1
EXHIBIT 1(e)
AMERICAN GENERAL CAPITAL [ ]
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT THAT AMERICAN GENERAL CAPITAL [ ]
HAS FUNDS AVAILABLE BY
AMERICAN GENERAL CORPORATION
UNDERWRITING AGREEMENT
American General Capital [ ], a statutory business trust created
under the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as depositor of the Trust and as guarantor
(the "Company"), propose to enter into a Pricing Agreement (the "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I
to the Pricing Agreement (such firms constituting the "Underwriters") certain
preferred securities representing beneficial interests in the assets of the
Trust. The preferred securities representing undivided beneficial interests in
the assets of the Trust specified in Schedule II to the Pricing Agreement as
Initial Preferred Securities are referred to as the "Initial Preferred
Securities". If specified in the Pricing Agreement, the Trust may grant the
Underwriters the right to purchase at their election an additional number of
preferred securities representing undivided beneficial interests in the assets
of the Trust, specified as provided in the Pricing Agreement as provided in
Section 2 hereof (the "Option Preferred Securities"). The Initial Preferred
Securities and the Option Preferred Securities, if any, which the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively referred
to as the "Preferred Securities". The Preferred Securities will be guaranteed
by the Company as to the payment of distributions, and as to payments on
liquidation or redemption, to the extent set forth in a guarantee agreement
(the "Guarantee") between the Company and Bankers Trust Company, as trustee
(the "Guarantee Trustee"). The proceeds of the sale of the Preferred
Securities and of the Trust's common securities (the "Common Securities") will
be invested by the Trust in Junior Subordinated Debentures (the "Junior
Subordinated Debentures") of the Company to be issued pursuant to a Junior
Subordinated Indenture, dated as of November 15, 1997 (the "Indenture"),
between the Company and Bankers Trust Company, as trustee (the "Debenture
Trustee"). The Preferred Securities may be exchangeable into such Junior
2
Subordinated Debentures or other property or securities if so specified in
Schedule II to the Pricing Agreement. The offer and sale of the Preferred
Securities, the Guarantee and the Junior Subordinated Debentures (referred to
herein, individually or together, as the "Securities") have been registered
under the registration statement referred to in Section 1(a) below.
The representative or representatives of the Underwriters, if any,
specified in the Pricing Agreement are referred to herein as the
"Representatives"; provided, however, that if the Pricing Agreement does not
specify any representative of the Underwriters, the term "Representatives"
shall mean the Underwriters.
The Pricing Agreement will incorporate by reference the provisions of
this Agreement, except as otherwise provided therein.
Section 1. Representations and Warranties. Each of the Trust and the
Company, jointly and severally, represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement (Nos. 333-40583,
▇▇▇-▇▇▇▇▇-▇▇, ▇▇▇-▇▇▇▇▇-▇▇, ▇▇▇-▇▇▇▇▇-▇▇ and 333- 40583-04) on Form
S-3 relating to, among other securities, the Securities, and all
post-effective amendments thereto required to the date of the Pricing
Agreement, have been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered or to be delivered
to the Representatives (and, excluding exhibits to such registration
statement, but including all documents incorporated by reference in
the prospectus contained therein on or prior to the date of the
Pricing Agreement, to the Representatives for each of the other
Underwriters) and such registration statement and each such amendment
thereto, if any, have been declared effective by the Commission and no
stop order suspending the effectiveness thereof has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. For purposes of this Agreement, (i) the term
"Registration Statement" shall mean the foregoing registration
statement, including all exhibits thereto and all documents
incorporated by reference therein as of the effective date thereof;
and any reference to the Registration Statement as amended (or similar
wording) shall mean the Registration Statement, including all
post-effective amendments thereto and all documents filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the effective date of the Registration
Statement and that are deemed to be incorporated by reference in the
Registration Statement upon the filing of such documents with the
Commission and the information, if any, deemed to be a part thereof
pursuant to Rule 434 under the Securities Act of
-2-
3
1933, as amended (the "Act"); (ii) the term "Prospectus" shall mean
the prospectus, including all documents incorporated by reference
therein as of the date thereof, relating to the Securities in the form
included in the Registration Statement as of the effective date
thereof or, if different, in the form in which it has most recently
been filed or transmitted for filing with the Commission on or prior
to the date of the Pricing Agreement, as amended or supplemented to
reflect the terms of the offering of the Securities by (A) if the
Company elects not to rely on Rule 434 under the Act, the Prospectus
Supplement contemplated by Section 3(a) hereof, in the form in which
such Prospectus Supplement is filed with the Commission pursuant to
Rule 424(b) under the Act in accordance with Section 3(a) hereof or
(B) if the Company elects to rely on Rule 434 under the Act, the Term
Sheet contemplated by Section 3(a) hereof, in the form in which such
Term Sheet is filed with the Commission pursuant to Rule 424(b) (7)
under the Act in accordance with Section 3(a) hereof (and, in such
case, the term "Prospectus" shall include such Term Sheet and the Rule
434(c) (2) Prospectus referred to in Section 3(a), if any, each
individually and taken together); any reference to the date of the
Prospectus shall be deemed to refer to the date of such Prospectus
Supplement or Term Sheet, as the case may be, and any reference to the
Prospectus as amended or supplemented (or similar wording) shall mean
the Prospectus, including all supplements thereto and all documents
filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of the
Prospectus and that are deemed to be incorporated by reference in the
Prospectus upon the filing of such documents with the Commission; and
(iii) the term "Preliminary Prospectus" shall mean any preliminary
prospectus relating to the Securities, including all documents
incorporated by reference therein as of the date thereof, included in
the registration statement prior to the effectiveness thereof or filed
with the Commission pursuant to Rule 424(a) under the Act; and any
reference to any Preliminary Prospectus as amended or supplemented (or
similar wording) shall mean such Preliminary Prospectus, including all
documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of such
Preliminary Prospectus and that are deemed to be incorporated by
reference in the Preliminary Prospectus upon the filing of such
documents with the Commission. If the Company files a registration
statement to register a portion of the Securities and relies on Rule
462(b) under the Act for such registration statement to become
effective upon filing with the Commission (the "Rule 462 (b)
Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (Nos. 333-40583, ▇▇▇-▇▇▇▇▇-▇▇, 333-
40583-02, ▇▇▇-▇▇▇▇▇-▇▇ and ▇▇▇-▇▇▇▇▇-▇▇ (the "Original Registration
Statement")) and the
-3-
4
Rule 462 (b) Registration Statement, as each such registration
statement may be amended pursuant to the Act;
(b) The documents incorporated by reference in the
Prospectus, as amended or supplemented, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, and, when read together with the other information
included or incorporated by reference in the Prospectus at the time
the Registration Statement became effective, at the time any
post-effective amendment thereto became effective and at the time any
annual report on Form 10-K was filed by the Company and incorporated
by reference into the Prospectus, none of such documents contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed during the
period during which delivery of a prospectus is required in connection
with the offering or sale of the Preferred Securities, and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to
the requirements of the Exchange Act and the rules and regulations of
the Commission thereunder and, when read together with the other
information included or incorporated by reference in the Prospectus at
the time such documents are filed with the Commission, none of such
documents will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Trust or the Company by or on behalf of an
Underwriter through the Representatives expressly for use in the
Prospectus;
(c) The Registration Statement, as amended, and the
Prospectus, as amended, conform, and any amendments or supplements
thereto filed during the period during which delivery of a prospectus
is required in connection with the offering or sale of the Securities
will conform, in all material respects to the applicable requirements
of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder. The Registration Statement, as amended, and the
Prospectus, as amended or supplemented, each as of the effective date
of the Registration Statement, as of the effective date of each
post-effective amendment to the Registration Statement, if any, and at
the time any annual report on Form 10-K was filed by the Company and
incorporated by reference into the Prospectus, did not, as of the date
of the Pricing Agreement do not, and as of the Time of Delivery
-4-
5
(as hereinafter defined) and during the period during which delivery
of a prospectus is required in connection with the offering and sale
of the Securities, will not, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or the Company by or on
behalf of an Underwriter through the Representatives expressly for use
in the Prospectus, or to the Statements of Eligibility on Form T-1
(the "Forms T-1"), except as to statements or omissions in such Forms
T-1 made in reliance upon information furnished in writing to the
Debenture Trustee or the Guarantee Trustee by or on behalf of the
Trust or the Company for use therein;
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has been
no material adverse change, nor any development or event involving a
prospective material adverse change, in the business, financial
condition, shareholders' equity (without considering the effect of
unrealized gains and losses on debt and equity securities classified
as "available for sale" under Statement of Financial Accounting
Standards (SFAS) No. 115) or results of operations of the Trust or of
the Company and its subsidiaries taken as a whole, other than as set
forth or contemplated in the Prospectus as amended or supplemented,
whether or not arising in the ordinary course of business;
(e) The Trust has been duly created and is validly existing
in good standing as a business trust under the Business Trust Act of
the State of Delaware (the "Delaware Business Trust Act") with the
power and authority to own its properties and conduct its business as
described in the Prospectus, and the Trust has conducted no business
to date, and it will conduct no business in the future that would be
inconsistent with the description of the Trust set forth in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Declaration of Trust dated
as of November 14, 1997 (the "Declaration") (and, at each Time of
Delivery, the Amended and Restated Declaration of Trust (the "Amended
Declaration") between the Company and the trustees named therein (the
"Trustees")), and the other agreements and instruments contemplated by
the Declaration or the Amended Declaration; the Trust has no
liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement, the Declaration or the
Amended Declaration and described in the Prospectus; based on expected
operations and current law, the Trust is not and will not be
classified as an
-5-
6
association taxable as a corporation for United States federal income
tax purposes; and the Trust is not a party to or subject to any
action, suit or proceeding of any nature;
(f) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Texas with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified
as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases substantial properties, or conducts business, and where
the failure so to qualify and be in good standing would have a
material adverse effect on the business of the Company and its
subsidiaries taken as a whole; each of the Company's consolidated
subsidiaries the consolidated assets of which constitute at least 15
percent of the consolidated assets of the Company (herein the
"Selected Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, has corporate power and authority to
own or lease its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases substantial
properties, or conducts business, and where the failure so to qualify
and be in good standing would have a material adverse effect on the
business of the Company and its subsidiaries taken as a whole; and
each of the Company and the Selected Subsidiaries has all required
authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies
(including, without limitation, each insurance regulatory authority
having jurisdiction over the Company or any insurance subsidiary of
the Company) to own or lease its properties and conduct its business
as described in the Prospectus, except such authorizations, approvals,
orders, licenses, certificates and permits which, if not obtained,
would not have a material adverse effect on the business of the
Company and its subsidiaries taken as a whole, and neither the Company
nor any of the Selected Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
authorization, approval, order, license, certificate or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially adversely affect the business of
the Company and its subsidiaries taken as a whole;
(g) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus (except for
subsequent issuances, if any, pursuant to employee benefit
-6-
7
plans, dividend reinvestment plans, or the exercise of convertible
securities or options referred to in the Prospectus or subsequent
purchases, if any, pursuant to the Company's share buyback program);
and all of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable, and conform in all material respects to the
description thereof contained in the Prospectus;
(h) All of the outstanding shares of capital stock of
each of the Selected Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable, and (except for any
directors' qualifying shares) are owned, directly or indirectly, by
the Company, free and clear of all liens and encumbrances;
(i) The Preferred Securities have been duly and validly
authorized by the Trust, and, when the Preferred Securities are issued
and delivered against payment therefor as provided herein and in the
Pricing Agreement, such Preferred Securities will be duly and validly
issued and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to the
description of the Preferred Securities contained in the Prospectus;
the issuance of the Preferred Securities is not subject to preemptive
or other similar rights; the Preferred Securities will have the rights
set forth in the Amended Declaration, and the terms of the Preferred
Securities are valid and binding on the Trust; the Preferred
Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
(j) The Common Securities of the Trust have been duly and
validly authorized by the Trust and upon delivery by the Trust to the
Company against payment therefor as described in the Prospectus will
be duly and validly issued undivided beneficial interests in the
assets of the Trust and will conform to the description thereof
contained in the Prospectus; the issuance of the Common Securities is
not subject to preemptive or other similar rights; and at each Time of
Delivery (as defined in Section 2 hereof), all of the issued and
outstanding Common Securities of the Trust will be directly or
indirectly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(k) The issue and sale of the Preferred Securities and
the Common Securities by the Trust, the purchase of the Junior
Subordinated Debentures by the Trust, the exchange by the Trust of
Junior Subordinated Debentures for Preferred Securities, the
compliance by the Trust with all of the
-7-
8
provisions of this Agreement and the Pricing Agreement, and the
consummation of the other transactions herein and therein contemplated
will not conflict with or result in any violation of (i) the
Declaration, the Amended Declaration or the Certificate of Trust dated
November 14, 1997 (the "Certificate of Trust") or (ii) to the best
knowledge of the Trust, any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Trust or any of its properties, in any manner which, in the case
of clause (ii), would have a material adverse effect on the Trust; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Preferred Securities and the
Common Securities by the Trust, the purchase of the Junior
Subordinated Debentures by the Trust, the exchange by the Trust of
Junior Subordinated Debentures for Preferred Securities, or the
consummation by the Trust of the other transactions contemplated by
this Agreement or the Pricing Agreement, except such as have been, or
will have been prior to the Time of Delivery, obtained under the Act
and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or "blue sky" or state insurance laws in
connection with the purchase and distribution of the Preferred
Securities by the Underwriters;
(l) The issue and sale of the Preferred Securities and
the Common Securities by the Trust, the issue by the Company of the
Guarantee, the issue and sale by the Company of the Junior
Subordinated Debentures, the exchange by the Trust of the Junior
Subordinated Debentures for Preferred Securities, the compliance by
each of the Trust and the Company with all of the provisions of this
Agreement, the Pricing Agreement, the Declaration, the Amended
Declaration, the Certificate of Trust, the Guarantee, the Junior
Subordinated Debentures and the Indenture, and the consummation of the
other transactions contemplated herein and therein will not (i)
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument for money borrowed to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, or (ii) result in any
violation of (x) the provisions of the Restated Articles of
Incorporation, as amended, or the Amended and Restated Bylaws of the
Company or (y) to the best knowledge of the Company, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of the Selected
Subsidiaries or any of their properties, in any manner which, in the
case of clauses (i) and (ii)(y), would have a material
-8-
9
adverse effect on the business of the Company and its subsidiaries
taken as a whole; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue by the Company
of the Guarantee, the issue and sale by the Company of the Junior
Subordinated Debentures, the exchange by the Trust of Junior
Subordinated Debentures for Preferred Securities, or the consummation
by the Company of the other transactions contemplated by this
Agreement, the Pricing Agreement, the Declaration, the Amended
Declaration, the Certificate of Trust, the Indenture or the Guarantee,
except such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or "blue sky" laws or state
insurance laws in connection with the purchase and distribution of the
Preferred Securities by the Underwriters;
(m) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings pending to
which the Trust, the Company or any of the Selected Subsidiaries is a
party or of which any property of the Trust, the Company or any of the
Selected Subsidiaries is subject which, individually or in the
aggregate, are expected to have a material adverse effect on the
business, financial condition, or results of operations of the Trust
or of the Company and its subsidiaries taken as a whole; and, to the
best of the Trust's and the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others;
(n) Neither the Trust nor the Company is or, after giving
effect to the issue and sale of the Preferred Securities and the
Junior Subordinated Debentures, respectively, will be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(o) The Junior Subordinated Debentures have been duly and
validly authorized and, when executed and authenticated pursuant to
the Indenture, and issued and delivered against payment therefor as
contemplated by this Agreement and the Pricing Agreement, will be duly
executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles; the Indenture has been duly and validly
authorized by the Company and, when duly
-9-
10
executed and delivered by the Company and the Debenture Trustee, will
constitute a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Indenture has been duly qualified under the Trust Indenture Act; and
the Junior Subordinated Debentures and the Indenture will conform in
all material respects with the descriptions thereof contained in the
Prospectus;
(p) The Guarantee has been duly and validly authorized by
the Company and, when executed and delivered by the Company as
contemplated by this Agreement and the Pricing Agreement, will have
been duly executed, issued and delivered, and assuming the valid
execution and delivery by the Guarantee Trustee, will constitute a
valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles; the Guarantee has been duly qualified
under the Trust Indenture Act; and the Guarantee will conform in all
material respects with the description thereof contained in the
Prospectus;
(q) The Amended Declaration has been duly and validly
authorized and, when validly executed and delivered by the Company and
the Trustees, will constitute a valid and legally binding obligation
of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Amended Declaration will conform in all material respects to the
description thereof contained in the Prospectus; and
(r) In connection with the offering of the Preferred
Securities, neither the Trust nor the Company has taken or will take,
directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result
in a violation of the anti-manipulation provisions under the Exchange
Act, including Regulation M.
Section 2. Purchase and Offering of Securities. The obligation of
the Trust to issue and sell the Preferred Securities and the obligation of any
of the Underwriters to purchase the Preferred Securities shall be evidenced by
the Pricing Agreement, which shall specify the aggregate number of the Initial
Preferred Securities, the maximum member of Option Preferred Securities, if
any, the initial public offering price of such Initial Preferred
-10-
11
Securities and Option Preferred Securities, if any, or the manner of
determining such price, the variable terms of the Preferred Securities,
including whether and the terms on which and terms of the Junior Subordinated
Debentures into which the Preferred Securities may be exchangeable, the form of
the Preferred Securities, the purchase price to the Underwriters of such
Preferred Securities, the names of the Underwriters of such Preferred
Securities (subject to substitution as provided by Section 7 herein), the names
of the Representatives of such Underwriters, the number of such Preferred
Securities to be purchased by each Underwriter and the commission payable to
the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Initial Preferred Securities and Option Preferred
Securities, if any, and payment therefor. The Pricing Agreement shall be in
the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and the
Pricing Agreement shall be several and not joint. Upon the execution of the
Pricing Agreement and authorization by the Representatives of the release of
the Initial Preferred Securities, the several Underwriters propose to offer the
Initial Preferred Securities for sale upon the terms and conditions set forth
in the Prospectus.
The Trust may specify in the Pricing Agreement that the Trust thereby
grants to the Underwriters the right (an "Over-allotment Option") to purchase
at their election up to the number of Option Preferred Securities set forth in
such Pricing Agreement, on the same terms as the Initial Preferred Securities,
for the sole purpose of covering over- allotments in the sale of the Initial
Preferred Securities. Any such election to purchase Option Preferred
Securities may be exercised by written notice from the Representatives to the
Trust, given within a period specified in the Pricing Agreement, setting forth
the aggregate number of Option Preferred Securities to be purchased and the
date on which such Option Preferred Securities are to be delivered, as
determined by the Representatives but in no event earlier than the First Time
of Delivery (as defined below) or, unless the Representatives and the Trust
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in the Pricing Agreement.
The number of Option Preferred Securities to be added to the number of
Initial Preferred Securities to be purchased by each Underwriter as set forth
in Schedule I to the Pricing Agreement shall be, in each case, the number of
Option Preferred Securities which the Trust has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Trust has not been so advised, the number of Option Preferred Securities to be
so added shall be, in each case, that proportion of Option Preferred
-11-
12
Securities which the number of Initial Preferred Securities to be purchased by
such Underwriter under the Pricing Agreement bears to the aggregate number of
Initial Preferred Securities (rounded as the Representatives may determine to
the nearest 100 shares). The total number of Preferred Securities to be
purchased by all the Underwriters pursuant to the Pricing Agreement shall be
the aggregate number of Initial Preferred Securities set forth in Schedule I to
the Pricing Agreement plus the aggregate number of Option Preferred Securities
which the Underwriters elect to purchase.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used by the Trust to purchase the Junior Subordinated
Debentures, the Company hereby agrees to pay at each Time of Delivery to the
Representatives, for the accounts of the several Underwriters, an amount per
Preferred Security specified in the Pricing Agreement for the Preferred
Securities to be delivered hereunder at such Time of Delivery.
The Initial Preferred Securities and the Option Preferred Securities
to be purchased by each Underwriter pursuant to the Pricing Agreement, in the
form specified in the Pricing Agreement, shall be delivered by or on behalf of
the Trust to the Representatives, through the facilities of The Depository
Trust Company ("DTC"), for the account of each such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
wire transfer to the account specified by the Trust in same day funds, (i) with
respect to the Initial Preferred Securities, all in the manner and at the place
and time and date specified in the Pricing Agreement or at such other place and
time and date as the Representatives and the Trust may agree upon in writing
(such time and date being herein called the "First Time of Delivery") and (ii)
with respect to the Option Preferred Securities, if any, in the manner and at
the time and date specified by the Representatives in the written notice given
by the Representatives of the Underwriters' election to purchase such Option
Preferred Securities, or at such other time and date as the Representatives and
the Trust may agree upon in writing (such time and date, if not the First Time
of Delivery, being herein called the "Second Time of Delivery"). Each such
time and date for delivery is herein called a "Time of Delivery".
At each Time of Delivery, the Company will pay, or cause to be paid,
the compensation payable at such Time of Delivery to the Underwriters in the
same funds and manner as the purchase price for the Preferred Securities to be
paid by the Underwriters to the Trust (any such certified or official bank
check or checks to be payable to the order of the Representatives and any such
wire transfer to be to the account specified by the Representatives).
-12-
13
Section 3. Certain Agreements of the Company. Each of the Trust and
the Company, jointly and severally, agrees with each of the Underwriters:
(a) Immediately following the execution of the Pricing
Agreement, to prepare (i) if the Trust and the Company elect not to
rely on Rule 434 under the Act, an amendment or supplement to the
prospectus related to the Securities to reflect the terms of the
offering of the Securities (the "Prospectus Supplement") in a form
reasonably approved by the Representatives, and to file the Prospectus
Supplement pursuant to Rule 424(b) (2) or (5) under the Act by 3:00
p.m., New York City time, on the business day immediately succeeding
the date of the Pricing Agreement (or such other time as shall be
specified in the Pricing Agreement), or (ii) if the Trust and the
Company elect to rely on Rule 434 under the Act, (A) an abbreviated
term sheet relating to the Preferred Securities, the Guarantee and the
Junior Subordinated Debentures (the "Term Sheet") that complies with
the requirements of Rule 434(c) (3) and (e) under the Act in a form
reasonably approved by the Representatives, and (B) if required by
Rule 434(c) (2) under the Act, a form of Prospectus relating to the
Preferred Securities, the Guarantee and the Junior Subordinated
Debentures (the "Rule 434(c) (2) Prospectus") complying with Rule
434(c) (2) under the Act in a form reasonably approved by the
Representatives, and to file such Term Sheet pursuant to Rule 424(b)
(7) under the Act, and any such Rule 434(c) (2) Prospectus pursuant to
Rule 424(b) under the Act, in each case by 3:00 p.m., New York City
time, on the business day immediately succeeding the date of the
Pricing Agreement (or such other time as shall be specified in the
Pricing Agreement); except as otherwise required by law, to make no
amendment or supplement to the Registration Statement or Prospectus
after the date of the Pricing Agreement and prior to any Time of
Delivery which shall be reasonably disapproved by the Representatives
promptly after reasonable notice thereof; for so long as the delivery
of a prospectus is required in connection with the offering or sale of
the Preferred Securities, to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Trust or the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, and to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed or transmitted for filing with the
Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating
to the Securities, of the suspension of the qualification of any of
the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any
-13-
14
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Preferred
Securities, the Guarantee and the Junior Subordinated Debentures, or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal.
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities and insurance laws of such
jurisdictions as the Representatives may reasonably request and to
comply with such laws to the extent necessary to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Preferred
Securities; provided, however, that in connection therewith neither
the Trust nor the Company shall be required to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus is required
at any time in connection with the offering or sale of the Securities
and if at such time any event shall have occurred or condition exist
as a result of which the Prospectus, as it may then be amended or
supplemented, would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period, in
the opinion of the Representatives, the Trust or the Company, to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify the Representatives of such event, condition, filing, amendment
or supplement and upon the Representatives' request to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance;
(d) In the case of the Company, to make generally
available to its security holders as soon as practicable, but
-14-
15
in any event not later than 90 days following the close of the period
covered thereby, an earnings statement, covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in Rule 158 under the
Act) of the Registration Statement, of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including Rule 158);
(e) During the period beginning from the date of the
Pricing Agreement and continuing to and including the last Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of
any Preferred Securities, any other beneficial interests of the Trust,
or any preferred securities or any securities of the Trust or the
Company, as the case may be, that are substantially similar to the
Preferred Securities, including the Guarantee, and including but not
limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive Preferred Securities,
preferred securities or any such substantially similar securities of
either the Trust or the Company, without the prior consent of the
Representatives;
(f) Not to be or become, at any time prior to the
expiration of three years after the Time of Delivery, an open-end
investment company, unit investment trust, closed-end investment
company or face-amount certificate company that is or is required to
be registered under Section 8 of the Investment Company Act;
(g) To use the net proceeds received by it from the sale
of the Preferred Securities, in the case of the Trust, and the Junior
Subordinated Debentures, in the case of the Company, as contemplated
in this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(h) In the case of the Company, to issue and deliver the
Guarantee and the Junior Subordinated Debentures concurrently with the
issuance and sale of the Preferred Securities; and
(i) If the Pricing Supplement specifies that the
Preferred Securities are to be listed on a securities exchange, to use
its best efforts to list on such securities exchange, subject to
notice of issuance, (i) the Preferred Securities, and (ii) the Junior
Subordinated Debentures, upon any distribution thereof to holders of
the Preferred Securities.
Section 4. Payment of Expenses. Each of the Trust and the Company
jointly and severally covenants and agrees with the several Underwriters to pay
or cause to be paid the following: (i) the
-15-
16
fees, disbursements and expenses of their counsel and accountants in connection
with the registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Pricing Agreement, the Declaration, the
Amended Declaration, the Indenture, the Junior Subordinated Debentures, the
Guarantee, any Blue Sky survey, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase,
sale and delivery of the Preferred Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities and insurance laws as provided in Section 3(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky survey; (iv) any
fees charged by securities rating services for rating the Securities; (v) any
filing fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Preferred Securities;
(vi) any fees and expenses in connection with listing on one or more securities
exchanges and under the Exchange Act of the Preferred Securities and, if
applicable, any Junior Subordinated Debentures distributed to holders of the
Preferred Securities; (vii) the cost of preparing certificates, if any, for the
Preferred Securities and any Junior Subordinated Debentures; (viii) the cost
and charges of any transfer agent or registrar or dividend disbursing agent;
(ix) the cost of qualifying the Preferred Securities and the Junior
Subordinated Debentures with DTC; (x) the cost and charges of any conversion
agent; (xi) the fees and expenses of the Debenture Trustee, the Guarantee
Trustee and the trustees of the Trust and the fees and disbursements of their
counsel; and (xii) all other costs and expenses incident to the performance of
its obligations hereunder and under any Over-allotment Option which are not
otherwise specifically provided for in this Section 4. It is understood,
however, that, except as provided in this Section 4, Section 6 and Section 8
hereof, the Underwriters will pay all of their own costs and expenses,
including the fees and disbursements of their own counsel, transfer taxes on
resale of any of the Preferred Securities by them, and any advertising expenses
connected with any offers they may make.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters under the Pricing Agreement shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties of the Trust and the Company in or incorporated
by reference in the Pricing Agreement are, at and as of each Time of Delivery,
true and correct, the condition that the Trust and the Company shall have
-16-
17
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus Supplement or, if the Company shall
have elected to rely on Rule 434 under the Act, the Term Sheet and any
Rule 434 (c) (2) Prospectus required by Rule 434 (c) (2) under the
Act, shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed therefor by Section 3(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission
shall have been complied with to the Representatives' reasonable
satisfaction;
(b) ▇▇▇▇▇ & Wood LLP, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated
each Time of Delivery, with respect to the incorporation of the
Company and the formation of the Trust, the validity of the Preferred
Securities and the Junior Subordinated Debentures being delivered at
each Time of Delivery and with respect to the Registration Statement,
the Prospectus and such other related matters as the Representatives
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them
to pass upon such matters (in rendering such opinion or opinions,
▇▇▇▇▇ & Wood LLP may rely as to matters of Texas law upon the opinions
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. and of the General Counsel, the Deputy
General Counsel or the Associate General Counsel - Corporate/Finance
of the Company referred to in subsections 5(c) and 5(d), respectively,
and as to matters of Delaware law upon the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇, P.A., referred to in subsection 5(e));
(c) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company,
shall have furnished to the Representatives their written opinion (in
rendering such opinion, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. may rely as to matters
of Delaware law upon the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.,
referred to in subsection 5(e)), dated each Time of Delivery, in form
and substance satisfactory to the Representatives, to the effect that:
(i) The Declaration and the Amended Declaration
have each been duly and validly authorized, executed and
delivered by the Company and the Declaration and the Amended
Declaration each conforms in all material respects to the
description thereof contained in the Prospectus;
-17-
18
(ii) All of the issued and outstanding Common
Securities of the Trust are owned of record directly or
indirectly by American General, free and clear of all liens
and encumbrances known to such counsel;
(iii) This Agreement and the Pricing Agreement have
each been duly authorized, executed and delivered by each of
the Trust and the Company;
(iv) The issue and sale by the Trust of the
Preferred Securities and Common Securities being delivered at
such Time of Delivery, the purchase by the Trust of the Junior
Subordinated Debentures being purchased at such Time of
Delivery, the exchange by the Trust of Junior Subordinated
Debentures for such Preferred Securities, the compliance by
the Trust with all of the provisions of this Agreement and the
Pricing Agreement, and the consummation of the other
transactions contemplated herein and therein will not result
in any violation of the provisions of this Agreement, the
Pricing Agreement, the Amended Declaration or the Certificate
of Trust or any statute, or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Trust or any of its
properties (other than any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties solely as
a result of the Trust's affiliation with the Company or its
subsidiaries); and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
by the Trust of the Preferred Securities and the Common
Securities being delivered at such Time of Delivery, the
purchase by the Trust of the Junior Subordinated Debentures
being purchased at such Time of Delivery, the exchange by the
Trust of Junior Subordinated Debentures for such Preferred
Securities, or the consummation by the Trust of the other
transactions contemplated by this Agreement and the Pricing
Agreement, other than any such consent, approval,
authorization, order, registration or qualification of or with
any such court or governmental agency or body having
jurisdiction over the Trust or any of its properties solely as
a result of the Trust's affiliation with the Company or its
subsidiaries and except such as have been obtained under the
Act and the Trust Indenture Act prior to such Time of Delivery
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
"blue sky" laws or insurance laws in connection with the
purchase and distribution of the Preferred Securities by the
Underwriters;
-18-
19
(v) The statements set forth in the Prospectus
under the captions "Description of Junior Subordinated
Debentures", "Description of Preferred Securities",
"Description of Guarantees", "Relationship among the Preferred
Securities, the Corresponding Junior Subordinated Debentures
and the Guarantee", "Description of Common Stock",
"Description of Preferred Stock", and any similar caption in
the Prospectus as amended with respect to the Preferred
Securities, insofar as they purport to constitute a summary of
the terms of the Junior Subordinated Debentures, the Preferred
Securities, the Guarantee, the Common Stock, and the Preferred
Stock, respectively, are accurate summaries in all material
respects and fairly present in all material respects the
information set forth therein;
(vi) Such counsel confirms their opinion filed as
Exhibit 8 to the Registration Statement and the information in
the Prospectus under "Certain Federal Income Tax
Consequences", to the extent that it constitutes matters of
law, summaries of legal matters, documents or proceedings or
legal conclusions, is correct in all material respects;
(vii) The Junior Subordinated Debentures have been
duly and validly authorized and, when executed and
authenticated pursuant to the Indenture and issued and
delivered against payment therefor as contemplated by this
Agreement and the Pricing Agreement, will be duly executed,
authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equity
principles and will be entitled to the benefits provided by
the Indenture; the Junior Subordinated Debentures are in the
form authorized in or pursuant to the Indenture; the Indenture
has been duly authorized, executed and delivered by the
Company and (assuming the Indenture has been duly authorized,
executed and delivered by the Debenture Trustee) constitutes a
valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; the Indenture has been duly
qualified under the Trust Indenture Act; and the Junior
Subordinated Debentures and the Indenture conform
-19-
20
in all material respects to the description thereof contained
in the Prospectus;
(viii) The Guarantee has been duly and validly
authorized by the Company and, when executed and delivered as
contemplated by this Agreement and the Pricing Agreement, will
have been duly executed, issued and delivered, and (assuming
the Guarantee has been duly authorized, executed and delivered
by the Guarantee Trustee) will constitute a valid and legally
binding obligation of the Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Guarantee conforms in
all material respects to the description thereof contained in
the Prospectus;
(ix) The Registration Statement is effective under
the Act and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission;
(x) The documents incorporated by reference in
the Prospectus (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, appeared on their
face to comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
(xi) The Registration Statement, at the time it
became effective, and as amended or supplemented as of the
date of the Pricing Agreement (or, if the Company shall have
elected to rely on Rule 434 under the Act, as of the time the
Term Sheet was filed with the Commission pursuant to Rule
434(b) (7) under the Act) (other than the financial statements
and other financial information included therein or the Forms
T-1, as to which no opinion or belief need be expressed),
appeared on its face to be appropriately responsive in all
material respects to the applicable requirements of the Act,
the Trust Indenture Act and the respective rules and
regulations of the Commission thereunder; and
(xii) Neither the Trust nor the Company is or,
after giving effect to the issue and sale of the Preferred
Securities and the Junior Subordinated Debentures, will
-20-
21
be, an "investment company" as such term is defined in the
Investment Company Act.
In addition, such opinion shall also contain a statement that
no facts have come to such counsel's attention that lead them to
believe that the Registration Statement (other than the financial
statements and other financial data contained therein, as to which
such counsel need not express any comment), at the time it became
effective, and if an amendment to the Registration Statement or an
annual report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time each such amendment became effective and
the most recent such Form 10-K was filed, as the case may be, and as
of the date of the Pricing Agreement, contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (other than the financial statements
and other financial data contained therein, as to which such counsel
need not express any comment), as amended or supplemented to reflect
the terms of the offering of the Securities by the Prospectus
Supplement or Term Sheet, as the case may be, and as amended or
supplemented at the Time of Delivery, contains an untrue statement of
a material fact or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(d) The General Counsel, the Deputy General Counsel
or the Associate General Counsel - Corporate/Finance of the Company
shall have furnished to the Representatives his or her written
opinion, dated each Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Texas, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) Each of the Selected Subsidiaries has been duly
incorporated and is validly existing as a business corporation or an
insurer, as the case may be, in good standing under the laws of its
jurisdiction of incorporation, provided, however, that "good standing"
means with respect to any corporation incorporated under the laws of
the State of Indiana that such corporation has filed its most recent
annual report required by the laws of the State of Indiana and
Articles of Dissolution have not been filed in the State of Indiana
with respect to such corporation; to the knowledge of such counsel,
-21-
22
each of the Company and the Selected Subsidiaries has been duly
qualified as a foreign corporation for the transaction of business or
licensed to transact business as an insurance company, as the case may
be, and is in good standing under the laws of each other jurisdiction
in which it owns or leases substantial properties, or conducts
business, and where the failure so to qualify would have a material
adverse effect on the business of the Company and its subsidiaries
taken as a whole; all of the outstanding shares of capital stock of
each Selected Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable, and (except for any directors'
qualifying shares) are owned, directly or indirectly, by the Company,
free and clear of all liens and encumbrances; and, to the knowledge of
such counsel, each of the Company and the Selected Subsidiaries has
all required authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and
bodies (including, without limitation, each insurance regulatory
authority having jurisdiction over the Company or any insurance
subsidiary of the Company) to own or lease its properties and to
conduct its business as described in the Prospectus, except such
authorizations, approvals, orders, licenses, certificates and permits
which, if not obtained, would not have a material adverse effect on
the business of the Company and its subsidiaries taken as a whole
(such counsel being entitled to rely in respect of the opinion in this
clause (ii) upon opinions (in form and substance reasonably
satisfactory to the Representatives) of local counsel and of counsel
for the Selected Subsidiaries, such counsel being acceptable to
counsel for the Underwriters, copies of which shall be furnished to
the Representatives; and in respect of matters of fact upon
certificates of officers of the Company or the Selected Subsidiaries,
provided that such counsel shall state that he or she believes that he
or she is justified in relying upon such opinions and certificates);
(iii) To the knowledge of such counsel, there are no
legal or governmental proceedings pending or threatened of a character
that are required to be disclosed in the Registration Statement and
Prospectus, other than as disclosed therein; and to the knowledge of
such counsel, there are no contracts, indentures, mortgages, deeds of
trust, loan agreements or other documents of a character required to
be described in the Registration Statement or Prospectus (or required
to be filed under the Exchange Act if upon such filing they would be
incorporated by reference therein) or to be filed as exhibits to the
Registration Statement that are not described and filed as required;
(iv) The issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time of
Delivery, the purchase by the Trust of the Junior
-22-
23
Subordinated Debentures being purchased at such Time of Delivery, the
exchange by the Trust of Junior Subordinated Debentures for such
Preferred Securities, the compliance by the Trust with all of the
provisions of this Agreement and the Pricing Agreement, and the
consummation of the other transactions contemplated herein and therein
will not result in any violation of any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Trust or any of its properties
solely as a result of the Trust's affiliation with the Company or its
subsidiaries, which violation would have a material adverse effect on
the business, financial condition, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time of
Delivery, the purchase by the Trust of the Junior Subordinated
Debentures being purchased at such Time of Delivery, the exchange by
the Trust of Junior Subordinated Debentures for such Preferred
Securities, or the consummation by the Trust of the other transactions
contemplated by this Agreement or the Pricing Agreement solely as a
result of the Trust's affiliation with the Company or its
subsidiaries, except such as have been obtained under the Act and the
Trust Indenture Act prior to such Time of Delivery and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or "blue sky" laws or insurance laws
in connection with the purchase and distribution of the Preferred
Securities by the Underwriters; and
(v) The issue and sale by the Trust of the Preferred
Securities and Common Securities being delivered at such Time of
Delivery, the issue by the Company of the Guarantee, the issue and
sale by the Company of the Junior Subordinated Debentures, the
exchange by the Trust of Junior Subordinated Debentures for such
Preferred Securities, the compliance by each of the Trust and the
Company with all of the provisions of this Agreement, the Pricing
Agreement, the Declaration, the Amended Declaration, the Certificate
of Trust, the Guarantee, the Junior Subordinated Debentures and the
Indenture and the consummation of the other transactions herein and
therein contemplated will not (A) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument for money borrowed to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, or (B)
result
-23-
24
in any violation of (x) the provisions of the Restated Articles of
Incorporation or the Amended and Restated By-Laws of the Company or
(y) any statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties, in
any manner which, in the case of clauses (A) and (B)(y), would have a
material adverse effect on the business of the Company and its
subsidiaries taken as a whole (such counsel being entitled to rely in
respect of the opinion in this clause (v) with respect to subsidiaries
upon opinions (in form and substance reasonably satisfactory to the
Representatives) of counsel for the subsidiaries, such counsel being
acceptable to counsel for the Underwriters, copies of which shall be
furnished to the Representatives, provided that such counsel shall
state that he or she believes that he or she is justified in relying
upon such opinions); and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue by the Company
of the Guarantee, the issue and sale by the Company of the Junior
Subordinated Debentures, the exchange by the Trust of Junior
Subordinated Debentures for such Preferred Securities, or the
consummation by the Company of the other transactions contemplated by
this Agreement, the Pricing Agreement, the Indenture, the Amended
Declaration, the Certificate of Trust or the Guarantee, except such as
have been obtained under the Act and the Trust Indenture Act prior to
such Time of Delivery and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or "blue sky" laws or insurance laws in connection with the
purchase and distribution of the Preferred Securities by the
Underwriters;
(e) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., special Delaware counsel to
the Trust and the Company, shall have furnished to the Representatives their
written opinion, dated each Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, and, under the Amended Declaration and the
Delaware Business Trust Act, has the trust power and authority to own
its properties and conduct its business as described in the
Prospectus; and all filings required under the laws of Delaware with
respect to the creation and valid existence of the Trust as a business
trust have been made;
(ii) The Amended Declaration constitutes a valid and
binding obligation of the Company and the trustees of the Trust and is
enforceable against the Company and such trustees
-24-
25
in accordance with its terms; and the Preferred Securities being
delivered at such Time of Delivery have the rights set forth in the
Amended Declaration subject to the effect upon the Amended Declaration
of (a) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance and transfer, and
other similar laws relating to or affecting the rights and remedies of
creditors generally, (b) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and
applied in a proceeding in equity or at law), and (c) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification;
(iii) Under the Amended Declaration and the Delaware
Business Trust Act, the Trust has the trust power and authority to (a)
execute and deliver, and to perform its obligations under this
Agreement and the Pricing Agreement and (b) issue and perform its
obligations under the Preferred Securities and the Common Securities
being delivered at such Time of Delivery;
(iv) Under the Amended Declaration and the Delaware
Business Trust Act, the execution and delivery by the Trust of this
Agreement and the Pricing Agreement, and the performance by the Trust
of its obligations hereunder, have been duly authorized by all
necessary trust action on the part of the Trust;
(v) The Common Securities of the Trust being delivered at
such Time of Delivery have been duly authorized by the Amended
Declaration and are validly issued undivided beneficial interests in
the assets of the Trust; the Preferred Securities being delivered at
such Time of Delivery have been duly and validly authorized by the
Amended Declaration and are duly and validly issued and, subject to
the qualifications set forth herein, fully paid and non-assessable
beneficial interests in the assets of the Trust; the holders of such
Preferred Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; provided that such
counsel may note that such holders may be obligated, pursuant to the
Amended Declaration, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from
transfers or exchanges of certificates representing such Preferred
Securities and the issuance of replacement certificates and (b)
provide security and indemnity in connection with requests of or
directions to the Property Trustee (as defined in the Amended
Declaration) to exercise its rights and powers under the Amended
Declaration;
-25-
26
(vi) Under the Amended Declaration and the Delaware
Business Trust Act, the issuance of the Preferred Securities and the
Common Securities being delivered at such Time of Delivery is not
subject to preemptive or other similar rights;
(vii) The execution, delivery and performance of this
Agreement, the Pricing Agreement, the Declaration, the Amended
Declaration, the Preferred Securities and the Common Securities, the
consummation of the transactions contemplated herein and therein, and
the compliance by the Trust with its obligations hereunder and
thereunder do not and will not result in any violation of the Amended
Declaration, the Certificate of Trust or any applicable Delaware law
or administrative regulation thereunder;
(viii) Except as previously made or obtained, as the case
may be, no filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Delaware court or
Delaware governmental authority or agency is necessary or required to
be obtained by the Trust solely in connection with the execution or
delivery by the Trust of this Agreement or the Pricing Agreement, or
the performance by the Trust of the transactions contemplated hereby
or thereby, including the issuance and sale of the Preferred
Securities and the Common Securities being delivered at such Time of
Delivery; and
(ix) The holders of the Preferred Securities being
delivered at such Time of Delivery (other than those holders who
reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as
a result of their participation in the Trust, and the Trust will not
be liable for any income tax imposed by the State of Delaware.
(f) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel to
Bankers Trust (Delaware), as Delaware Trustee under the Amended Declaration,
shall have furnished to the Representatives their written opinion, dated each
Time of Delivery, in form and substance satisfactory to the Representatives, to
the effect that Bankers Trust (Delaware) has been duly incorporated and is
validly existing in good standing as a banking corporation under the laws of
the State of Delaware and has the corporate power to act as trustee of a
Delaware business trust under the laws of the State of Delaware, 12 Del.C.
Section 3801, et seq.;
(g) On the date of the Pricing Agreement prior to the execution
thereof and also at each Time of Delivery, the independent certified public
accountants who have audited the consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives
-26-
27
a letter or letters dated such Time of Delivery, with respect to such
consolidated financial statements, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in Annex II
hereto;
(h) Since the date of the Pricing Agreement and since the
respective dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement, there shall have been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the business, financial condition, shareholders' equity or
results of operations of the Trust or of the Company and its subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, the
effect of which is, in the reasonable judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Preferred Securities on the terms
and in the manner contemplated in the Prospectus;
(i) On or after the date of the Pricing Agreement, no downgrading
shall have occurred in the rating accorded the Preferred Securities or any of
the Company's long-term debt securities or preferred stock by either ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Ratings Services;
(j) On or after the date of the Pricing Agreement, there shall not
have occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or any other
exchange on which application shall have been made to list the Preferred
Securities; (ii) a suspension or material limitation in trading in the
Preferred Securities or any of the Company's securities on the New York Stock
Exchange or any other national securities exchange; (iii) a general moratorium
on commercial banking activities in New York declared by either Federal or New
York State authorities; or (iv) an outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
subsection 5(i), in the reasonable judgment of the Representatives, makes it
impracticable to proceed with the public offering or the delivery of the
Initial Preferred Securities or the Option Preferred Securities, if any, or
both on the terms and in the manner contemplated in the Prospectus;
(k) The Amended Declaration, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(l) The Trust and the Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery, a certificate or
certificates of the Trust and the Company satisfactory to the Representatives,
signed by the administrative
-27-
28
trustees of the Trust and the Chairman, the Vice Chairman, the President or a
Vice President of the Company, as the case may be, as to the accuracy of the
representations and warranties of the Trust and the Company herein at and as of
such Time of Delivery, as to the performance by the Trust and the Company of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in the first two clauses of
subsection 5(a) and in subsection 5(h) and as to such other matters as the
Representatives may reasonably request; and
(m) If the Pricing Supplement specifies that the Preferred
Securities are to be listed on a securities exchange, the Preferred Securities,
at each Time of Delivery, shall have been duly listed, subject to notice of
issuance, on such securities exchange.
Section 6. Indemnification.
(a) The Trust and the Company, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, as incurred, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, preparing for or defending against any
such action or claim, commenced or threatened; provided, however, that
neither the Trust nor the Company shall be liable in any such case to
the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives expressly for use therein; and
provided, further, that neither the Trust nor the Company shall be
liable to any Underwriter under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus to the
extent that any such loss, claim, damage or liability of such
Underwriter results from the fact that such Underwriter sold Preferred
Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the
Prospectus as then amended or supplemented (excluding documents
incorporated by
-28-
29
reference therein) in any case where such delivery is required by the
Act if the Trust or the Company has previously furnished copies
thereof to such Underwriter and the loss, claim, damage or liability
of such Underwriter results from an untrue statement or omission or
alleged untrue statement or omission of a material fact contained in
the Preliminary Prospectus which was corrected in the Prospectus (or
the Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold harmless the
Trust and the Company against any losses, claims, damages or
liabilities, as incurred, to which the Trust or the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, or any such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Trust and
the Company by or on behalf of such Underwriter through the
Representatives expressly for use therein, and will reimburse the
Trust and the Company for any legal or other expenses reasonably
incurred by the Trust or the Company in connection with investigating,
preparing for or defending against any such action or claim, commenced
or threatened.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement or threat of
any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under such
subsection, notify such indemnifying party in writing of the
commencement or threat thereof; but the omission so to notify such
indemnifying party shall not relieve it from any liability which it
may have to any indemnified party otherwise than under such
subsection. In case any such action shall be commenced or threatened
against any indemnified party and it shall notify the indemnifying
party of the commencement or threat thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish and so elect within a reasonable time after receipt of such
notification, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
-29-
30
indemnified party, be counsel to the indemnifying party and it being
understood that the indemnifying party shall not, in connection with
any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (provided that local counsel
may be retained to the extent necessary) for all such indemnified
parties (treating the indemnified party and the persons referred to in
subsection (e) below to which the provisions of this Section 6 shall
extend as a single indemnified party for such purpose)), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include any statement as to, or
an admission of, fault, culpability or a failure to act, by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 6
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Trust and the Company on the one hand and the
Underwriters on the other hand from the offering of the Preferred
Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection
(c) above or is not entitled to receive the indemnification provided
for in subsection (a) above because of the second proviso thereof,
then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but
-30-
31
also the relative fault of the Trust and the Company on the one hand
and the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Trust and the Company on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total
net proceeds from such offering (before deducting expenses) received
by the Trust bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Trust and the Company on the one hand or the Underwriters on the
other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission, including, with respect to any Underwriter, the extent to
which such losses, claims, damages or liabilities (or actions in
respect thereof) with respect to any Preliminary Prospectus result
from the fact that such Underwriter sold Preferred Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference) in any
case where such delivery is required by the Act, if either the Trust
or the Company has previously furnished copies thereof to such
Underwriter and the loss, claim, damage or liability results from an
untrue statement or omission or alleged untrue statement or omission
of a material fact contained in the Preliminary Prospectus which was
corrected in the Prospectus (or the Prospectus as amended or
supplemented). The Trust, the Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing for or defending
against any such action or claim. Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which
the Preferred Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to
-31-
32
pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent is representation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to the Preferred
Securities and not joint.
(e) The obligations of the Trust and the Company under
this Section 6 shall be in addition to any liability which the Trust
and the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any
liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer,
trustee and director of the Trust and of the Company, as the case may
be, and to each person, if any, who controls the Trust or the Company
within the meaning of the Act.
Section 7. Default of Underwriters.
(a) If any Underwriter shall default in its obligation to
purchase the Initial Preferred Securities or Option Preferred
Securities which it has agreed to purchase under the Pricing
Agreement, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Initial
Preferred Securities or Option Preferred Securities on the terms
contained herein. If within thirty-six hours after such default by
any Underwriter the Representatives do not arrange for the purchase of
such Initial Preferred Securities or Option Preferred Securities, as
the case may be, then the Trust and the Company shall be entitled to a
further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase
such Initial Preferred Securities or Option Preferred Securities on
such terms. In the event that, within the respective prescribed
periods, the Representatives notify the Trust and the Company that
they have so arranged for the purchase of such Initial Preferred
Securities or Option Preferred Securities, as the case may be, or the
Trust and the Company notify the Representatives that they have so
arranged for the purchase of such Initial Preferred Securities or
Option Preferred Securities, as the case may be, the Representatives
or the Trust and the Company shall have the right to postpone the
applicable Time of Delivery for such Initial Preferred Securities or
Option Preferred Securities for a period of not more than seven days,
in order to effect whatever changes may thereby be made
-32-
33
necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Trust and the Company agree
to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter"
as used in this Agreement and the Pricing Agreement shall include any
person substituted under this Section with like effect as if such
person had originally been a party to the Pricing Agreement.
(b) If, after giving effect to any arrangements for the
purchase of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Company as
provided in subsection (a) above, the aggregate number of such Initial
Preferred Securities or Option Preferred Securities which remains
unpurchased does not exceed ten percent of the aggregate number of the
Initial Preferred Securities or Option Preferred Securities, as the
case may be, to be purchased at the respective Time of Delivery, then
the Trust and the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Initial Preferred
Securities or Option Preferred Securities, as the case may be, which
such Underwriter agreed to purchase under the Pricing Agreement and,
in addition, to require each non-defaulting Underwriter to purchase
its pro rata share (based on the number of the Initial Preferred
Securities or Option Preferred Securities, as the case may be, which
such Underwriter agreed to purchase under the Pricing Agreement) of
the Initial Preferred Securities or Option Preferred Securities, as
the case may be, of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Company as
provided in subsection (a) above, the aggregate number of Initial
Preferred Securities or Option Preferred Securities, as the case may
be, which remains unpurchased exceeds ten percent of the aggregate
number of the Initial Preferred Securities or Option Preferred
Securities, as the case may be, to be purchased at the respective Time
of Delivery, as determined as set forth in subsection (b) above, or if
the Trust and the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to
purchase Initial Preferred Securities or Option Preferred Securities,
as the case may be, of a defaulting Underwriter or Underwriters, then
the Pricing Agreement shall thereupon terminate, without liability on
the
-33-
34
part of any non-defaulting Underwriter or the Trust or the Company,
except for the expenses to be borne by the Trust, the Company and the
Underwriters as provided in Section 4 hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Trust and the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust
or the Company, or any officer, trustee or director or controlling person of
the Trust or the Company, and shall survive delivery of and payment for the
Preferred Securities. If the Pricing Agreement shall be terminated pursuant to
Section 7 hereof, neither the Trust nor the Company shall then be under any
liability to any Underwriter except as provided in Section 4 and Section 6
hereof; but, if for any other reason Preferred Securities are not delivered by
or on behalf of the Trust as provided herein, the Trust and the Company,
jointly and severally, will reimburse the Underwriters through the
Representatives for all reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Preferred Securities
not so delivered, but the Trust and the Company shall then be under no further
liability to any Underwriter with respect to such Preferred Securities except
as provided in Section 4 and Section 6 hereof.
Section 9. Parties and Notices.
(a) In all dealings hereunder, the Representatives shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such Representatives jointly or by such of the
Representatives, if any, as may be designated for such purpose in the Pricing
Agreement; and
(b) All statements, requests, notices and agreements hereunder
shall be in writing, or by telegram or facsimile transmission if promptly
confirmed in writing, and if to the Underwriters shall be sufficient in all
respects if delivered or sent by registered mail to the Representatives, as
such, at the address of the Representatives designated for such purpose as set
forth in the Pricing Agreement; and if to the Trust or the Company shall be
sufficient in all respects if delivered or sent by registered mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however,
-34-
35
that any notice to an Underwriter pursuant to Section 6(c) hereof shall be
delivered or sent by registered mail to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Trust and the Company by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
Section 10. Successors. This Agreement and the Pricing Agreement
shall be binding upon, and inure solely to the benefit of, the Underwriters,
the Trust, the Company and, to the extent provided in Section 6 and Section 8
hereof, the officers, trustees and directors of the Trust and the Company and
each person who controls the Trust, the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or the Pricing Agreement. No purchaser of any of the Preferred
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
Section 11. Governing Law. This Agreement and the Pricing Agreement
shall be governed by, and construed in accordance with, the laws of the State
of New York applicable to agreements made and to be performed in such State.
Section 12. Time of the Essence. Time shall be of the essence of the
Pricing Agreement.
Section 13. Counterparts. The Pricing Agreement may be executed by
any one or more of the parties thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
-35-
36
ANNEX I
PRICING AGREEMENT
[Name of Representative]
[Name(s) of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o [Name of Representative]
[Representative's Address]
, 19..
Ladies and Gentlemen:
American General Capital [ ], a statutory business trust created under
the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as depositor of the Trust and as guarantor
(the "Company"), propose, subject to the terms and conditions stated herein and
in the Underwriting Agreement filed as an exhibit to the registration statement
filed by the Trust and the Company on Form S-3 (Nos. 333-40583, ▇▇▇-▇▇▇▇▇-▇▇,
333- 40583-02, ▇▇▇-▇▇▇▇▇-▇▇ and 333-40583-04) and attached hereto (the
"Underwriting Agreement"), to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Preferred Securities specified in
Schedule II hereto, consisting of the Initial Preferred Securities and any
Option Preferred Securities granted to the Underwriters which the Underwriters
elect to purchase.
If so specified in Schedule II hereto, the Preferred Securities are
exchangeable into Junior Subordinated Debentures of the Company or other
property or securities specified in Schedule II hereto. The Preferred
Securities will be guaranteed by the Company on a limited basis as to the
payment of Distributions and as to payments on liquidation or redemption (the
"Guarantee").
Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Pricing Agreement to the same extent as if such provisions had been set forth
in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 1 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented with respect to the Preferred Securities. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be
-1-
37
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters pursuant to Section 9 of the Underwriting Agreement and the
address of the Representatives referred to in such Section 9 are set forth in
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Preferred Securities, in the
form heretofore delivered to you, is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Trust, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Initial Preferred Securities set forth opposite the name
of such Underwriter in Schedule I hereto and, (b) in the event and to the
extent that the Underwriters shall exercise the option, if any, to purchase
Option Preferred Securities, as provided below, the Trust agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust at the purchase price to
the Underwriters set forth in Schedule II hereto that portion of the number of
Option Preferred Securities as to which such option shall have been exercised.
If so specified in Schedule II, the Trust hereby grants to each of the
Underwriters the right to purchase at their option up to the number of Option
Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto on the terms referred to in the preceding paragraph for the
sole purpose of covering over-allotments, if any, in the sale of the Initial
Preferred Securities. Any such option to purchase Option Preferred Securities
may be exercised by written notice from the Representatives to the Trust given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Option Preferred Securities to be
purchased and the date on which such Option Preferred Securities are to be
delivered, as determined by the Representatives, but in no event earlier than
the First Time of Delivery or, unless the Representatives and the Trust
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
-2-
38
If the foregoing is in accordance with your understanding, please sign
and return to us one counterpart hereof for the Trust and one for the Company,
one for each of the Representatives and one for each counsel, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter
and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement between each of the Underwriters and the Trust and the Company. It
is understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the Trust
and the Company for examination, upon request, but without warranty on the part
of the Representatives as to the authority of the signers thereof.
Very truly yours,
American General Capital [ ],
By: American General Corporation,
as depositor
By:
-------------------------------
Name:
Title:
American General Corporation
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of Representative]
[Name(s) of Co-Representative(s)]
By:
--------------------------------
[Name:
Title:
Name of Representative Partnership]
On behalf of each of the Underwriters
-3-
39
SCHEDULE I
[MAXIMUM NUMBER
NUMBER OF OF OPTION
INITIAL PREFERRED PREFERRED
SECURITIES TO BE SECURITIES WHICH
UNDERWRITER PURCHASED MAY BE
PURCHASED
[Name of Representative] . . . . . . . . . . . . . . . . . .
[Name(s) of Co-Representative(s)] . . . . . . . . . . . . . .
[Names of other Underwriters] . . . . . . . . . . . . . . . .
------------------ --------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]
================== ====================
-4-
40
SCHEDULE II
Title of Preferred Securities:
Filing Date:
[Time and date Prospectus Supplement and/or Term Sheet to be filed pursuant to
Rule 424 (b)]
Number of Preferred Securities:
Number of Initial Preferred Securities:
Maximum Number of Option Preferred Securities, if any:
Distribution Payments: [Monthly, Quarterly Semi-Annually, Other], on the
____ day of [the month] [____, ____, ____ and ____ in
each year] [____ and ____ in each year], commencing
..............., 19..., [at an annual rate of .....%
of the liquidation preference per share]
Record Dates:
Liquidation Preference: $........ per share, plus accumulated and unpaid
Distributions to the date of payment
Exchange Provisions:
Redemption Provisions:
Initial Offering Price to Public: $........ per Preferred Security
Purchase Price by Underwriters: $........ per Preferred Security
Underwriters' Compensation: $........ per Preferred Security
Method of and Specified Funds for Payment of Purchase Price and Underwriters'
Compensation:
By wire transfer to bank accounts specified by the Trust and the
Representative in same day funds
Form of Preferred Securities:
Book-entry-only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to each Time of Delivery at the office
of DTC.
[Securities Exchange: [NYSE]]
Time of Delivery: ........ a.m. (New York City time), ................., 19..
Closing Location: Brown & Wood LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
-5-
41
[Other Terms]:
Title of Junior Subordinated Debentures:
Aggregate Principal Amount:
Interest Payments: [Monthly, Quarterly Semi-Annually, Other], on the
____ day of [the month] [____, ____, ____ and ____ in
each year] [____ and ____ in each year], commencing
..............., 19..., [at an annual rate of .....%]
Record Dates:
Maturity Date:
Redemption Provisions:
Sinking Fund Provisions:
Extension Provisions:
* A DESCRIPTION OF PARTICULAR TAX, ACCOUNTING OR OTHER UNUSUAL
FEATURES OF THE PREFERRED SECURITIES AND THE JUNIOR SUBORDINATED DEBENTURES
SHOULD BE SET FORTH, OR REFERENCED TO AN ATTACHED AND ACCOMPANYING DESCRIPTION,
IF NECESSARY TO THE TRUST'S AND THE COMPANY'S UNDERSTANDING OF THE TRANSACTION
CONTEMPLATED. SUCH A DESCRIPTION MIGHT APPROPRIATELY BE IN THE FORM IN WHICH
SUCH FEATURES WILL BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT FOR THE OFFERING.
-6-
42
ANNEX II
Pursuant to subsection 5(f) of the Underwriting Agreement, the
Underwriters shall have received from the independent certified public
accountants who have audited the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement and Prospectus, one or more letters, dated as of each Time of
Delivery, each of which shall be to the effect that they are independent
auditors with respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder and which, when read
together, shall be to the further effect that:
(i) In their opinion, the consolidated financial statements
audited by them and included or incorporated by reference in the
Registration Statement and Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations thereunder;
(ii) On the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included or incorporated by reference in the
Registration Statement and Prospectus, a reading of any other
unaudited financial statement data included or incorporated by
reference in the Registration Statement and Prospectus, a reading of
the latest available interim unaudited financial statements of the
Company and its subsidiaries ("Interim Financials"), if any, a reading
of any unaudited pro forma financial statements included or
incorporated by reference in the Registration Statement and Prospectus
and a reading of the minutes of the Company's shareholder's meetings,
the meetings of the Board of Directors, the Executive Committee of the
Board of Directors, the Audit Committee of the Board of Directors and
the Terms Committee of the Board of Directors since the end of the
most recent fiscal year with respect to which an audit report has been
issued and inquiries of and discussions with certain officials of the
Company who have responsibility for financial and accounting matters
with respect to the unaudited financial statements and any other
unaudited financial statement data included or incorporated by
reference in the Registration Statement and Prospectus, any Interim
Financials, and any unaudited pro forma financial statements included
or incorporated by reference in the Registration Statement and
Prospectus, and as to whether (1) as of a specified date not more than
three days prior to the date of the letter, there was any change in
the consolidated capital stock (other than issuances of capital stock
upon the exercise of options or for purposes of employee compensation
plans, upon earn-outs of performance shares, upon conversions of
convertible securities and upon the exercise of put options, in each
case which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in consolidated long-term debt of the Company and its
subsidiaries (except for increases due to accretion of discount on
original issue discount securities, if any) or any decrease in the
consolidated net assets of the Company and its subsidiaries (before
considering the effect of unrealized gains and losses on debt and
equity securities classified as "available-for-sale" under Statement
of Financial Accounting Standards (SFAS) No. 115) as compared with the
amounts shown on the most recent consolidated balance sheet of the
Company and its subsidiaries included or incorporated by reference in
the Registration Statement and Prospectus (the "Recent Balance Sheet")
or (2) during the period, if any, from the date of the Recent Balance
Sheet to the date of the most recent balance sheet included in the
Interim Financials (the "Interim Period") there was any decrease, as
compared with the corresponding period in the preceding year, in
consolidated total revenues or in consolidated net income of the
Company and its subsidiaries, or (3) during the period from the date
of the Interim Financials or, if there are no Interim Financials, from
the date of the Recent Balance Sheet to a specified date not more than
three days prior to the date of the letter
43
there was any decrease, as compared with the corresponding period in
the preceding year, in consolidated total revenues or in consolidated
net income of the Company and its subsidiaries, which reading,
inquiries and discussions would not necessarily reveal changes in the
financial position or results of operations or inconsistencies in the
application of generally accepted accounting principles or other
matters of significance with respect to the following, nothing came to
their attention that caused them to believe that (A) any material
modifications should be made to the unaudited financial statements of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and Prospectus for them to be in
conformity with generally accepted accounting principles or that such
unaudited financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations
thereunder, (B) the Interim Financials, if any, are not stated on a
basis substantially consistent with that of the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement and Prospectus, (C) any other unaudited
financial statement data included or incorporated by reference in the
Registration Statement and Prospectus do not agree with the
corresponding items in the unaudited financial statements from which
such data were derived or any such unaudited financial statement data
were not determined on a basis substantially consistent with the
corresponding amounts in the audited financial statements included or
incorporated by reference in the Registration Statement and
Prospectus, (D) any unaudited pro forma financial statements included
or incorporated by reference in the Registration Statement and
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements, (E)(1) as
of the date of the Interim Financials, if any, and as of a specified
date not more than three days prior to the date of the letter, there
was any change in the consolidated capital stock (other than issuances
of capital stock upon the exercise of options or for purposes of
employee compensation plans, upon earn-outs of performance shares,
upon conversions of convertible securities and upon the exercise of
put options, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in consolidated long-term debt of the
Company and its subsidiaries (except for increases due to accretion of
discount on original issue discount securities, if any) or any
decrease in the consolidated net assets of the Company and its
subsidiaries (before considering the effect of unrealized gains and
losses on debt and equity securities classified as "available-for
sale" under Statement of Financial Accounting Standards (SFAS) No.
115) as compared with the amounts shown on the Recent Balance Sheet or
(2) during any Interim Period, there was any decrease, as compared
with the corresponding period in the preceding year, in consolidated
total revenues or in consolidated net income of the Company and its
subsidiaries, or (3) during the period from the date of the Interim
Financials or, if there are no Interim Financials, from the date of
the Recent Balance Sheet to a specified date not more than three days
prior to the date of the letter there was any decrease, as compared
with the corresponding period in the preceding year, in consolidated
total revenues or in consolidated net income of the Company and its
subsidiaries except in each such case for (1), (2) and (3) as set
forth in or contemplated by the Registration Statement and Prospectus
or except for such exceptions as may be enumerated in such letter; and
(iii) In addition to the limited procedures referred to in clause
(ii) above, they have carried out certain other specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information which are derived from the
general financial and accounting records of the Company and its
subsidiaries, which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by the
Representatives and have compared such amounts, percentages and
financial information with the financial and accounting records of the
Company and its subsidiaries and have found them to be in agreement.
-2-