, and are to be, executed and delivered. Each Purchase Contract evidenced hereby shall obligate the Holder of this Security Certificate to purchase, and the Company to sell, on the Final Settlement Date at a price equal to the Stated Amount, a number of shares of Common Stock of the Company equal to the Settlement Rate on the Final Settlement Date, unless, on or prior to the Final Settlement Date, there shall have occurred a Bankruptcy Event, Sale of Assets, an Acceleration or a Holder's Early Settlement with respect to the Security of which such Purchase Contract is a part. The "Settlement Rate" is initially one share of Common Stock, in each case subject to adjustment as provided in the Purchase Contract Agreement. No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in the Purchase Contract Agreement. Unless a Holder settles the Purchase Contract evidenced hereby through the early delivery of cash to the Agent in the manner described in the Purchase Contract Agreement, the purchase price for the shares of Common Stock purchased pursuant to each Purchase Contract shall be paid by application of payments received by the Company on the Final Settlement Date or an earlier Acceleration Date from, as the case may be, either (i) the Collateral Agent pursuant to the Pledge Agreement in respect of the principal of the Treasury Notes pledged to secure the obligations of the relevant Holder under such Purchase Contract or (ii) the proceeds of the sale of the Treasury Notes underlying the Holder's Securities pursuant to the provisions of the Purchase Contract Agreement. Such application shall satisfy in full (whether or not the principal amount of the Treasury Notes then equals the Stated Amount) the obligations under such Purchase Contract of the Holder of this Security of which such Purchase Contract is a part. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner set forth in the Purchase Contract Agreement. Subject to the next succeeding paragraph and the provisions of the Purchase Contract Agreement, the Company shall pay by 12:00 noon New York City time to the Agent, on each Payment Date, the Contract Fees payable in respect of each Purchase Contract for the benefit of the Person in whose name the Security Certificate (or one or more Predecessor Security Certificates) evidencing such Purchase Contract is registered at the close of business on the Record Date next preceding such Payment Date. The Contract Fees will be payable at the office of the Agent in The City of New York maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Security Register. The right to receive Contract Fees including accrued and unpaid Contract Fees and Deferred Contract Fees, if any, shall terminate upon the occurrence of a Bankruptcy Event, and the Company shall have no further obligation with respect thereto. The Company shall have the right, at any time prior to the Final Settlement Date, an Acceleration Date applicable to a Holder's Securities or Sale of Assets Date, to defer the payment of any or all of the Contract Fees otherwise payable on any Payment Date (on a pro rata basis among all Outstanding Securities), but only if the Company shall give the Holders and the Agent written notice of its election to defer such payment (specifying the amount to be deferred and the period of deferment) as provided in the Purchase Contract Agreement. Any Contract Fees so deferred shall bear additional Contract Fees thereon at the rate of 1.0% per annum (computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Fees together with the additional Contract Fees accrued thereon, are referred to herein as the "Deferred Contract Fees"). Deferred Contract Fees shall be due on the next succeeding Payment Date except to the extent that payment is deferred further in the notice of election pursuant to the Purchase Contract Agreement. The Company may pay Deferred Contract Fees in whole or in part on any Payment Date (on a pro rata basis among all Outstanding Securities). No Contract Fees or Deferred Contract Fees may be deferred to a date that is after the Final Settlement Date or a Sale of Assets Date or, with respect to any particular Purchase Contract, the Acceleration thereof. In the event the Company elects to defer the payment of Contract Fees on the Purchase Contract until the Final Settlement Date, a Sale of Assets Date or a Company Acceleration Date or a Mandatory Acceleration Date (or a date prior to such dates as set forth in its written notice referred to in the preceding paragraph), the Company shall make a cash payment, on the date such Deferred Contract Fees become due and payable, equal to the aggregate amount of Deferred Contract Fees payable to a Holder. In the event the Company exercises its option to defer the payment of Contract Fees, then, until the Deferred Contract Fees have been paid in full, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (i) purchase or acquisitions of shares of Common Stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans now or hereafter in effect or the satisfaction by the Company of its obligations pursuant to any contract or security now or hereafter outstanding requiring the Company to purchase shares of Common Stock, (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (iii) the purchase of fractional shares in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged (iv) the payment of accrued dividends (and cash in lieu of fractional shares) upon the conversion of any shares of preferred stock of the Company as may be outstanding from time to time, in accordance with the terms of such stock or (v) dividends on its capital stock paid in shares of capital stock) or make any guarantee payments with respect to the foregoing. The Purchase Contracts and the obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Fees or any Deferred Contract Fees, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Final Settlement Date or an earlier Acceleration Date with respect to a particular Security, a Bankruptcy Event or Sale of Assets shall have occurred; provided that, in the event of a Sale of Assets, the Company will pay all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, to Holders on the tenth Business Day following the Sale of Assets Date. Upon and after the occurrence of a Bankruptcy Event or Sale of Assets, the Securities shall thereafter represent the right to receive and take possession of the Treasury Notes forming a part of such Securities in accordance with the provisions of the Purchase Contract Agreement and the Pledge Agreement. Upon the occurrence of a Bankruptcy Event or Sale of Assets, the Company shall promptly but in no event after two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Security Register. Prior to a Mandatory Acceleration Date, a Bankruptcy Event Date, Sale of Assets Date or the Final Settlement Date, the Company shall have the right at any time and from time to time to accelerate, in whole or in part, the Outstanding Securities (a "Company Acceleration") (subject to the notice provisions set forth in the Purchase Contract Agreement). "Company Acceleration Price" shall mean the per share price (payable in shares of Common Stock) at which the Company may accelerate settlement of the Securities, which shall be initially $59.289 declining by $.00860 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $51.1081 on August 31, 1999 and equal to $50.625 thereafter. The Company may not exercise its right to accelerate the Securities unless the Current Market Price determined as of the second Business Day immediately preceding the Notice Date is equal to or exceeds the Company Acceleration Price applicable to such Notice Date. Upon the effective date of such acceleration ( a "Company Acceleration Date"), the Agent shall sell, pursuant to Section 4.02(d) of the Purchase Contract Agreement, at the direction of the Company subject to receipt thereof and pursuant to the Purchase Contract Agreement, the Treasury Notes underlying the Securities accelerated unless the Holder has paid the Stated Amount in cash pursuant to Section 4.2(b) of the Purchase Contract Agreement. The Company shall then deliver, subject to the terms of the Purchase Contract Agreement, to the Agent for the benefit of the Holders thereof in exchange for each such Security accelerated, (i) a number of fully paid and non-assessable shares of Common Stock determined by dividing the Company Acceleration Price in effect on the Company Acceleration Date by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Company Acceleration Date and (ii) an amount in cash equal to all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, on such Security to and including such Company Acceleration Date (and Contract Fees and Deferred Contract Fees, if any, shall cease to accrue on each Security accelerated as of such date). Accrued interest on the Treasury Notes (and premium in respect of the Sale of Treasury Notes) shall be paid to Holders as provided in the Purchase Contract Agreement. Immediately prior to the effectiveness of a merger or consolidation of, or a statutory share exchange involving, the Company that results in the conversion or exchange of the Common Stock into, or the right to receive, other securities or other property (whether of the Company or any other entity) (any such merger, consolidation or share exchange being referred to herein as a "Merger or Consolidation"), each Outstanding Security shall automatically be settled for (a "Mandatory Acceleration"), unless sooner accelerated: (i) fully paid and non-assessable shares of Common Stock at the Settlement Rate in effect on the effective time on the date of any Merger or Consolidation (the "Mandatory Acceleration Date"); plus (ii) an amount in cash equal to all accrued and unpaid Contract Fees and Deferred Contract Fees, if any, on such Securities to but excluding the Mandatory Acceleration Date (and Contract Fees and Deferred Contract Fees shall cease to accrue as of the Mandatory Acceleration Date); plus (iii) an amount in cash (except as provided below) initially equal to $8.664, declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $.4831 on August 31, 1999 and equal to zero thereafter, in each case determined with reference to the Mandatory Acceleration Date. Accrued interest on the Treasury Notes shall be paid to Holders as provided in the Purchase Contract Agreement. At the option of the Company and provided that the Company has sufficient authorized and reserved shares of Common Stock, it may deliver to the Agent, for the benefit of the Holders, on the Mandatory Acceleration Date in lieu of some or all of the cash consideration described in clauses (iii) above, fully paid and non-assessable shares of Common Stock. The number of shares of Common Stock to be delivered in lieu of any cash consideration described in such clauses (iii) shall be determined by dividing the amount of cash consideration that the Company has elected to deliver in Common Stock by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Mandatory Acceleration Date. Notice shall be given for a Mandatory Acceleration as set forth in the Purchase Contract Agreement. If fewer than all outstanding Securities are to be accelerated, the Securities to be accelerated shall be selected by the Agent by lot. Upon the occurrence of a Bankruptcy Event or Sale of Assets and the transfer to the Agent of the Treasury Notes underlying the Securities pursuant to the terms of the Pledge Agreement, the Agent shall request transfer instructions with respect to such Treasury Notes from each Holder of Securities by written request mailed to such Holder at his address as it appears in the Security Register, in respect of the Treasury Notes underlying the Security Certificate held by such Holder. Upon surrender to the Agent of a Security Certificate with such transfer instructions in proper form for transfer of the Treasury Notes by Federal Reserve Bank-Wire or other appropriate procedure, subject to the receipt of the Treasury Notes, the Agent shall transfer the Treasury Notes evidenced by such Security Certificate to such Holder in accordance with such instructions within three Business Days. If a Security Certificate is not duly surrendered to the Agent with appropriate transfer instructions, the Agent shall hold the Treasury Notes evidenced by such Security Certificate as custodian for the Holder of such Security Certificate. In the event of an Acceleration of Securities, Holders of Securities so accelerated may elect to pay to the Company through the Agent by no later than 5:00 p.m., New York City time on the third Business Day immediately preceding the Acceleration Date in immediately available funds an amount in U.S. dollars equal to the Stated Amount per Security so accelerated. Holders may make the election provided in this paragraph only in integral multiples of 400 Securities. Upon Surrender to the Agent of a Security Certificate with such transfer instructions in proper form for transfer of the Treasury Notes by Federal Reserve Bank-Wire or other appropriate procedure, along with the payment described in the previous sentence, subject to receipt from the Collateral Agent, the Agent shall transfer the Treasury Notes evidenced by such Security Certificate to such Holder in accordance with such instructions within three Business Days of such payment. If payment is made in accordance with the first sentence of this paragraph, the Company will issue the number of shares of Common Stock equal to the Stated Amount for the Securities accelerated on the Acceleration Date. The Company will also pay in cash on the Acceleration Date accrued Contract Fees and Deferred Contract Fees, if any, to holders of Securities who elect to pay the Stated Amount in cash upon an Acceleration as provided in the Purchase Contract Agreement. Because Holders may only elect to make a payment in cash pursuant to the Purchase Contract Agreement in integral multiples of 400 Securities Treasury Notes shall be transferred only in denominations of $15,000 and integral multiples thereof. Any Securities accelerated which are not in integral multiples of 400 shall be settled in shares of Common Stock pursuant to the Purchase Contract Agreement. In the case of an Acceleration of Securities, the Agent on behalf of each Holder (other than Holders that, pursuant to an election made in accordance with the Purchase Contract Agreement, have paid the Stated Amount in immediately available funds not later than 5:00 p.m., New York City time on the third Business Day immediately preceding the Acceleration Date) will sell on the second Business Day immediately preceding the Acceleration Date the Treasury Notes underlying each such Holder's Securities to or through one or more U.S. government securities dealers selected by the Company at the then prevailing prices and automatically apply on the Acceleration Date, out of the proceeds of such sale (excluding premium and accrued interest on the Treasury Notes), an amount equal to the Stated Amount to satisfy in full each such Holder's obligation to purchase the Common Stock from the Company on the Acceleration Date. Any excess proceeds (in respect of premium on the sale of the Treasury Notes) will be paid to such Holder. In the event that the proceeds from the sale of such Treasury Notes (exclusive of accrued interest on the Treasury Notes) is less than the Stated Amount, such proceeds nevertheless will satisfy in full each such Holder's obligation to purchase the Common Stock from the Company on the Acceleration Date. Amounts in respect of accrued interest on the Treasury Notes will be paid to each such Holder on the Acceleration Date. The proceeds of such sales shall be after deduction by the Agent of all commissions and other out-of-pocket transaction costs incurred in connection with the sale of such Treasury Notes and, until the net proceeds of such sale or sales have been distributed to Holders of the Securities, the Agent shall hold such proceeds as custodian for the Holders of Securities. Such proceeds shall be held by the Agent uninvested without liability to any Person for interest or other compensation thereon. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts in integral multiples of 400 Securities may be settled early ("Holder's Early Settlement") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Holder's Early Settlement with respect to any Purchase Contracts evidenced by this Security Certificate, the Holder of this Security Certificate shall deliver this Security Certificate to the Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form (or a writing substantially similar to the form) of Election to Settle Early set forth below duly completed and accompanied by payment in the form of a certified or cashier's check payable to the order of the Company in immediately available funds in a U.S. dollar amount or by wire transfer of Federal funds (the "Holder's Early Settlement Amount") equal to the product of (A) the Stated Amount times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect a Holder's Early Settlement. If such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, the amount equal to the sum of (x) the Contract Fees and Deferred Contract Fees, if any, payable on such Payment Date with respect to such Purchase Contracts plus (y) the interest on the related Treasury Notes payable on such Payment Date shall be paid on the next succeeding Payment Date applicable to the Prepaid Securities. The Company shall cause the Treasury Notes deliverable upon a Holder's Early Settlement to be released from the Pledge by the Collateral Agent and transferred to the Agent, for delivery to the Holder thereof or its designee, no later than 5:00 p.m. on the third Business Day after the applicable Holder's Early Settlement Date. Upon Holder's Early Settlement and subject to receipt from the Collateral Agent of the Treasury Notes, the Agent shall, in accordance with the written instructions provided by the Holder thereof on the form (or a writing substantially similar to the form) of Election to Settle Early of this Security Certificate evidencing the related Securities, transfer the Treasury Notes forming a part of such Securities to the applicable Holder as provided in the Purchase Contract Agreement. Upon a Holder's Early Settlement, the Company shall issue and deliver to the Agent at the Corporate Trust Office a certificate or certificates representing a face amount of Prepaid Securities equal to the aggregate Stated Amount of the Securities subject to such Holder's Early Settlement and bearing all rights in respect of accrued and unpaid Contract Fees and Deferred Contract Fees, if any; and the Agent shall transfer such Prepaid Securities to the Holders no later than 5:00 p.m. on the third Business Day after the applicable Holder's Early Settlement Date. Upon the transfer of Treasury Notes and the delivery of Prepaid Securities pursuant to the Purchase Contract Agreement, the Purchase Contract which has been thereby settled shall cease to be in effect. This Security is issued in the form of one or more, fully registered, Global Security Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of the Company as set forth in the Purchase Contract Agreement. If definitive, fully registered Security Certificates are issued pursuant to the Purchase Contract Agreement, such Security Certificates will be issuable only in registered form and only in denominations of a single Security and any integral multiple thereof. The transfer of any Security Certificate will be registered and Security Certificates may be exchanged as provided in the Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. For so long as the Purchase Contract underlying a Security remains in effect, such Security shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Security in respect of the Treasury Notes and Purchase Contract constituting such Security may be transferred and exchanged only as a Security. Upon registration of transfer of this Security Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this Security Certificate. The Company covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Security Certificate, by his acceptance hereof, authorizes the Agent to enter into and perform the related Purchase Contracts forming part of the Securities evidenced hereby on his behalf as his attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Agent to enter into and perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents to the Pledge of the Treasury Notes underlying this Security Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect of principal of the Treasury Notes on the Final Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of at least 66 2/3% of the Outstanding Securities. All terms used herein which are defined in the Purchase Contract Agreement have the meanings set forth therein. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law. Prior to due presentment of a Security Certificate for registration of transfer, the Company and the Agent and any agent of the Company or the Agent may treat the Person in whose name this Security Certificate is registered as the owner of the Securities evidenced hereby for the purpose of receiving payments of interest on the Treasury Notes, receiving payments of Contract Fees and any Deferred Contract Fees, delivery of the Treasury Notes, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not the payment of interest on the Treasury Notes or any Contract Fees payable in respect thereof shall be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Agent. SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after an Acceleration Date or the Final Settlement Date of the Purchase Contracts underlying the number of Securities evidenced by this Security Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated:______________________________ ___________________________________ Signature If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: ____________________________________ __________________________________ Name Name ____________________________________ __________________________________ Address Address Social Security or other Taxpayer Identification Number, if any __________________________________ HOLDER'S ELECTION TO SETTLE EARLY The undersigned Holder of this Security Certificate hereby irrevocably exercises the option to effect Holder's Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Securities evidenced by this Security Certificate specified below. The undersigned Holder directs that a certificate for Prepaid Securities deliverable upon such Holder's Early Settlement be registered in the name of, and delivered with any Security Certificate representing any Securities evidenced hereby as to which Holder's Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. HOLDERS MAY MAKE THE ELECTION REFERRED TO THIS PARAGRAPH AND IN THE PURCHASE CONTRACT AGREEMENT ONLY IN INTEGRAL MULTIPLES OF 400 SECURITIES. Treasury Notes deliverable upon such Holder's Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated:________________________ _____________________________________ Signature Number of Securities evidenced hereby as to which Holder's Early Settlement of the related Purchase Contracts is being elected: If shares or Security Certificates are REGISTERED HOLDER to be registered in the name of and delivered to and Treasury Notes are to be transferred to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: ____________________________________ __________________________________ Name Name ____________________________________ __________________________________ Address Address Social Security or other Taxpayer Identification Number, if any __________________________________ Transfer Instructions for Treasury Notes Transferable Upon Holder's Early Settlement: EX-4.4 9 EXHIBIT 4.4 PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of November 6, 1996 (this "Agree ment"), among SunAmerica Inc., a Maryland corporation (the "Company"), The First National Bank of Chicago, a national banking association, not individually but solely as collateral agent (in such capacity, together with its successors in such capacity, the "Collateral Agent") and as "depositary" (as defined in 31 C.F.R ss.306, as amended) and as "securities intermediary" (as defined in Section 8-102(a)(14) of the 1994 Official Text of the Uniform Commercial Code and in 31 C.F.R. ss.357.2, as amended (in such capacity, together with its successors in such capacity, the "Securities Intermediary")) for the collateral account and for any Treasury Notes credited to the collateral account, and The Bank of New York, not individually but solely as purchase contract agent and as attorney-in-fact of the Holders (as hereinafter defined) from time to time of the Securities (as hereinafter defined) (in such capacity, together with its successors in such capacity, the "Pur chase Contract Agent") under the Purchase Contract Agreement (as hereinafter defined). RECITALS The Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement, dated as of the date hereof (as modified and supplemented and in effect from time to time, the "Purchase Contract Agreement"), pursuant to which there will be issued 8.5% Premium Equity Redemption Cumulative Security Units (the "Securities"). Each Security consists of (a) one Purchase Contract (as hereinafter defined) and (b) 7.5% United States Treasury Notes due October 31, 1999 ("Treasury Notes") having a principal amount equal to $37.50 (the "Stated Amount") and maturing on October 31, 1999 (the "Final Settlement Date"), subject to the pledge of such Treasury Notes created hereby. The Company has caused the Underwriters, on its behalf, to purchase the Treasury Notes, to be settled on November 6, 1996, with the proceeds of the offering of the Securities and other funds to be provided by the Company. The Company will convey such Treasury Notes to the Holders as a part of the Securi ties. Pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders (as defined in the Purchase Contract Agreement) from time to time of the Securities have authorized the Purchase Contract Agent, as attorney-in-fact of such Holders, among other things to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided hereby of the Treasury Notes constituting part of such Securities as provided herein and subject to the terms hereof. Accordingly, the Company, the Collateral Agent and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Securities, agree as follows: SECTION 1. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; and (b) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Acceleration" has the meaning specified in the Purchase Contract Agreement. "Act" has the meaning specified in the Purchase Contract Agreement. "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Applicable Treasury Regulations" means Subpart O- Book-Entry Procedure of Title 31 of the Code of Federal Regulations (31 C.F.R. (S) 306.115 et. seq.) and any other regulations of the United States Treasury Department from time to time applicable to the transfer or pledge of book-entry U.S. Treasury Securities, including, without limitation, the regulations set forth in 31 CFR Part 357 which becomes effective January 1, 1997. "Bankruptcy Code" means title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "Bankruptcy Event" has the meaning specified in the Purchase Contract Agreement. "Board Resolution" has the meaning specified in the Purchase Contract Agreement. "Business Day" means any day that is not a Saturday, a Sunday or a day on which the New York Stock Exchange or banking institutions or trust companies in The City of New York are authorized or obligated by law or executive order to be closed. "Collateral Agent" has the meaning specified in the first paragraph of this instrument. "Collateral Account" means the account maintained at The First National Bank of Chicago in the name "The First National Bank of Chicago as Collateral Agent of SunAmerica Inc. as pledgee of The Bank of New York as Purchase Contract Agent". "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such, and thereafter "Company" shall mean such successor. "Final Settlement Date" has the meaning specified in the Recitals. "Holder" when used with respect to a Security, or a Purchase Contract constituting a part thereof, has the meaning specified in the Purchase Contract Agreement. "Holder's Early Settlement" has the meaning specified in the Purchase Contract Agreement. "Holder's Early Settlement Amount" has the meaning specified in the Purchase Contract Agreement. "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company and who shall be reasonably acceptable to the Collateral Agent or the Purchase Contract Agent, as the case may be. "Outstanding Securities" has the meaning specified in the Purchase Contract Agreement. "Outstanding Security Certificates" has the meaning specified in the Purchase Contract Agreement. "Payment Date" has the meaning specified in the Purchase Contract Agreement. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Pledge" has the meaning specified in Section 2 hereof. "Pledged Treasury Notes" has the meaning specified in Section 2 hereof. "Purchase Contract" has the meaning specified in the Purchase Contract Agreement. "Purchase Contract Agent" has the meaning specified in the first paragraph of this instrument. "Sale of Assets" has the meaning specified in the Purchase Contract Agreement. "Security" has the meaning specified in the Recitals. "Security Certificate" has the meaning specified in the Purchase Contract Agreement. "Stated Amount" has the meaning specified in the Recitals. "Treasury Notes" has the meaning specified in the Recitals. "Underwriters" means the several Underwriters named in the Underwriting Agreement dated October 31, 1996 between the Company and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs & Co. and Smith Barney, Inc., as representatives of the several Underwriters named herein. SECTION 2. The Pledge. The Holders from time to time of the Securities acting through the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant to the Collateral Agent for the benefit of the Company, as collateral security for the performance when due by such Holders of their respective obligations under the Purchase Contracts comprising a portion of such Securities, a security interest in all of the right, title and interest of such Holders in the Treasury Notes credited to the Collateral Account. Concurrently with the execution and delivery of the Securities (i) Morgan Stanley & Co., Incorporated shall cause the Treasury Notes to be credited to an account of the Securities Intermediary at the Federal Reserve Bank of Chicago by Federal Reserve Bank-Wire and (ii) the Securities Intermediary shall credit the Treasury Notes to the Collateral Account, in each case pursuant to Applicable Treasury Regulations and to the Uniform Commercial Code to the extent such laws are applicable and pursuant to instructions from the Purchase Contract Agent on behalf of the Holders. The pledge provided in this Section 2 is herein referred to as the "Pledge" and the Treasury Notes subject to the Pledge, excluding any Treasury Notes released from the Pledge as provided in Section 4 hereof, are hereinafter referred to as the "Pledged Treasury Notes." Subject to the Pledge, and to the provisions of Article 4 of the Purchase Contract Agreement, the Holders from time to time of the Securities shall have full beneficial ownership of the Treasury Notes credited to the Collateral Account and all securities entitlements (as defined in 31 C.F.R. ss.357.2 or any similar provision of state law or Revised Article 8 (as defined in 31 C.F.R. ss.357)) in respect thereof. Notwithstanding any other provision of this Agreement, the Securities Intermediary hereby agrees that (a) it will comply with "entitlement orders" (within the meaning of Section 8-102(a)(8) of Revised Article 8) relating to the Collateral Account issued by the Collateral Agent without further consent by the Purchase Contract Agent or any Holder and (b) it hereby waives any right of set-off or recoupment that it may have with respect to the Collateral Account. The Securities Intermediary hereby represents that it has not entered into, and hereby agrees that until the termination of the Purchase Contract Agreement it will not enter into, any agreement with any of the parties hereto specifying any jurisdiction other than the State of New York as its jurisdiction for purposes of 31 C.F.R ss.357.11(b), as amended, and any similar state law, or with any other person relating to the Collateral Account pursuant to which it has agreed to comply with entitlement orders made by such person. SECTION 3. Distribution of Principal and Interest. (a) All payments of principal of, or interest on, any Treasury Notes consti tuting part of the Securities received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds no later than 12:00 p.m., New York City time, on the Business Day such interest payment is received by the Collateral Agent (provided that in the event such interest payment is received by the Collateral Agent on a day that is not a Business Day, then such payment shall be made no later than 10:00 a.m., New York City time, on the next succeeding Business Day) (i) in the case of (A) interest payments and (B) any principal payments with respect to any Treasury Notes that have been released from the Pledge pursuant to Section 4 hereof, to the Purchase Contract Agent to the account designated by it for such purpose and (ii) in the case of principal payments on any Pledged Treasury Notes, the Collateral Agent is hereby authorized to make such payments to the Company, in full satisfaction of the respective obligations of the Holders of the Securities of which such Pledged Treasury Notes are a part under the Purchase Contracts forming a part of such Securities. All such payments received by the Purchase Contract Agent as provided herein shall be applied by the Purchase Contract Agent pursuant to the provisions of the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any payments of principal on account of any Pledged Treasury Notes, the Purchase Contract Agent shall hold the same as trustee of an express trust for the benefit of the Company (and promptly deliver over to the Company) for applica tion to the obligations of the Holders of the Securities of which such Treasury Notes are a part under the Purchase Contracts relating to the Securities of which such Treasury Notes are a part, and such Holders shall acquire no right, title or interest in any such payments of principal so received. SECTION 4. Release of Pledged Treasury Notes. (a) Upon written notice to the Collateral Agent by the Company or the Purchase Contract Agent that there has occurred a Bankruptcy Event or Sale of Assets, resulting in the termination of the Purchase Contracts in accordance with Section 5.09 of the Purchase Contract Agreement, the Collateral Agent shall re lease all Pledged Treasury Notes from the Pledge and shall transfer all such Trea sury Notes, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent. If such Bankruptcy Event or Sale of Assets shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail immediately to effectuate the release and transfer of all Pledged Treasury Notes as provided by this Section 4(a), the Purchase Contract Agent shall, subject to Section 6(m), and provided, however, that the Company shall have offered to the Purchase Contract Agent such reasonable indemnity as it may require against the costs, liabilities and expenses to be incurred herein (i) use its best efforts to obtain an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or transferring the Treasury Notes as provided in this Section 4(a), and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Bankruptcy Event or Sale of Assets, and if (y) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Bankruptcy Event or Sale of Assets or (z) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and transfer of all Pledged Treasury Notes as provided in this Section 4(a), then the Purchase Contract Agent shall within fifteen days after the occurrence of such Bankruptcy Event or Sale of Assets commence an action or proceeding in the court with jurisdiction of the Company's case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Treasury Notes as provided by this Section 4(a) or (ii) commence an action or proceeding like that described in the immediately preceding subsection hereof within ten days after the occurrence of such Bankruptcy Event or Sale of Assets. (b) Upon written notice to the Collateral Agent and the Company by the Purchase Contract Agent that one or more Holders of Securities have elected to effect Holder's Early Settlement of their respective obligations under the Purchase Contracts forming a part of such Securities in accordance with the terms of the Purchase Contracts and the Purchase Contract Agreement (setting forth the number of such Purchase Contracts as to which such Holders have elected to ef fect Holder's Early Settlement), and that the Purchase Contract Agent has received from such Holders, and paid to the Company, the related Holder's Early Settle ment Amounts pursuant to the terms of the Purchase Contracts and the Purchase Contract Agreement and that all conditions to such Holder's Early Settlement have been satisfied, then the Company shall direct the Collateral Agent to release from the Pledge and transfer all such Treasury Notes, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent with a principal amount equal to the product of (i) the Stated Amount times (ii) the number of such Purchase Contracts as to which such Holders have elected to effect Holder's Early Settlement. (c) Upon written notice to the Collateral Agent by the Company of an Acceleration in accordance with the terms of the Purchase Contracts and the Purchase Contract Agreement (setting forth the number of Securities to be accelerated), and that all conditions to such Acceleration have been satisfied, then the Collateral Agent shall release from the Pledge and shall transfer all such Treasury Notes, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent with a principal amount equal to the product of (i) the Stated Amount times (ii) the number of Securities to be accelerated. (d) Transfers of Treasury Notes pursuant to Section 4(a), (b) or (c) shall be by Federal Reserve Bank-Wire or in another appropriate manner, (i) if the Collateral Agent shall have received such notification at or prior to 11:00 a.m., New York City time, on a Business Day, then no later than 2:00 p.m., New York City time, on such Business Day and (ii) if the Collateral Agent shall have received such notification on a day that is not a Business Day or after 11:00 a.m., New York City time, on a Business Day, then no later than 10:00 a.m., New York City time, on the next succeeding Business Day. SECTION 5. Rights and Remedies. (a) The Collateral Agent shall have all of the rights and remedies with respect to the Pledged Treasury Notes of a secured party under the Uniform Commercial Code as in effect in the State of New York (the "Code") (whether or not the Code is in effect in the jurisdiction where the rights and remedies are asserted) and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of principal payments of any Pledged Treasury Notes as provided in Section 3 hereof in satisfaction of the obligations of the Holder of the Securities of which such Pledged Treasury Notes are a part under the Purchase Contracts forming a part of such Securities, the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Notes and such obligations of such Holder, any and all of the rights and remedies available to a secured party under the Code after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of principal of or interest on the Pledged Treasury Notes. (d) The Purchase Contract Agent agrees that, from time to time, upon the written request of the Collateral Agent, the Purchase Contract Agent shall execute and deliver such further documents and do such other acts and things as the Collateral Agent may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder; provided that, except as expressly set forth herein or in accordance with this subsection (d), the Purchase Contract Agent shall have no obligation or liability with respect to the maintenance or perfection of the Pledge. SECTION 6. The Collateral Agent and the Purchase Contract Agent. It is hereby agreed as follows: (a) Appointment, Powers and Immunities. The Collateral Agent shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Collateral Agent: (i) shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against the Collateral Agent, nor shall the Collateral Agent be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (ii) shall not be re sponsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Securities or the Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Securities or the Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent) to perform any of its obligations hereunder or thereunder; (iii) shall not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 6(b) hereof); (iv) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence; and (v) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder. Subject to the foregoing, during the term of this Agreement, the Collateral Agent shall take all reasonable action in connection with the safe keeping and preservation of the Pledged Treasury Notes hereunder. No provision of this Agreement shall require the Collateral Agent to expend or risk its own funds or otherwise incur any financial liability in the perfor mance of any of its duties hereunder. In no event shall the Collateral Agent be liable for any amount in excess of the value of the Pledged Treasury Notes. (b) Instructions of the Company. The Company shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent shall be adequately indemnified as provided herein. Nothing in this Section 6(b) shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsis tent with such direction. (c) Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely upon any certification, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telex, telegram or cable) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), and upon advice and statements of legal counsel and other experts selected by the Collateral Agent. As to any matters not expressly provided for by this Agreement, the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. (d) Rights in Other Capacities. The Collateral Agent and its affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with the Purchase Contract Agent and any Holder of Securities (and any of their subsidiaries or affiliates) as if it were not acting as the Collateral Agent, and the Collateral Agent and its affiliates may accept fees and other consideration from the Purchase Contract Agent and any Holder of Securities without having to account for the same to the Company, provided that the Collateral Agent covenants and agrees with the Company that the Collateral Agent shall not accept, receive or permit there to be created in its favor any security interest, lien or other encumbrance of any kind in or upon the Pledged Treasury Notes. (e) Non-Reliance on Collateral Agent. The Collateral Agent shall not be required to keep itself informed as to the performance or observance by the Purchase Contract Agent or any Holder of Securities of this Agreement, the Purchase Contract Agreement, the Securities or any other document referred to or provided for herein or therein or to inspect the properties or books of the Purchase Contract Agent or any Holder of Securities. The Collateral Agent shall not have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent or any Holder of Securities (or any of their affiliates) that may come into the possession of the Collateral Agent or any of its affiliates. (f) Compensation and Indemnity by Company. The Company agrees: (i) to pay the Collateral Agent from time to time reasonable compensation for all services rendered by it hereunder and (ii) to indemnify the Collateral Agent and the Purchase Contract Agent for, and to hold them harmless against, any loss, liability or expense incurred without gross negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of their powers and duties under this Agreement, including the costs and expenses (including reasonable fees and expenses of counsel) of defending themselves against any claim or liability in connection with the exercise or performance of such powers and duties. (g) Compensation and Indemnity by Holders. The Holders agree (i) to indemnify the Purchase Contract Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence or bad faith on its part, arising out of or in connection with the institution of suit on behalf of the Holders pursuant to Section 4(a) above and (ii) to compensate the Purchase Contract Agent for the reasonable costs and expenses (including reasonable fees and expenses of counsel) incurred by it in instituting such suit. (h) Failure to Act. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto and/or any other Person with respect to any funds or property deposited hereunder, the Collateral Agent shall be entitled, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent shall be entitled to refuse to act until either (i) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing, satisfactory to the Collateral Agent or (ii) the Collateral Agent shall have received security or an indemnity satisfactory to the Collateral Agent sufficient to save the Collateral Agent harmless from and against any and all loss, liability or expense which the Collateral Agent may incur by reason of its acting. The Collateral Agent may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent may deem necessary. Notwithstanding anything contained herein to the contrary, the Collateral Agent shall not be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. (i) Resignation of Collateral Agent. Subject to the appointment and acceptance of a successor Collateral Agent as provided below, (a) the Collateral Agent may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent, (b) the Collateral Agent may be removed at any time by the Company and (c) if the Collateral Agent fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent may be removed by the Purchase Contract Agent at the written direction of 25% in aggregate principal amount of Holders of the Securities. The Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent pursuant to clause (c) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's giving of notice of resignation or such removal, then the retiring Collateral Agent may at the expense of the Company petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. The Collateral Agent shall be a bank which has an office in New York, New York and a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall take all appropriate action to transfer any money and property held by it hereunder (including the Pledged Treasury Notes) to such successor Collateral Agent. The retiring Collateral Agent shall, upon such succession, be discharged from its duties and obligations as Collateral Agent hereunder. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Section 6 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent. Promptly following the removal or resignation of the Collateral Agent the Company shall give written notice thereof to Moody's Investors Services, Inc. (j) Right to Appoint Agent or Advisor. The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by such agents or advisors selected in good faith. (k) Survival. The provisions of this Section 6 shall survive termination of this Agreement and the resignation or removal of the Collateral Agent. (l) Anything in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent or its officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, or any of its officers, employees or agents, incurred without any act or deed that is found to be attributable to gross negligence on the part of the Collateral Agent, its officers, employees or agents. (m) The Purchase Contract Agent. The duties and responsibilities of the Purchase Contract Agent under this Agreement shall in each case be governed by Article VII of the Purchase Contract Agreement. SECTION 7. Amendment. (a) Amendment Without Consent of Holders. Without the consent of any Holders, the Company, the Collateral Agent and the Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent and the Purchase Contract Agent, for any of the following purposes: (i) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; or (ii) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (iii) to evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent or Purchase Contract Agent; or (iv) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other such provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. (b) Amendment with Consent of Holders. With the consent of the Holders of not less than 66 2/3% of the Outstanding Securities, by Act of said Holders delivered to the Company, the Purchase Contract Agent and the Collateral Agent, the Company when authorized by a Board Resolution, the Purchase Contract Agent and the Collateral Agent may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided, however, that no such sup plemental agreement shall, without the consent of the Holder of each Outstanding Security affected thereby, (i) change the amount or type of Treasury Notes underlying a Security, impair the right of the Holder of any Security to receive interest payments on the underlying Treasury Notes or otherwise adversely affect the Holder's rights in or to such Treasury Notes; or (ii) change any Payment Date; (iii) impair the right to institute suit for the enforcement of any Purchase Contract. (iv) otherwise effect any action that would require the consent of the Holder of each Outstanding Security affected thereby pursuant to the Purchase Contract Agreement if such action were effected by an agreement supplemental thereto; or (v) reduce the percentage of Outstanding Securities the consent of whose Holders is required for any such amendment. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. (c) Execution of Amendments. In executing any amendment permitted by this Section, the Collateral Agent and the Purchase Contract Agent shall be entitled to receive and (subject to Section 6(a) hereof, with respect to the Collateral Agent, and Section 7.01 of the Purchase Contract Agreement, with respect to the Purchase Contract Agent) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to such execution and delivery have been satisfied. (d) Effect of Amendments. Upon the execution of any amendment under this Section, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Security Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase Contract Agreement shall be bound thereby. (e) Reference to Amendments. Security Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Section may, and shall if required by the Collateral Agent or the Purchase Contract Agent, bear a notation in a form approved by the Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Security Certificates so modified as to conform, in the opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in accordance with the Purchase Contract Agreement in exchange for Outstanding Security Certificates. SECTION 8. Miscellaneous. (a) No Waiver. No failure on the part of the Collateral Agent or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. (b) Governing Law. THIS AGREEMENT, THE COLLATERAL ACCOUNT, AND PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION AND THE PRIORITY OF THE SECURITY INTEREST IN THE TREASURY NOTES OR ANY SECURITY ENTITLEMENT WITH RESPECT THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE SECURITIES INTERMEDIARY'S JURISDICTION WILL BE THE STATE OF NEW YORK FOR PURPOSES OF 31 C.F.R. ss.357.11(b), AS AMENDED, AND ANY SIMILAR STATE LAW. The Company, the Collateral Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern Dis trict of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney- in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. (c) Notices. All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. (d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent and the Purchase Contract Agent, and the Holders from time to time of the Securities, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Purchase Contract Agent. (e) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. (f) Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. (g) Expenses, etc. The Company agrees to reimburse the Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral Agent (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; (b) all reasonable costs and expenses of the Collateral Agent (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Securi ties to satisfy its obligations under the Purchase Contracts forming a part of the Securities and (ii) the enforcement of this Section 8(g); and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. (h) Security Interest Absolute. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time of the Securities hereunder, shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any provision of the Purchase Contracts or the Securities or any other agreement or instrument relating thereto; (ii) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of Securities under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Purchase Contract Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or (iii) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SunAmerica Inc. By: -------------------------------- Name: James R. Belardi Title: Executive Vice President Address for Notices: SunAmerica Inc. 1 SunAmerica Center Los Angeles, CA 90067-6022 Attention: Treasurer Telecopy: (310) 772-6635 The Bank of New York as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Securities By: -------------------------------- Name: Vivian Georges Title: Assistant Vice President Address for Notices: The Bank of New York 101 Barclay Street Floor 21 West New York, NY 10286 Attention: Corporate Trust Administration Trustee Telecopy: (212) 815-5915 The First National Bank of Chicago as Collateral Agent and Securities Intermediary with respect to the Collateral Account and as Securities Intermediary with respect to any Treasury Notes credited to the Collateral Account By: -------------------------------- Name: Richard D. Manella Title: Vice President Address for Notices: The First National Bank of Chicago One First National Plaza Mail Suite 0126 Chicago, Illinois 60670-0126 Attention: Corporate Trust Administration Telecopy: (312) 407-1708 EX-4.5 10 EXHIBIT 4.5 ======================================================= SUNAMERICA INC. AND THE BANK OF NEW YORK, Trustee Prepaid Security Indenture Dated as of November 1, 1996 __________ ======================================================= TABLE OF CONTENTS __________ Page ---- PARTIES.................................................................. 1 RECITALS................................................................. 1 Authorization of Indenture...................................... 1 Compliance with Legal Requirements.............................. 1 Purpose of and Consideration for Indenture...................... 1 ARTICLE ONE DEFINITIONS SECTION 1.1 Certain Terms Defined............................... 1 ARTICLE TWO SECURITIES SECTION 2.1 Forms Generally...................................... 8 SECTION 2.2 Form of Trustee's Certificate of Authentication...................................... 8 SECTION 2.3 Amount Unlimited; Issuable in Series................. 9 SECTION 2.4 Authentication and Delivery of Securities......................................... 12 SECTION 2.5 Execution of Securities............................. 16 SECTION 2.6 Certificate of Authentication....................... 17 SECTION 2.7 Denomination and Date of Securities; Payments of Interest............................... 17 SECTION 2.8 Registration, Transfer and Exchange................. 19 SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities............................. 23 SECTION 2.10 Cancellation of Securities; Destruction Thereof............................................ 25 SECTION 2.11 Temporary Securities................................ 25 SECTION 2.12 CUSIP Numbers....................................... 26 ARTICLE THREE COVENANTS OF THE ISSUER SECTION 3.1 Payment of Principal and Interest................... 26 SECTION 3.2 Offices for Payments, etc........................... 27 SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee......................................... 29 SECTION 3.4 Paying Agents....................................... 29 SECTION 3.5 Written Statement to Trustee.........................30 SECTION 3.6 Luxembourg Publications............................. 30 SECTION 3.7 SEC Reports......................................... 30 SECTION 3.8 Applicability of Article............................ 31 ARTICLE FOUR SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders.................................... 31 SECTION 4.2 Preservation and Disclosure of Securityholders Lists.............................................. 31 SECTION 4.3 Reports by the Issuer............................... 31 SECTION 4.4 Reports by the Trustee.............................. 32 ARTICLE FIVE REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default..................... 30 SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt............................. 35 SECTION 5.3 Application of Proceeds............................. 38 SECTION 5.4 Suits for Enforcement............................... 39 SECTION 5.5 Restoration of Rights on Abandonment of Proceedings........................................ 39 SECTION 5.6 Limitations on Suits by Securityholders.................................... 40 SECTION 5.7 Unconditional Right of Securityholders to Institute Certain Suits......................... 41 SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.................. 41 SECTION 5.9 Control by Holders of Securities.................... 41 SECTION 5.10 Waiver of Past Defaults............................. 42 SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances...................................... 43 SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs.............................................. 43 SECTION 5.13 Applicability of Article............................ 44 ARTICLE SIX CONCERNING THE TRUSTEE SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default......................................... 44 SECTION 6.2 Certain Rights of the Trustee....................... 46 SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof................. 47 SECTION 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, etc................................... 48 SECTION 6.5 Moneys Held by Trustee.............................. 48 SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim........................ 48 SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc................................................ 49 SECTION 6.8 Indentures Not Creating Potential Conflicting Interests for the Trustee............................................ 49 SECTION 6.9 Persons Eligible for Appointment as Trustee......................................... 49 SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee................................50 SECTION 6.11 Acceptance of Appointment by Successor Trustee............................................ 52 SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee............... 54 SECTION 6.13 This Section intentionally left blank............... 55 SECTION 6.14 Appointment of Authenticating Agent................. 55 SECTION 6.15 Preferential Collection of Claims....................56 ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS SECTION 7.1 Evidence of Action Taken by Securityholders.................................... 56 SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities......................................... 57 SECTION 7.3 Holders to be Treated as Owners..................... 58 SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding... 59 SECTION 7.5 Right of Revocation of Action Taken................. 59 ARTICLE EIGHT SUPPLEMENTAL INDENTURES SECTION 8.1 Supplemental Indentures Without Consent of Securityholders................................. 60 SECTION 8.2 Supplemental Indentures With Consent of Securityholders.................................... 62 SECTION 8.3 Effect of Supplemental Indenture.................... 64 SECTION 8.4 Documents to Be Given to Trustee.................... 64 SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures......................................... 64 ARTICLE NINE CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 9.1 Issuer May Consolidate, Etc., Only on Certain Terms...................................... 65 SECTION 9.2 Successor Corporation Substituted................... 66 ARTICLE TEN SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS SECTION 10.1 Satisfaction and Discharge of Indenture.......................................... 66 SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities................ 71 SECTION 10.3 Repayment of Moneys Held by Paying Agent....................................... 71 SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years............... 71 SECTION 10.5 Indemnity for U.S. Government Obligations........................................ 72 ARTICLE ELEVEN MISCELLANEOUS PROVISIONS SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability............................... 72 SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities and Coupons............................. 73 SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture....................................... 73 SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons.............. 73 SECTION 11.5 Officer's Certificates and Opinions of Counsel; Statements to Be Contained Therein................. 74 SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays..... 75 SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939................... 76 SECTION 11.8 New York Law to Govern.............................. 76 SECTION 11.9 Counterparts........................................ 76 SECTION 11.10 Effect of Headings.................................. 76 SECTION 11.11 Securities in a Foreign Currency or in ECU.......................................... 76 SECTION 11.12 Judgment Currency................................... 77 ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS SECTION 12.1 Applicability of Article............................ 78 SECTION 12.2 Notice of Redemption; Partial Redemptions........................................ 78 SECTION 12.3 Payment of Securities Called for Redemption......................................... 81 SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption......................................... 82 SECTION 12.5 Mandatory and Optional Sinking Funds................ 82 TESTIMONIUM SIGNATURES THIS INDENTURE, dated as of November 1, 1996 between SUNAMERICA INC., a Maryland corporation (the "Issuer") THE BANK OF NEW YORK, a New York banking corporation, as trustee (the "Trustee"), W I T N E S S E T H : WHEREAS, the Issuer has duly authorized the issue from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture; WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities; and WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done; NOW, THEREFORE: In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities and of the coupons, if any, appertaining thereto as follows: ARTICLE ONE DEFINITIONS SECTION 1.1 Certain Terms Defined. The following terms (except as otherwise expressly provided herein or in any supplemental indenture or form of Security for a particular series or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act of 1933 (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term "generally accepted accounting principles" means such accounting principles as are generally accepted at the time of any computation. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. "Authenticating Agent" shall have the meaning set forth in Section 6.14. "Authorized Newspaper" means a newspaper (which, in the case of The City of New York, will, if practicable, be The Wall Street Journal (Eastern Edition), in the case of the United Kingdom, will, if practicable, be the Financial Times (London Edition) and, in the case of Luxembourg, will, if practicable, be the Luxembourger Wort) published in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in The City of New York, the United Kingdom or in Luxembourg, as applicable. "Board of Directors" means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf. "Board Resolution" means a copy of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted or consented to by the Board of Directors and to be in full force and effect, and delivered to the Trustee. "Business Day" means any day that is not a Saturday, Sunday or a day on which the NYSE or banking institutions or trust companies in the City of New York are authorized or obligated by law or executive order to be closed. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located in the City of New York, State of New York. "Coupon" means any interest coupon appertaining to an Unregistered Security. "Covenant Defeasance" shall have the meaning set forth in Section 10.1(C). "Depositary" means, with respect to the Securities of any series issuable or issued in the form of one or more Registered Global Securities, the Person designated as Depositary by the Company pursuant to Section 2.3 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Registered Global Securities of that series. "Dollar" means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. "ECU" means the European Currency Unit as defined and revised from time to time by the Council of European Communities. "Event of Default" means any event or condition specified as such in Section 5.1. "Foreign Currency" means a currency issued by the government of a country other than the United States. "Holder", "Holder of Securities", "Securityholder" or other similar terms mean (a) in the case of any Registered Security, the person in whose name such Security is registered in the security register kept by the Issuer for that purpose in accordance with the terms hereof, and (b) in the case of any Unregistered Security, the bearer of such Security, or any Coupon appertaining thereto, as the case may be. "Indenture" means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder. "Issuer" means (except as otherwise provided in Article Six) SunAmerica Inc., a Maryland corporation and, subject to Article Nine, its successors and assigns. "Issuer Order" means a written statement, request or order of the Issuer signed in its name by the chairman or vice chairman of the Board of Directors, the president, any executive, senior or other vice president or the treasurer of the Issuer. "Judgment Currency" shall have the meaning set forth in Section 11.12. "Officer's Certificate" means a certificate signed by the chairman or vice chairman of the Board of Directors, the president or any executive, senior or other vice president or the treasurer of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 11.5. "Opinion of Counsel" means an opinion in writing signed by the General Counsel of the Issuer or by such other legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 11.5. "Original Issue Date" of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution. "Original Issue Discount Security" means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.1. "Outstanding" when used with reference to Securities, shall, subject to the provisions of Section 7.4, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for the payment or redemption of which moneys or U.S. Government Obligations (as provided for in Section 10.1(A) and (B)) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities that shall have been paid or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.9 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Issuer) or Securities converted pursuant hereto or Securities not deemed outstanding pursuant to Section 12.2.In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.1. "Periodic Offering" means an offering of Securities of a series from time to time, the specific terms of which Securities, including, without limitation, the rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Securities. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Principal" whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include "and premium, if any". "Record Date" shall have the meaning set forth in Section 2.7. "Registered Global Security", means a Security evidencing all or a part of a series of Registered Securities, issued to the Depositary for such series in accordance with Section 2.4, and bearing the legend prescribed in Section 2.4. "Registered Security" means any Security registered on the Security register of the Issuer. "Required Currency" shall have the meaning set forth in Section 11.12. "Responsible Officer" when used with respect to the Trustee means the chairman of the board of directors, any vice chairman of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president, (whether or not designated by numbers or words added before or after the title "vice president") the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. "Security" or "Securities" (except as otherwise provided in Section 7.4) has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture. "Trust Indenture Act of 1939" (except as otherwise provided in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was originally executed. "Trustee" means the Person identified as "Trustee" in the first paragraph hereof and, subject to the provisions of Article Six, shall also include any successor trustee. "Trustee" shall also mean or include each Person who is then a trustee hereunder and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the trustee with respect to the Securities of such series. "Unregistered Security" means any Security other than a Registered Security. "U.S. Government Obligations" shall have the meaning set forth in Section 10.1(A). "Yield to Maturity" means the yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice. ARTICLE TWO SECURITIES SECTION 2.1 Forms Generally. The Securities of each series and the Coupons, if any, to be attached thereto shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to rather than set forth in a Board Resolution, an Officer's Certificate detailing such establishment) or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities and Coupons, if any, as evidenced by their execution of such Securities and Coupons. The definitive Securities and Coupons, if any, shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities and Coupons, if any, as evidenced by their execution of such Securities and Coupons, if any. SECTION 2.2 Form of Trustee's Certificate of Authentication. The Trustee's certificate of authentication on all Securities shall be in substantially the following form: "This is one of the Securities referred to in the within-mentioned Subordinated Indenture. ______________________, as Trustee By_____________________ Authorized Signatory" If at any time there shall be an Authenticating Agent appointed with respect to any series of Securities, then the Trustee's Certificate of Authentication to be borne by the Securities of each such series shall be substantially as follows: "This is one of the Securities referred to in the within-mentioned Subordinated Indenture. _________________________, as Authenticating Agent By_____________________ Authorized Signatory" SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series and each such series shall rank equally and pari passu with the Securities of each other series and all other senior and unsubordinated debt of the Issuer. There shall be established in or pursuant to one or more Board Resolutions (and to the extent established pursuant to rather than set forth in a Board Resolution, in an Officer's Certificate detailing such establishment) or established in one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series, (1) the designation of the Securities of the series, which shall distinguish the Securities of the Series from the Securities of all other series; (2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3); (3) if other than Dollars, the coin or currency in which the Securities of that series are denominated (including, but not limited to, any Foreign Currency or ECU); (4) the date or dates on which the principal of the Securities of the series is payable; (5) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, on which such interest shall be payable and (in the case of Registered Securities) on which a record shall be taken for the determination of Holders to whom interest is payable and/or the method by which such rate or rates or date or dates shall be determined, and any provisions for the deferral of interest payments; (6) the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.2); (7) the right, if any, of the Issuer to redeem Securities, in whole or in part, at its option and the period or periods within which, the price or prices at which and any terms and conditions upon which Securities of the series may be so redeemed, pursuant to any sinking fund or otherwise; (8) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation; (9) if other than denominations of $1,000 and any integral multiple thereof in the case of Registered Securities, or $1,000 and $5,000 in the case of Unregistered Securities, the denominations in which Securities of the series shall be issuable; (10) if other than the principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the maturity thereof; (11) if other than the coin or currency in which the Securities of that series are denominated, the coin or currency in which payment of the principal of or interest on the Securities of such series shall be payable; (12) if the principal of or interest on the Securities of such series are to be payable, at the election of the Issuer or a Holder thereof, in a coin or currency other than that in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made; (13) if the amount of payments of principal of and interest on the Securities of the series may be determined with reference to an index based on a coin or currency other than that in which the Securities of the series are denominated, the manner in which such amounts shall be determined; (14) whether the Securities of the series will be issuable as Registered Securities (and if so, whether such Securities will be issuable as Registered Global Securities) or Unregistered Securities (with or without Coupons), or any combination of the foregoing, any restrictions applicable to the offer, sale or delivery of Unregistered Securities or the payment of interest thereon and, if other than as provided in Section 2.8, the terms upon which Unregistered Securities of any series may be exchanged for Registered Securities of such series and vice versa; (15) whether and under what circumstances the Issuer will pay additional amounts on the Securities of the series held by a person who is not a U.S. person in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional amounts; (16) if the Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and terms of such certificates, documents or conditions; (17) any trustees, depositaries, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series; (18) any additional terms relating to events of default or covenants (or the defeasance thereof) with respect to the Securities of such series, including without limitation any terms inconsistent with the provisions of this Indenture relating to events of default or covenants (or the defeasance thereof); (19) if the Securities of such series are to be convertible or exchangeable into any cash, securities or property, at the option of the Holder or the Issuer or upon the happening of some event or otherwise, all terms relating to such convertibility, including without limitation any term inconsistent with the provisions of this Indenture relating to conversion or exchange; (20) any additional definitions with respect to the Securities of such series, including without limitation any definitions inconsistent with the provisions of this Indenture; and (21) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series and Coupons, if any, appertaining thereto, shall be substantially identical, except in the case of Registered Securities as to denomination and except as may otherwise be provided by or pursuant to the Board Resolution or Officer's Certificate referred to above or as set forth in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board Resolution, such Officer's Certificate or in any such indenture supplemental hereto. SECTION 2.4 Authentication and Delivery of Securities. The Issuer may deliver Securities of any series having attached thereto appropriate Coupons, if any, executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and make available for delivery such Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The maturity date, original issue date, interest rate and any other terms of the Securities of such series and Coupons, if any, appertaining thereto shall be determined by or pursuant to such Issuer Order and procedures. If provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in the case of subparagraphs 2, 3 and 4 below only at or before the time of the first request of the Issuer to the Trustee to authenticate Securities of such series) and (subject to Section 6.1) shall be fully protected in relying upon, unless and until such documents have been superseded or revoked: (1) an Issuer Order requesting such authentication and setting forth delivery instructions if the Securities and Coupons, if any, are not to be delivered to the Issuer, provided that, with respect to Securities of a series subject to a Periodic Offering, (a) such Issuer Order may be delivered by the Issuer to the Trustee prior to the delivery to the Trustee of such Securities for authentication and delivery, (b) the Trustee shall authenticate and make available for delivery Securities of such series for original issue from time to time, in an aggregate principal amount not exceeding the aggregate principal amount established for such series, pursuant to an Issuer Order or pursuant to procedures acceptable to the Trustee as may be specified from time to time by an Issuer Order, (c) the maturity date or dates, original issue date or dates, interest rate or rates and any other terms of Securities of such series shall be determined by an Issuer Order or pursuant to such procedures and (d) if provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Issuer or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing; (2) any Board Resolution, Officer's Certificate and/or executed supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the forms and terms of the Securities and Coupons, if any, were established; (3) an Officer's Certificate setting forth the form or forms and terms of the Securities and Coupons, if any, stating that the form or forms and terms of the Securities and Coupons, if any, have been established pursuant to Sections 2.1 and 2.3 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and (4) At the option of the Issuer, either one or more Opinions of Counsel, or a letter addressed to the Trustee permitting it to rely on one or more Opinions of Counsel, substantially to the effect that: (a) the forms of the Securities and Coupons, if any, have been duly authorized and established in conformity with the provisions of this Indenture; (b) in the case of an underwritten offering, the terms of the Securities have been duly authorized and established in conformity with the provisions of this Indenture, and, in the case of an offering that is not underwritten, certain terms of the Securities have been established pursuant to a Board Resolution, an Officer's Certificate or a supplemental indenture in accordance with this Indenture, and when such other terms as are to be established pursuant to procedures set forth in an Issuer Order shall have been established, all such terms will have been duly authorized by the Issuer and will have been established in conformity with the provisions of this Indenture; (c) when the Securities and Coupons, if any, have been executed by the Issuer and authenticated by the Trustee in accordance with the provisions of this Indenture and delivered to and duly paid for by the purchasers thereof, they will have been duly issued under this Indenture, will be entitled to the benefits of this Indenture, and will be valid and binding obligations of the Issuer, enforceable in accordance with their respective terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability; and (d) the execution and delivery by the Issuer of, and the performance by the Issuer of its obligations under, the Securities and Coupons, if any, will not contravene any provision of any material applicable law or the certificate of incorporation or by-laws of the Issuer or any agreement or other instrument binding upon the Issuer or any of its "significant subsidiaries" (as defined in Article 1 of Regulation S-X under the Securities Act of 1933) that is material to the Issuer and its subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Issuer or any "significant subsidiary" (as defined above), and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Issuer of its obligations under the Securities and Coupons, if any, except such as are specified and have been obtained and such as may be required by the securities or blue sky laws of the various states in connection with the offer and sale of the Securities and Coupons, if any. In rendering such opinions, any counsel may qualify any opinions as to enforceability by stating that such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting the rights and remedies of creditors and is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Such counsel may rely upon opinions of other counsel (copies of which shall be delivered to the Trustee), who shall be counsel reasonably satisfactory to the Trustee, in which case the opinion shall state that such counsel believes he and the Trustee are entitled so to rely. Such counsel may also state that, insofar as such opinion involves factual matters, he has relied, to the extent he deems proper, upon certificates of officers of the Issuer and its subsidiaries and certificates of public officials. The Trustee shall have the right to decline to authenticate and make available for delivery any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders or would affect the Trustee's own rights, duties or immunities under the Securities, this Indenture or otherwise. If the Issuer shall establish pursuant to Section 2.3 that the Securities of a series are to be issued in the form of one or more Registered Global Securities, then the Issuer shall execute and the Trustee shall, in accordance with this Section and the Issuer Order with respect to such series, authenticate and make available for delivery one or more Registered Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary." Each Depositary designated pursuant to Section 2.3 must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation. SECTION 2.5 Execution of Securities. The Securities and, if applicable, each Coupon appertaining thereto shall be signed on behalf of the Issuer by the chairman or vice chairman of its Board of Directors or its president or any executive, senior or other vice president or its treasurer, under its corporate seal (except in the case of Coupons), which may, but need not, be attested. Such signatures may be the manual or facsimile signatures of the present or any future such officers. The seal of the Issuer may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. Typographical and other minor errors or defects in any such reproduction of the seal or any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee. In case any officer of the Issuer who shall have signed any of the Securities or Coupons, if any, shall cease to be such officer before the Security or Coupon so signed (or the Security to which the Coupon so signed appertains) shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security or Coupon nevertheless may be authenticated and delivered or disposed of as though the person who signed such Security or Coupon had not ceased to be such officer of the Issuer; and any Security or Coupon may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security or Coupon, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer. SECTION 2.6 Certificate of Authentication. Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized signatories, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. No Coupon shall be entitled to the benefits of this Indenture or shall be valid and obligatory for any purpose until the certificate of authentication on the Security to which such Coupon appertains shall have been duly executed by the Trustee. The execution of such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture. SECTION 2.7 Denomination and Date of Securities; Payments of Interest. The Securities of each series shall be issuable as Registered Securities or Unregistered Securities in denominations established as contemplated by Section 2.3 or, with respect to the Registered Securities of any series, if not so established, in denominations of $1,000 and any integral multiple thereof. If denominations of Unregistered Securities of any series are not so established, such Securities shall be issuable in denominations of $1,000 and $5,000. The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication thereof. Each Registered Security shall be dated the date of its authentication. Each Unregistered Security shall be dated as provided in the resolution or resolutions of the Board of Directors of the Issuer referred to in Section 2.3. The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the dates, established as contemplated by Section 2.3. The person in whose name any Registered Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer or exchange of such Registered Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted interest shall be paid to the persons in whose names Outstanding Registered Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Registered Securities not less than 15 days preceding such subsequent record date. The term "record date" as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Registered Securities of such series established as contemplated by Section 2.3, or, if no such date is so established, if such interest payment date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day. SECTION 2.8 Registration, Transfer and Exchange. The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section 3.2 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide for the registration of Registered Securities of such series and the registration of transfer of Registered Securities of such series. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times such register or registers shall be open for inspection by the Trustee. Upon due presentation for registration of transfer of any Registered Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.2, the Issuer shall execute and the Trustee shall authenticate and make available for delivery in the name of the transferee or transferees a new Registered Security or Registered Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount. Unregistered Securities (except for any temporary global Unregistered Securities) and Coupons (except for Coupons attached to any temporary global Unregistered Securities) shall be transferable by delivery. At the option of the Holder thereof, Registered Securities of any series (other than a Registered Global Security, except as set forth below) may be exchanged for a Registered Security or Registered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Registered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.2 and upon payment, if the Issuer shall so require, of the charges hereinafter provided. If the Securities of any series are issued in both registered and unregistered form, except as otherwise specified pursuant to Section 2.3, at the option of the Holder thereof, Unregistered Securities of any series may be exchanged for Registered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.2, with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges hereinafter provided. At the option of the Holder thereof, if Unregistered Securities of any series, maturity date, interest rate and original issue date are issued in more than one authorized denomination, except as otherwise specified pursuant to Section 2.3, such Unregistered Securities may be exchanged for Unregistered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.2 or as specified pursuant to Section 2.3, with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges hereinafter provided. Registered Securities of any series may not be exchanged for Unregistered Securities of such series unless (1) otherwise specified pursuant to Section 2.3 and (2) the Issuer has delivered to the Trustee an Opinion of Counsel that (x) the Issuer has received from the Internal Revenue Service a ruling or (y) since the date hereof, there has been a change in the applicable Federal income tax law, in either case to the effect that the inclusion of terms permitting Registered Securities to be exchanged for Unregistered Securities would result in no adverse Federal income tax effect to the Issuer or to any Holder. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive. All Securities and Coupons surrendered upon any exchange or transfer provided for in this Indenture shall be promptly canceled by the Trustee and the Trustee will return the canceled Securities to the Issuer. All Registered Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by the Holder or his attorney duly authorized in writing. The Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction. The Issuer shall not be required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption, in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed. Notwithstanding any other provision of this Section 2.8, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary. If at any time the Depositary for any Registered Securities of a series represented by one or more Registered Global Securities notifies the Issuer that it is unwilling or unable to continue as Depositary for such Registered Securities or if at any time the Depositary for such Registered Securities shall no longer be eligible under Section 2.4, the Issuer shall appoint a successor Depositary eligible under Section 2.4 with respect to such Registered Securities. If a successor Depositary eligible under Section 2.4 for such Registered Securities is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer's election pursuant to Section 2.3 that such Registered Securities be represented by one or more Registered Global Securities shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and make available for delivery, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities in exchange for such Registered Global Security or Securities. The Issuer may at any time and in its sole discretion determine that the Registered Securities of any series issued in the form of one or more Registered Global Securities shall no longer be represented by a Registered Global Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and make available for delivery, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities, in exchange for such Registered Global Security or Securities. If specified by the Issuer pursuant to Section 2.3 with respect to Securities represented by a Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in exchange in whole or in part for Securities of the same series in definitive registered form on such terms as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, without service charge, (i) to the Person specified by such Depositary a new Registered Security or Securities of the same series, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Registered Global Security; and (ii) to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause (i) above. Upon the exchange of a Registered Global Security for Securities in definitive registered form without coupons, in authorized denominations, such Registered Global Security shall be canceled by the Trustee or an agent of the Issuer or the Trustee. Securities in definitive registered form without coupons issued in exchange for a Registered Global Security pursuant to this Section 2.8 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered. All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. Notwithstanding anything herein or in the terms of any series of Securities to the contrary, none of the Issuer, the Trustee or any agent of the Issuer or the Trustee (any of which, other than the Issuer, shall rely on an Officer's Certificate and an Opinion of Counsel) shall be required to exchange any Unregistered Security for a Registered Security if such exchange would result in adverse Federal income tax consequences to the Issuer (such as, for example, the inability of the Issuer to deduct from its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then applicable United States Federal income tax laws. SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security or any Coupon appertaining to any Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the request of any officer of the Issuer, the Trustee shall authenticate and make available for delivery a new Security of the same series, maturity date, interest rate and original issue date, bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining to the Securities so mutilated, defaced, destroyed, lost or stolen, or in exchange or substitution for the Security to which such mutilated, defaced, destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen. In every case the applicant for a substitute Security or Coupon shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof and in the case of mutilation or defacement shall surrender the Security and related Coupons to the Trustee or such agent. Upon the issuance of any substitute Security or Coupon, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) or its agent connected therewith. In case any Security or Coupon that has matured or is about to mature, has been called for redemption in full or is being converted in full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security, pay or authorize the payment or conversion of the same or the payment of the relevant Coupon (without surrender thereof except in the case of a mutilated or defaced Security or Coupon), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof. Every substitute Security or Coupon of any series issued pursuant to the provisions of this Section by virtue of the fact that any such Security or Coupon is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security or Coupon shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities or Coupons of such series duly authenticated and delivered hereunder. All Securities and Coupons shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and Coupons and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. SECTION 2.10 Cancellation of Securities; Destruction Thereof. All Securities and Coupons surrendered for payment, redemption, registration of transfer or exchange, conversion or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee or any agent of the Trustee, shall be delivered to the Trustee or its agent for cancellation or, if surrendered to the Trustee, shall be canceled by it; and no Securities or Coupons shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee or its agent shall return canceled Securities and Coupons to the Issuer. If the Issuer or its agent shall acquire any of the Securities or Coupons, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities or Coupons unless and until the same are delivered to the Trustee or its agent for cancellation. SECTION 2.11 Temporary Securities. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and make available for delivery temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as Registered Securities without coupons, or as Unregistered Securities with or without coupons attached thereto, of any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof. Temporary Securities may contain such references to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Registered Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.2 and, in the case of Unregistered Securities, at any agency maintained by the Issuer for such purpose as specified pursuant to Section 2.3, and the Trustee shall authenticate and make available for delivery in exchange for such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having authorized denominations and, in the case of Unregistered Securities, having attached thereto any appropriate Coupons. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless otherwise established pursuant to Section 2.3. The provisions of this Section are subject to any restrictions or limitations on the issue and delivery of temporary Unregistered Securities of any series that may be established pursuant to Section 2.3 (including any provision that Unregistered Securities of such series initially be issued in the form of a single global Unregistered Security to be delivered to a depositary or agency located outside the United States and the procedures pursuant to which definitive or global Unregistered Securities of such series would be issued in exchange for such temporary global Unregistered Security). SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the 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 Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee of any change in the CUSIP numbers. ARTICLE THREE COVENANTS OF THE ISSUER SECTION 3.1 Payment of Principal and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any additional amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided in such Securities and in the Coupons, if any, appertaining thereto and in this Indenture. The interest on Securities with Coupons attached (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. If any temporary Unregistered Security provides that interest thereon may be paid while such Security is in temporary form, the interest on any such temporary Unregistered Security (together with any additional amounts payable pursuant to the terms of such Security) shall be paid, as to the installments of interest evidenced by Coupons attached thereto, if any, only upon presentation and surrender thereof, and, as to the other installments of interest, if any, only upon presentation of such Securities for notation thereon of the payment of such interest, in each case subject to any restrictions that may be established pursuant to Section 2.3. The interest on Registered Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and, at the option of the Issuer, may be paid by wire transfer or by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the registry books of the Issuer. SECTION 3.2 Offices for Payments, etc. So long as any Registered Securities are authorized for issuance pursuant to this Indenture or are outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Registered Securities of each series may be presented for payment, where the Securities of each series may be presented for exchange or conversion as is provided in this Indenture and, if applicable, pursuant to Section 2.3 and where the Registered Securities of each series may be presented for registration of transfer as in this Indenture provided. The Issuer will maintain one or more offices or agencies in a city or cities located outside the United States (including any city in which such an agency is required to be maintained under the rules of any stock exchange on which the Securities of such series are listed) where the Unregistered Securities, if any, of each series and Coupons, if any, appertaining thereto may be presented for payment. No payment on any Unregistered Security or Coupon will be made upon presentation of such Unregistered Security or Coupon at an agency of the Issuer within the United States nor will any payment be made by transfer to an account in, or by mail to an address in, the United States unless pursuant to applicable United States laws and regulations then in effect such payment can be made without adverse tax consequences to the Issuer. Notwithstanding the foregoing, payments in Dollars of Unregistered Securities of any series and Coupons appertaining thereto that are payable in Dollars may be made at an agency of the Issuer maintained in the Borough of Manhattan, The City of New York if such payment in Dollars at each agency maintained by the Issuer outside the United States for payment on such Unregistered Securities is illegal or effectively precluded by exchange controls or other similar restrictions. The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Issuer in respect of the Securities of any series, the Coupons appertaining thereto or this Indenture may be served. The Issuer will give to the Trustee written notice of the location of each such office or agency and of any change of location thereof. In case the Issuer shall fail to maintain any agency required by this Section to be located in the Borough of Manhattan, The City of New York, or shall fail to give such notice of the location or of any change in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee. The Issuer may from time to time designate one or more additional offices or agencies where the Securities of a series and any Coupons appertaining thereto may be presented for payment, where the Securities of that series may be presented for exchange as provided in this Indenture and pursuant to Section 2.3 and where the Registered Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for in this Section. The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof. SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder. SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section, (a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series, or Coupons appertaining thereto, if any, or of the Trustee, (b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and (c) that it will pay any such sums so held in trust by it to the Trustee upon the Trustee's written request at any time during the continuance of the failure referred to in clause (b) above. The Issuer will, on or prior to each due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to take such action. If the Issuer shall act as its own paying agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series or the Coupons appertaining thereto a sum sufficient to pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action. Anything in this Section to the contrary notwithstanding, but subject to Section 10.1, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained. Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.3 and 10.4. SECTION 3.5 Written Statement to Trustee. The Issuer will furnish to the Trustee on or before January 31 in each year (beginning with January 31, 1997) a brief certificate (which need not comply with Section 11.5) from the principal executive, financial or accounting officer of the Issuer stating that in the course of the performance by the signer of his duties as an officer of the Issuer he would normally have knowledge of any default or non-compliance by the Issuer in the performance of any covenants or conditions contained in this Indenture, stating whether or not he has knowledge of any such default or non-compliance and, if so, describing each such default or non-compliance of which the signer has knowledge and the nature thereof. SECTION 3.6 Luxembourg Publications. In the event of the publication of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 10.4 or 12.2, the party making such publication in the Borough of Manhattan, The City of New York and London shall also, to the extent that notice is required to be given to Holders of Securities of any series by applicable Luxembourg law or stock exchange regulation, as evidenced by an Officer's Certificate delivered to such party, make a similar publication in Luxembourg. SECTION 3.7 SEC Reports. The Issuer shall file with the Trustee, within 15 days after it files such annual and quarterly reports, information, documents and other reports with the Commission, copies of its annual report and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) that the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. SECTION 3.8 Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series except as otherwise specified as contemplated by Section 2.3 for Securities of such series. ARTICLE FOUR SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders. If and so long as the Trustee shall not be the Security registrar for the Securities of any series, the Issuer and any other obligor on the Securities will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Registered Securities of such series pursuant to Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than 5 days after each record date for the payment of interest on such Registered Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.3 for non-interest bearing Registered Securities in each year, and (b) at such other times as the Trustee may request in writing, within thirty days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished. SECTION 4.2 Preservation and Disclosure of Securityholders Lists. This Section intentionally left blank. SECTION 4.3 Reports by the Issuer. The Issuer covenants to file with the Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports that the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 or pursuant to Section 314 of the Trust Indenture Act of 1939. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.4 Reports by the Trustee. Any Trustee's report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before July 15 in each year beginning July 15, 1997, as provided in Section 313(c) of the Trust Indenture Act of 1939, so long as any Securities are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee no more than 60 days prior thereto. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange, if any, upon which the Securities are listed, with the Commission and with the Issuer. The Issuer will promptly notify the Trustee when the Securities are listed on any stock exchange. ARTICLE FIVE REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default. "Event of Default" with respect to Securities of any series wherever used herein, means each one of the following events that shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or for any substantial part of its property, or make any general assignment for the benefit of creditors; or (c) any other Event of Default provided in the supplemental indenture under which such series of Securities is issued or in the form of Security for such series. If an Event of Default described in clause (a), (b) or (c) (unless, in the case of an Event of Default described in clause (c), otherwise provided in the relevant supplemental indenture or form of Security with respect to such series) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, the entire principal amount (or, if the Securities of any such affected series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities of all series, and the interest accrued thereon, if any, shall automatically become immediately due and payable, without any demand or other notice or act on behalf of the Trustee, the Holders or any other Person. The foregoing provisions, however, are subject to the condition that if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series (or of all the Securities, as the case may be) and the principal of any and all Securities of each such series (or of all the Securities, as the case may be) that shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of each such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, its agents, attorneys and counsel except as a result of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities that shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein -- then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of each such series, or of all the Securities, in each case voting as a single class, then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to each such series (or with respect to all the Securities, as the case may be), but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities. SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise -- then upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series, and such Coupons, for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, its agents, attorneys and counsel except as a result of its negligence or bad faith. Until such demand is made by the Trustee, the Issuer may pay the principal of and interest on the Securities of any series to the registered holders, whether or not the Securities of such Series be overdue. In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon the Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Securities, wherever situated the moneys adjudged or decreed to be payable. In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise: (a) to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities, or to the creditors or property of the Issuer or such other obligor, (b) unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and (c) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person. All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series or Coupons appertaining to such Securities, may be enforced by the Trustee without the possession of any of the Securities of such series or Coupons appertaining to such Securities or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities or Coupons appertaining to such Securities in respect of which such action was taken. In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities or Coupons appertaining to such Securities in respect to which such action was taken, and it shall not be necessary to make any Holders of such Securities or Coupons appertaining to such Securities parties to any such proceedings. SECTION 5.3 Application of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of any series shall, subject to the subordination provisions hereof, be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities and Coupons appertaining to such Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, its agents and attorneys except as a result of negligence or bad faith; SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or Yield to Maturity, without preference or priority of principal over interest or Yield to Maturity, or of interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and FOURTH: To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto. SECTION 5.4 Suits for Enforcement. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such proceedings had been taken. SECTION 5.6 Limitations on Suits by Securityholders. No Holder of any Security of any series or of any Coupon appertaining thereto shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of each affected series then Outstanding (treated as a single class) shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 5.9; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security or Coupon with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series or Coupons appertaining to such Securities shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities or Coupons appertaining to such Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series and Coupons appertaining to such Securities. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. SECTION 5.7 Unconditional Right of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security or Coupon to receive payment of the principal of and interest on such Security or Coupon on or after the respective due dates expressed in such Security or Coupon, or to institute suit for the enforcement of any such payment on or after such respective dates, or the right to convert such Security, if any, or to institute suit therefor shall not be impaired or affected without the consent of such Holder. SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 5.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities or Coupons is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No delay or omission of the Trustee or of any Holder of Securities or Coupons to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 5.6, every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities or Coupons may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities or Coupons. SECTION 5.9 Control by Holders of Securities. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with all such series voting as a single class) at the time Outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 6.1) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 6.1) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders. Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and that is not inconsistent with such direction or directions by Securityholders. SECTION 5.10 Waiver of Past Defaults. Prior to the acceleration of the maturity of any Securities as provided in Section 5.1, the Holders of a majority in aggregate principal amount of the Securities of all series at the time Outstanding with respect to which an event of default shall have occurred and be continuing (voting as a single class) may on behalf of the Holders of all such Securities waive any past default or Event of Default described in Section 5.1 and its consequences, except a default in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Security affected. In the case of any such waiver, the Issuer, the Trustee and the Holders of all such Securities shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Upon any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances. The Trustee shall, within ninety days after the occurrence of a default with respect to the Securities of any series, give notice of all defaults with respect to that series known to the Trustee (i) if any Unregistered Securities of that series are then Outstanding, to the Holders thereof, by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.6, at least once in an Authorized Newspaper in Luxembourg) and (ii) to all Holders of Securities of such series in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act of 1939, unless in each case such defaults shall have been cured before the mailing or publication of such notice (the term "defaults" for the purpose of this Section being hereby defined to mean any event or condition that is, or with notice or lapse of time or both would become, an Event of Default); provided that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund installment on such series, the 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 or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series. SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security or Coupon by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under clause (d) or (h) of Section 5.1 (if the suit relates to Securities of more than one but less than all series), l0% in aggregate principal amount of Securities then Outstanding and affected thereby or 10% in aggregate principal amount of all Securities then Outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security on or after the due date expressed in such Security or any date fixed for redemption. SECTION 5.13 Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series except as otherwise specified as contemplated by Section 2.3 for Securities of such series. ARTICLE SIX CONCERNING THE TRUSTEE SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the curing or waiving of all Events of Default that may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived) the Trustee shall exercise with respect to such series of Securities such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that (a) prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default with respect to such series that may have occurred: (i) the duties and obligations of the Trustee with respect to the Securities of any series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the 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 pursuant to Section 5.9 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. None of the provisions contained in this Indenture shall require the 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 there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it. The provisions of this Section 6.1 are in furtherance of and subject to Section 315 of the Trust Indenture Act of 1939. SECTION 6.2 Certain Rights of the Trustee. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to Section 6.1: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer's Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer's Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer; (c) the Trustee may consult with counsel of its choice and any written advice or any Opinion of Counsel 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 reliance thereon in accordance with such advice or Opinion of Counsel; (d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred therein or thereby; (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture; (f) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the 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, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand. The Trustee shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; and (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities or Coupons. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof. SECTION 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent. SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of Section 10.4 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder. SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Issuer also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities or Coupons, and the Securities are hereby subordinated to such senior claim. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1(a) or Section 5.1(b), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or state bankruptcy, insolvency or other similar law. The provisions of this Section shall survive the termination of this Indenture. SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer's Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 6.8 Indentures Not Creating Potential Conflicting Interests for the Trustee. The following indentures are hereby specifically described for the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: this Indenture with respect to the Securities of any other series. SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation or banking association organized and doing business under the laws of the United States of America or of any State or the District of Columbia having a combined capital and surplus of at least $5,000,000, and that is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by Federal, State or District of Columbia authority. Such corporation or banking association shall have a place of business in the Borough of Manhattan, The City of New York if there be such a corporation in such location willing to act upon reasonable and customary terms and conditions. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, 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. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.10. The provisions of this Section 6.9 are in furtherance of and subject to Section 310(a) of the Trust Indenture Act of 1939. SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and (i) if any Unregistered Securities of a series affected are then Outstanding, by giving notice of such resignation to the Holders thereof, by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and at least once in an Authorized Newspaper in London (and, if required by Section 3.6, at least once in an Authorized Newspaper in Luxembourg), (ii) if any Unregistered Securities of a series affected are then Outstanding, by mailing notice of such resignation to the Holders thereof who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939 at such addresses as were so furnished to the Trustee and (iii) by mailing notice of such resignation to the Holders of then Outstanding Registered Securities of each series affected at their addresses as they shall appear on the registry books. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 5.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or (ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 6.9 and Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or (iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. (c) The Holders of a majority in aggregate principal amount of the Securities of each series at the time outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 7.1 of the action in that regard taken by the Securityholders. (d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.11. SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.6. If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor Trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto, which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures. No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.9. Upon acceptance of appointment by any successor trustee as provided in this Section 6.11, the Issuer shall give notice thereof (a) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof, by publication of such notice at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.9, at least once in an Authorized Newspaper in Luxembourg), (b) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939, by mailing such notice to such Holders at such addresses as were so furnished to the Trustee (and the Trustee shall make such information available to the Issuer for such purpose) and (c) to the Holders of Registered Securities of each series affected, by mailing such notice to such Holders at their addresses as they shall appear on the registry books. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 6.10. If the Issuer fails to give such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer. SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.9, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full force that it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 6.13 This Section intentionally left blank. SECTION 6.14 Appointment of Authenticating Agent. As long as any Securities of a series remain Outstanding, the Trustee may, by an instrument in writing, appoint with the approval of the Issuer an authenticating agent (the "Authenticating Agent"), which shall be authorized to act on behalf of the Trustee to authenticate Securities, including Securities issued upon exchange, registration of transfer, partial redemption or pursuant to Section 2.9. Securities of each such series authenticated by such Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee. Whenever reference is made in this Indenture to the authentication and delivery of Securities of any series by the Trustee or to the Trustee's Certificate of Authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent for such series and a Certificate of Authentication executed on behalf of the Trustee by such Authenticating Agent. Such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000 (determined as provided in Section 6.9 with respect to the Trustee) and subject to supervision or examination by Federal or State authority. Any corporation into which any Authenticating Agent may be merged or converted, or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent with respect to all series of Securities for which it served as Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent. Any Authenticating Agent may at any time, and if it shall cease to be eligible shall, resign by giving written notice of resignation to the Trustee and to the Issuer. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14 with respect to one or more series of Securities, the Trustee shall upon receipt of an Issuer Order appoint a successor Authenticating Agent and the Issuer shall provide notice of such appointment to all Holders of Securities of such series in the manner and to the extent provided in Section 11.4. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent for such series from time to time reasonable compensation. The Authenticating Agent for the Securities of any series shall have no responsibility or liability for any action taken by it as such at the direction of the Trustee. Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any Authenticating Agent. SECTION 6.15 Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Issuer (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Issuer (or any such other obligor). ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS SECTION 7.1 Evidence of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article. SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by a Securityholder or his agent or proxy may be proved in the following manner: (a) The fact and date of the execution by any Holder of any instrument may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the person executing such instruments acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute sufficient proof of the authority of the person executing the same. The fact of the holding by any Holder of an Unregistered Security of any series, and the identifying number of such Security and the date of his holding the same, may be proved by the production of such Security or by a certificate executed by any trust company, bank, banker or recognized securities dealer wherever situated satisfactory to the Trustee, if such certificate shall be deemed by the Trustee to be satisfactory. Each such certificate shall be dated and shall state that on the date thereof a Security of such series bearing a specified identifying number was deposited with or exhibited to such trust company, bank, banker or recognized securities dealer by the person named in such certificate. Any such certificate may be issued in respect of one or more Unregistered Securities of one or more series specified therein. The holding by the person named in any such certificate of any Unregistered Securities of any series specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (1) another certificate bearing a later date issued in respect of the same Securities shall be produced, or (2) the Security of such series specified in such certificate shall be produced by some other person, or (3) the Security of such series specified in such certificate shall have ceased to be Outstanding. Subject to Sections 6.1 and 6.2, the fact and date of the execution of any such instrument and the amount and numbers of Securities of any series held by the person so executing such instrument and the amount and numbers of any Security or Securities for such series may also be proven in accordance with such reasonable rules and regulations as may be prescribed by the Trustee for such series or in any other manner that the Trustee for such series may deem sufficient. (b) In the case of Registered Securities, the ownership of such Securities shall be proved by the Security register or by a certificate of the Security registrar. The Issuer may set a record date for purposes of determining the identity of Holders of Registered Securities of any series entitled to vote or consent to any action referred to in Section 7.1, which record date may be set at any time or from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, with respect to Registered Securities of any series, only Holders of Registered Securities of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent. SECTION 7.3 Holders to be Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Holder of any Unregistered Security and the Holder of any Coupon as the absolute owner of such Unregistered Security or Coupon (whether or not such Unregistered Security or Coupon shall be overdue) for the purpose of receiving payment thereof or on account thereof and for all other purposes and neither the Issuer, the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Unregistered Security or Coupon. SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities that are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Securities that the Trustee knows are so owned shall be so disregarded. Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officer's Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such Officer's Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination. SECTION 7.5 Right of Revocation of Action Taken. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action. ARTICLE EIGHT SUPPLEMENTAL INDENTURES SECTION 8.1 Supplemental Indentures Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto, which comply with the Trust Indenture Act of 1939, as then in effect, for one or more of the following purposes: (a) to add to the covenants of the Issuer for the benefit of the Holders, and to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants an Event of Default, or to surrender any right or power herein conferred upon the Issuer; or (b) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11; or (c) to establish the forms or terms of Securities of any series or of the Coupons appertaining to such Securities as permitted by Sections 2.1 and 2.3; or (d) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Indenture, provided such action shall not adversely affect the interests of the Holders. (e) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11; and (f) to make any changes to the terms of this Indenture to clarify inconsistencies with the provisions of the prospectus supplement dated October 31, 1996 (which prospectus supplement relates to the Company's Premium Equity Redemption Cumulative Security Units--PERCS Units), including, without limitation, to insert additional provisions inconsistent with any existing provisions hereof. The Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 8.2. SECTION 8.2 Supplemental Indentures With Consent of Securityholders. With the consent (evidenced as provided in Article Seven) of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto, which comply with the Trust Indenture Act of 1939, as then in effect, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series or of the Coupons appertaining to such Securities, except that no such supplemental indenture shall (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or make the principal thereof (including any amount in respect of original issue discount), or interest thereon payable in any coin or currency other than that provided in the Securities and Coupons or in accordance with the terms thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 5.1 or the amount thereof provable in bankruptcy pursuant to Section 5.2, or alter the provisions of Section 11.11 or 11.12 or impair or affect the right of any Securityholder to institute suit for the payment or conversion (if applicable) thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder and any right to convert, in each case without the consent of the Holder of each Security so affected, or (b) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Security so affected. A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one or more particular series of Securities, or that modifies the rights of Holders of Securities of such series, or of Coupons appertaining to such Securities, with respect to such covenant or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or of the Coupons appertaining to such Securities. Upon the request of the Issuer, accompanied by a copy of a resolution of the Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order) certified by the secretary or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the Holders of the Securities as aforesaid and other documents, if any, required by Section 7.1, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give notice thereof (i) to the Holders of then Outstanding Registered Securities of each series affected thereby, by mailing a notice thereof by first-class mail to such Holders at their addresses as they shall appear on the Security register, (ii) if any Unregistered Securities of a series affected thereby are then Outstanding, to the Holders thereof who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939, by mailing a notice thereof by first-class mail to such Holders at such addresses as were so furnished to the Trustee and (iii) if any Unregistered Securities of a series affected thereby are then Outstanding, to all Holders thereof, by publication of a notice thereof at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.6, at least once in an Authorized Newspaper in Luxembourg), and in each case such notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject to the provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with the applicable provisions of this Indenture. SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and made available for delivery in exchange for the Securities of such series then Outstanding. ARTICLE NINE CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 9.1 Issuer May Consolidate, Etc., Only on Certain Terms. The Issuer shall not consolidate with or merge into any other Person or transfer or lease its properties and assets substantially as an entirety to any Person, and the Issuer shall not permit any other Person to consolidate with or merge into the Issuer, unless: (a) either the Issuer shall be the continuing corporation, or the corporation (if other than the Issuer) formed by such consolidation or into which the Issuer is merged or to which the properties and assets of the Issuer substantially as an entity are transferred or leased shall be a corporation organized and existing under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under the Securities and this Indenture); (b) immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (c) the Issuer has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and any such supplemental indenture comply with this Article and that all conditions precedent provided for herein relating to such transaction have been complied with. SECTION 9.2 Successor Corporation Substituted. The successor corporation formed by such consolidation or into which the Issuer is merged or to which such transfer or lease is made shall succeed to and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such successor corporation had been named as the Issuer herein, and thereafter (except in the case of a lease to another Person) the predecessor corporation shall be relieved of all obligations and covenants under the Indenture and the Securities and, in the event of such conveyance or transfer, any such predecessor corporation may be dissolved and liquidated. ARTICLE TEN SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any time (a) the Issuer shall have paid or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder and all unmatured Coupons appertaining thereto (other than Securities of such series and Coupons appertaining thereto that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.9) as and when the same shall have become due and payable, or (b) the Issuer shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated and all unmatured Coupons appertaining thereto (other than any Securities of such series and Coupons appertaining thereto that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.9) or (c) in the case of any series of Securities where the exact amount (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (ii) below, (i) all the Securities of such series and all unmatured Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with Section 10.4) or, in the case of any series of Securities the payments on which may only be made in Dollars, direct obligations of the United States of America, backed by its full faith and credit ("U.S. Government Obligations"), maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (A) the principal and interest on all Securities of such series and Coupons appertaining thereto on each date that such principal or interest is due and payable and (B) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; and if, in any such case, the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer, then this Indenture shall cease to be of further effect (except as to (i) rights of registration of transfer and exchange of Securities of such Series and of Coupons appertaining thereto and the Issuer's right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) the rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and (vi) the obligations of the Issuer under Section 3.2) and the Trustee, on demand of the Issuer accompanied by an Officer's Certificate and an Opinion of Counsel and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture; provided, that the rights of Holders of the Securities and Coupons to receive amounts in respect of principal of and interest on the Securities and Coupons held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series. (B) The following provisions shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer's Certificate or indenture supplemental hereto provided pursuant to Section 2.3. In addition to discharge of the Indenture pursuant to the next preceding paragraph, in the case of any series of Securities the exact amounts (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (a) below, the Issuer shall be deemed to have paid and discharged the entire indebtedness on all the Securities of such a series and the Coupons appertaining thereto on the date of the deposit referred to in subparagraph (a) below, and the provisions of this Indenture with respect to the Securities of such series and Coupons appertaining thereto shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Securities of such series and of Coupons appertaining thereto and the Issuer's right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of Holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) the rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them and (vi) the obligations of the Issuer under Section 3.2) and the Trustee, at the expense of the Issuer, shall at the Issuer's request, execute proper instruments acknowledging the same, if (a) with reference to this provision the Issuer has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series and Coupons appertaining thereto (i) cash in an amount, or (ii) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (A) the principal and interest on all Securities of such series and Coupons appertaining thereto on each date that such principal or interest is due and payable and (B) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; (b) such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Issuer is a party or by which it is bound; (c) the Issuer has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date hereof, there has been a change in the applicable Federal income tax law, in either case to the effect that, and such opinion shall confirm that, the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and (d) the Issuer has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with. (C) The Issuer shall be released from its obligations under Section 9.1 with respect to the Securities of any series, and any Coupons appertaining thereto, Outstanding on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities of any series, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in such Section, whether directly or indirectly by reason of any reference elsewhere herein to such Section or by reason of any reference in such Section to any other provision herein or in any other document and such omission to comply shall not constitute an Event of Default under Section 5.1, but the remainder of this Indenture and such Securities and Coupons shall be unaffected thereby. The following shall be the conditions to application of this subsection (C) of this Section 10.1: (a) The Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Securities of such series and coupons appertaining thereto, (i) cash in an amount, or (ii) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (A) the principal and interest on all Securities of such series and Coupons appertaining thereto and (B) any mandatory sinking fund payments on the day on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; (b) No Event of Default or event that with notice or lapse of time or both would become an Event of Default with respect to the Securities shall have occurred and be continuing on the date of such deposit; (c) Such covenant defeasance shall not cause the Trustee to have a conflicting interest as defined in Section 6.8 and for purposes of the Trust Indenture Act of 1939 with respect to any securities of the Issuer; (d) Such covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Issuer is a party or by which it is bound; (e) Such covenant defeasance shall not cause any Securities then listed on any registered national securities exchange under the Securities Exchange Act of 1934, as amended, to be delisted; (f) The Issuer shall have delivered to the Trustee an Officer's Certificate and Opinion of Counsel to the effect that the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (g) The Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the covenant defeasance contemplated by this provision have been complied with. SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities. Subject to Section 10.4, all moneys deposited with the Trustee (or other trustee) pursuant to Section 10.1 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series and of Coupons appertaining thereto for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law. SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys. SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of or interest on any Security of any series or Coupons attached thereto and not applied but remaining unclaimed for two years after the date upon which such principal or interest shall have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities of such series and of any Coupons appertaining thereto shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Issuer for any payment that such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before being required to make any such repayment with respect to moneys deposited with it for any payment (a) in respect of Registered Securities of any series, shall at the expense of the Issuer, mail by first-class mail to Holders of such Securities at their addresses as they shall appear on the Security register, and (b) in respect of Unregistered Securities of any series, shall at the expense of the Issuer cause to be published once, in an Authorized Newspaper in the Borough of Manhattan, The City of New York and once in an Authorized Newspaper in London (and if required by Section 3.6, once in an Authorized Newspaper in Luxembourg), notice, that such moneys remain and that, after a date specified therein, which shall not be less than thirty days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 10.1 or the principal or interest received in respect of such obligations. ARTICLE ELEVEN MISCELLANEOUS PROVISIONS SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder, officer or director, as such, of the Issuer or of any successor, either directly or through the Issuer or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities and the Coupons appertaining thereto by the Holders thereof and as part of the consideration for the issue of the Securities and the Coupons appertaining thereto. SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities and Coupons. Nothing in this Indenture, in the Securities or in the Coupons appertaining thereto, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the holders of Senior Indebtedness and the Holders of the Securities or Coupons, if any, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors, the holders of the Senior Indebtedness and the Holders of the Securities or Coupons, if any. SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Issuer shall bind its successors and assigns, whether so expressed or not. SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities or Coupons to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to SunAmerica Inc., 11601 Wilshire Boulevard, Los Angeles, California 90025-1748, Attention: Secretary. Any notice, direction, request or demand by the Issuer or any Holder of Securities or Coupons to or upon the Trustee shall be deemed to have been sufficiently given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Trustee is filed by the Trustee with the Issuer) to The Bank of New York, 101 Barclay Street, Floor 21W, New York, NY 10286, Attention: Corporate Trust Administration. Where this Indenture provides for notice to Holders of Registered Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his last address as it appears in the Security register. In any case where notice to such Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be reasonably satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. SECTION 11.5 Officer's Certificates and Opinions of Counsel; Statements to Be Contained Therein. Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him 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 or not, in the opinion of such person, such condition or covenant has been complied with. Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate or opinion of any independent firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent. SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or any Coupons appertaining thereto or the date fixed for redemption or repayment of any such Security or Coupon shall not be a Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an "incorporated provision") included in this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such imposed duties or incorporated provision shall control. SECTION 11.8 New York Law to Govern. This Indenture and each Security and Coupon shall be deemed to be a contract under the laws of the State of New York without regard to the conflicts of law principles thereof, and for all purposes shall be construed in accordance with the laws of such State, except as may otherwise be required by mandatory provisions of law. SECTION 11.9 Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. SECTION 11.10 Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 11.11 Securities in a Foreign Currency or in ECU. Unless otherwise specified in an Officer's Certificate delivered pursuant to Section 2.3 of this Indenture with respect to a particular series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all series or all series affected by a particular action at the time Outstanding and, at such time, there are Outstanding Securities of any series that are denominated in a coin or currency other than Dollars (including ECUs), then the principal amount of Securities of such series that shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Communities (or any successor thereto) as published in the Official Journal of the European Communities (such publication or any successor publication, the "Journal"). If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or, in the case of ECUs, rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question, which for purposes of the ECU shall be Brussels, Belgium, or such other quotations or, in the case of ECU, rates of exchange as the Trustee shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a series denominated in a currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture. All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Issuer and all Holders. SECTION 11.12 Judgment Currency. The Issuer agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest on the Securities of any series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized or required by law or executive order to close. ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS SECTION 12.1 Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series that are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.3 for Securities of such series. SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of redemption to the Holders of Registered Securities of any series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the registry books. Notice of redemption to the Holders of Unregistered Securities to be redeemed as a whole or in part, who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939 shall be given by mailing notice of such redemption, by first class mail, postage prepaid, at least 30 days and not more than 60 prior to the date fixed for redemption, to such Holders at such addresses as were so furnished to the Trustee (and, in the case of any such notice given by the Issuer, the Trustee shall make such information available to the Issuer for such purpose). Notice of redemption to all other Holders of Unregistered Securities shall be published in an Authorized Newspaper in the Borough of Manhattan, The City of New York and in an Authorized Newspaper in London (and, if required by Section 3.6, in an Authorized Newspaper in Luxembourg), in each case, once in each of three successive calendar weeks, the first publication to be not less than 30 nor more than 60 days prior to the date fixed for redemption. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series. The notice of redemption to each such Holder shall specify, the principal amount and CUSIP numbers of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of such Securities and, in the case of Securities with Coupons attached thereto, of all Coupons appertaining thereto maturing after the date fixed for redemption, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue and will specify any conversion price then in effect and when any right to convert such Security on part thereof to be redeemed will expire. In case any Security of a series is to be redeemed in part only the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued. The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer's request, by the Trustee in the name and at the expense of the Issuer. On or before the redemption date specified in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.4) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other than those, if any, theretofore surrendered for conversion) at the appropriate redemption price, together with accrued interest to the date fixed for redemption. If any Security called for redemption is converted pursuant hereto, any money deposited with the Trustee or any paying agent or so segregated and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer's request, or, if then held by the Issuer, shall be discharged from such trust. The Issuer will deliver to the Trustee at least 70 days prior to the date fixed for redemption an Officer's Certificate stating the aggregate principal amount and CUSIP numbers of Securities to be redeemed and the date fixed for redemption. In case of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officer's Certificate stating that such restriction has been complied with. If less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such Series to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security that has been or is to be redeemed. If any Security selected for partial redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Upon any redemption of less than all the Securities of any series, the Issuer and the Trustee may treat as outstanding any Securities of such series surrendered for conversion during the period of 15 days next preceding the mailing of a notice of redemption, and need not treat as outstanding any Security authenticated and delivered during such period in exchange for the unconverted portion of any Security of such series converted in part during such period. SECTION 12.3 Payment of Securities Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and the unmatured Coupons, if any, appertaining thereto shall be void, and, except as provided in Sections 6.5 and 10.4, such Securities shall cease from and after the date fixed for redemption to be convertible or entitled to any other benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified in said notice, together with all Coupons, if any, appertaining thereto maturing after the date fixed for redemption, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that payment of interest becoming due on or prior to the date fixed for redemption shall be payable in the case of Securities with Coupons attached thereto, to the Holders of the Coupons for such interest upon surrender thereof, and in the case of Registered Securities, to the Holders of such Registered Securities registered as such on the relevant record date subject to the terms and provisions of Sections 2.3 and 2.7 hereof. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security and such Security shall remain convertible in accordance with its terms until paid or duly provided for. If any Security with Coupons attached thereto is surrendered for redemption and is not accompanied by all appurtenant Coupons maturing after the date fixed for redemption, the surrender of such missing Coupon or Coupons may be waived by the Issuer and the Trustee, if there be furnished to each of them such security or indemnity as they may require to save each of them harmless. Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and make available for delivery to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented. SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officer's Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an "optional sinking fund payment". The date on which a sinking fund payment is to be made is herein referred to as the "sinking fund payment date". In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer or converted and delivered to the Trustee for cancellation pursuant to Section 2.10, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities. On or before the 60th day next preceding each sinking fund payment date for any series, the Issuer will deliver to the Trustee an Officer's Certificate (which need not contain the statements required by Section 11.5) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment that the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid that have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer's Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officer's Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such 60th day, to deliver such Officer's Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section. If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or a lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or ECU) if the Issuer shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency or ECU) is available. The Trustee shall select, in the manner provided in Section 12.2, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities shall be excluded from eligibility for redemption under this Section if they are identified by registration and certificate number in an Officer's Certificate delivered to the Trustee at least 60 days prior to the sinking fund payment date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such Officer's Certificate as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 12.2 (and with the effect provided in Section 12.3) for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity. The Issuer's obligation to make a mandatory or optional sinking fund payment shall automatically be reduced by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant to the preceding paragraph on any sinking fund payment date and converted; provided, that if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion agent shall give the Trustee written notice prior to the date fixed for redemption of the principal amount of Securities or portions thereof so converted. On or before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date. The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the giving of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article Five and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 5.10 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of November 1, 1996. SUNAMERICA INC. By _______________________ Name: James R. Belardi Title:Executive Vice President [CORPORATE SEAL] Attest: By _______________________ Name: Title: THE BANK OF NEW YORK, as Trustee By _____________________ Name: Vivian Georges Title: Assistant Vice President [CORPORATE SEAL] Attest: By _______________________ Name: Title: STATE OF CALIFORNIA ) ) ss.: COUNTY OF LOS ANGELES ) On this 1st day of November, 1996 before me personally came James R. Belardi, to me personally known, who, being by me duly sworn, did depose and say that he resides at 1242 Berkeley Street, Santa Monica, California 90404, that he is the Executive Vice President of SunAmerica Inc., one of the corporations described in and that executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [NOTARIAL SEAL] _______________________ Notary Public STATE OF ILLINOIS ) ) ss.: COUNTY OF COOK ) On this 1st day of November, 1996 before me personally came Vivian Georges, to me personally known, who, being by me duly sworn, did depose and say that she resides at 526 East Broad Street, Westfield, New Jersey, that she is an Assistant Vice President of THE BANK OF NEW YORK, one of the corporations described in and that executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [NOTARIAL SEAL] _____________________ Notary Public EX-4.6 11 EXHIBIT 4.6 - ------------------------------------------------------------------------------ SUNAMERICA INC. AND THE BANK OF NEW YORK, Trustee First Supplemental Indenture Dated as of November 6, 1996 To Prepaid Security Indenture Dated as of November 1, 1996 ------------------- Prepaid Premium Equity Redemption Cumulative Securities - ------------------------------------------------------------------------------ THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November 6, 1996 (this "First Supplemental Indenture"), between SUNAMERICA INC., a Maryland corporation (the "Issuer"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the "Trustee") under the Indenture dated as of November 1, 1996 between the Issuer and the Trustee (the "Indenture"), WHEREAS, the Issuer executed and delivered the Indenture to the Trustee to provide for the future issuance of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities"); and WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a new series of its Security Units to be known as its Prepaid Premium Equity Redemption Cumulative Securities (the "Prepaid Securities"), the form and substance of such Prepaid Securities and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this First Supplemental Indenture; and WHEREAS, the Issuer has issued its Premium Equity Redemption Cumulative Security Units, 8.5% PERCS Units (the "PERCS Units"), pursuant to a Purchase Contract Agreement (the "Purchase Contract Agreement") dated as of November 6, 1996, between the Issuer and The Bank of New York, as purchase contract agent, which PERCS Units may, under certain circumstances described in the Purchase Contract Agreement, be settled prior to the Final Settlement Date (as defined in Section 1.01) by holders thereof in exchange for Prepaid Securities; and WHEREAS, the Issuer desires and has requested the Trustee to join with it in the execution and delivery of this First Supplemental Indenture, and all requirements necessary to make this First Supplemental Indenture a valid instrument, in accordance with its terms, and to make the Prepaid Securities, when executed by the Issuer and authenticated and delivered by the Trustee, the valid obligations of the Issuer, have been performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized; NOW THEREFORE, in consideration of the purchase and acceptance of the Prepaid Securities by the holders thereof upon early settlement of the PERCS Units, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Prepaid Securities and the terms, provisions and conditions thereof, the Issuer covenants and agrees with the Trustee as follows: ARTICLE ONE Definitions SECTION 1.01. Capitalized terms used and not otherwise defined in this First Supplemental Indenture shall have the meanings ascribed to them in the Indenture. In addition, the following terms shall have the respective meanings specified in this Section. "Acceleration" means either an Issuer Redemption or a Mandatory Conversion. "Acceleration Date" means either an Issuer Redemption Date or a Mandatory Conversion Date. "Amount in Respect of Contract Fees" means the amount payable by the Issuer on each Payment Date in respect of each Prepaid Security, equal to 1.0% per annum of the Stated Amount, computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be, except that Contract Fees payable on the first Payment Date pursuant to the Purchase Contract Agreement will be adjusted so that Contract Fees payable on such date will be $.122243 per Prepaid Security. Expect as otherwise stated herein, Amounts in Respect of Contract Fees shall be considered to be interest for all purposes under the Indenture. "Authorized Newspaper" has the meaning provided in the Purchase Contract Agreement. "Business Day" has the meaning provided in the Purchase Contract Agreement. "Closing Price" has the meaning provided in the Purchase Contract Agreement. "Common Stock" has the meaning provided in the Purchase Contract Agreement. "Company Acceleration" means a Company Acceleration of the PERCS Units as provided in the Purchase Contract Agreement. "Contract Fees" means the Contract Fees payable with respect to the PERCS Units as provided in the Purchase Contract Agreement. "Current Market Price" has the meaning provided in the Purchase Contract Agreement. "Deferred Amounts in Respect of Contract Fees" has the meaning provided in Section 3.02. "Deferred Contract Fees" means the Deferred Contract Fees payable with respect to the PERCS Units as provided in the Purchase Contract Agreement. "Final Settlement Date" has the meaning provided in the Purchase Contract Agreement. "Final Settlement Fund" has the meaning provided in Section 4.01. "Holder" means, for purposes of this First Supplemental Indenture, a Holder (as such term is defined in the Indenture) of a Prepaid Security. "Holder's Early Settlement" has the meaning provided in the Purchase Contract Agreement. "Issuer Redemption" has the meaning provided in Section 4.02. "Issuer Redemption Date" has the meaning provided in Section 4.02. "Issuer Redemption Price" means the per share price (payable in shares of Common Stock) at which the Issuer may accelerate the settlement of the Securities, which initially shall be $59.289, declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $51.1081 on August 31, 1999 and equal to $50.625 thereafter. "Issuer Redemption Settlement Fund" has the meaning provided in Section 4.02. "Mandatory Conversion" has the meaning provided in Section 4.03. "Mandatory Conversion Date" has the meaning provided in Section 4.03. "Mandatory Conversion Settlement Fund" has the meaning provided in Section 4.03. "Merger or Consolidation" has the meaning provided in the Purchase Contract Agreement. "Notice Date" means, with respect to any notice given by the Issuer in connection with an Acceleration, the earlier of (i) the commencement of the mailing of such notice to Holders and (ii) the date such notice is first published in accordance with Section 4.05. "NYSE" means the New York Stock Exchange. "Outstanding Securities" has the meaning provided in the Purchaser Contract Agreement. "Payment Date" has the meaning provided in the Purchase Contract Agreement and is subject to the provisions of Article I of the Purchase Contract Agreement. "PERCS Units" has the meaning stated in the recitals of this First Supplemental Indenture. "Prepaid Security" has the meaning stated in the recitals of this First Supplemental Indenture. "Purchase Contract" has the meaning provided in the Purchase Contract Agreement. "Purchase Contract Agreement" has the meaning stated in the recitals of this First Supplemental Indenture. "Record Date" has the meaning provided in the Purchase Contract Agreement. "Sale of Assets" has the meaning provided in the Purchase Contract Agreement. "Sale of Assets Date" has the meaning provided in the Purchase Contract Agreement. "Security Register" has the meaning provided in the Purchase Contract Agreement. "Settlement Rate" shall be initially one share of Common Stock, subject to adjustment as provided in the Purchase Contract Agreement. "Stated Amount" means $37.50 per Prepaid Security. Except as otherwise stated herein, the Stated Amount of any Prepaid Security shall be considered to be the principal amount of such Security for all purposes under the Indenture. ARTICLE TWO General Terms and Conditions; Form of Prepaid Securities SECTION 2.01. There shall be and is hereby authorized a series of Securities designated the "Prepaid Premium Equity Redeemable Cumulative Securities", limited in aggregate Stated Amount to $431,250,000. The Prepaid Securities shall be issued in the form of registered Securities without Coupons. The Prepaid Securities shall be issued in certificated form in denominations equal to the Stated Amount and integral multiples thereof. SECTION 2.02. The Prepaid Securities and the Trustee's certificate of authentication shall be in substantially the form of Exhibit A, which is a part of this First Supplemental Indenture. ARTICLE THREE Amounts in Respect of Contract Fees SECTION 3.01. Subject to Section 3.02, the Issuer shall pay by 12:00 noon New York City time to the Trustee, on each Payment Date, in respect of each Prepaid Security, beginning with the first Payment Date following the issuance of such Prepaid Security (unless such Prepaid Security was issued subsequent to a Record Date but prior to the next succeeding Payment Date, in which event, beginning with the second Payment Date following the issuance of such Prepaid Security), an amount equal to the Amount in Respect of Contract Fees payable to the Person in whose name such Prepaid Security appears on the Security Register at the close of business on the Record Date next preceding such Payment Date. The Amounts in Respect of Contract Fees will be payable at the office of the Trustee in the City of New York, at the option of the Issuer, by check mailed to the address of the Person entitled thereto as such address appears on the Security Register. If an Acceleration Date, a Sale of Assets Date or a date upon which an Event of Default occurs after any Record Date and on or prior to the next succeeding Payment Date (an "Interim Period"), Contract Fees otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding the occurrence of such event, and such Amounts in Respect of Contract Fees shall be paid to the Person in whose name appears on the Security Register at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Prepaid Security with respect to which settlement is effected on a date other than during an Interim Period, Amounts in Respect of Contract Fees that would otherwise be payable on such date other than a date during an Interim Period with respect to the Prepaid Security shall not be payable. SECTION 3.02. The Issuer shall have the right, at any time prior to the Final Settlement Date, an earlier Acceleration Date applicable to a Holder's Securities or a Sale of Assets Date, to defer the payment of any or all of the Amounts in Respect of Contract Fees otherwise payable on any Payment Date (on a pro rata basis among all Outstanding Securities including Prepaid Securities), but only if the Issuer shall give the Holders and the Trustee written notice of its election to defer such payment (specifying the amount to be deferred and the period of deferment) at least ten Business Days prior to the earlier of the next succeeding Payment Date or the date the Issuer is required to give notice of the Record Date or Payment Date with respect to payment of such Amounts in Respect of Contract Fees to the NYSE or other applicable self-regulatory organization or to Holders of the PERCS Units, but in any event not less than two Business Days prior to the Record Date. Any Amounts in Respect of Contract Fees so deferred shall bear additional Amounts in Respect of Contract Fees thereon at the rate of 1.0% per annum (computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Amounts in Respect of Contract Fees together with the additional Amounts in Respect of Contract Fees accrued thereon, are referred to herein as "Deferred Amounts in Respect of Contract Fees"). Deferred Amounts in Respect of Contract Fees shall be due on the next succeeding Payment Date, except to the extent that payment is deferred further in the notice of election pursuant to this Section. The Issuer may pay Deferred Amounts in Respect of Contract Fees in whole or in part on any Payment Date (on a pro rata basis among all Outstanding Securities including Prepaid Securities). No Amounts in Respect of Contract Fees or Deferred Amounts in Respect of Contract Fees may be deferred to a date that is after the Final Settlement Date, or a Sale of Assets Date or, with respect to any particular Prepaid Securities, the Acceleration thereof. In the event the Issuer elects to defer the payment of Amounts in Respect of Contract Fees until the Final Settlement Date, a Sale of Assets Date, a Issuer Redemption Date or a Mandatory Conversion Date (or a date prior to such dates as set forth in its written notice referred to in the preceding paragraph) the Issuer shall make a cash payment, on the date such Amount in Respect of Deferred Contract Fees becomes due and payable, equal to the aggregate Amount in Respect of Deferred Contract Fees payable to a Holder. In the event the Issuer exercises its option to defer the payment of Amounts in Respect of Contract Fees, then, until the Deferred Amounts in Respect of Contract Fees have been paid in full, the Issuer shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (i) purchase or acquisitions of shares of Common Stock in connection with the satisfaction by the Issuer of its obligations under any employee benefit plans now or hereafter in effect or the satisfaction by the Issuer of its obligations pursuant to any contract or security requiring the Issuer to purchase shares of Common Stock, (ii) as a result of a reclassification of the Issuer's capital stock or the exchange or conversion of one class or series of the Issuer's capital stock for another class or series of the Issuer's capital stock, (iii) the purchase of fractional shares in shares of the Issuer's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iv) the payment of accrued dividends (and cash in lieu of fractional shares) upon the conversion of any shares of preferred stock of the Issuer as may be outstanding from time to time, in accordance with the terms of such stock or (v) dividends on its capital stock paid in shares of capital stock) or make any guarantee payments with respect to the foregoing. The Prepaid Securities and the obligations and rights of the Issuer and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Issuer to pay any Amounts in Respect of Contract Fees or any Deferred Amounts in Respect of Contract Fees, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Issuer, if, on or prior to the Final Settlement Date or an earlier Acceleration Date with respect to any particular Prepaid Securities, an Event of Default or Sale of Assets shall have occurred; provided that, in the event of a Sale of Assets, the Issuer will pay all accrued and unpaid Amounts in Respect of Contract Fees and Amounts in Respect of Deferred Contract Fees, if any, to Holders on the tenth Business Day following the Sale of Assets Date. Upon the occurrence of an Event of Default or Sale of Assets, the Issuer shall promptly but in no event after two Business Days thereafter give written notice to the Trustee and to the Holders, at their addresses as they appear in the Security Register. Notwithstanding the foregoing, the Issuer may defer payments of Amounts in Respect of Contract Fees only if, and to the extent that, it has also deferred Contract Fees on the PERCS Units. SECTION 3.03. In addition to the Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees referred to in Sections 3.01 and 3.02, each Prepaid Security shall entitle the Holder thereof to Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees in amounts equal to the amounts of accrued and unpaid Contract Fees and Deferred Contract Fees, respectively, with respect to the PERCS Units at the time such Prepaid Security was issued, and any Deferred Contract Fees to which a Holder is entitled pursuant to this Section 3.03 shall bear additional Amounts in Respect of Contract Fees from the date of issuance of such Prepaid Security as provided in Section 3.02. ARTICLE FOUR Issuance of Common Stock; Acceleration; Repayment Upon a Sale of Assets SECTION 4.01. Unless an Event of Default, Sale of Assets shall have occurred on or prior to the Final Settlement Date or an earlier Acceleration Date, on the Final Settlement Date or an earlier Acceleration Date, the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, one or more certificates representing a number of shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Final Settlement Fund"), equal to the Settlement Rate in effect on the Final Settlement Date. SECTION 4.02. Prior to a Mandatory Conversion Date, a date upon which Event of Default occurs, Sale of Assets Date or to the Final Settlement Date, the Issuer shall have the right at any time and from time to time to redeem, in whole or in part, the outstanding Prepaid Securities (an "Issuer Redemption") (subject to the notice provisions set forth in Section 4.05). The Issuer may not exercise its right to accelerate the Securities unless the Current Market Price determined as of the second Business Day immediately preceding the Notice Date is equal to or exceeds the Issuer Redemption Price applicable to such Notice Date. Upon the effective date of an Issuer Redemption (an "Issuer Redemption Date"), the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders of Prepaid Securities so redeemed, (i) one or more certificates representing a number of fully paid and non-assessable shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for such Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Issuer Redemption Settlement Fund"), determined by dividing the Issuer Redemption Price in effect on Issuer Redemption Date by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Issuer Redemption Date and (ii) an amount in cash equal to all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, on such Prepaid Securities to and including such Issuer Redemption Date (and Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, shall cease to accrue on each Prepaid Security redeemed as of such date). The Issuer shall redeem the Prepaid Securities in whole if it effects a Company Acceleration of the PERCS Units in whole. If fewer than all Outstanding Securities (including the Prepaid Securities) are to be redeemed, the Prepaid Securities to be redeemed shall be selected by the Trustee by lot. SECTION 4.03. Immediately prior to the effectiveness of a Merger or Consolidation, each outstanding Prepaid Security shall automatically convert into (a "Mandatory Conversion"), unless sooner redeemed, the right to receive, and the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, (i) one or more certificates representing a number of fully paid and non-assessable shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Mandatory Conversion Settlement Fund"), equal to the Settlement Rate in effect on the Mandatory Conversion Date, (ii) an amount in cash equal to all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, on such Prepaid Security to but excluding the Mandatory Conversion Date (and Amounts in Respect of Contract Fees shall cease to accrue as of the Mandatory Conversion Date) and (iii) an amount in cash (except as provided in herein) initially equal to $8.664 declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $.4831 on August 31, 1999 and equal to zero thereafter, in each case determined with reference to the Mandatory Conversion Date. At the option of the Issuer and provided the Issuer has sufficient authorized and reserved shares of Common Stock, it may deliver to the Agent, for the benefit of the Holders, on the Mandatory Conversion Date, for the benefit of the Holders, in lieu of some or all the cash payment referred to in clause (iii) of the preceding paragraph, a number of shares of Common Stock (in addition to the shares of Common Stock referred to in clause (i) of the preceding paragraph) equal to (x) the amount of such cash payment that the Issuer has elected to pay in Common Stock divided by (y) the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Mandatory Conversion Date. No fractional shares of Common Stock will be issued by the Issuer with respect to the payment of such amounts pursuant to clause (iii) above. In lieu of fractional shares otherwise issuable with respect to such payment of such premium, Holders will be entitled to receive an amount in cash as provided in Section 4.07. SECTION 4.04. Upon a Sale of Assets, each Prepaid Security shall automatically convert into the right to receive, and the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, an amount in cash equal to the sum of (i) the Stated Amount and (ii) all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, as provided in Section 3.02. SECTION 4.05. The Issuer will provide notice of the Final Settlement Date or any earlier Acceleration (including any potential acceleration upon the effectiveness of a Merger or Consolidation) to the Trustee and Holders of record of the Prepaid Securities to be accelerated not less than 30 nor more than 60 days prior to the Final Settlement Date or the date fixed for such Acceleration; provided, however, that if the effectiveness of a Merger or Consolidation makes it impracticable to provide at least 30 days' notice, the Issuer shall provide such notice as soon as practicable prior to such effectiveness. Such notice shall be provided by mailing notice of the Final Settlement Date or any earlier Acceleration first class postage prepaid, to each Holder of record of the Prepaid Securities subject to such Acceleration, at such Holder's address as it appears on the Security Register of the Issuer, and by publishing notice thereof in The Wall Street Journal or The New York Times or, if neither such newspaper is then being published, any other Authorized Newspaper. Each such mailed or published notice shall state, as appropriate, the following: (1) the Final Settlement Date or an Acceleration Date; (2) the number of Prepaid Securities to be accelerated and, if less than all the Prepaid Securities held by any Holder are subject to such Acceleration, the number of such Prepaid Securities subject to such Acceleration; (3) the Settlement Rate or the Issuer Redemption Price, as applicable, and, if applicable, the Current Market Price to be used to calculate the number of shares of Common Stock deliverable upon such Acceleration; (4) whether the Issuer is exercising any option to deliver shares of Common Stock in lieu of any cash (in the case of a Mandatory Conversion) and the Current Market Price to be used to calculate the number of such shares of Common Stock; (5) the place or places where certificates for such Prepaid Securities are to be surrendered for Acceleration; (6) whether the Issuer is depositing with a bank or a trust company on or before an Acceleration Date, the shares of Common Stock, and cash, if any, payable by the Issuer and the proposed date of such deposit; and (7) the amount of accrued and unpaid Amounts in Respect of Contract Fees (and Deferred Amounts in Respect of Contract Fees, if any) payable per Prepaid Security subject to such Acceleration, and that Amounts in Respect of Contract Fees on Prepaid Securities subject to such Acceleration will cease to accrue on such Acceleration Date. SECTION 4.06. Upon surrender of a certificate representing a Prepaid Security to the Trustee on or after the Final Settlement Date, an earlier Acceleration Date or the date ten Business Days following a Sale of Assets Date, together with settlement instructions thereon duly completed and executed, the Holder of such Prepaid Security shall be entitled to receive in exchange therefor (i) a certificate representing that number of whole shares of Common Stock that such Holder is entitled to receive pursuant to the provisions of this Article Four (after taking into account all Prepaid Securities then held by such Holder) together with cash in lieu of fractional shares as provided in Section 4.07 and any dividends or distributions with respect to such shares constituting part of the Final Settlement Fund, the Issuer Redemption Settlement Fund or the Mandatory Conversion Settlement Fund, as applicable, but without any interest thereon, and (ii) any cash to which such Holder is entitled pursuant to this Article Four, and the Prepaid Certificate so surrendered shall forthwith be canceled. In the case of an Acceleration of fewer than all the Prepaid Securities, a certificate shall be issued at the expense of the Issuer representing the Prepaid Securities not subject to such Acceleration. Shares of Common Stock so delivered shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions on the certificate for such Prepaid Security. If any shares of Common Stock issued in respect of a Prepaid Security are to be registered to a Person other than the Person in whose name the certificate evidencing such Prepaid Security is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the certificate evidencing such Prepaid Security or has established to the satisfaction of the Issuer that such tax either has been paid or is not payable. SECTION 4.07. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered on the Final Settlement Date or earlier Acceleration upon settlement of any Prepaid Securities or with respect to the payment of amounts in shares of Common Stock pursuant to clause (iii) of Section 4.03 on a Mandatory Conversion (if the Issuer elects to pay such amounts in shares of Common Stock in lieu of cash). If certificates evidencing more than one Prepaid Security shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock that shall be delivered upon settlement shall be computed on the basis of the aggregate number of Prepaid Securities evidenced by the certificates so surrendered. Instead of any fractional share of Common Stock that would otherwise be deliverable upon settlement of any Prepaid Securities on the Final Settlement Date or an earlier Acceleration Date or with respect to the payment of any amounts in shares of Common Stock pursuant to clause (iii) of Section 4.03 on a Mandatory Conversion (if the Issuer elects to pay such amounts in shares of Common Stock in lieu of cash) the Issuer, through the Trustee, shall make a cash payment in respect of such fractional interest in an amount equal to the value of such fractional shares at the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the relevant Notice Date or Final Settlement Date, as applicable. The Issuer shall provide the Trustee from time to time with sufficient funds to permit the Trustee to make all cash payments required by this Section 4.07 in a timely manner. SECTION 4.08. The Settlement Rate shall be subject to adjustment from time to time in a manner identical to that set forth in Section 5.06 of the Purchase Contract Agreement. Whenever the Settlement Rate is adjusted as herein provided, the Issuer shall: (i) forthwith compute the adjusted Settlement Rate in accordance with Section 5.06 of the Purchase Contract Agreement and prepare a certificate signed by the Chief Executive Officer, the Chairman, the President, any Vice President or the Treasurer of the Issuer setting forth the adjusted Settlement Rate, the method of calculation thereof in reasonable detail and the facts requiring such adjustment and upon which such adjustment is based, and file such certificate forthwith with Agent for the Prepaid Securities and the transfer agent or agents for the Common Stock; and (ii) mail a notice stating that the Settlement Rate has been adjusted, the facts requiring such adjustment and upon which such adjustment is based and setting forth the adjusted Settlement Rate to the Trustee and the Holders of record of the outstanding Prepaid Securities at or prior to the time the Issuer mails an interim statement to its stockholders covering the quarter-yearly period during which the facts requiring such adjustment occurred, but in any event within 45 days of the end of such quarter-yearly period. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist which may require any adjustment of the Settlement Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at the time be issued or delivered with respect to any Prepaid Security; and the Trustee makes no representation with respect thereto. The Trustee shall not be responsible for any failure of the Issuer to issue, transfer or deliver any shares of Common Stock pursuant to a Prepaid Security or to comply with any of the duties, responsibilities or covenants of the Issuer contained in this Article. ARTICLE FIVE Covenants SECTION 5.01. The Issuer shall at all times prior to the Final Settlement Date, an earlier Acceleration Date or a Sale of Assets Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable (x) on the Final Settlement Date pursuant to Section 4.01 and (y) in payment of amounts in shares of Common Stock pursuant to clause (iii) of Section 4.03 on a Mandatory Conversion (if the Issuer elects to pay such amounts in shares of Common Stock in lieu of cash) or the Issuer Redemption Price. SECTION 5.02. The Issuer covenants that all shares of Common Stock that may be issued (x) on the Final Settlement Date pursuant to Section 4.01 and (y) in payment of amounts in shares of Common Stock pursuant to clause (iii) of Section 4.03 on a Mandatory Conversion (if the Issuer elects to pay such amounts in shares of Common Stock in lieu of cash) or the Issuer Redemption Price will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. SECTION 5.03. Notwithstanding anything to the contrary in the Indenture, the provisions of Article 9 of the Indenture shall not apply to the Prepaid Securities. ARTICLE SIX Events of Default SECTION 6.01. The provision of Article Five of the Indenture shall, except as provided in this First Supplemental Indenture, apply to the Prepaid Securities. If an Event of Default shall have occurred and be continuing, the Prepaid Securities shall be accelerated so that the Issuer shall become immediately obligated to make the deliveries of Common Stock that the Issuer would be obligated to make if the date of such acceleration were the Final Settlement Date. Any obligations of the Issuer with respect to accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees shall be extinguished and of no further effect upon an Event of Default, and in no event shall the Issuer be obligated to pay any amounts in respect of accrued and unpaid Amounts in Respect of Contract Fees or Deferred Amounts in Respect of Contract Fees, if any, upon an Event of Default. ARTICLE SEVEN Issuance of Prepaid Securities SECTION 7.01. Upon settlement of PERCS Units prior to the Final Settlement Date as provided in Section 5.10 of the Purchase Contract Agreement, Prepaid Securities in Stated Amount equal to the Stated Amount of the PERCS Units so settled may, upon execution of this First Supplemental Indenture, be executed by the Issuer and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Prepaid Securities to or upon an Issuer Order, without any further action by the Issuer. ARTICLE EIGHT Miscellaneous Provisions SECTION 8.01. The Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 8.02. Notwithstanding Section 5.03, all covenants and agreements of the Issuer with respect to the Prepaid Securities set forth in this First Supplemental Indenture or the Indenture shall bind the successors and assigns of the Issuer, whether so expressed or not. SECTION 8.03. The recitals herein contained are made by the Issuer and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture. SECTION 8.04. Notwithstanding anything to the contrary in the Indenture or the Purchase Contract Agreement, upon the election of a Holder's Early Settlement pursuant to the Purchase Contract Agreement or earlier, the Issuer may amend the provisions of this First Supplemental Indenture in order to make the terms of this First Supplemental Indenture substantially similar to the terms of the Purchase Contract Agreement and the Purchase Contract without the consent of the holders of such Purchase Contracts or such holders who have elected a Holder's Early Settlement pursuant to the Purchase Contract Agreement. SECTION 8.05. This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law. SECTION 8.06. This First Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgments and as of the day and year first above written. SUNAMERICA INC. By: _____________________________ Name: Title: Attested: By: _____________________________ Name: Title: THE BANK OF NEW YORK, as Trustee By: _____________________________ Name: Title: STATE OF CALIFORNIA ) ) ss.: COUNTY OF LOS ANGELES ) November 6, 1996 On the day of , in the year one thousand nine hundred ninety-six, before me personally came to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of SUNAMERICA INC., one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporation seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. _____________________________ NOTARY PUBLIC My Commission Expires EXHIBIT A SUNAMERICA INC. PREPAID PREMIUM EQUITY REDEMPTION CUMULATIVE SECURITY UNITS (STATED AMOUNT $37.50 PER SECURITY) No. CUSIP No. 866930852 This Security Certificate certifies that is the registered Holder of the number of Securities of SunAmerica Inc., a Maryland corporation (the "Issuer") set forth above. Each Security represents a principal amount equal to the Stated Amount of $37.50. Each Prepaid Security evidenced hereby obligates the Holder of this Security Certificate to purchase, and the Issuer to sell, on October 31, 1999 (the "Final Settlement Date"), at a price equal to $37.50 (the "Stated Amount"), a number of shares of Common Stock, par value $1.00 per share ("Common Stock"), of the Issuer, equal to the Settlement Rate on the Final Settlement Date, unless on or prior to the Final Settlement Date, there shall have occurred a Bankruptcy Event, Sales of Assets, or an earlier Acceleration with respect to the Prepaid Security. The purchase price for the shares of Common Stock have been be paid in full. The Issuer shall pay or accrue, on each Payment Date, in respect of each Prepaid Security evidenced hereby an amount (the "Amounts in Respect of Contract Fees") equal to 1.0% per annum of the Stated Amount, computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be, subject to deferral at the option of the Issuer as provided in First Supplemental Indenture and more fully described on the reverse hereof; except that the Amounts in Respect of Contract Fees payable on the first Payment Date will be adjusted so that the Amounts in Respect of Contract Fees payable on such date will be $.122243 per Security. Such Amounts in Respect of Contract Fees shall be payable to the Person in whose name appears on the Security Register at the close of business on the Record Date next preceding such Payment Date. The Amounts in Respect of Contract Fees will be payable at the office of the Trustee in The City of New York or, at the option of the Issuer, by check mailed to the address of the Person entitled thereto as such address appears on the Security Register. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Security Certificate shall not be entitled to any benefits under the Indenture. IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed. Dated:_________________________ SUNAMERICA INC. By: _________________________ Name: Title: Attested: By:_________________________ (FORM OF CERTIFICATE OF AUTHENTICATION) CERTIFICATE OF AUTHENTICATION This is one of the Prepaid Securities described in the within-mentioned Indenture. Dated: The Bank of New York, as Trustee _________________________ or as Authentication Agent By: _________________________ Authorized Signatory (FORM OF REVERSE OF DEBENTURE) This Prepaid Security is one of a duly authorized series of Prepaid Securities of the Issuer (herein sometimes referred to as the "Prepaid Securities"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an Indenture dated as of November 1, 1996 duly executed and delivered between the Issuer and The Bank of New York, a New York banking corporation, as Trustee (herein referred to as the "Trustee"), as supplemented by the First Supplemental Indenture dated as of November 6, 1996 between the Issuer and the Trustee (said Indenture as so supplemented being hereinafter referred to as the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the holders of the Prepaid Securities, and, to the extent specifically set forth in the Indenture. Unless an Event of Default, Sale of Assets shall have occurred on or prior to the Final Settlement Date or an earlier Acceleration Date, on the Final Settlement Date or an earlier Acceleration Date, the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, one or more certificates representing a number of shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Final Settlement Fund"), equal to the Settlement Rate in effect on the Final Settlement Date. The "Settlement Rate" is initially one share of Common Stock, in each case subject to adjustment as provided in the Indenture. Notice will be provided to the Holder upon an adjustment of the Settlement Rate as provided in the Indenture. No fractional shares of Common Stock will be issued upon settlement of this Prepaid Security, as provided in the Indenture. The Issuer shall pay by 12:00 noon New York City time to the Trustee, on each Payment Date, in respect of each Prepaid Security, beginning with the first Payment Date following the issuance of such Prepaid Security (unless such Prepaid Security was issued subsequent to a Record Date but prior to the next succeeding Payment Date, in which event, beginning with the second Payment Date following the issuance of such Prepaid Security), an amount equal to the Amount in Respect of Contract Fees payable to the Person in whose name such Prepaid Security appears on the Security Register at the close of business on the Record Date next preceding such Payment Date. The Amounts in Respect of Contract Fees will be payable at the office of the Trustee in The City of New York or, at the option of the Issuer, by check mailed to the address of the Person entitled thereto at such address as it appears on the Security Register. The Issuer shall have the right, at any time prior to the Final Settlement Date, an earlier Acceleration Date or a Sale of Assets Date, to defer the payment of any or all of the Amounts in Respect of Contract Fees otherwise payable on any Payment Date (on a pro rata basis among all Outstanding Securities including Prepaid Securities), but only if the Issuer shall give the Holders and the Trustee written notice of its election to defer such payment (specifying the amount to be deferred and the period of deferment) at least ten Business Days prior to the earlier of the next succeeding Payment Date or the date the Issuer is required to give notice of the Record Date or Payment Date with respect to payment of such Amounts in Respect of Contract Fees to the NYSE or other applicable self-regulatory organization or to Holders (as defined in the Purchase Contract Agreement) of the PERCS Units, but in any event not less than two Business Days prior to the Record Date. Any Amounts in Respect of Contract Fees so deferred shall bear additional Amounts in Respect of Contract Fees thereon at the rate of 1.0% per annum (computed on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Amounts in Respect of Contract Fees together with the additional Amounts in Respect of Contract Fees accrued thereon, are referred to herein as "Deferred Amounts in Respect of Contract Fees"). Deferred Amounts in Respect of Contract Fees shall be due on the next succeeding Payment Date, except to the extent that payment is deferred further in the notice of election pursuant to this paragraph. The Issuer may pay Deferred Amounts in Respect of Contract Fees in whole or in part on any Payment Date (on a pro rata basis among all Outstanding Securities including Prepaid Securities). No Amounts in Respect of Contract Fees or Deferred Amounts in Respect of Contract Fees may be deferred to a date that is after the Final Settlement Date, or a Sale of Assets Date or, with respect to any particular Prepaid Securities, the Acceleration thereof. In the event the Issuer elects to defer the payment of Amounts in Respect of Contract Fees until the Final Settlement Date, a Sale of Assets Date, an Issuer Redemption Acceleration Date or a Mandatory Conversion Date (or a date prior to such dates as set forth in its written notice referred to in this paragraph) the Issuer shall make a cash payment, on the date such Amount in Respect of Deferred Contract Fees becomes due and payable, equal to the aggregate Amount in Respect of Deferred Contract Fees payable to a Holder. In the event the Issuer exercises its option to defer the payment of Amounts in Respect of Contract Fees, then, until the Deferred Amounts in Respect of Contract Fees have been paid in full, the Issuer shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (i) purchase or acquisitions of shares of Common Stock in connection with the satisfaction by the Issuer of its obligations under any employee benefit plans now or hereafter in effect or the satisfaction by the Issuer of its obligations pursuant to any contract or security requiring the Issuer to purchase shares of Common Stock, (ii) as a result of a reclassification of the Issuer's capital stock or the exchange or conversion of one class or series of the Issuer's capital stock for another class or series of the Issuer's capital stock, (iii) the purchase of fractional shares in shares of the Issuer's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iv) the payment of accrued dividends (and cash in lieu of fractional shares) upon the conversion of any shares of preferred stock of the Issuer as may be outstanding from time to time, in accordance with the terms of such stock or (v) dividends on its capital stock paid in shares of capital stock) or make any guarantee payments with respect to the foregoing. This Prepaid Security and the obligations and rights of the Issuer and the Holder hereof, including, without limitation, the rights of the Holder to receive and the obligation of the Issuer to pay any Amounts in Respect of Contract Fees or any Deferred Amounts in Respect of Contract Fees, shall immediately and automatically terminate, without the necessity of any notice or action by the Holder, the Agent or the Issuer, if, on or prior to the Final Settlement Date or an earlier Acceleration Date with respect to any particular Prepaid Securities, an Event of Default or Sale of Assets shall have occurred; provided that, in the event of a Sale of Assets, the Issuer will pay all accrued and unpaid Amounts in Respect of Contract Fees and Amounts in Respect of Deferred Contract Fees, if any, to the Holder on the tenth Business Day following the Sale of Assets Date. Upon the occurrence of an Event of Default or Sale of Assets, the Issuer shall promptly but in no event after two Business Days thereafter give written notice to the Trustee and to the Holder, at its address as it appears in the Security Register. Notwithstanding the foregoing, the Issuer may defer payments of Amounts in Respect of Contract Fees only if, and to the extent that, it has also deferred Contract Fees on the PERCS Units. Prior to a Mandatory Conversion Date, a date upon which an Event of Default occurs, Sale of Assets Date or the Final Settlement Date, the Issuer shall have the right at any time and time to time to redeem, in whole or in part, the outstanding Prepaid Securities (an "Issuer Redemption") (subject to the notice provisions set forth in the Indenture). The Issuer may not exercise its right to accelerate the Securities unless the Current Market Price determined as of the second Business Day immediately preceding the Notice Date is equal to or exceeds the Issuer Redemption Price applicable to such Notice Date. Upon the effective date of an Issuer Redemption (an "Issuer Redemption Date"), the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders of Prepaid Securities so redeemed, (i) one or more certificates representing a number of fully paid and non-assessable shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for such Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Issuer Redemption Settlement Fund"), determined by dividing the Issuer Redemption Price in effect on the Issuer Redemption Date by the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Issuer Redemption Date and (ii) an amount in cash equal to all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, on such Prepaid Securities to and including such Issuer Redemption Date (and Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, shall cease to accrue on each Prepaid Security redeemed as of such date). The Issuer shall redeem the Prepaid Securities in whole if it effects a Company Acceleration of the PERCS Units in whole. If fewer than all Outstanding Securities (including Prepaid Securities) are to be redeemed, the Prepaid Securities to be redeemed shall be selected by the Trustee by lot. Notice shall be given for an Issuer Redemption as set forth in the Indenture. No fractional shares of Common Stock will be issued by the Issuer with respect to the payment of the Issuer Redemption Price. The Holder will receive cash in lieu of fractional shares otherwise issuable with respect to such payment as provided in the Indenture. Immediately prior to the effectiveness of a Merger or Consolidation, each outstanding Prepaid Security shall automatically convert into (a "Mandatory Conversion"), unless sooner redeemed, the right to receive, and the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, (i) one or more certificates representing a number of fully paid and non-assessable shares of Common Stock, registered in the name of the Trustee (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Mandatory Conversion Settlement Fund"), equal to the Settlement Rate in effect on the Mandatory Conversion Date, (ii) an amount in cash equal to all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, on such Prepaid Security to but excluding the Mandatory Conversion Date (and Amounts in Respect of Contract Fees shall cease to accrue as of the Mandatory Conversion Date) and (iii) an amount in cash (except as provided in herein) initially equal to $8.664 declining by $.008060 on each day following November 6, 1996 (computed on the basis of a 360-day year of twelve 30-day months) to $.4831 on August 31, 1999 and equal to zero thereafter, in each case determined with reference to the Mandatory Conversion Date. At the option of the Issuer and provided the Issuer has sufficient authorized and reserved shares of Common Stock, it may deliver to the Agent, for the benefit of the Holders, on the Mandatory Conversion Date, for the benefit of the Holders, in lieu of some or all the cash payment referred to in clause (iii) of the preceding paragraph, a number of shares of Common Stock (in addition to the shares of Common Stock referred to in clause (i) of the preceding paragraph) equal to (x) the amount of such cash payment that the Issuer has elected to pay in Common Stock divided by (y) the Current Market Price of the Common Stock determined as of the second Business Day immediately preceding the Notice Date applicable to such Mandatory Conversion Date. Notice shall be given for a Mandatory Conversion as set forth in the Indenture. No fractional shares of Common Stock will be issued by the Issuer with respect to the payment of such amounts pursuant to clause (iii) above on a Mandatory Conversion (if the Issuer so elects). The Holder will receive cash in lieu of fractional shares otherwise issuable with respect to such payment as provided in the Indenture. Upon a Sale of Assets, each Prepaid Security shall automatically convert into the right to receive, and the Issuer shall issue and deposit with the Trustee, for the benefit of the Holders, an amount in cash equal to the sum of (i) the Stated Amount and (ii) all accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees, if any, as provided for in the Indenture. If an Event of Default shall have occurred and be continuing, the Prepaid Securities shall be accelerated so that the Issuer shall become immediately obligated to make the deliveries of Common Stock that the Issuer would be obligated to make if the date of such acceleration were the Final Settlement Date. Any obligations of the Issuer with respect to accrued and unpaid Amounts in Respect of Contract Fees and Deferred Amounts in Respect of Contract Fees shall be extinguished and of no further effect upon an Event of Default, and in no event shall the Issuer be obligated to pay any amounts in respect of accrued and unpaid Amounts in Respect of Contract Fees or Deferred Amounts in Respect of Contract Fees, if any, upon an Event of Default. The Security Certificates are issuable only in registered form and only in denominations of a single Security and any integral multiple thereof. The transfer of any Security Certificate will be registered and Security Certificates may be exchanged as provided in the Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Indenture. No service charge shall be required for any such registration of transfer or exchange, but the Issuer and the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Upon registration of transfer of this Security Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Trustee pursuant to the Indenture), under the terms of the Indenture and the Prepaid Securities evidenced hereby and the transferor shall be released from the obligations under the Prepaid Securities evidenced by this Security Certificate. The Issuer covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Security Certificate, by his acceptance hereof, authorizes the Trustee to enter into and perform the related Prepaid Securities forming part of the Securities evidenced hereby on his behalf as his attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Prepaid Securities by the Issuer or its trustee in the event that the Issuer becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Prepaid Securities, consents to the provisions of the Indenture. Subject to certain exceptions, the provisions of the Indenture may be amended with the consent of the Holders of at least 66 2/3% of the Outstanding Securities. All terms used herein which are defined in the Indenture and the First Supplemental Indenture have the meanings set forth therein. The Prepaid Securities shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law. The Issuer, the Trustee and its Affiliates and any agent of the Issuer or the Trustee may treat the Person in whose name this Security Certificate is registered as the owner of the Securities evidenced hereby for the purpose of receiving payments of Contract Fees and any Deferred Contract Fees, performance of the Prepaid Securities and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary. The Prepaid Securities shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Indenture is available for inspection at the offices of the Trustee. SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after an Acceleration Date the Final Settlement Date of the Purchase Contracts underlying the number of Securities evidenced by this Security Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated:_________________________________ __________________________________ Signature If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: __________________________________ __________________________________ Name Name __________________________________ __________________________________ Address Address Social Security or other Taxpayer Identification Number, if any __________________________________ EX-4.7 12 EXHIBIT 4.7 Supplemental Indenture dated as of October 28, 1996 between SunAmerica Inc., a Maryland corporation (the "Issuer"), and The First National Bank of Chicago, a national banking association, as Trustee under the Indenture dated as of April 15, 1993, as supplemented (the "Indenture"; terms defined in the Indenture have such defined meanings herein and references herein to Sections and Articles refer to Sections and Articles in the Indenture as amended hereby), between the Issuer and the Trustee. WHEREAS, the Issuer desires to amend the Indenture to authorize the issuance of Securities of any series convertible into any cash, securities or property, at the option of the Issuer or Holders of Securities of such series or upon the happening of some event or otherwise, as specified for the Securities of such series pursuant to Section 2.3. WHEREAS, Section 8.1 authorizes supplemental indentures which add to the covenants of the Issuer or make other provisions not inconsistent with the Indenture which shall not adversely affect the interests of the Holders of the Securities. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: The Issuer covenants and agrees with the Trustee as follows: Article One Amendment to Indenture Section 1.01. The definition of "Outstanding" in Section 1.1 is hereby amended to add to the end thereof before the period: or Securities converted pursuant hereto or Securities not deemed outstanding pursuant to Section 13.2. Section 1.02. Section 2.3(2) is hereby amended to substitute a comma for "or" on the last line thereof and insert after "12.3": or 13.3. Section 1.03: Section 2.3 is hereby further amended by deleting "and" at the end of Section 2.3(18), changing the designation of Section 2.3(19) to "2.3(20)" and inserting after Section 2.3(18): (19) if the Securities of such series are to be convertible into any cash, securities or property, at the option of the Holders or the Issuer or upon the happening of some event or otherwise, all terms relating to such convertibility, including without limitation any term inconsistent with the provisions of this Indenture relating to conversion; and Section 1.04. Section 2.7 is hereby amended to insert after "payment date" on the 8th line of the 3rd paragraph: (but subject to Section 13.2 in the case of any conversion during such period). Section 1.05. Section 2.10 is hereby amended to insert "conversion," after "payment," at the beginning of the 3rd line. Section 1.06. Section 3.2 is hereby amended to insert "or conversion" after "exchange" on the 7th line of the 1st paragraph and on the 5th line of the 5th paragraph. Section 1.07. Section 5.1(c) is hereby amended to insert after "series" at the end thereof: or default in the conversion of any Security specified to be convertible as contemplated by Section 2.3 and the continuance of such default for 45 days. Section 1.08. Section 5.7 is hereby amended to insert before the last word, "shall", on the 8th line: or the right to convert such Security, if any, or to institute suit therefor,. Section 1.09. Section 8.1 is hereby amended to delete "and" at the end of Section 8.1(e), substitute "; and" for the period at the end of Section 8.1(f) and insert new Section 8.1(g) thereafter: (g) to add any provision hereto or remove or change any provision hereof relating to the conversion of any Securities, whether at the option of the Holders or the Issuer or upon the happening of some event or otherwise, provided that no such action shall adversely affect the interest of Holders of Outstanding Securities. Section 1.10. Section 8.2 is hereby amended to insert "or conversion (if applicable)" after "institute suit for the payment" at the end of the 8th to last line in 1st paragraph and to insert "and any right to convert" after "any right of repayment at the option of the Security- holder", on the line two lines below such 8th to last line in the 1st paragraph. Section 1.11. Section 12.2 is hereby amended: (a) to insert at the end of the 1st sentence of the 2nd paragraph: and will specify any conversion price then in effect and when the right to convert such Security or part thereof to be redeemed will expire. (b) to insert in the 4th paragraph on the 8th line after "for redemption": (other than those, if any, theretofore surrendered for conversion). (c) to insert after the 1st sentence in the 4th paragraph: If any Security called for redemption is converted pursuant hereto, and money deposited with the Trustee or any paying agent or so segregated and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer's request, or, if then held by the Issuer, shall be discharged from such trust. (d) Insert at the end of the last paragraph: If any Security selected for partial redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Upon any redemption of less than all the Securities of any series, the Issuer and the Trustee may treat as outstanding any Securities of such series surrendered for conversion during the period of 15 days next preceding the mailing of such series of a notice of redemption, and need not treat as outstanding any Security authenticated and delivered during such period in exchange for the unconverted portion of any Security of such series converted in part during such period." Section 1.12. Section 12.5 is hereby amended to insert after "by the Issuer" beginning line 9 of the 2nd paragraph: or converted. Section 1.13. Section 12.5 is hereby amended to insert at the end of the 4th paragraph: The Issuer's obligation to make a mandatory or optional sinking fund payment shall automatically be reduced by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant to the preceding paragraph on any sinking fund payment date which are converted prior to such sinking fund payment date; provided, that if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion agent shall give the Trustee written notice prior to the date fixed for redemption of the principal amount of Securities or portions thereof so converted. Section 1.14. Article Thirteen is hereby inserted after Article Twelve: ARTICLE THIRTEEN CONVERSION OF SECURITIES SECTION 13.1. Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series which are convertible before their maturity except as otherwise specified as contemplated by Section 2.3 for Securities of such series. SECTION 13.2. Conversion. Subject to and upon compliance with the provisions of this Article, any Security which by its terms specified as contemplated by Section 2.3 is convertible into any cash, securities or property ("Conversion Proceeds") may, at any time until and including but not after the close of business on the date of maturity of such Security, or in case such Security or some portion thereof shall be called for redemption prior to such date, then, with respect to such Security or such portion thereof as is so called, until and including but (if no default is made in making due provision for the payment of the redemption price) not after the close of business on the date fixed for redemption, be converted, in whole, or in part in multiples of $1,000 principal amount, at 100% of the principal amount of such Security (or portion thereof), into the Conversion Proceeds issuable upon conversion of such Security, at the conversion price in effect at the Date of Conversion (as hereinafter defined). SECTION 13.3 Exercise of Conversion. In order to convert, the Holder of any Security to be converted shall surrender such Security to the Issuer at any time during usual business hours at its office or agency maintained for the purpose as provided in this Indenture, accompanied by a fully executed written notice, in substantially the form set forth on the reverse of the Security, that the Holder elects to convert such Security or a stated portion thereof constituting a multiple of $1,000 principal amount, and, if such Security is surrendered for conversion during the period between the close of business on any record date and the opening of business on the following interest payment date and has not been called for redemption on a redemption date within such period (or on such interest payment date), accompanied also by payment of an amount equal to the interest payable on such interest payment date on the principal amount of the Security being surrendered for conversion. Such notice shall also state the name or names (with address) in which any certificate or certificates for Conversion Proceeds constituting securities shall be issued. Securities surrendered for conversion shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer duly executed by, the Holder or his attorney duly authorized in writing. As promptly as practicable after the receipt of such notice and the surrender of such Security as aforesaid, the Issuer shall, subject to the provisions of this Article Thirteen, deliver the Conversion Proceeds thereof at such office or agency to such Holder, or on his written order. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date (herein called the "Date of Conversion") on which such notice shall have been received by the Issuer and such Security shall have been surrendered as aforesaid, and the person or persons in whose name or names any certificate or certificates for Conversion Proceeds constituting securities shall be issuable upon such conversion shall be deemed to have become on the Date of Conversion the holder or holders of record of the securities represented thereby; provided, however, that any such surrender on any date when the stock transfer books for such securities shall be closed shall constitute the person or persons in whose name or names the certificate or certificates are to be issued as the recordholder or holders thereof for all purposes at the opening of business on the next succeeding day on which such stock transfer books are open but such conversion shall nevertheless be at the conversion price in effect at the close of business on the date when such Security shall have been so surrendered with the conversion notice. In the case of conversion of a portion, but less than all, of a Security, the Issuer shall execute, and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Issuer, a Security or Securities in the aggregate principal amount of the unconverted portion of the Security surrendered. Except as otherwise expressly provided in this Indenture, no payment or adjustment shall be made for interest accrued on any Security (or portion thereof) converted or for dividends or distributions on any security issued upon conversion of any Security. SECTION 13.4 Fractional Interests. No fractions of any security or scrip representing fractions thereof shall be issued upon conversion of Securities. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full securities which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Securities so surrendered. If any fraction of any security would, except for the provisions of this Section, be issuable on the conversion of any Security or Securities, the Issuer shall make payment in lieu thereof in an amount of United States dollars equal to the value of such fraction computed on the basis of the current market price of such security on the last business day prior to the Date of Conversion. SECTION 13.5 Conversion Price. The conversion price ("Conversion Price") per unit of Conversion Proceeds issuable upon conversion of the Securities, if any, shall initially be the amount specified as contemplated in Section 2.3 for the Securities of any series and shall be subject to adjustment from time to time as specified as contemplated in Section 2.3 for the Securities of such series. Whenever the Conversion Price is adjusted as herein provided, the Issuer shall promptly (i) file with the Trustee and each conversion agent an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to each Holder of Securities at his address as the same appears on the registry books of the Issuer. The Issuer shall be entitled to make such reductions in the Conversion Price, in addition to those required by this Section, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision of shares, distribution of rights or warrants to purchase stock or securities, or distribution of other assets (other than cash dividends) hereafter made by the Issuer to its stockholders shall not be taxable. SECTION 13.6 Continuation of Conversion in Case of Reclassification, Change, Merger, Consolidation or Sale of Assets. If any of the following shall occur, namely: (a) any reclassification or change of outstanding securities issuable upon conversion of the Securities (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (b) any consolidation or merger to which the Issuer is a party as a result of which the holders of such securities shall be entitled to receive stock, other securities or other assets with respect to or in exchange for such securities or (c) sale or conveyance of all or substantially all of the property or business of the Issuer as an entirety (if the Issuer is the issuer of such securities), then the Issuer, or such successor or purchasing corporation, as the case may be, shall, as a condition precedent to such reclassification, change, consolidation, merger, sale or conveyance, execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security then Outstanding shall have the right to convert such Security into the kind and amount of securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the amount of such securities issuable upon conversion of such Security immediately prior to such reclassification, change, consolidation, merger, sale or conveyance. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments specified as contemplated by Section 2.3 for Securities of the series. If, in the case of any such consolidation, merger, sale or conveyance, the securities and property receivable thereupon by a holder of outstanding securities issuable upon conversion includes shares of stock or other securities and property of a corporation other than the successor or purchasing corporation, as the case may be, in such consolidation, merger, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The provisions of this Section shall similarly apply to successive consolidations, mergers, sales or conveyances. Notice of the execution of each such supplemental indenture shall be mailed to each Holder of Securities at his address as the same appears on the registry books of the Issuer. Neither the Trustee nor any conversion agent shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either to the kind or amount of shares of stock or securities or property receivable by Holders of Securities upon the conversion of their Securities after any such reclassification, change, consolidation, merger, sale or conveyance or to any adjustment to be made with respect thereto, but, subject to the provisions of Sections 6.1 and 6.2, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate (which the Issuer shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. SECTION 13.7 Notice of Certain Events. So long as any convertible Securities are outstanding, in case: (a) the Issuer shall declare a dividend (or any other distribution) payable to the holders of any securities constituting Conversion Proceeds otherwise than in cash; or (b) the Issuer shall authorize the granting to the holders of such securities of rights to subscribe for or purchase any shares of stock of any class or of any other rights; or (c) the Issuer shall authorize any reclassification or change of such securities (other than a subdivision or combination of such securities), or any consolidation or merger to which the Issuer is a party and for which approval of any stockholders of the Issuer is required, or the sale or conveyance of all or substantially all the property or business of the Issuer; or (d) there shall be proposed any voluntary or involuntary dissolution, liquidation or winding-up of the Issuer; then, the Issuer shall cause to be filed at the office or agency maintained for the purpose of conversion of the Securities as provided in Section 3.2, and shall cause to be mailed to each Holder of Securities, at his address as it shall appear on the registry books of the Issuer, at least 20 days before the date hereinafter specified (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating the date on which (1) a record is expected to be taken for the purpose of such dividend, distribution or rights, or if a record is not to be taken, the date as of which the holders of such securities of record to be entitled to such dividend, distribution or rights are to be determined, or (2) such reclassification, change, consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up is expected to become effective and the date, if any is to be fixed, as of which it is expected that holders of such securities of record shall be entitled to exchange their such securities for securities or other property deliverable upon such reclassification, change, consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up. SECTION 13.8 Taxes on Conversion. The Issuer will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of Conversion Proceeds on conversion of Securities pursuant thereto; provided, however, that the Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of Conversion Proceeds in a name other than that of the holder of the Securities to be converted and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Issuer the amount of any such tax or has established, to the satisfaction of the Issuer, that such tax has been paid. The Issuer extends no protection with respect to any other taxes imposed in connection with conversion of Securities. SECTION 13.9 Issuer to Provide Stock. To the extent that any Securities are convertible into securities of the Issuer, the Issuer shall reserve, free from pre-emptive rights, out of its authorized but unissued securities, sufficient securities to provide for the conversion of the Securities from time to time as such Securities are presented for conversion, provided, that nothing contained herein shall be construed to preclude the Issuer from satisfying its obligations in respect of the conversion of Securities by delivery of repurchased Securities which are held in the treasury of the Issuer. If any securities to be reserved for the purpose of conversion of Securities hereunder require registration with or approval of any governmental authority under any Federal or State law before such securities may be validly issued or delivered upon conversion, then the Issuer covenants that it will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be, provided, however, that nothing in this Section shall be deemed to affect in any way any obligation of the Issuer to convert Securities. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of such securities, the Issuer will take all corporate action which may, in the Opinion of Counsel, be necessary in order that the Issuer may validly and legally issue fully paid and non-assessable such securities at such adjusted Conversion Price. The Issuer covenants that all securities of the Issuer which may be issued upon conversion of Securities will upon issue be fully paid and non-assessable by the Issuer and free of pre-emptive rights. SECTION 13.10 Disclaimer of Responsibility for Certain Matters. Neither the Trustee nor any agent of the Trustee shall at any time be under any duty or responsibility to any holder of Securities to determine whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the Officers' Certificate referred to in Section 13.5, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture as specified as contemplated in Section 2.3 provided to be employed, in making the same. Neither the Trustee nor any agent of the Trustee shall be accountable with respect to the validity or value (or the kind or amount) of any securities or property, which may at any time be issued or delivered upon the conversion of any Security; and neither the Trustee nor any conversion agent makes any representation with respect thereto. Neither the Trustee nor any agent of the Trustee shall be responsible for any failure of the Issuer to issue, register the transfer of or deliver any securities or property upon the surrender of any Security for the purpose of conversion or, subject to Sections 6.1 and 6.2, to comply with any of the covenants of the Issuer contained in this Article or specified as contemplated in Section 2.3. SECTION 13.11 Return of Funds Deposited for Redemption of Converted Securities. Any funds which at any time shall have been deposited by the Issuer or on its behalf with the Trustee or any paying agent for the purpose of paying the principal of and interest on any of the Securities and which shall not be required for such purposes because of the conversion of such Securities, shall after such conversion be repaid to the Issuer by the Trustee or such other paying agent. Article Two Miscellaneous Provisions SECTION 2.01. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 2.02. The recitals herein contained are made by the Issuer and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. SECTION 2.03. This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgments and as of the day and year first above written. SUNAMERICA INC. By: ______________________________ Name: Title: Attest: ______________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ______________________________ Name: Title: Attest: ______________________________ Name: Title: STATE OF CALIFORNIA ) ) ss.: COUNTY OF Los Angeles ) On the 28th day of October, in the year one thousand nine hundred ninety-six, before me personally came James R. Belardi to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of SUNAMERICA INC., one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporation seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ______________________________ NOTARY PUBLIC My Commission Expires STATE OF ILLINOIS ) ) ss.: COUNTY OF COOK ) On the 28th day of October, in the year one thousand nine hundred ninety-six, before me personally came to me known, who, being by me duly sworn, did depose and say that he resides at , that he is a of THE FIRST NATIONAL BANK OF CHICAGO, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation and that he signed his name thereto by like authority. ______________________________ NOTARY PUBLIC My Commission Expires EX-4.8 13 EXHIBIT 4.8 Supplemental Indenture dated as of October 28, 1996, between SunAmerica Inc., a Maryland corporation (the "Company"), and The First National Bank of Chicago, a national banking association, as Trustee under the Indenture dated as of March 15, 1995, as supplemented (the "Indenture"; terms defined in the Indenture have such defined meanings herein and references herein to Sections and Articles refer to Sections and Articles in the Indenture amended hereby), between the Company and the Trustee. WHEREAS, the Company desires to amend the Indenture to authorize the issuance of Debentures of any series convertible into any cash, securities or property, at the option of the Company or holders of Debentures of such series or upon the happening of some event or otherwise, as specified for the Debentures of such series pursuant to Section 2.01. WHEREAS, Section 9.01 authorizes supplemental indentures which add to the covenants of the Company or make other provisions not inconsistent with the Indenture which shall not adversely affect the interests of the holders of the Debentures. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: The Company covenants and agrees with the Trustee as follows: Article One Amendment to Indenture Section 1.01. The definition of "Outstanding" in Section 1.01 is hereby amended to add at the end thereof before the period: or Debentures converted pursuant hereto. Section 1.02. Section 2.01 is hereby amended by adding after (13): (14) If the Debentures of the series are to be convertible into any cash, security or property, at the option of the holders of such Debentures or the Company or upon the happening of some event or otherwise, all terms relating to such convertibility, including without limitation any term inconsistent with the provisions of this Indenture relating to conversion. Section 1.03. Section 2.08 is hereby amended by inserting "conversion," after "redemption," on line 1. Section 1.04. Section 3.02(a) is hereby amended by inserting after the first sentence of the second paragraph: Each such notice shall also specify any conversion price then applicable to such Debentures and when any right to convert such Debentures or any portion thereof called for redemption will expire. Section 1.05. Section 3.05 is hereby amended to insert "or converted" after "Debentures" in the fifth line. Section 1.06. Section 4.02 is hereby amended to insert "or conversion, if applicable," at the end of clause (i). Section 1.07. Section 6.01(a)(2) is hereby amended to insert at the end thereof: or default in the conversion of any Debenture of that series made convertible pursuant to Section 2.01 and the continuance of such default for a period of 45 days. Section 1.08. Section 6.04 is hereby amended to insert, in the 5th line of the second paragraph thereof after "date": or the right to convert such Debenture, if any, or to institute suit therefor. Section 1.09. Section 9.01 is hereby amended to substitute "; or" for the period at the end of clause (d) and to insert a new clause (e) after clause (d): (e) to add any provision hereto or remove or change any provision hereof relating to the conversion of any Debentures, whether at the option of the Holders or the Company or upon the happening of some event or otherwise, provided that no such action shall adversely affect the interest of Debentureholders. Section 1.10. Article Fifteen is hereby added after Article Fourteen: ARTICLE FIFTEEN CONVERSION OF Debentures SECTION 15.01. Applicability of Article. The provisions of this Article shall be applicable to the Debentures of any series which are convertible before their maturity except as otherwise specified as contemplated by Section 2.01 for Debentures of such series. SECTION 15.02. Conversion. Subject to and upon compliance with the provisions of this Article, any Debenture which by its terms specified as contemplated by Section 2.01 is convertible into any cash, securities or property ("Conversion Proceeds") may, at any time until and including but not after the close of business on the date of maturity of such Debenture, or in case such Debenture or some portion thereof shall be called for redemption prior to such date, then, with respect to such Debenture or such portion thereof as is so called, until and including but (if no default is made in making due provision for the payment of the redemption price) not after the close of business on the date fixed for redemption, be converted, in whole, or in part in multiples of $1,000 principal amount, at 100% of the principal amount of such Debenture (or portion thereof), into the Conversion Proceeds issuable upon conversion of such Debenture, at the conversion price in effect at the Date of Conversion (as hereinafter defined). SECTION 15.03 Exercise of Conversion. In order to convert, the holder of any Debenture to be converted shall surrender such Debenture to the Company at any time during usual business hours at its office or agency maintained for the purpose as provided in this Indenture, accompanied by a fully executed written notice, in substantially the form set forth on the reverse of the Debenture, that the holder elects to convert such Debenture or a stated portion thereof constituting a multiple of $1,000 principal amount, and, if such Debenture is surrendered for conversion during the period between the close of business on any record date and the opening of business on the following interest payment date and has not been called for redemption on a redemption date within such period (or on such interest payment date), accompanied also by payment of an amount equal to the interest payable on such interest payment date on the principal amount of the Debenture being surrendered for conversion. Such notice shall also state the name or names (with address) in which any certificate or certificates for Conversion Proceeds constituting securities shall be issued. Debentures surrendered for conversion shall (if so required by the Company or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company duly executed by, the holder or his attorney duly authorized in writing. As promptly as practicable after the receipt of such notice and the surrender of such Debenture as aforesaid, the Company shall, subject to the provisions of this Article Fifteen, deliver the Conversion Proceeds thereof at such office or agency to such holder, or on his written order. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date (herein called the "Date of Conversion") on which such notice shall have been received by the Company and such Debenture shall have been surrendered as aforesaid, and the person or persons in whose name or names any certificate or certificates for Conversion Proceeds constituting securities shall be issuable upon such conversion shall be deemed to have become on the Date of Conversion the holder or holders of record of the securities represented thereby; provided, however, that any such surrender on any date when the stock transfer books for such securities shall be closed shall constitute the person or persons in whose name or names the certificate or certificates are to be issued as the recordholder or holders thereof for all purposes at the opening of business on the next succeeding day on which such stock transfer books are open but such conversion shall nevertheless be at the conversion price in effect at the close of business on the date when such Debenture shall have been so surrendered with the conversion notice. In the case of conversion of a portion, but less than all, of a Debenture, the Company shall execute, and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Company, a Debenture or Debentures in the aggregate principal amount of the unconverted portion of the Debenture surrendered. Except as otherwise expressly provided in this Indenture, no payment or adjustment shall be made for interest accrued on any Debenture (or portion thereof) converted or for dividends or distributions on any security issued upon conversion of any Debenture. SECTION 15.04 Fractional Interests. No fractions of any security or scrip representing fractions thereof shall be issued upon conversion of Debentures. If more than one Debenture shall be surrendered for conversion at one time by the same holder, the number of full securities which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Debentures so surrendered. If any fraction of any security would, except for the provisions of this Section, be issuable on the conversion of any Debenture or Debentures, the Company shall make payment in lieu thereof in an amount of United States dollars equal to the value of such fraction computed on the basis of the current market price of such security on the last business day prior to the Date of Conversion. SECTION 15.05 Conversion Price. The conversion price ("Conversion Price") per unit of Conversion Proceeds issuable upon conversion of the Debentures, if any, shall initially be the amount specified as contemplated in Section 2.01 for the Debentures of any series and shall be subject to adjustment from time to time as specified as contemplated in Section 2.01 for the Debentures of such series. Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly (i) file with the Trustee and each conversion agent an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to each holder of Debentures at his address as the same appears on the registry books of the Company. The Company shall be entitled to make such reductions in the Conversion Price, in addition to those required by this Section, as it in its discretion shall determine to be advisable in order that any stock dividend, subdivision of shares, distribution of rights or warrants to purchase stock or securities, or distribution of other assets (other than cash dividends) hereafter made by the Company to its stockholders shall not be taxable. SECTION 15.06 Continuation of Conversion in Case of Reclassification, Change, Merger, Consolidation or Sale of Assets. If any of the following shall occur, namely: (a) any reclassification or change of outstanding securities issuable upon conversion of the Debentures (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (b) any consolidation or merger to which the Company is a party as a result of which the holders of such securities shall be entitled to receive stock, other securities or other assets with respect to or in exchange for such securities or (c) sale or conveyance of all or substantially all of the property or business of the Company as an entirety (if the Company is the issuer of such securities), then the Company, or such successor or purchasing corporation, as the case may be, shall, as a condition precedent to such reclassification, change, consolidation, merger, sale or conveyance, execute and deliver to the Trustee a supplemental indenture providing that the holder of each Debenture then Outstanding shall have the right to convert such Debenture into the kind and amount of securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the amount of such securities issuable upon conversion of such Debenture immediately prior to such reclassification, change, consolidation, merger, sale or conveyance. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments specified as contemplated by Section 2.3 for Debentures of the series. If, in the case of any such consolidation, merger, sale or conveyance, the securities and property receivable thereupon by a holder of outstanding securities issuable upon conversion includes shares of stock or other securities and property of a corporation other than the successor or purchasing corporation, as the case may be, in such consolidation, merger, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the holders of the Debentures as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The provisions of this Section shall similarly apply to successive consolidations, mergers, sales or conveyances. Notice of the execution of each such supplemental indenture shall be mailed to each holder of Debentures at his address as the same appears on the registry books of the Company. Neither the Trustee nor any conversion agent shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either to the kind or amount of shares of stock or securities or property receivable by holders of Debentures upon the conversion of their Debentures after any such reclassification, change, consolidation, merger, sale or conveyance or to any adjustment to be made with respect thereto, but, subject to the provisions of Sections 7.01 and 7.02, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. SECTION 15.07 Notice of Certain Events. So long as any convertible Securities are outstanding, in case: (a) the Company shall declare a dividend (or any other distribution) payable to the holders of any securities constituting Conversion Proceeds otherwise than in cash; or (b) the Company shall authorize the granting to the holders of such securities of rights to subscribe for or purchase any shares of stock of any class or of any other rights; or (c) the Company shall authorize any reclassification or change of such securities (other than a subdivision or combination of such securities), or any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or conveyance of all or substantially all the property or business of the Company; or (d) there shall be proposed any voluntary or involuntary dissolution, liquidation or winding-up of the Company; then, the Company shall cause to be filed at an office or agency maintained for the purpose of conversion of the Debentures, and shall cause to be mailed to each holder of Debentures, at his address as it shall appear on the registry books of the Company, at least 20 days before the date hereinafter specified (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating the date on which (1) a record is expected to be taken for the purpose of such dividend, distribution or rights, or if a record is not to be taken, the date as of which the holders of such securities of record to be entitled to such dividend, distribution or rights are to be determined, or (2) such reclassification, change, consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up is expected to become effective and the date, if any is to be fixed, as of which it is expected that holders of such securities of record shall be entitled to exchange their such securities for securities or other property deliverable upon such reclassification, change, consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up. SECTION 15.08 Taxes on Conversion. The Company will pay any and all documentary, stamp or similar taxes payable to the United States of America or any political subdivision or taxing authority thereof or therein in respect of the issue or delivery of Conversion Proceeds on conversion of Debentures pursuant thereto; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of Conversion Proceeds in a name other than that of the holder of the Debentures to be converted and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid. The Company extends no protection with respect to any other taxes imposed in connection with conversion of Debentures. SECTION 15.09 Company to Provide Stock. To the extent that any Debentures are convertible into securities of the Company, the Company shall reserve, free from pre-emptive rights, out of its authorized but unissued securities, sufficient securities to provide for the conversion of the Debentures from time to time as such Debentures are presented for conversion, provided, that nothing contained herein shall be construed to preclude the Company from satisfying its obligations in respect of the conversion of Debentures by delivery of repurchased Debentures which are held in the treasury of the Company. If any securities to be reserved for the purpose of conversion of Debentures hereunder require registration with or approval of any governmental authority under any Federal or State law before such securities may be validly issued or delivered upon conversion, then the Company covenants that it will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be, provided, however, that nothing in this Section shall be deemed to affect in any way any obligation of the Company to convert Debentures. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of such securities, the Company will take all corporate action which may, in the Opinion of Counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable such securities at such adjusted Conversion Price. The Company covenants that all securities of the Company which may be issued upon conversion of Debentures will upon issue be fully paid and non-assessable by the Company and free of pre-emptive rights. SECTION 15.10 Disclaimer of Responsibility for Certain Matters. Neither the Trustee nor any agent of the Trustee shall at any time be under any duty or responsibility to any holder of Debentures to determine whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the Officers' Certificate referred to in Section 15.05, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture as specified as contemplated in Section 2.01 provided to be employed, in making the same. Neither the Trustee nor any agent of the Trustee shall be accountable with respect to the validity or value (or the kind or amount) of any securities or property, which may at any time be issued or delivered upon the conversion of any Debenture; and neither the Trustee nor any conversion agent makes any representation with respect thereto. Neither the Trustee nor any agent of the Trustee shall be responsible for any failure of the Company to issue, register the transfer of or deliver any securities or property upon the surrender of any Debenture for the purpose of conversion or, subject to Sections 7.01 and 7.02, to comply with any of the covenants of the Company contained in this Article or specified as contemplated in Section 2.01. SECTION 15.11 Return of Funds Deposited for Redemption of Converted Debentures. Any funds which at any time shall have been deposited by the Company or on its behalf with the Trustee or any paying agent for the purpose of paying the principal of and interest on any of the Debentures and which shall not be required for such purposes because of the conversion of such Debentures, shall after such conversion be repaid to the Company by the Trustee or such other paying agent. ARTICLE TWO Miscellaneous Provisions SECTION 2.01. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 2.02. The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. SECTION 2.03. This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgments and as of the day and year first above written. SUNAMERICA INC. By: ______________________________ Name: Title: Attest: ______________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ______________________________ Name: Title: Attest: ______________________________ Name: Title: STATE OF CALIFORNIA ) ) ss.: COUNTY OF Los Angeles ) On the 28th day of October, in the year one thousand nine hundred ninety-six, before me personally came to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of SUNAMERICA INC., one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporation seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ______________________________ NOTARY PUBLIC My Commission Expires STATE OF ILLINOIS ) ) ss.: COUNTY OF COOK ) On the 28th day of October, in the year one thousand nine hundred ninety-six, before me personally came to me known, who, being by me duly sworn, did depose and say that he resides at , that he is a of THE FIRST NATIONAL BANK OF CHICAGO, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation and that he signed his name thereto by like authority. ______________________________ NOTARY PUBLIC My Commission Expires -----END PRIVACY-ENHANCED MESSAGE-----