AMERICAN GENERAL FINANCE CORPORATION
Medium-Term Notes, Series E
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
August 5, 1997
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Dear Sirs:
AMERICAN GENERAL FINANCE CORPORATION, an Indiana
corporation (the "Company"), confirms its agreement with each
of you (each an "Agent" and together the "Agents") with
respect to the issue and sale by the Company of its
Medium-Term Notes, Series E described herein (the "Notes").
The Notes are to be issued pursuant to an Indenture, dated as
of May 1, 1997 (the "Indenture"), between the Company and The
First National Bank of Chicago (the "Trustee"). As of the
date hereof, the Company has authorized the issuance and sale
of up to $1,000,000,000 aggregate principal amount of Notes
pursuant to the terms of this Agreement or a Distribution
Agreement dated August 5, 1997 (the "Affiliated Agent
Distribution Agreement") between the Company and American
General Securities Incorporated ("AGSI"), 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
AGSI 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 registration
statements on Form S-3 (Registration No. 33-57910 and No.
333-28925) 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 statements
have 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
statements (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. In
addition, after such time as the Company has issued and sold
$50 million aggregate principal amount of Notes, the term
"Registration Statement" shall not include Registration
Statement No. 33-57910 or the exhibits thereto or documents
incorporated by reference therein.
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, AGSI), 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 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 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 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 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.
(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 which reasonably
could be expected to materially and adversely affect the
properties or assets thereof, or which reasonably could
be expected to 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 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.
(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 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
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.
(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 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 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 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 the General Counsel or an Associate 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 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 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 Susan A.
Jacobs, 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 she
shall state that she believes that she 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 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 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 LLP, 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
LLP 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 LLP 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 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 a 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 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, 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 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 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;
(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 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, 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;
(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.
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 Ratings Services.
(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.
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 77019-2155
Attention: Assistant Treasurer - Corporate Finance
Telecopy: (713) 522-3487
If to an agent, to the address specified on the signature
page to this Agreement.
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,
AMERICAN GENERAL FINANCE CORPORATION
By: ________________
John S. Poelker
Senior Vice President and
Chief Financial Officer
By: _______________
James L. Gleaves
Assistant Treasurer
Accepted: Address for notices:
Lehman Brothers Inc. Lehman Brothers Inc.
3 World Financial Center
New York, New York
10285
Attention: MTN
Product Management
By:_______________ Telecopy: (212) 528-1718
Name:
Title:
Merrill Lynch & Co. Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center
By:_______________ North Tower-10th Floor
Name: New York, New York
10281-1310
Title: Attention: MTN
Product Management
Telecopy: (212) 449-2234
J.P. Morgan Securities Inc. J.P. Morgan Securities Inc.
60 Wall Street, 3rd Floor
New York, New York
10260
Attention: MTN
Trading Desk
By:______________ Telecopy: (212) 648-5909
Name:
Title:
Smith Barney Inc. Smith Barney Inc.
390 Greenwich Street,
4th Floor
New York, New York
10013
Attention: MTN
Product
By: _____________ Management/Origination
Name: Telecopy: (212) 723-8854
Title:
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 but less than 30 years 0.750
From 30 years or more 0.875
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 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, each of which
shall be to the effect that they are independent auditors
with respect to the Company within the meaning of the 1933
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 1933
Act and the 1934 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 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 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 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 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 1934 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 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 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.