EXHIBIT 1(b)
AMERICAN GENERAL FINANCE CORPORATION
Medium-Term Notes, Series D
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
February 13, 1995
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
LEHMAN BROTHERS
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
SMITH BARNEY INC.
1345 Avenue of the Americas
46th Floor
New York, New York 10105
Dear Sirs:
AMERICAN GENERAL FINANCE CORPORATION, an Indiana corporation (the
"Company"), confirms its agreement with CS First Boston Corporation; Lehman
Brothers, Lehman Brothers Inc. (including its affiliate Lehman Government
Securities Inc.); Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated; and Smith Barney Inc. (each an "Agent" and together the
"Agents") with respect to the issue and sale by the Company of its Medium-Term
Notes, Series D described herein (the "Notes"). The Notes are to be issued
pursuant to an Indenture, dated as of October 1, 1994 (the "Indenture"),
between the Company and The Chase Manhattan Bank (National Association) (the
"Trustee"). As of the date hereof, the Company has authorized the issuance
and sale of up to $500,000,000 aggregate principal amount of Notes pursuant to
the terms of this Agreement or a Distribution Agreement dated February 13,
1995 (the "Affiliated Agent Distribution Agreement") between the Company and
AGF Investment Corp. ("AGFIC"), an affiliate of the Company registered with
the Securities and Exchange Commission (the "Commission") as a broker-dealer
pursuant to Section 15(b) of the Securities Exchange Act of 1934 (the "1934
Act"). It is understood, however, that the Company may from time to time
authorize the issuance of additional Notes and that such additional Notes may
be sold through or to the Agents pursuant to the terms of this Agreement or
through AGFIC pursuant to the Affiliated Agent Distribution Agreement, all as
though the issuance of such Notes were authorized as of the date hereof.
The Company has filed with the Commission a registration statement on
Form S-3 (Registration No. 33-55803) for the registration of debt securities,
including the Notes, and warrants to purchase debt securities under the
Securities Act of 1933 (the "1933 Act") and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such registration
statement has been declared effective by the Commission and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement (and any further registration statements
which may be filed by the Company for the purpose of registering additional
Notes and in connection with which this Agreement is included or incorporated
by reference as an exhibit) and the prospectus constituting a part thereof,
together with any prospectus supplements or pricing supplements relating to
the Notes, including all documents incorporated therein by reference, as from
time to time amended or supplemented by the filing of documents pursuant to
the 1934 Act or the 1933 Act or otherwise, are referred to herein as the
"Registration Statement" and the "Prospectus", respectively, except that if
any revised prospectus shall be provided to the Agents by the Company for use
in connection with the offering of the Notes which is not required to be filed
by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Agents for such use. The term "Prospectus" shall
not, however, include any prospectus supplement which relates solely to an
offering of debt securities of the Company other than the Notes.
SECTION 1. Appointment as Agent.
(a) Appointment of Agent; Purchases as Principal. Subject to the terms
and conditions stated herein and subject to the reservation by the Company of
the right to sell Notes directly on its own behalf and through or to other
dealers or agents (including, without limitation, AGFIC), the Company hereby
(i) appoints each Agent as a nonexclusive agent for the purpose of soliciting
purchases of the Notes from the Company by others and (ii) agrees that
whenever the Company determines to sell Notes directly to one or more of the
Agents as principal for resale to others, it will enter into a Terms Agreement
(hereafter defined) relating to such sale in accordance with the provisions of
Section 3(b) hereof; provided, however, that no Agent will have any obligation
under this Section 1 to purchase Notes from the Company as principal; and
provided further, that any sales of Notes through or to other dealers or
agents that are not affiliates of the Company will be made substantially in
accordance with the terms of this Agreement.
(b) Reasonable Best Efforts Solicitations; Right to Reject Offers. Upon
receipt of instructions from the Company, each Agent will use its reasonable
best efforts to solicit offers to purchase such principal amount of the Notes
as the Company and such Agent shall agree upon from time to time during the
term of this Agreement, it being understood that the Company shall not approve
the solicitation of offers to purchase Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
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principal amount of the Notes registered pursuant to the Registration
Statement. The Agents will have no responsibility for maintaining records
with respect to the aggregate principal amount of Notes sold or of otherwise
monitoring the availability of Notes for sale under the Registration
Statement. Each Agent will communicate to the Company, orally or in writing,
each offer to purchase Notes, other than those offers rejected by such Agent.
Each Agent shall have the right, in its reasonably exercised discretion, to
reject any proposed purchase of Notes, as a whole or in part, and any such
rejection shall not be deemed a breach of that Agent's agreement contained
herein. The Company may accept or reject any proposed purchase of the Notes,
in whole or in part. Each Agent shall make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase
Notes has been solicited by such Agent and accepted by the Company, but such
Agent shall not have any liability to the Company in the event any such
purchase is not consummated for any reason.
(c) Reliance. The Company and the Agents agree that any Notes the
placement of which the Agents arrange shall be placed by the Agents, and any
Notes purchased by the Agents shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether through an Agent as agent or to an Agent as
principal), as of the date of each delivery of Notes (whether through an Agent
as agent or to an Agent as principal) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of the times referred to in Section 7(b) hereof, as follows:
(i) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation under the laws of
the State of Indiana 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 to so 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.
(ii) Subsidiaries. Each of the Company's 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
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the business of the Company and its subsidiaries taken as a whole; and
all of the outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable, and (except for directors' qualifying shares) are
owned, directly or indirectly, by the Company, free and clear of all
liens and encumbrances; and the Company and each of its 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 commission 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 its
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.
(iii) Registration Statement and Prospectus. At the time the
Registration Statement became effective, the Registration Statement and
the Indenture complied, and as of the applicable representation date
referred to in Section 2(a) hereof will comply, in all material respects
with the applicable requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission promulgated thereunder. The Registration Statement, at the
time it became effective, did not, and at each time thereafter at which
any amendment to the Registration Statement becomes effective and any
Annual Report on Form 10-K is filed by the Company with the Commission
and as of each applicable representation date referred to in Section 2(a)
hereof, 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. The Prospectus, as of the
date hereof does not, and as of each representation date referred to in
Section 2(a) hereof will not, include an untrue statement of a material
fact or omit 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; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by any Agent expressly for use in the Registration Statement or
Prospectus or to that part of the Registration Statement which
constitutes the Trustee's Statement of Eligibility and Qualification
under the 1939 Act (Form T-1).
(iv) Incorporated Documents. The documents incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied or when so filed will comply in all
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material respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the Prospectus, did
not and 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 Company by any Agent expressly for use in the
Prospectus or such documents.
(v) Financial Statements. The financial statements (including the
notes thereto) and any supporting schedules of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as at
the dates indicated and the consolidated results of their operations for
the periods specified; and, except as stated therein, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
(vi) Authorization and Validity of this Agreement, the Indenture and
the Notes. This Agreement has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by each Agent,
will be a valid and legally binding agreement of the Company; the
Indenture has been duly qualified under the 1939 Act, has been duly
authorized, executed and delivered by the Company and constitutes a valid
and legally binding instrument of the Company enforceable against the
Company in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws of general applicability
relating to or affecting enforcement of creditors' rights or by general
equity principles; the Notes have been duly authorized by all necessary
action by the Board of Directors, and by the Terms and Pricing Committee
of the Board of Directors, of the Company, and, when the variable terms
of the Notes have been established by any two of the authorized officers
to whom such authority has been delegated and the same have been
executed, authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the consideration therefor
specified in the Prospectus or pursuant to any Terms Agreement
(hereinafter defined), the Notes will constitute valid and legally
binding obligations of the Company enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws of general applicability relating to or
affecting enforcement of creditors' rights or by general equity
principles, and will be entitled to the benefits of the Indenture; and
the Notes and the Indenture will be substantially in the forms heretofore
delivered to each Agent and conform in all material respects to all
statements relating thereto contained in the Prospectus.
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(vii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statement and Prospectus, except as may otherwise be stated therein or
contemplated thereby, (a) there has been no material adverse change nor
any development or event involving a prospective material adverse change
in the business, financial condition or results of operations of the
Company and its subsidiaries considered as a whole, whether or not
arising in the ordinary course of business; and (b) there have not been
any transactions entered into by the Company or any of its subsidiaries,
other than transactions in the ordinary course of business or
transactions which are not material in relation to the Company and its
subsidiaries taken as a whole.
(viii) No Defaults; Regulatory Approvals. Neither the Company nor any
of its subsidiaries is in violation of its articles of incorporation,
charter or By-laws or in default in the performance or observance of any
contractual obligation, the violation of or default under which has or
will have a material adverse effect on the business of the Company and
its subsidiaries taken as a whole; and the execution and delivery of this
Agreement and the Indenture and the consummation of the transactions
contemplated herein, therein and pursuant to any applicable Terms
Agreement have been duly authorized by all necessary corporate action and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which any of
the property or assets of the Company or any such subsidiary is subject,
nor will such action result in any violation of the provisions of the
Restated Articles of Incorporation, as amended, or the Amended and
Restated By-Laws of the Company or, to the best knowledge of the Company,
any law, administrative regulation or administrative or court order or
decree.
(ix) Legal Proceedings; Contracts. Except as may be set forth in
the Registration Statement and Prospectus, there are no legal or
governmental proceedings pending or to the best of the Company's
knowledge, threatened to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is subject, which individually or in the aggregate, are
expected to have a material adverse effect on the business, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole, or might materially and adversely affect the properties
or assets thereof, or might materially and adversely affect the
consummation of this Agreement; and there are no contracts or documents
of the Company or any of its subsidiaries which are required to be filed
as exhibits to the Registration Statement by the 1933 Act or by the 1933
Act Regulations which have not been so filed.
(x) No Authorization, Approval or Consent Required. No
authorization, approval or consent of any court or governmental authority
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or agency is necessary in connection with the sale of the Notes
hereunder, except such as may be required under the 1933 Act or the 1933
Act Regulations or state securities or "Blue Sky" or insurance laws.
(xi) Investment Company Act of 1940 Not Applicable. The Company is
not an "investment company" or a "company controlled by an `investment
company'" within the meaning of the Investment Company Act of 1940, as
amended.
(xii) The Company is in compliance with all provisions of Section
517.075 of the Florida Statutes, and if the Company commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date hereof, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or
with any person or affiliate located in Cuba changes in any material way,
the Company will provide the Florida Department of Banking and Finance
notice of such business or change, as appropriate, in a form acceptable
to such Department.
(b) Additional Certifications. Any certificate signed by any officer of
the Company and delivered to the Agents or to counsel for the Agents in
connection with the solicitation of offers to purchase Notes or the sale of
Notes to an Agent or Agents pursuant to a Terms Agreement shall be deemed a
representation and warranty by the Company to each Agent or to the Agent or
Agents who have entered into such Terms Agreement, as the case may be, as to
the matters covered thereby on the date of such certificate and at each
representation date referred to in Section 2(a) hereof subsequent thereto.
SECTION 3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, each Agent individually agrees, as an agent of the Company, to use
its reasonable best efforts to solicit offers to purchase the Notes upon the
terms and conditions set forth herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agents,
commencing at any time for any period of time or permanently. Upon receipt of
instructions from the Company, each Agent will forthwith suspend solicitation
of offers to purchase the Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent, as consideration for the sale of
each Note resulting from a solicitation made or an offer to purchase received
by it, a commission in the form of a discount from the purchase price of such
Note in an amount and manner to be agreed to by the Company and such Agent,
which amount may not exceed the percentage of the principal amount of such
Note as set forth in Exhibit A hereto.
The purchase price, interest rate or interest rate basis or formula,
maturity date and other terms with respect to specific Notes shall be agreed
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upon by the Company and the applicable Agent and set forth in a pricing
supplement to the Prospectus (a "Pricing Supplement") to be prepared following
each acceptance by the Company of an offer for the purchase of Notes. Except
as may be otherwise provided in such Pricing Supplement, the Notes will be
issued in denominations of $1,000 and integral multiples thereof. All Notes
sold through an Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to one or more Agents as
principal shall be made in accordance with the terms contained herein and
(unless the Company and the applicable Agent or Agents shall otherwise agree)
pursuant to a separate agreement which will provide for the sale of such Notes
to, and the purchase and reoffering thereof by, such Agent or Agents. Each
such separate agreement (which may be an oral agreement and confirmed in
writing) is herein referred to as a "Terms Agreement". Unless the context
otherwise requires, each reference contained herein to "this Agreement" shall
be deemed to include any applicable Terms Agreement between the Company and
one or more Agents. Each such Terms Agreement, whether oral (and confirmed in
writing, which may be by facsimile transmission) or in writing, shall be with
respect to such information (as applicable) as is specified in Exhibit B
hereto. Any Agent's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth, except as may be
provided in such Terms Agreement. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by the Agent or Agents pursuant
thereto, the price to be paid to the Company for such Notes, the time and
place of delivery of and payment for such Notes and such other provisions
(including further terms of the Notes) as may be mutually agreed upon. Each
Agent is authorized to engage the services of any broker or dealer in
connection with the resale of the Notes purchased pursuant to any such Terms
Agreement and may reallow to any broker or dealer a portion of the discount or
commission payable pursuant hereto. Such Terms Agreement shall also specify
the requirements for the officer's certificate, opinions of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof, respectively,
and with respect to any stand-off agreement pursuant to Section 4(k) hereof,
and with respect to any opinions pursuant to Section 5(d) hereof.
(c) Administrative Procedures. Administrative Procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agents and
the Company (the "Procedures"). The Agents and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify each Agent
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the Commission for filing of any
supplement to the Prospectus (excluding, however, any Pricing Supplement or
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any prospectus supplement which relates solely to any offering of debt
securities other than the Notes) or any document to be filed pursuant to the
1934 Act which will be incorporated by reference in the Prospectus, (iii) of
the receipt of any comments from the Commission with respect to the
Registration Statement or the Prospectus, including any documents incorporated
therein by reference, (iv) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment. In addition, the Company will notify each Agent if the rating
assigned to any long-term debt securities of the Company by any nationally
recognized statistical rating agency shall have been lowered or if any such
rating agency shall have informed the Company or publicly announced that it
has placed any debt securities of the Company on what is commonly termed a
"watch list" for possible downgrading.
(b) Notice of Certain Proposed Filings. The Company will give each
Agent notice of its intention to file or prepare any additional registration
statements with respect to the registration of additional Notes, any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
(other than a Pricing Supplement or any amendment or supplement to the
Prospectus which relates exclusively to an offering of debt securities of the
Company other than the Notes), whether by the filing of documents pursuant to
the 1934 Act, the 1933 Act or otherwise, and will furnish each Agent with
copies of any such amendment or supplement or other documents proposed to be
filed or prepared a reasonable time in advance of such proposed filing or
preparation, as the case may be.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to each Agent as many conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as such Agent may
reasonably request. The Company will furnish to each Agent as many copies of
the Prospectus (as amended or supplemented) as such Agent shall reasonably
request so long as such Agent is required to deliver a Prospectus in
connection with sales or solicitations of offers to purchase the Notes.
(d) Preparation and Filing of Pricing Supplements. The Company will
prepare, with respect to any Notes to be sold through or to an Agent pursuant
to this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by such Agent and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the 1933 Act not later than the close of
business of the Commission on the fifth business day after the date on which
such Pricing Supplement is first used.
(e) Prospectus Revisions -- Material Changes. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which
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it is necessary, in the reasonable opinion of counsel for the Agents or
counsel for the Company, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of any of such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, immediate
notice shall be given, and confirmed in writing, to each Agent to cease the
solicitation of offers to purchase the Notes in such Agent's capacity as agent
and to cease sales of any Notes such Agent may then own as principal pursuant
to a Terms Agreement, and the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents pursuant
to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to any of the first
three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to each Agent, confirmed in writing, and shall cause the
Prospectus to be amended or supplemented, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference capsule financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall be necessary
for an understanding thereof or as shall be required by the 1933 Act or the
1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company
for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent auditors with respect thereto, as well as such other information
and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(h) Earnings Statement. The Company will make generally available to
its security holders as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering each
twelve month period beginning, in each case, not later than the first day of
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the Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale of
Notes.
(i) "Blue Sky" Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities and insurance laws of such states and other
jurisdictions of the United States as the Agents may designate, and will
maintain such qualifications in effect for as long as may be required for the
distribution of the Notes; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified. The
Company will file such statements and reports as may be required by the laws
of each jurisdiction in which the Notes have been qualified as above provided.
The Company will promptly advise each Agent of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Notes for sale in any such state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations.
(k) Stand-Off Agreement. If required pursuant to the terms of a Terms
Agreement, between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without the prior
consent of the Agent or Agents who have entered into such Terms Agreement,
offer or sell, or enter into any agreement to sell, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such Terms
Agreement and commercial paper in the ordinary course of business), except as
may otherwise be provided for in any such Terms Agreement.
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section during any period from the time the Agents shall have suspended
solicitation of offers to purchase the Notes in their capacity as agents
pursuant to a request from the Company to the time the Company shall determine
that solicitation of offers to purchase the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with one or more of the Agents;
provided, however, that compliance with such subsections shall be required for
any portion of such period during which one or more of the Agents shall hold,
as principal, any Notes purchased pursuant to a Terms Agreement, if so
requested by any such Agent.
SECTION 5. Conditions of Obligations.
Each Agent's obligations to solicit offers to purchase the Notes as agent
of the Company, the obligations of any purchaser of Notes sold through an
Agent as agent, and any Agent's obligations to purchase Notes pursuant to any
Terms Agreement, will be subject to the accuracy of the representations and
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warranties on the part of the Company herein contained and to the accuracy of
the statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company of all its covenants and agreements herein contained and to the
following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(1) Opinion of General Counsel of the Company. The opinion of
Gary M. Smith, Vice President, Secretary and General Counsel of the
Company (the "General Counsel"), to the effect that:
(i) Each of the subsidiaries of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement; to
the knowledge of such counsel, the Company and each of its
subsidiaries 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 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 such subsidiary have
been duly issued, are fully paid and non-assessable, and (except for
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, the Company and each of its
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 commission 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 (i) upon opinions (in form and substance
satisfactory to the Agents) of local counsel and of counsel for the
subsidiaries, such counsel being acceptable to counsel for the
Agents, copies of which shall be furnished to each Agent; and in
respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state
that he believes that he is justified in relying upon such opinions
and certificates);
(ii) There are no legal or governmental proceedings pending or
to the best knowledge of such counsel threatened of a character
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which are required to be disclosed in the Registration Statement and
Prospectus, other than as disclosed therein; to the best 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 1934 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;
(iii) Neither the Company nor any of its subsidiaries is in
violation of its articles of incorporation, charter or By-laws or in
default in the performance or observance of any contractual
obligation known to such counsel, the violation of or default under
which has or will have a material adverse effect on the business of
the Company and its subsidiaries taken as a whole. The issue and
sale of the Notes, the compliance by the Company with all of the
provisions of the Notes, the Indenture, this Agreement (and, if the
opinion is being given pursuant to Section 7(c) hereof as a result
of the Company having entered into a Terms Agreement requiring such
opinion, the applicable Terms Agreement), and the consummation of
the transactions herein and therein contemplated will not (A)
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument for money borrowed to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, or (B) result in
any violation of (x) the provisions of the Restated Articles of
Incorporation, as amended, 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
(iii) with respect to subsidiaries upon opinions (in form and
substance satisfactory to the Agents) of counsel for the
subsidiaries, such counsel being acceptable to counsel for the
Agents, copies of which shall be furnished to each Agent, provided
that such counsel shall state that he believes that he is justified
in relying upon such opinions); and
(iv) 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 Notes or the
consummation by the Company of the other transactions contemplated
by this Agreement (and, if the opinion is being given pursuant to
Section 7(c) hereof as a result of the Company having entered into a
Terms Agreement requiring such opinion, the applicable Terms
-13-
Agreement) or the Indenture, except such as may be required under
the 1933 Act and the 1939 Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or "Blue Sky" or insurance laws.
(2) Opinion of Special Counsel to the Company. The opinion or
opinions of Baker & Daniels and/or Jon P. Newton, Esq. (who shall rely
upon opinions (in form and substance satisfactory to the Agents) of
counsel licensed to practice in Indiana (such counsel being acceptable to
the Agents) as to matters of subheadings (i)-(v) below governed by
Indiana law (copies of which shall be furnished to each Agent); provided
that he shall state that he believes that he is justified in relying upon
such opinions), special counsel to the Company (the "Special Counsel"),
to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Indiana;
(ii) The Company has the corporate power and authority to own
its properties and conduct its business as described in the
Registration Statement;
(iii) This Agreement (and, if the opinion is being given
pursuant to Section 7(c) hereof as a result of the Company having
entered into a Terms Agreement requiring such opinion, the
applicable Terms Agreement) has been duly authorized, executed and
delivered by the Company;
(iv) 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 Trustee) constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws of general applicability
relating to or affecting enforcement of creditors' rights or by
general equity principles;
(v) The form of the Notes to be issued has been authorized in
or pursuant to the Indenture, the Notes have been duly authorized by
all necessary action by the Board of Directors, and by the Terms and
Pricing Committee of the Board of Directors, of the Company and,
when the variable terms of the Notes have been established by any
two of the authorized officers to whom such authority has been
delegated and the Notes have been executed and authenticated as
specified in the Indenture and delivered against payment of the
consideration therefor determined in accordance with this Agreement
(and, if the opinion is being given pursuant to Section 7(c) hereof
as a result of the Company having entered into a Terms Agreement
requiring such opinion, in accordance with the applicable Terms
Agreement), (A) the Notes will be valid and binding obligations of
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the Company, enforceable against the Company in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws of general applicability relating to or
affecting enforcement of creditors' rights or by general equity
principles, and (B) each holder of Notes will be entitled to the
benefits of the Indenture;
(vi) The statements in the Prospectus under the captions
"Description of Notes" and "Description of Debt Securities", insofar
as they purport to summarize certain provisions of documents
specifically referred to therein, are accurate summaries of such
provisions in all material respects;
(vii) The Indenture is qualified under the 1939 Act;
(viii) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission; and
(ix) The Registration Statement (other than the financial
statements and other financial information included or incorporated
by reference therein or the Statement of Eligibility and
Qualification filed as an exhibit thereto, as to which no opinion
need be expressed), at the time it became effective (and, if the
opinion is being given pursuant to Section 7(c) hereof as a result
of the Company having entered into a Terms Agreement requiring such
opinion, as of the date of such Terms Agreement), appeared on its
face to be appropriately responsive in all material respects to the
applicable requirements of the 1933 Act, the 1939 Act and the
respective rules and regulations thereunder.
(3) Opinion of Counsel to the Agents. The opinion of Brown & Wood,
counsel to the Agents, covering the matters referred to in subparagraph
(a)(2) of this Section under the subheadings (i) and (iii) through (ix),
inclusive. In giving such opinion, Brown & Wood may rely as to matters
of Indiana law upon the opinion of Special Counsel referred to in
subparagraph (a)(2) of this Section.
(4) In giving their opinions required by subparagraphs (a)(2) and
(a)(3) of this Section, the Special Counsel and Brown & Wood shall each
additionally state that nothing has come to such counsel's attention that
would lead such counsel to believe that the Registration Statement, at
the time it became effective, or 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 the most recent such amendment became
effective or the most recent such Form 10-K was filed, as the case may be
(and, if the opinion is being given pursuant to Section 7(c) hereof as a
result of the Company having entered into a Terms Agreement requiring
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such opinion, as of the date of such Terms 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, as amended or supplemented at the
date of this Agreement (or, if the opinion is being given pursuant to
Section 7(c) hereof, as amended or supplemented at the date of such
opinion and, if being given as a result of the Company having entered
into a Terms Agreement requiring such opinion, as amended or supplemented
at the date of such Terms Agreement and the Settlement Date with respect
thereto), includes 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.
(b) Officer's Certificate. At the date hereof (and at each Settlement
Date if called for under any Terms Agreement), each Agent shall have received
a certificate signed by the Chairman, the President or a Vice President of the
Company, dated as of the date hereof (or such Settlement Date), to the effect
that (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus or since the date of such Terms
Agreement, as applicable, there has not been any material adverse change nor
any development or event involving a prospective material adverse change in
the business, financial condition, or results of operations of the Company and
its subsidiaries considered as whole, whether or not arising in the ordinary
course of business; (ii) the other representations and warranties of the
Company contained in Section 2 hereof are true and correct with the same force
and effect as though expressly made at and as of the date of such certificate;
(iii) the Company has performed or complied with all agreements and satisfied
all conditions on its part to be performed or satisfied pursuant to this
Agreement at or prior to the date of such certificate; and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission.
(c) Comfort Letter. On the date hereof and at each Settlement Date with
respect to any Terms Agreement if called for by such Terms Agreement, the
independent auditors who have audited the financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registration
Statement shall have furnished to the Agents a letter or letters dated as of
the date hereof or such Settlement Date, as the case may be, in form and
substance reasonably satisfactory to the Agents, to the effect set forth in
Exhibit C hereto.
(d) Other Documents. On the date hereof and at each Settlement Date
with respect to any applicable Terms Agreement if called for by such Terms
Agreement, counsel to the Agents shall have been furnished with such documents
and opinions as such counsel may reasonably require for the purpose of
enabling such counsel to pass upon the issuance and sale of the Notes as
herein contemplated and the related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Notes as
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herein contemplated shall be satisfactory in form and substance to the Agents
and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, at the
option of the applicable Agent or Agents, any Terms Agreement, may be
terminated by any Agent party hereto or the Agent or Agents party to such
Terms Agreement by notice to the Company at any time and any such termination
shall be without liability of any party to any other party, except that the
covenant regarding provision of an earnings statement set forth in Section
4(h) hereof, the provisions concerning payment of expenses under Section 10
hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, the provisions concerning the representations, warranties and
agreements to survive delivery in Section 11 hereof, and the provisions set
forth under "Governing Law" in Section 14 hereof and the provisions set forth
under "Parties" in Section 15 hereof shall remain in effect; provided,
however, that an Agent's termination of this Agreement shall terminate this
Agreement only as between such Agent and the Company.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the respective Agent shall promptly notify the Company
and deliver the Note to the Company, and, if such Agent has theretofore paid
the Company for such Note, the Company will promptly return such funds to such
Agent. If such failure occurred for any reason other than default by that
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the
funds for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with each Agent that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to an Agent as
principal or through an Agent as agent) and each delivery of Notes to an Agent
(whether to an Agent as principal or through an Agent as agent) shall be
deemed to be an affirmation that the representations and warranties of the
Company contained in this Agreement and in any certificate theretofore
delivered to the Agents pursuant hereto are true and correct at the time of
such acceptance or delivery, as the case may be, as though made at and as of
each such time (and it is understood that such representations and warranties
shall relate to the Registration Statement and Prospectus as amended and
supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by a Pricing Supplement and, unless any Agent shall otherwise
specify, other than by an amendment or supplement which relates exclusively to
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an offering of securities other than the Notes), (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than any Current Report on Form 8-K relating exclusively to the issuance of
securities under the Registration Statement or to quarterly or annual
financial results of the Company, in each case unless any Agent shall
otherwise specify), (iii) if required pursuant to the terms of a Terms
Agreement, the Company sells Notes to an Agent or Agents pursuant to a Terms
Agreement or (iv) if specifically requested by the Agent to or through whom
the Notes are issued and sold, the Company issues and sells Notes through or
to an Agent bearing interest determined by reference to an interest rate basis
or formula not described in the Prospectus in the form first filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, the Company
shall furnish or cause to be furnished to the Agents forthwith a certificate,
dated the date of filing with the Commission of such supplement or document,
the date of effectiveness of such amendment, or the date of such sale, as the
case may be, in form satisfactory to the Agents to the effect that the
statements contained in the certificate referred to in Section 5(b) hereof
which was last furnished to the Agents are true and correct at the time of
such amendment, supplement, filing or sale, as the case may be, as though made
at and as of such time (except that such statements shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented
to such time) or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in said Section 5(b), modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by a Pricing Supplement or an amendment or supplement providing
solely for the inclusion of additional financial information, and, unless any
Agent shall otherwise specify, other than by an amendment or supplement which
relates exclusively to an offering of securities other than the Notes), (ii)
there is filed with the Commission any document incorporated by reference into
the Prospectus (other than any Current Report on Form 8-K or Quarterly Report
on Form 10-Q, unless any Agent shall otherwise specify), (iii) if required
pursuant to the terms of a Terms Agreement, the Company sells Notes to an
Agent or Agents pursuant to a Terms Agreement or (iv) if specifically
requested by the Agent to or through whom the Notes are issued and sold, the
Company issues and sells Notes through or to an Agent bearing interest
determined by reference to an interest rate basis or formula not described in
the Prospectus in the form first filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations, the Company shall furnish or cause to be
furnished forthwith to the Agents and to counsel to the Agents written
opinions of the General Counsel and Special Counsel to the Company, or other
counsel satisfactory to the Agents, dated the date of filing with the
Commission of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form and substance
satisfactory to the Agents, of the same tenor as the opinions referred to in
Sections 5(a)(1) and 5(a)(2) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such opinions; or, in lieu of such opinions, counsel
last furnishing such opinion to the Agents shall furnish the Agents with a
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letter to the effect that the Agents may rely on such last opinion to the same
extent as though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the Commission
any document incorporated by reference into the Prospectus which contains
additional financial information (other than any Current Report on Form 8-K
relating exclusively to quarterly or annual financial results of the Company,
unless any Agent shall otherwise specify), or (ii) if required pursuant to the
terms of a Terms Agreement, the Company sells Notes to an Agent or Agents
pursuant to a Terms Agreement, the Company shall cause the independent
auditors who have audited the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Prospectus forthwith
to furnish the Agents a letter, dated the date of filing with the Commission
of such supplement or document, the date of effectiveness of such amendment,
or the date of such sale, as the case may be, in form satisfactory to the
Agents, of the same tenor as the letter referred to in Section 5(c) hereof,
but modified to relate to the Registration Statement and Prospectus as amended
and supplemented to the date of such letter, and with such changes as may be
necessary to reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided, however, that if
the Registration Statement or the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, such auditors
may limit the scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other information included
therein of an accounting, financial or statistical nature is of such a nature
that, in the reasonable judgment of any Agent, such letter should cover such
other information.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls any Agent
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
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(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by any Agent), reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) and
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by
any Agent expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto), or made
in reliance upon the Statement of Eligibility and Qualification under the 1939
Act filed as an exhibit to the Registration Statement.
(b) Indemnification of Company. Each Agent severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement (or signs any amendment thereto), and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by such Agent expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(c) General. 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 the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement or threat thereof; but the
omission so to notify the 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 desire 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,
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with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party and it being understood that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel of which
there shall not be more than one firm in any jurisdiction) for all such
indemnified parties (treating the indemnified party and its controlling
persons, directors and officers referred to in subsections (a) and (b) above,
respectively, to which the provisions of this Section 8 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.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 8 hereof is for any
reason unavailable to or insufficient to hold harmless the indemnified parties
although applicable in accordance with its terms, the Company and each Agent
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by
the Company and such Agent, as incurred, in such proportions that each Agent
is responsible for that portion represented by the percentage that the total
commissions and underwriting discounts received by such Agent from the sale of
Notes to the date of such liability bears to the total sales price received by
the Company from the sale of Notes to the date of such liability, and the
Company is responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls an Agent within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Agent, and
each director of the Company, each officer of the Company who signed the
Registration Statement (or signs any amendment thereto), and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and
any amendments thereto and the Prospectus and any amendments or
supplements thereto;
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(ii) The preparation, filing and reproduction of this Agreement;
(iii) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
(iv) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel and of any Calculation Agent;
(v) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions
contemplated hereby;
(vi) The qualification of the Notes under securities and insurance
laws in accordance with the provisions of Section 4(i) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Agents in connection therewith and in connection with the preparation of
any Blue Sky Survey and any Legal Investment Survey;
(vii) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Agents of the Prospectus and
any amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes;
(viii) The printing (or copying) and delivery to the Agents of copies
of the Indenture (and any supplements and amendments thereto) and any
"Blue Sky" Survey and any Legal Investment Survey;
(ix) Any fees charged by rating agencies for the rating of the
Notes;
(x) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(xi) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company;
(xii) The cost of providing CUSIP or other identification numbers for
the Notes; and
(xiii) The fees and expenses of any Depository (as defined in the
Indenture) and any nominees thereof in connection with the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or any Terms Agreement, or in certificates of officers of the
Company submitted pursuant hereto or thereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of any Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for any of the Notes.
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SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement may be terminated for
any reason, at any time by any party hereto upon the giving of 30 days'
written notice of such termination to each other party hereto; provided,
however, that an Agent's termination of this Agreement shall terminate this
Agreement only between such Agent and the Company; and, provided further, that
the Company may, if it so elects, terminate this Agreement as between itself
and one, some or all of the Agents by specifying the Agents with respect to
which this Agreement is to be terminated in the written notice of termination.
(b) Termination of a Terms Agreement. The applicable Agent or Agents,
as the case may be, may terminate any Terms Agreement, immediately upon notice
to the Company, at any time prior to the Settlement Date relating thereto
(i) if there shall have been, since the date of such Terms Agreement or since
the respective dates as of which information is given in the Registration
Statement and Prospectus, any material adverse change or any development or
event involving a prospective material adverse change in the business,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course
of business; or (ii) if there shall have occurred any of the following (A) 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 Notes, or (B) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities, or (C) an outbreak or escalation of hostilities or other national
or international calamity or crisis, if the effect of any such event specified
in this clause (ii) in the reasonable judgment of the applicable Agent or
Agents makes it impracticable to proceed with the public offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus; or (iii) if there shall have occurred a downgrading in the rating
accorded the Company's long-term debt securities by either Moody's Investors
Service, Inc. or Standard & Poor's Corporation.
(c) General. In the event of any such termination, no party will have
any liability to the other parties hereto, except that (i) the Agents shall be
entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination an offer to purchase
any of the Notes has been accepted by the Company but the time of delivery to
the purchaser or his agent of the Note or Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so delivered, (iii) if at the time of termination
any Agent shall own any Notes purchased pursuant to a Terms Agreement with the
intention of reselling them, the covenants set forth in Sections 4 and 7
hereof shall remain in effect until the earlier of the time such Notes are
resold and nine (9) months after delivery of written notice of termination,
and (iv) the covenant set forth in Section 4(h) hereof, the indemnity and
contribution agreements set forth in Sections 8 and 9 hereof, and the
provisions of Sections 10, 11, 14 and 15 hereof shall remain in effect.
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SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail
or by telex, telecopier or telegram, and any such notice shall be effective
when received at the specified address.
If to the Company:
American General Finance Corporation
c/o American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Assistant Treasurer
Telecopy: (713) 522-3487
If to CS First Boston Corporation:
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attention: Joseph D. Fashano
Telecopy: (212) 318-0532
If to Lehman Brothers:
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Attention: Medium-Term Note Department
Telecopy: (212) 528-1718
If to Merrill Lynch & Co.:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy: (212) 449-2234
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If to Smith Barney Inc.
Smith Barney Inc.
1345 Avenue of the Americas
46th Floor
New York, New York 10105
Attention: MTN Product Management
Telecopy: (212) 698-8479
or at such other address as such parties may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties created
hereby 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 15. Parties.
This Agreement shall inure to the benefit of and be binding upon each
Agent and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the parties hereto and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes shall be deemed to be a successor by reason merely of
such purchase.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
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AMERICAN GENERAL FINANCE CORPORATION
By: /S/ PHILIP M. HANLEY
Philip M. Hanley
Senior Vice President and Chief
Financial Officer
By: /S/ JAMES L. GLEAVES
James L. Gleaves
Assistant Treasurer
Accepted:
CS FIRST BOSTON CORPORATION
By:_________________________
Name:
Title:
LEHMAN BROTHERS INC.
By:_________________________
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:_________________________
Name:
Title:
SMITH BARNEY INC.
By:_________________________
Name:
Title:
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EXHIBIT A
As consideration for the services of the Agents hereunder, the Company
shall pay the Agent who places any Note a commission in the form of a discount
from the purchase price of such Note in an amount and manner agreed to by the
Company and such Agent, which amount may not exceed the percentage of the
principal amount of such Note set forth below; provided, however, that this
commission schedule may be revised from time to time by the Company at its
sole discretion, by written notice thereof from the Company to all of the
Agents.
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 9 months but less than 1 year......................... 0.125%
From 1 year but less than 18 months........................ 0.150
From 18 months but less than 2 years....................... 0.200
From 2 years but less than 3 years......................... 0.250
From 3 years but less than 4 years......................... 0.350
From 4 years but less than 5 years......................... 0.450
From 5 years but less than 6 years......................... 0.500
From 6 years but less than 7 years......................... 0.550
From 7 years but less than 10 years........................ 0.600
From 10 years but less than 15 years....................... 0.625
From 15 years but less than 20 years....................... 0.700
From 20 years or more ..................................... 0.750
EXHIBIT B
The following terms, if applicable, shall be agreed to by the applicable
Agent or Agents and the Company pursuant to each Terms Agreement:
Principal Amount: U.S. $____________
Certificated Notes or Book-Entry Notes:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Interest Reset Period(s):
Index Maturity:
Spread:
Spread Multiplier:
Maximum Interest Rate:
Minimum Interest Rate:
Interest Reset Months:
Interest Payment Month(s):
Interest Payment Date(s):
Calculation Agent:
If redeemable at the option of the Company:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If repayable at the option of the holder thereof:
Repayment Date(s):
Date of Maturity:
Purchase Price: ____%
Settlement Date and Time:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b) of the
Distribution Agreement.
Legal Opinions pursuant to Section 7(c) of the Distribution
Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
Opinions pursuant to Section 5(d) of the
Distribution Agreement.
EXHIBIT C
Pursuant to subsection 5(c) of the Distribution Agreement, the Agents
shall have received from the independent auditors 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, each of which shall be to the effect that they are independent
auditors with respect to the Company as required by the 1933 Act and by the
published rules and regulations of the Commission thereunder and which, when
read together, shall be to the further effect that:
(i) In their opinion the financial statements of the Company and
its subsidiaries 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 1933 Act and the 1934 Act and the applicable published rules and
regulations thereunder;
(ii) On the basis of a reading of the unaudited financial
statements and 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 and the Terms and Pricing 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 responsible for accounting and
financial 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 five days
prior to the date of the letter, there was any change in the
consolidated capital stock 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 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 five days prior to the date of the letter
there was any decrease, as compared with the corresponding period in the
preceding year, in consolidated total revenues or in consolidated net
income of the Company and its subsidiaries, which reading, inquiries and
discussions would not necessarily reveal changes in the financial
position or results of operations or inconsistencies in the application
of generally accepted accounting principles or other matters of
significance with respect to the following, nothing has come to their
attention which would lead them to believe that (A) the unaudited
financial statements of the Company and its subsidiaries 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 the 1934 Act and the published rules and
regulations thereunder or were not fairly presented in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included or incorporated by reference therein, or the Interim
Financials, if any, were not determined on a basis substantially
consistent with the audited financial statements included or
incorporated by reference in the Registration Statement or Prospectus,
(B) any other unaudited financial statement data included or
incorporated by reference in the 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 Prospectus, (C) any unaudited pro forma
financial statements included or incorporated by reference in the
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, (D)(1) as of
the date of the Interim Financials, if any, and as of a specified date
not more than five days prior to the date of the letter, there was any
change in the consolidated capital stock 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 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 five 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,
-2-
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 Agents 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.
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