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EXHIBIT 4(k)
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
AMERICAN GENERAL DELAWARE, L.L.C.
DATED AS OF MAY ___, 1995
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINED TERMS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
Section 2.1. Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4. Registered Agent and Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5. Principal Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6. Qualification in Other Jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.7. Admission of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.8. Merger, Consolidation, etc. of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1. Purpose and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
Section 4.1. Form of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.2. Contributions by the Common Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.3. Contributions by the Preferred Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.4. Investment Of Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.5. Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.6. General Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.7. Special Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.8. Allocations For Income Tax Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.9. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.10. Allocation of Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.11. Interests as Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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ARTICLE V
MEMBERS
Section 5.1. Powers of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.2. Partition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.3. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
MANAGEMENT
Section 6.1. Management of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.2. Reliance by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.3. No Management by any Preferred Members or American General . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.4. Preferred Members May Appoint a Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.5. Business Transactions of the Managing Member with the Company . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.6. Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
Section 7.1. Common Securities and Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2. Persons Deemed Preferred Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1. Voting Rights of Holders of Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.2. Voting Rights of Holders of Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.3. Meetings of the Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX
DIVIDENDS
Section 9.1. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.2. Limitations on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.3. Certain Restrictions on the Payment of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE X
BOOKS AND RECORDS
Section 10.1. Books and Records; Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.2. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.3. Limitation on Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE XI
TAX MATTERS
Section 11.1. Company Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.2. Tax Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.3. Taxation as Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XII
EXPENSES
Section 12.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XIII
LIABILITY
Section 13.1. Liability of Common Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 13.2. Liability of Preferred Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XIV
ASSIGNMENT OF INTERESTS
Section 14.1. Assignment of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 14.2. Right of Assignee to Become a Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 14.3. Events of Cessation of Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1. No Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 15.2. Events Causing Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 15.3. Notice of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 15.4. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.5. Certain Restrictions on Liquidation Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 15.6. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE XVI
MISCELLANEOUS
Section 16.1. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 16.2. Successors; Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 16.3. Governing Law; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 16.4. Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 16.5. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 16.6. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 16.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 16.8. Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AMERICAN GENERAL DELAWARE, L.L.C.
This Amended and Restated Limited Liability Company Agreement of
American General Delaware, L.L.C. (the "Company") is made as of May ___, 1995,
among American General Corporation ("American General") and American General
Delaware Management Corporation ("American General Manager"), as current Members
(as defined below) of the Company and the Persons (as defined below) who become
Members of the Company in accordance with the provisions hereof.
WHEREAS, American General and American General Capital Services, Inc.
("AGCSI") have heretofore formed a limited liability company pursuant to the
Delaware Limited Liability Company Act. 6 Del. C. Section 18-101, et seq., as
amended from time to time (the "Delaware Act"), by filing a Certificate of
Formation of the Company with the office of the Secretary of State of the State
of Delaware on March 28, 1995, and entering into a Limited Liability Company
Agreement of the Company dated as of March 28, 1995 (the "Original Limited
Liability Company Agreement"); and
WHEREAS, on April 20, 1995, American General Manager was admitted as a
member of the Company; and
WHEREAS, on April 20, 1995, AGCSI resigned as a Member of the Company
and all of AGCSI's interest in the Company was redeemed and cancelled; and
WHEREAS, on April 20, 1995, American General and American General
Manager entered into the First Amendment to the Limited Liability Company
Agreement; and
WHEREAS, the Members desire to continue the Company as a limited
liability company under the Delaware Act and to amend and restate the Original
Limited Liability Company Agreement, as amended, in its entirety.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby amend and
restate the Original Limited Liability Company Agreement, as amended, in its
entirety and agree as follows:
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ARTICLE I
DEFINED TERMS
SECTION 1.1. DEFINITIONS. The terms defined in this Article I shall,
for the purposes of this Agreement, have the meanings herein specified.
"Additional Dividends" shall have the meaning, if any, set
forth in the Preferred Securities Designation with respect to a series of
Preferred Securities. Such term shall apply to a series of Preferred Securities
only if and to the extent set forth in the related Preferred Securities
Designation.
"Adjusted Capital Account" means the Capital Account
established for a Member, as the same is specially computed to reflect the
adjustments required or permitted by the Treasury Regulations under Section
704(b) of the Code to be taken into account in applying the second sentence of
section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement of the Company, as amended, modified, supplemented or restated
from time to time.
"American General Common Stock" means the Common Stock, par
value $.50 per share, of American General.
"American General Preferred Stock" means the Preferred Stock,
par value $1.50 per share, of American General.
"Capital Account" shall have the meaning set forth in Section
4.5.
"Certificate" means the Certificate of Formation referred to in
the first recital of this Agreement and any and all amendments thereto and
restatements thereof filed on behalf of the Company with the office of the
Secretary of State of the State of Delaware pursuant to the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding federal tax statute enacted after the date of
this Agreement. A reference to a specific section (Section) of the Code refers
not only to such specific section but also to any corresponding provision of any
federal tax statute enacted after the date of this Agreement, as such specific
section or corresponding provision is in effect on the date of application of
the provisions of this Agreement containing such reference.
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"Common Member" means a Member that holds one or more Common
Securities.
"Common Securities" means the Interests in the Company which
represent common limited liability company interests in the Company and are
described in this Agreement.
"Company Distribution Account" shall have the meaning set forth
in Section 4.4 of this Agreement.
"Company Dividend Junior Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Dividend Parity Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Liquidation Parity Securities" shall have the meaning
set forth in Section 15.5 of this Agreement.
"Covered Person" means the Managing Member, any Affiliate of
the Managing Member or any officers, directors, managers, shareholders,
partners, members, employees, representatives or agents of the Managing Member,
or any employee or agent of the Company or its Affiliates.
"Debentures" means the Debentures evidencing the loans to
American General from the Company of substantially all of the Proceeds of the
issuances of Interests and related capital contributions.
"Dividend Payment Date" has the meaning set forth in Section
9.1(c) of this Agreement.
"Eligible Investment Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" means (a) the Fiscal Agent or (b) a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank), (1) (i) which has either (A) a long-term unsecured
debt rating of AAA or better by S&P and Aaa or better by Moody's or (B) a
short-term unsecured debt rating or a certificate of deposit rating of A-1+ or
better by S&P and P-1 or better by Moody's and (ii) whose deposits are insured
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by the FDIC or (2) (i) the parent of which has a long-term or short-term
unsecured debt rating which signifies investment grade and (ii) whose deposits
are insured by the FDIC.
"Eligible Investments" mean book-entry securities, negotiable
instruments, cash or securities represented by instruments in bearer or
registered form which evidence:
(a) any security issued or guaranteed as to principal or
interest by the United States, or by a person controlled or supervised
by and acting as an instrumentality of the Government of the United
States pursuant to authority granted by the Congress of the United
States, or any certificate of deposit for any of the foregoing;
(b) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of S&P,
Moody's and, if rated by Fitch, Fitch in the highest investment rating
category granted thereby and having a maturity not in excess of nine
months;
(c) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC;
(d) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the Government of the
United States of America or any agency or instrumentality thereof, the
obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution and the
deposits of which are insured by the FDIC.
(e) any other security which is identified as a permitted
investment of a finance subsidiary pursuant to Rule 3a-5 under the
Investment Company Act of 1940, as amended, at the time it is acquired
by the Company.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Fiscal Period" means a calendar month.
"Fitch" means Fitch Investors Service, Inc. or any successor
thereto.
"Guarantee" means the Guarantee Agreement to be entered into by
American General for the benefit of the Preferred Members, as amended from time
to time.
"Indemnified Person" means each Common Member, any Affiliate of
such Common Member or any officers, directors, managers, shareholders, partners,
members, employees, representatives or agents of such Common Member, or any
employee or agent of the Company or its Affiliates.
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"Indenture" means the Indenture dated as of May ___, 1995,
between American General and Chemical Bank, as trustee, pursuant to which the
Debentures will be issued, as amended, modified or supplemented from time to
time.
"Interest" means a limited liability company interest in the
Company, including the right of the holder thereof to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of a Member to comply with all of the terms and provisions of this
Agreement.
"Liquidation Distribution" shall have the meaning set forth in
Section 15.5 of this Agreement.
"LP Act" means the Delaware Revised Uniform Limited Partnership
Act. 6 Del C. Section 17-101, et seq., as amended from time to time.
"Majority [Or Other Stated Percentage] in Liquidation
Preference" means Preferred Members who are the record owners of Preferred
Securities whose aggregate liquidation preferences represent more than 50% or
not less than such stated percentage of the aggregate liquidation preference of
all Preferred Securities of any particular series or all series, as the context
requires, then outstanding.
"Managing Member" means American General Manager, in its
capacity as the manager of the Company and as a Member that holds Common
Securities.
"Member" means any Person that holds an Interest in the Company
and is admitted as a member of the Company pursuant to the provisions of this
Agreement, in its capacity as a member of the Company. For purposes of the
Delaware Act, the Common Members and the Preferred Members shall constitute
separate classes or groups of Members.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal
Period means the income and loss, respectively, of the Company for such Fiscal
Period as determined in accordance with the method of accounting followed by the
Company for federal income tax purposes, including, for all purposes, any
tax-exempt income and any expenditures of the Company which are described in
Section 705(a)(2)(B) of the Code (or treated as so described under Section
1.704-1(b)(2)(iv)(i) of the Treasury Regulations); provided, however, that any
item allocated under Section 4.7 shall be excluded from the computation of Net
Income and Net Loss.
"Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
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"Preferred Certificate" means a certificate evidencing the
Preferred Securities held by a Preferred Member.
"Preferred Member" means a Member that holds one or more
Preferred Securities.
"Preferred Securities" means the Interests which represent
preferred limited liability company interests in the Company and are described
in this Agreement.
"Preferred Securities Designation" means any written action of
the Managing Member pursuant to Section 7.1(b) of this Agreement providing for
the issue of a series of Preferred Securities.
"Rating Agencies" means Fitch, Moody's and S&P.
"S&P" means Standard & Poor's Ratings Group or any successor
thereof.
"Tax Matters Partner" means the Managing Member designated as
such in Section 11.1(b) of this Agreement.
"Third Party Creditors" shall have the meaning set forth in
Section 13.1 of this Agreement.
SECTION 1.2. HEADINGS. The headings and subheadings in this Agreement
are included for convenience and identification only and are in no way intended
to describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
SECTION 2.1. CONTINUATION.
(a) The Members hereby agree to continue the Company as a
limited liability company under and pursuant to the provisions of the Delaware
Act and agree that the rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided herein.
(b) Upon the execution of this Agreement, American General and
American General Manager shall continue to be Members and shall each be
designated as a Common Member and shall together be the holders of all of the
Common Securities.
(c) The Managing Member, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any and all
amendments to and restatements of the Certificate.
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SECTION 2.2. NAME. The name of the Company heretofore formed and
continued hereby is American General Delaware, L.L.C. The business of the
Company may be conducted upon compliance with all applicable laws under any
other name designated by the Managing Member.
SECTION 2.3. TERM. The term of the Company commenced on the date the
Certificate was filed in the office of the Secretary of State of the State of
Delaware and shall continue until December 31, 2050, unless dissolved before
such date in accordance with the provisions of this Agreement.
SECTION 2.4. REGISTERED AGENT AND OFFICE. The Company's registered
agent and office in Delaware shall be The Corporation Trust Company, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801. At any time, the Managing
Member may designate another registered agent and/or registered office.
SECTION 2.5. PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the Company shall be at 2590 American General Center, Nashville,
Tennessee 37250. The Managing Member may change the location of the Company's
principal place of business.
SECTION 2.6. QUALIFICATION IN OTHER JURISDICTIONS. The Managing Member
shall cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company conducts business and in which such qualification, formation or
registration is required by law or deemed advisable by the Managing Member. The
Managing Member, as an authorized person within the meaning of the Delaware Act,
shall execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business.
SECTION 2.7. ADMISSION OF MEMBERS.
(a) Subject to Section 2.1(b) of this Agreement, a Person shall
be admitted as a Member and shall become bound by the terms of this Agreement,
without execution of this Agreement, if such Person (or a representative
authorized by such Person orally, in writing or by other action such as payment
for an Interest) complies with the conditions for becoming a Member as set forth
in Section 2.7(b) and requests (which request shall be deemed to have been made
upon acquisition of an Interest directly from the Company or upon an assignment
of an Interest from another Person) that the records of the Company reflect such
admission. The Company shall be promptly notified of any assignment of an
Interest.
The Company will reflect the admission of a Member in the
records of the Company as soon as is reasonably practicable after either of the
following events: (i) in the case of a Person acquiring an Interest directly
from the Company, at the time of payment therefor, and (ii) in the case of an
assignment, upon notification thereof (the Company being entitled to assume, in
the absence of knowledge to the contrary, that proper payment has been made by
the assignee).
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(b) Subject to the restrictions on transfer of Common
Securities set forth in Sections 7.1(e) and 14.1 of this Agreement, whether
acquiring an Interest directly from the Company or by assignment, a Person shall
be admitted as a Member upon the acquisition or assignment, as the case may be,
of such Interest and the reflection of such Person's admission as a Member on
the registration books maintained by or on behalf of the Company. The consent of
any other Member shall not be required for the admission of a Member.
SECTION 2.8. MERGER, CONSOLIDATION, ETC. OF THE COMPANY. The Company
may not consolidate with, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to any Person, except with the prior approval of Preferred Members
holding not less than 66-2/3% in Liquidation Preference of the outstanding
Preferred Securities of each series or except as set forth in this Section 2.8.
The Company may, without the consent of Preferred Members, consolidate with,
merge with or into, or be replaced by, or convey, transfer or lease its assets
as an entirety or substantially as an entirety to, a limited liability company,
limited partnership or trust organized as such under the laws of any state of
the United States of America or the District of Columbia, provided that (i) such
successor entity either (x) expressly assumes all of the obligations of the
Company under the Preferred Securities or (y) substitutes for the Preferred
Securities of each series other securities having substantially the same terms
as such Preferred Securities of each series (the "Successor Securities") so long
as the Successor Securities rank, with respect to participation in the profits
or assets of the successor entity, at least as high as the Preferred Securities
of the related series rank with respect to payment of dividends and distribution
of assets upon the liquidation, dissolution or winding-up of the Company, (ii)
American General expressly acknowledges such successor entity as the holder of
Debentures relating to such Preferred Securities and its obligations under the
Guarantee with respect to the Successor Securities, (iii) such merger,
consolidation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities or the Successor Securities, if any, to be delisted (or, in
the case of any Successor Securities, to fail to be listed) by any national
securities exchange or other organization on which such Preferred Securities are
then listed, (iv) such merger, consolidation, replacement, conveyance, transfer
or lease does not cause the Preferred Securities or Successor Securities, if
any, to be downgraded by any "nationally recognized statistical rating
organization," as that term is defined by the Securities and Exchange Commission
for purposes of Rule 436(g)(2) under the Securities Act of 1933, as amended, (v)
such merger, consolidation, replacement, conveyance, transfer or lease does not
adversely affect the powers, preferences and other special rights of Preferred
Members or the holders of the Successor Securities, if any, in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity) and (vi) prior to such merger, consolidation, replacement,
conveyance, transfer or lease, American General has received an opinion of
nationally recognized independent legal counsel to the Company experienced in
such matters to the effect that (x) such successor entity will be treated as a
partnership or as a grantor trust, as appropriate, for federal income tax
purposes, (y) following such merger, consolidation, replacement, conveyance,
transfer or lease, American General and such successor entity will be in
compliance with the Investment Company Act of 1940, as amended, without
registering thereunder as an investment company and (z) such merger,
consolidation, replacement, conveyance, transfer
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or lease will not adversely affect the limited liability of the Preferred
Members or the holders of the Successor Securities, if any, or result in federal
income tax liability to such Preferred Members or holders other than with
respect to any fractional share interests converted into cash.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
SECTION 3.1. PURPOSE AND POWERS. The purposes of the Company are (a) to
issue Interests and to use substantially all of the proceeds from the issuance
thereof and the related capital contributions to purchase Debentures from
American General, (b) to invest, at all times, at least 1% of such proceeds and
capital contributions in the Eligible Investment Account as provided herein and
(c) except as otherwise limited herein, to enter into, make and perform all
contracts and other undertakings, and to take any and all actions necessary,
appropriate, proper, advisable, incidental or convenient to or for the
furtherance of the purpose of the Company as set forth herein. The Company may
not conduct any other business or operations except as contemplated by the
preceding sentence.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
SECTION 4.1. FORM OF CONTRIBUTION. The contribution of a Member to the
Company may, as determined by the Managing Member in its discretion, be in cash,
a promissory note or other legal consideration.
SECTION 4.2. CONTRIBUTIONS BY THE COMMON MEMBERS. The Common Members
shall make such contributions to the Company, either in connection with the
purchase of Common Securities or otherwise, so as to cause their Common
Securities to be entitled to at least 21% of all interests in the capital,
income, gain, loss, deduction and credit of the Company at all times.
SECTION 4.3. CONTRIBUTIONS BY THE PREFERRED MEMBERS. The Preferred
Members shall make contributions to the Company in accordance with the
applicable terms of Section 7.1 of this Agreement. Preferred Members, in their
capacity as Members of the Company, shall not be required to make any additional
contributions to the Company and shall have no additional liability solely by
reason of being Preferred Members in excess of their share of the Company's
assets and undistributed profits (subject to their obligation to return
distributions wrongfully distributed to them as required by applicable law).
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SECTION 4.4. INVESTMENT OF CAPITAL CONTRIBUTIONS.
(a) The Managing Member shall establish and maintain in the
name of the Company an Eligible Investment Account bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Company. The Managing Member shall deposit
from the proceeds of the aggregate capital contributions received from
the Members, upon their receipt thereof, an amount equal to at least 1%
of such aggregate capital contributions into the Eligible Investment
Account.
(b) Funds on deposit in the Eligible Investment Account shall
be invested by the Managing Member; provided, however, it is understood
and agreed that the Managing Member shall not be liable for any loss
arising from such investment in Eligible Investments; provided,
further, that none of the funds deposited in the Eligible Investment
Account shall be invested in an Eligible Investment or Eligible
Investments issued by American General or an Affiliate thereof for a
period of five years following the Closing Date. All such Eligible
Investments shall be held by the Managing Member for the benefit of the
Company, provided, however, that on the day preceding each Dividend
Payment Date all interest and other investment income (net of losses
and investment expenses) on funds on deposit in the Eligible Investment
Account shall be deposited into the account maintained by the Company
for receipt of income on the Debentures (the "Company Distribution
Account") and shall constitute a portion of the Company's Net Income
eligible for distribution to the Members. Funds on deposit in the
Eligible Investment Account shall be invested in Eligible Investments
that will mature prior to the next succeeding Dividend Payment Date.
SECTION 4.5. CAPITAL ACCOUNTS. An individual capital account (a
"Capital Account") shall be established and maintained on the books of the
Company for each Member in compliance with Treasury Regulation Sections
1.704-1(b)(2)(iv) and 1.704-2, as amended. Subject to the preceding sentence,
each Capital Account will be increased by the amount of the capital
contributions made by, and the Net Income allocated to, such Member and reduced
by the amount of distributions made by the Company, and Net Losses allocated to
the Member. In addition, a Member's Capital Account shall be increased or
decreased, as the case may be, for any items specially allocated to such Member
under Section 4.7 of this Agreement, and a Common Member's Capital Account shall
be increased to the extent that such Common Member pays any costs or expenses of
the Company directly out of such Common Member's own funds.
SECTION 4.6. GENERAL ALLOCATIONS. After giving effect to the special
allocations set forth in Section 4.7 of this Agreement:
(a) The Company's Net Income for each Fiscal Period shall be
allocated, as of the close of business on the record date for such
Fiscal Period, as follows:
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(i) First, to each Preferred Member, in an amount
equal to the excess of (x) the amount of all Dividends
(including Additional Dividends) accrued on such Preferred
Member's Preferred Securities from the issuance of such
Preferred Securities through the close of business on the
record date for such Fiscal Period, over (y) the amount of Net
Income allocated to such Preferred Member (and his predecessors
in interest) in respect of such Preferred Securities pursuant
to this Section 4.6(a)(i) (and amounts, if any, allocated
pursuant to Section 4.7(j) of this Agreement) for all prior
Fiscal Periods.
(ii) Second, to each Preferred Member, in an amount
equal to the excess of (x) the amount of all Net Losses
allocated to such Preferred Member from the date of issuance of
such Preferred Member's Preferred Securities through the close
of business on the record date for such Fiscal Period pursuant
to Section 4.6(b)(ii) over (y) the amount of Net Income
allocated to such Preferred Member (and his predecessors in
interest) in respect of such Preferred Securities pursuant to
this Section 4.6(a)(ii) for all prior Fiscal Periods.
(iii) Any remaining Net Income shall be allocated to
the Common Members, and shared among them in the ratio in which
the Common Members have made contributions to the Company
pursuant to Section 4.2 of this Agreement.
(b) The Company's Net Loss for each Fiscal Period shall be
allocated, as of the close of business on the record date for such
Fiscal Period, as follows:
(i) First, to the Common Members (in the ratio in
which the Common Members have made contributions to the Company
pursuant to Section 4.2 of this Agreement) until the balance of
each Common Member's Adjusted Capital Account is reduced to
zero.
(ii) Second, to the Preferred Members (in proportion
to their respective aggregate Adjusted Capital Account
balances) until their Adjusted Capital Account balances are
reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the
Common Members and shared among them in the ratio in which the
Common Members have made contributions to the Company pursuant
to Section 4.2 of this Agreement.
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(c) The Managing Member may make such changes to the
allocations in Sections 4.6(a) and 4.6(b) as it deems reasonably
necessary so that, immediately prior to the Company's liquidation (or
the exchange of Preferred Securities for a portion of the Debentures),
the positive balances in the Capital Accounts of the Preferred Members
shall, to the maximum extent possible, equal their respective
Liquidation Distributions.
SECTION 4.7. SPECIAL ALLOCATIONS.
(a) If a Preferred Member delivers a Notice of Conversion to
the Conversion Agent pursuant to the appropriate Preferred Securities
Designation, which instructs the Conversion Agent to exchange Preferred
Securities of a series for a portion of the Debentures of the related
series held by the Company and to immediately thereafter convert such
Debentures into American General Common Stock, such Preferred Member
shall be allocated any interest income (including original issue
discount) accruing on a daily basis on the Debentures so converted
until the date of such conversion, but only to the extent such interest
income was not previously allocated to the Members in a prior Fiscal
Period under Section 4.6 of this Agreement or this Section 4.7.
(b) If the Conversion Agent exchanges all of the Preferred
Securities of a series for a portion of the Debentures of the related
series held by the Company and immediately thereafter exchanges such
Debentures for American General Preferred Stock of the related series,
pursuant to the appropriate Preferred Securities Designation, the
Preferred Members of such series shall be allocated (in proportion to
the liquidation preferences of such Preferred Securities held by each
such Preferred Member) any interest income (including original issue
discount) accruing on a daily basis on the Debentures so exchanged
until the date of such exchange, but only to the extent such interest
income was not previously allocated to the Members in prior Fiscal
Periods under Section 4.6 of this Agreement or this Section 4.7.
(c) If the Conversion Agent exchanges all of the Preferred
Securities of any series for a portion of the Debentures of the related
series held by the Company and distributes such Debentures to the
Preferred Members pursuant to the appropriate Preferred Securities
Designation, such Preferred Members shall be allocated (in proportion
to the liquidation preferences of such Preferred Securities held by
each such Preferred Member) any interest income (including original
issue discount) accruing on a daily basis on the Debentures so
distributed until the date of such distribution, but only to the extent
such interest income was not previously allocated to the Members in
prior Fiscal Periods under Section 4.6 of this Agreement or this
Section 4.7.
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(d) If the Company receives a prepayment premium upon a
prepayment of some or all of the Debentures of any series, income, gain
or loss recognized by the Company from such prepayment shall be
allocated to the Preferred Members whose related Preferred Securities
are redeemed pursuant to the appropriate Preferred Securities
Designation as a result of such prepayment (in proportion to the
liquidation preferences of such Preferred Securities held by each such
Preferred Member).
(e) If the Company is deemed to receive a dividend under
Section 305(c) of the Code with respect to any series of Debentures,
the Preferred Members holding Preferred Securities of the related
series shall be allocated (in proportion to the liquidation preferences
of such Preferred Securities held by each such Preferred Member) that
portion of such dividend income which is allocable to the portion of
such series of Debentures having an aggregate principal amount equal to
the aggregate liquidation preference of such Preferred Securities; the
balance of such dividend income shall be allocated to the Common
Members and shared among them in the ratio in which the Common Members
have made contributions to the Company pursuant to Section 4.2 of this
Agreement in connection with such Preferred Securities.
(f) All items of loss and deduction in respect of expenses
incurred by or on behalf of the Company and paid by a Common Member (or
out of such Common Member's share of distributions) shall be allocated
entirely to the Common Member which pays such expenses.
(g) For purposes of determining the Net Income, Net Loss or any
other items allocable to any Fiscal Period, Net Income, Net Loss and
any such other items shall be determined on a daily, monthly or other
basis, as determined by the Managing Member using any method that is
permissible under Section 706 of the Code and the Treasury Regulations
promulgated thereunder. Unless otherwise specified, such Net Income,
Net Loss or other items shall be determined for each Fiscal Period.
(h) Notwithstanding anything to the contrary that may be
expressed or implied in this Article IV, the interest of the Common
Members, in the aggregate, in each item of income, gain, loss,
deduction and credit will be equal to at least (i) at any time that
aggregate capital contributions to the Company are equal to or less
than $50,000,000, 1% of each such item and (ii) at any time that
aggregate capital contributions to the Company are greater than
$50,000,000, at least 1% multiplied by a fraction (not exceeding one
and not less than 0.2), the numerator of which is $50,000,000 and the
denominator of which is the lesser of the aggregate balances of the
Capital Accounts of all Members at such time and the aggregate capital
contributions to the Company of all Members at such time.
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(i) The Members intend that the allocations under Section 4.6
of this Agreement and this Section 4.7 conform to Treasury Regulations
Sections 1.704-1(b) and 1.704-2 (including, without limitation and to
the extent applicable, the minimum gain chargeback, chargeback of
partner nonrecourse debt minimum gain, qualified income offset and
partner nonrecourse debt provisions of such Treasury Regulations), and
the Managing Member shall make such allocations under this Section 4.7,
or such changes in the allocations under Section 4.6 of this Agreement,
as it believes are reasonably necessary to meet all applicable
requirements of such Treasury Regulations.
(j) In the event that, for any Fiscal Period, the Company is
required to recognize income in respect of original issue discount on a
series of Debentures in excess of the aggregate Dividends (including
Additional Dividends) accrued for such Fiscal Period in respect of the
related series of Preferred Securities, such excess income shall be
allocated to the Members in the same ratio as Net Income is allocated
under Section 4.6 (a) of this Agreement.
SECTION 4.8. ALLOCATIONS FOR INCOME TAX PURPOSES. The income, gains,
losses, deductions and credits of the Company shall be allocated in the same
manner as the items entering into the computation of Net Income and Net Loss are
allocated under Section 4.6 of this Agreement or as such items are otherwise
allocated under Section 4.7 of this Agreement; provided, however, that solely
for federal, state and local income and franchise tax purposes, but not for book
or Capital Account purposes, income, gain, loss and deductions with respect to
any property properly carried on the Company's books at a value other than the
tax basis of such property shall be allocated in a manner determined in the
Managing Member's discretion, so as to take into account (consistently with the
principles of Section 704(c) of the Code) the difference between such property's
book value and its tax basis.
SECTION 4.9. WITHHOLDING. The Company shall comply with withholding
requirements under federal, state and local law and shall remit amounts withheld
to and file required forms with applicable jurisdictions. To the extent that the
Company is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Member, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Member.
In the event of any claimed over-withholding, Members shall be limited to an
action against the applicable jurisdiction. If the amount withheld was not
withheld from actual distributions, the Company may reduce subsequent
distributions by the amount of such withholding. Each Member agrees to furnish
the Company with such representations and forms as shall reasonably be requested
by the Company to assist it in determining the extent of, and in fulfilling, its
withholding obligations.
SECTION 4.10. ALLOCATION OF DISTRIBUTIONS. The distributions of
the Company shall, subject to the applicable terms of Sections 7.1, 9.1, 9.2,
9.3, 15.4 and 15.5 of this Agreement and of any series of Preferred Securities
(including the preferential allocation of distributions, if any), be allocated
entirely to the Common Members.
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SECTION 4.11. INTERESTS AS PERSONAL PROPERTY. Each Member
hereby agrees that its Interest shall for all purposes be personal property. A
Member has no interest in specific Company property.
ARTICLE V
MEMBERS
SECTION 5.1. POWERS OF MEMBERS. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement.
SECTION 5.2. PARTITION. Each Member waives any and all rights that it
may have to maintain an action for partition of the Company's property.
SECTION 5.3. RESIGNATION. The Common Members shall have no right to
resign from the Company. Any other Member may resign from the Company prior to
the liquidation, dissolution and winding up of the Company only upon the
assignment of its Interest (including any redemption, repurchase, exchange or
other acquisition by the Company of such Interest) in accordance with the
provisions of this Agreement. A resigning Member shall not be entitled to
receive any distribution and shall not otherwise be entitled to receive the fair
value of its Interest except as otherwise expressly provided for in this
Agreement.
ARTICLE VI
MANAGEMENT
SECTION 6.1. MANAGEMENT OF THE COMPANY. Except as otherwise provided
herein, the business and affairs of the Company shall be managed, and all
actions required under this Agreement shall be determined, solely and
exclusively by the Managing Member, which shall have all rights and powers on
behalf and in the name of the Company to perform all acts necessary and
desirable to the objects and purposes of the Company. Without limiting the
generality of the foregoing, the Managing Member, in its capacity as a Common
Member and not by virtue of any delegation of management power from any Member,
shall have the power on behalf of the Company to:
(a) authorize and engage in transactions and dealings on behalf
of the Company, including transactions and dealings with any Member
(including any Common Member) or any Affiliate of any Member;
(b) call meetings of Members or any class or series thereof;
(c) issue Interests, including Common Securities, Preferred
Securities and classes and series thereof, in accordance with this
Agreement;
(d) pay all expenses incurred in forming the Company;
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(e) lend money, with or without security, to American General
or any Affiliate thereof;
(f) determine and make distributions (hereinafter sometimes
referred to as "dividends"), in cash or otherwise, on Interests, in
accordance with the provisions of this Agreement, the Delaware Act and,
if applicable, each Preferred Securities Designation;
(g) establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including
with respect to allocations, dividends and voting rights;
(h) establish or set aside in their discretion any reserve or
reserves for contingencies and for any other proper Company purpose;
(i) redeem, repurchase or exchange, on behalf of the Company,
Interests which may be so redeemed, repurchased or exchanged;
(j) appoint (and dismiss from appointment) attorneys and agents
on behalf of the Company, and employ (and dismiss from employment) any
and all persons providing legal, accounting or financial services to
the Company, or such other employees or agents as the Managing Member
deems necessary or desirable for the management and operation of the
Company, including, without limitation, any Member (including any
Common Member) or any Affiliate of any Member;
(k) incur and pay all expenses and obligations incident to the
operation and management of the Company, including, without limitation,
the services referred to in the preceding paragraph, taxes, interest,
travel, rent, insurance, supplies, salaries and wages of the Company's
employees and agents;
(l) acquire and enter into any contract of insurance necessary
or desirable for the protection or conservation of the Company and its
assets or otherwise in the interest of the Company as the Managing
Member shall determine;
(m) open accounts and deposit, maintain and withdraw funds in
the name of the Company in banks, savings and loan associations,
brokerage firms or other financial institutions;
(n) effect a dissolution of the Company and act as liquidating
trustee or the Person winding up the Company's affairs, all in
accordance with the provisions of this Agreement, the Delaware Act and,
if applicable, each Preferred Securities Designation;
(o) bring and defend on behalf of the Company actions and
proceedings at law or equity before any court or governmental,
administrative or other regulatory agency, body or commission or
otherwise;
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(p) prepare and cause to be prepared reports, statements and
other relevant information for distribution to Members as may be
required or determined to be necessary or desirable by the Managing
Member from time to time;
(q) prepare and file all necessary returns and statements and
pay all taxes, assessments and other impositions applicable to the
assets of the Company; and
(r) execute all other documents or instruments, perform all
duties and powers and do all things for and on behalf of the Company in
all matters necessary or desirable or incidental to the foregoing.
The Managing Member is authorized and directed to conduct its
affairs and to operate the Company in such a way that the Company will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act of 1940, as amended, or taxed as a corporation for
federal income tax purposes and so that the Preferred Securities of any series
will be treated as indebtedness of American General for federal income tax
purposes. In this connection, the Managing Member is authorized to take any
action not inconsistent with applicable law, this Agreement and the applicable
Preferred Securities Designation and that the Managing Member determines in its
discretion to be necessary or desirable for such purposes.
The expression of any power or authority of the Managing Member
in this Agreement shall not in any way limit or exclude any other power or
authority which is not specifically or expressly set forth in this Agreement.
SECTION 6.2. RELIANCE BY THIRD PARTIES. Persons dealing with the
Company are entitled to rely conclusively upon the power and authority of the
Managing Member herein set forth.
SECTION 6.3. NO MANAGEMENT BY ANY PREFERRED MEMBERS OR AMERICAN
GENERAL. Except as otherwise expressly provided herein, no Preferred Member
shall take part in the day-to-day management, operation or control of the
business and affairs of the Company. Neither the Preferred Members, in their
capacity as Preferred Members of the Company, nor American General, in its
capacity as a Common Member, shall be agents of the Company or have any right,
power or authority to transact any business in the name of the Company or to act
for or on behalf of or to bind the Company.
SECTION 6.4. PREFERRED MEMBERS MAY APPOINT A TRUSTEE. Subject to the
terms and conditions set forth in Section 8.1(b) of this Agreement, the
Preferred Members of each series of Preferred Securities shall have the right to
appoint a trustee, and any trustee so appointed shall have the power to enforce
the Company's rights under the Debentures of the related series against American
General, enforce the obligations undertaken with respect to such Preferred
Securities by American General under the Guarantee and, to the extent permitted
by law, declare and pay dividends on such Preferred Securities to the extent
funds of the Company are legally available therefor. Without limiting the powers
of any trustee so appointed and for the avoidance of any doubt concerning the
powers of the
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trustee, any trustee, in its own name and as trustee of an express trust, may
institute a proceeding, including, without limitation, any suit in equity, an
action at law or other judicial or administrative proceeding, to enforce the
Company's creditor rights directly against American General to the same extent
as the Company and on behalf of the Company, and may prosecute such proceeding
to judgment or final decree, and enforce the same against American General and
collect, out of the property, wherever situated, of American General, the monies
adjudged or decreed to be payable in the manner provided by law. The Managing
Member agrees to execute and deliver such documents as may be necessary or
appropriate for the trustee to exercise such powers.
SECTION 6.5. BUSINESS TRANSACTIONS OF THE MANAGING MEMBER WITH THE
COMPANY. The Managing Member or its Affiliates may lend money to, borrow money
from, act as surety, guarantor or endorser for, guarantee or assume one or more
obligations of, provide collateral for, and transact other business with, the
Company and, subject to applicable law, shall have the same rights and
obligations with respect to any such matter as a Person who is not the Managing
Member or an Affiliate thereof.
SECTION 6.6. OUTSIDE BUSINESSES. Any Member or Affiliate thereof may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company, and the Company and the Members shall have no rights by virtue
of this Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Company, shall not be deemed wrongful or improper. No Member
or Affiliate thereof shall be obligated to present any particular investment
opportunity to the Company even if such opportunity is of a character that, if
presented to the Company, could be taken by the Company, and any Member or
Affiliate thereof shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment opportunity.
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
SECTION 7.1. COMMON SECURITIES AND PREFERRED SECURITIES.
(a) The Interests in the Company shall initially be divided
into two classes, Common Securities and Preferred Securities.
(b) The Preferred Securities may be issued from time to time in
one or more series with such relative rights, powers, preferences, limitations
and restrictions as may from time to time be established in a written action or
actions of the Managing Member providing for the issue of such series of
Preferred Securities as hereinafter provided. Authority is hereby expressly
granted to the Managing Member, subject to the provisions of this Agreement, to
authorize the issue of one or more series of Preferred Securities and to
establish each such series by a written action or actions (including without
limitation an amendment of this Agreement) providing for the issue of such
series:
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(i) the number of Preferred Securities to constitute such
series and the distinctive designation thereof;
(ii) whether the Preferred Securities of such series shall have
voting rights in addition to those set forth in this Agreement or
required by law and, if so, the terms of such voting rights;
(iii) the annual dividend rate (or method of calculation
thereof), if any, on the Preferred Securities of such series, the
conditions and dates upon which such dividends shall be payable and the
ability of the Company, if any, to defer the dividend payment period
for the Preferred Securities of such series, the dates from which such
dividends shall accrue, the preference or relation, if other than pari
passu, which such dividends have with respect to dividends payable on
any other class or classes of Interests or on any other series of
Preferred Securities, and whether such dividends shall be cumulative or
noncumulative;
(iv) whether the Preferred Securities of such series shall be
subject to redemption by the Company, and, if made subject to
redemption, the times and other terms and conditions of such redemption
(including the mandatory or optional nature of such redemption, whether
such redemption shall be in whole and/or in part, and the amount and
kind of consideration to be received upon such redemption);
(v) the amount or amounts which shall be paid out of the assets
of the Company to Preferred Members holding the Preferred Securities of
such series upon voluntary or involuntary liquidation, dissolution or
winding up of the Company, and any rights in addition to those set
forth in this Agreement of the Preferred Members that hold Preferred
Securities of such series upon the liquidation, dissolution or winding
up of the Company;
(vi) whether or not the Preferred Securities of such series
shall be subject to the operation of a retirement or sinking fund, and,
if so, the extent to and manner in which any such retirement or sinking
fund shall be applied to the purchase or redemption of the Preferred
Securities of such series for retirement and the terms and provisions
relative to the operation thereof;
(vii) whether or not the Preferred Securities of such series
shall be convertible into, or exchangeable for, Interests of any other
class or classes, or of any other series of Preferred Securities, or
securities of any other kind, including those issued by the Managing
Member, American General or any of its Affiliates, and if so
convertible or exchangeable, the terms and conditions of such
conversion or exchange, including the price or prices or the rate or
rates of conversion or exchange; the method, if any, of adjusting the
same and the terms of any right to terminate such conversion or
exchange privilege;
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(viii) any limitations and restrictions in addition to those
set forth in this Agreement to be effective while any Preferred
Securities of such series are outstanding upon the payment of dividends
or other distributions on, and upon the purchase, redemption or other
acquisition by the Company of, Common Securities or any other series of
Preferred Securities;
(ix) any conditions or restrictions in addition to those set
forth in this Agreement upon the issue of any additional Interests
(including additional Preferred Securities of such series or Interests
of any other series ranking pari passu with or senior to the Preferred
Securities of such series as to the payment of dividends or
distribution of assets on dissolution);
(x) the times, prices and other terms and conditions for the
offering of the Preferred Securities of such series; and
(xi) any other relative rights, powers, preferences,
limitations and restrictions as shall not be inconsistent with this
Section 7.1.
In connection with the foregoing and without limiting the
generality thereof, the Managing Member is hereby expressly authorized, without
the vote or approval of any other Member, to take any action to create under the
provisions of this Agreement a series of Preferred Securities that was not
previously outstanding. Without the vote or approval of any other Member, the
Managing Member may execute, swear to, acknowledge, deliver, file and record
whatever documents may be required in connection with the issue from time to
time of Preferred Securities in one or more series as shall be necessary,
convenient or desirable to reflect the issue of such series. The Managing Member
shall do all things it deems to be appropriate or necessary to comply with the
Delaware Act and is authorized and directed to do all things it may deem to be
necessary or permissible in connection with any future issuance, including
compliance with any statute, rule, regulation or guideline of any federal, state
or other governmental agency or any securities exchange.
Any action or actions taken by the Managing Member pursuant to
the provisions of this paragraph (b) shall be deemed an amendment and supplement
to and part of this Agreement.
(c) All Preferred Securities shall rank senior to the Common
Securities in respect of the right to receive dividends and the right to receive
payments out of the assets of the Company upon voluntary or involuntary
liquidation, dissolution or winding up of the Company. All Preferred Securities
redeemed, purchased or otherwise acquired by the Company (including Preferred
Securities surrendered for conversion or exchange) shall be cancelled and
thereupon restored to the status of authorized but unissued Preferred Securities
undesignated as to series.
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(d) No Member shall be entitled as a matter of right to
subscribe for or purchase, or have any preemptive right with respect to, any
part of any new or additional issue of Common Securities or Preferred Securities
of any series whatsoever, or of securities convertible into any Common
Securities or Preferred Securities of any series whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration or by
way of dividend.
(e) Common Securities shall not be evidenced by any certificate
or other written instrument, but shall only be evidenced by this Agreement.
Common Securities shall be non-assignable and non-transferable, and may only be
issued to and held by American General (or a successor of American General in
accordance with the provisions of the Guarantee) and American General Manager.
Any transfer or purported transfer of any Common Security shall be null and
void. Preferred Securities shall be freely assignable and transferable.
(f) Any Person purchasing Preferred Securities shall be
admitted to the Company as a Preferred Member upon compliance with Section 2.7
of this Agreement.
SECTION 7.2. PERSONS DEEMED PREFERRED MEMBERS. The Company may treat
the Person in whose name any Preferred Certificate shall be registered on the
books and records of the Company as a Preferred Member and the sole holder of
such Preferred Certificate for purposes of receiving dividends and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claims to or interest in such Preferred Certificate on the
part of any other Person, whether or not the Company shall have actual or other
notice thereof.
ARTICLE VIII
VOTING AND MEETINGS
SECTION 8.1. VOTING RIGHTS OF HOLDERS OF PREFERRED SECURITIES.
(a) Except as shall be otherwise provided herein or in the
Preferred Securities Designation for any series of Preferred Securities and
except as otherwise required by the Delaware Act, the Preferred Members holding
such Preferred Securities shall have, with respect to such Preferred Securities,
no right or power to vote on any question or matter or in any proceeding or to
be represented at, or to receive notice of, any meeting of Members.
(b) If (i) the Company fails to pay dividends in full
(including any arrearages and Additional Dividends) on the Preferred Securities
of any series for 18 consecutive monthly dividend periods; (ii) an Event of
Default (as defined in the Indenture) occurs and is continuing with respect to
the Debentures of the related series; or (iii) American General is in default on
any of its payment or other obligations under the Guarantee with respect to the
Preferred Securities of any series, then the Preferred Members holding a
Majority in Liquidation Preference of the outstanding Preferred
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Securities of such series will be entitled to appoint and authorize a trustee to
enforce the Company's rights under such Debentures against American General,
enforce the obligations undertaken with respect to such Preferred Securities by
American General under the Guarantee and, to the extent permitted by law,
declare and pay dividends on such Preferred Securities to the extent funds of
the Company are legally available therefor. For purposes of determining whether
the Company has failed to pay dividends in full for 18 consecutive monthly
dividend periods, dividends shall be deemed to remain in arrears,
notwithstanding any partial payments in respect thereof, until all accumulated
and unpaid dividends (including any Additional Dividends) have been or
contemporaneously are declared and paid with respect to all monthly dividend
periods terminating on or prior to the date of payment of such full cumulative
dividends. Not later than 30 calendar days after the right to appoint a trustee
arises and upon not less than 15 calendar days' written notice by first class
mail to the Preferred Members holding Preferred Securities of such series, the
Managing Member will convene a meeting to elect such a trustee. If the Managing
Member fails to convene such meeting within such 30-day period, the Preferred
Members holding at least 10% in Liquidation Preference of the Preferred
Securities of such series will be entitled to convene such meeting. In the event
that, at such meeting, Preferred Members holding less than a Majority in
Liquidation Preference vote for such appointment, no such trustee shall be
appointed. Any trustee so appointed shall vacate office immediately, subject to
the applicable terms of any Interests the holders of which were entitled to
appoint such trustee, if the Company (or American General pursuant to the
Guarantee) shall have paid in full all accumulated and unpaid dividends
(including any Additional Dividends) on the Preferred Securities of such series
or such Event of Default under the Indenture or such default under the
Guarantee, as the case may be, shall have been cured. Notwithstanding the
appointment of any such trustee, American General shall retain all rights under
the Indenture and as obligor under the Debentures of the related series,
including any rights it may have to extend the interest payment period of any
Debentures, and any such extension would not constitute an Event of Default
under the Indenture with respect to such series of Debentures or enable a holder
of Preferred Securities of the related series to require the payment of a
dividend that has not theretofore been declared.
In furtherance of the foregoing, and without limiting the
powers of any trustee so appointed and for the avoidance of any doubt concerning
the powers of such trustee, the trustee, in its own name and as trustee of an
express trust for the benefit of the related Preferred Members, may institute a
proceeding, including, without limitation, any suit in equity, an action at law
or other judicial or administrative proceeding, to enforce the Company's
creditor rights directly against American General to the same extent as the
Company and on behalf of the Company, and may prosecute such proceeding to
judgment or final decree, and enforce the same against American General and,
subject to any subordination provisions contained in the Indenture, collect, out
of the property, wherever situated, of American General the monies adjudged or
decreed to be payable in the manner and to the extent provided by law.
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So long as the Debentures of any series are held by the
Company, the Managing Member shall not (i) at any time in which a trustee has
been appointed pursuant to this Section 8.1(b), direct the time, method and
place of conducting any proceeding for any remedy available to such trustee with
respect to such series of Debentures, or exercising any trust or power conferred
on such trustee with respect to such series of Debentures, (ii) waive compliance
with, or any past default under, the Debentures of such series or the Indenture
(to the extent that the holder of such Debentures is entitled to the benefits of
the covenant or condition waived), (iii) exercise any right to rescind or annul
a declaration that the principal of the Debentures of such series shall be due
and payable, (iv) consent to any amendment, modification or termination of the
Debentures of such series or of the Indenture which requires a consent of the
holders of the Debentures of such series pursuant to Section 902 of the
Indenture, without, in each case, obtaining the prior approval of the Preferred
Members holding at least 66-2/3% in Liquidation Preference of the Preferred
Securities of such series; provided, however, that where a waiver or consent
under the Debentures of such series would require the consent of each holder
affected thereby, no such consent shall be given by the Managing Member without
the prior consent of each Preferred Member holding Preferred Securities of such
series. The Managing Member shall not revoke any action previously authorized or
approved by a vote of Preferred Members holding Preferred Securities of such
series, without the approval of Preferred Members holding at least 66-2/3% in
Liquidation Preference of the Preferred Securities of such series then
outstanding (or, if such action required the approval of each such Preferred
Member, then only with the approval of each such Preferred Member). The Managing
Member shall notify all Preferred Members holding Preferred Securities of such
series of any notice of default with respect to the Debentures of the related
series received from the trustee under the Indenture.
(c) If any proposed amendment to this Agreement or the
Preferred Securities Designation for any series of Preferred Securities provides
for, or the Managing Member otherwise proposes to effect:
(i) any action that would materially adversely affect
the powers, preferences or special rights of the Preferred Securities
of such series, whether by way of amendment of this Agreement, such
Preferred Securities Designation or otherwise (including, without
limitation, the authorization or issuance of any Interests in the
Company ranking, as to payment of dividends or distribution of assets
upon liquidation, dissolution or winding up of the Company, senior to
the Preferred Securities of such series),
(ii) the liquidation, dissolution or winding up of the
Company (in any case other than in connection with the exchange of
Preferred Securities of such series for other securities pursuant to
the terms of such series of Preferred Securities), or
(iii) the commencement of any voluntary bankruptcy,
insolvency, reorganization or other similar proceeding involving the
Company,
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then the Preferred Members holding outstanding Preferred Securities of such
series, together with, if any such resolution or action described in clause (i)
above would materially adversely affect the powers, preferences or special
rights of any Company Dividend Parity Securities or any Company Liquidation
Parity Securities, the holders of such Company Dividend Parity Securities or
such Company Liquidation Parity Securities, as the case may be, or, with respect
to any such resolution or action described in clause (ii) or (iii) above, the
holders of all Company Liquidation Parity Securities, will be entitled to vote
together as a class on such resolution or action of the Managing Member (but not
any other resolution or action) and such resolution or action shall not be
effective except with the approval of the Preferred Members holding at least
66-2/3% in Liquidation Preference of such outstanding securities; provided,
however, that no such approval shall be required if the liquidation, dissolution
or winding-up of the Company is proposed or initiated upon the occurrence of any
of the events specified in Section 15.2(a) through (c) and (e) through (f).
The powers, preferences or special rights of the Preferred
Securities of any series will be deemed not to be adversely affected by the
creation or issuance of, and no vote will be required for the creation or
issuance of, any further Interests in the Company ranking junior to or pari
passu with the Preferred Securities of such series with respect to voting rights
or rights to payment of dividends or distribution of assets upon liquidation,
dissolution or winding-up of the Company.
(d) Notwithstanding any provision to the contrary herein, the
first sentence of Section 14.1 of this Agreement may only be amended with the
consent of each Preferred Member; provided that, to the fullest extent permitted
by applicable law, any such amendment shall not permit the Preferred Members to
approve any transferee of Common Securities.
(e) Notwithstanding that Preferred Members holding Preferred
Securities of any series are entitled to vote or consent under any of the
circumstances described in this Agreement, any of the Preferred Securities of
any series that are owned by American General or by any entity more than 50% of
which is owned by American General, either directly or indirectly, shall not be
entitled to vote or consent and shall, for the purposes of such vote or consent,
be treated as if they were not outstanding.
SECTION 8.2. VOTING RIGHTS OF HOLDERS OF COMMON SECURITIES. Except as
otherwise provided herein or in the Preferred Securities Designation for any
series of Preferred Securities and except as otherwise required by the Delaware
Act, all voting rights of the Company shall be vested exclusively in the Common
Members. The Common Securities shall entitle the Common Members to vote in
proportion to their percentage ownership interest of Common Securities upon all
matters upon which Common Members have the right to vote. All Common Members
shall have the right to vote separately as a class on any matter on which the
Common Members have the right to vote regardless of the voting rights of any
other Member.
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SECTION 8.3. MEETINGS OF THE MEMBERS.
(a) Meetings of the Members of any class or series or of all
classes or series of Interests may be called at any time by the Managing Member
or as provided by any applicable Preferred Securities Designation. Except to the
extent otherwise provided, the following provisions shall apply to meetings of
Members.
(b) Members may vote in person or by proxy at such meeting.
Whenever a vote, consent or approval of Members is permitted or required under
this Agreement or any applicable Preferred Securities Designation, such vote,
consent or approval may be given at a meeting of Members or by written consent.
(c) Each Member may authorize any Person to act for it by proxy
on all matters in which a Member is entitled to vote, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
signed by the Member or its attorney-in-fact and shall be revocable at the
pleasure of the Member executing it at any time before it is voted.
(d) Each meeting of Members shall be conducted by the Managing
Member or by such other Person that the Managing Member may designate.
(e) Any required approval of Preferred Members holding
Preferred Securities of a series may be given at a separate meeting of such
Preferred Members convened for such purpose or at a meeting of Members of the
Company or pursuant to written consents. The Managing Member will cause a notice
of any meeting at which Preferred Members holding Preferred Securities of a
series are entitled to vote, or of any matter upon which action by written
consent of such Preferred Members is to be taken, to be mailed to each Preferred
Member holding Preferred Securities of such series. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any matter on which such
Preferred Members are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents.
(f) Subject to Section 8.3(e) and the applicable Preferred
Securities Designation, the Managing Member, in its sole discretion, shall
establish all other provisions relating to meetings of Members, including notice
of the time, place or purpose of any meeting at which any matter is to be voted
on by any Members, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements (but in no
event higher than 66 2/3% in Liquidation Preference of the Preferred Securities
of any series), voting in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
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ARTICLE IX
DIVIDENDS
SECTION 9.1. DIVIDENDS. (a) Preferred Members shall receive periodic
dividends, if any, in accordance with the Preferred Securities Designation for
the Preferred Securities of any particular series, as and when declared by the
Managing Member, and Common Members shall receive periodic dividends, subject to
Section 9.3 of this Agreement, the applicable terms of any series of Preferred
Securities and the provisions of the Delaware Act, as and when declared by the
Managing Member, in its discretion out of funds of the Company legally available
therefor.
(b) Dividends on the Preferred Securities shall be declared by
the Managing Member to the extent that the Managing Member reasonably
anticipates that at the time of payment the Company will have, and must be paid
by the Company to the extent that at the time of proposed payment it has, (i)
funds legally available for the payment of such dividends and (ii) cash on hand
sufficient to permit such payments.
(c) A Preferred Member shall not be entitled to receive any
dividend with respect to the Preferred Securities of any series, irrespective of
whether such dividend has been declared by the Managing Member, prior to the
date on which such dividend is payable (the "Dividend Payment Date") and until
such time as the Company has received the interest payment on the Debentures of
the related series for the interest payment date corresponding to such Divided
Payment Date and such monies are available for distribution to the Preferred
Member pursuant to the terms of this Agreement and the Delaware Act, and
notwithstanding any provision of Section 18-606 of the Delaware Act to the
contrary, until such time, a Preferred Member shall not have the status of a
creditor of the Company, or the remedies available to a creditor of the Company.
SECTION 9.2. LIMITATIONS ON DISTRIBUTIONS. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution (including a dividend) to any Member on account of its
Interest if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
SECTION 9.3. CERTAIN RESTRICTIONS ON THE PAYMENT OF DIVIDENDS. If
accumulated dividends (including Additional Dividends) have not been paid in
full on the Preferred Securities of any series then outstanding, the Company
shall not:
(i) pay, or declare and set aside for payment, any dividends on
the Preferred Securities of any other series or any other Interests in
the Company ranking pari passu with the Preferred Securities of such
series as to the payment of dividends ("Company Dividend Parity
Securities"), unless the amount of any dividends declared on such
Company Dividend Parity Securities is paid on such Company Dividend
Parity Securities and the Preferred Securities of such series on a pro
rata basis on the date such dividends are paid on such Company Dividend
Parity Securities, so that the ratio of
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(x) (A) the aggregate amount paid as dividends on the
Preferred Securities of such series to (B) the aggregate amount
paid as dividends on the Company Dividend Parity Securities is
the same as the ratio of
(y) (A) the aggregate amount of all accumulated
arrears of unpaid dividends on the Preferred Securities of such
series to (B) the aggregate amount of all accumulated arrears
of unpaid dividends on the Company Dividend Parity Securities;
(ii) pay, or declare and set aside for payment, any dividends
on any Interests in the Company ranking junior to the Preferred
Securities of such series as to the payment of dividends ("Company
Dividend Junior Securities"); or
(iii) redeem, purchase or otherwise acquire any Company
Dividend Parity Securities or Company Dividend Junior Securities (other
than purchases or acquisitions resulting from the reclassification of
such Securities or the exchange or conversion of any Company Dividend
Parity Security or Company Dividend Junior Security pursuant to the
terms thereof or the purchase of fractional interests therein upon such
conversion or exchange);
until, in each case, such time as all accumulated and unpaid dividends
(including Additional Dividends) on all of the Preferred Securities of
such series shall have been paid in full or have been irrevocably set
aside for payment in full for all dividend periods terminating on or
prior to, in the case of clauses (i) and (ii), the date of such
payment, and in the case of clause (iii), the date of such redemption,
purchase or other acquisition.
ARTICLE X
BOOKS AND RECORDS
SECTION 10.1. BOOKS AND RECORDS; ACCOUNTING. The Managing
Member shall keep or cause to be kept at the address of the Managing Member (or
at such other place as the Managing Member shall advise the other Members in
writing) true and full books and records regarding the status of the business
and financial condition of the Company.
SECTION 10.2. FISCAL YEAR. The fiscal year of the Company for
federal income tax and accounting purposes shall, except as otherwise required
in accordance with the Code, end on December 31 of each year.
SECTION 10.3. LIMITATION ON ACCESS TO RECORDS. Notwithstanding
any provision of this Agreement, the Managing Member may, to the maximum extent
permitted by law, keep confidential from the Preferred Members any information
the disclosure of which the Managing Member reasonably believes is not in the
best interest of the Company or could damage the Company or its business or
which the Company or the Managing Member is required by law or by an agreement
with any Person to keep confidential.
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ARTICLE XI
TAX MATTERS
SECTION 11.1. COMPANY TAX RETURNS. (a) The Managing Member
shall cause to be prepared and timely filed all tax returns required to be filed
for the Company. The Managing Member may, in its discretion, make or refrain
from making any federal, state or local income or other tax elections for the
Company that it deems necessary or advisable, including, without limitation, any
election under Section 754 of the Code or any successor provision.
(b) The Managing Member is hereby designated as the Company's
"Tax Matters Partner" under Code Section 6231(a)(7) and shall have all the
powers and responsibilities of such position as provided in the Code. The
Managing Member is specifically directed and authorized to take whatever steps
the Managing Member, in its discretion, deems necessary or desirable to perfect
such designation, including filing any forms or documents with the Internal
Revenue Service and taking such other action as may from time to time be
required under the regulations issued under the Code. Expenses incurred by the
Tax Matters Partner, in its capacity as such, will be borne by the Company.
SECTION 11.2. TAX REPORTS. The Managing Member shall, as
promptly as practicable and in any event within 90 days after the end of each
fiscal year, cause to be prepared and mailed to each Preferred Member of record
federal income tax form K-1 and any other forms which are necessary or
advisable.
SECTION 11.3. TAXATION AS PARTNERSHIP. The Members recognize that the
Company will be treated as a partnership for U.S. federal income tax purposes,
and the Managing Member shall operate the Company in such a manner as will
preserve its treatment as a partnership for U.S. federal income tax purposes.
ARTICLE XII
EXPENSES
SECTION 12.1. EXPENSES. Except as otherwise provided in this
Agreement, the Company shall be responsible for and shall pay all expenses out
of funds of the Company determined by the Managing Member to be available for
such purpose, provided that such expenses or obligations are those of the
Company or are otherwise incurred by the Managing Member in connection with this
Agreement, including, without limitation:
(a) all costs and expenses related to the business of the
Company and all routine administrative expenses of the Company,
including the maintenance of books and records of the Company, the
preparation and dispatch to the Members of checks, financial reports,
tax returns and notices required pursuant to this Agreement and the
holding of any meetings of the Members;
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(b) all expenses incurred in connection with any litigation
involving the Company (including the cost of any investigation and
preparation) and the amount of any judgment or settlement paid in
connection therewith (other than expenses incurred by the Managing
Member in connection with any litigation brought by or on behalf of any
Member against the Managing Member);
(c) all expenses for indemnity or contribution payable by the
Company to any Person;
(d) all expenses incurred in connection with the collection of
amounts due to the Company from any Person;
(e) all expenses incurred in connection with the preparation of
amendments to this Agreement; and
(f) all expenses incurred in connection with the liquidation,
dissolution or winding-up of the Company.
ARTICLE XIII
LIABILITY
SECTION 13.1. LIABILITY OF COMMON MEMBERS. Each Common Member,
by acquiring its Interest and being admitted to the Company as a Common Member,
shall be liable to the creditors of the Company (other than to Members holding
other classes or series of Interests, in their capacity as Members) (hereinafter
referred to individually as a "Third Party Creditor," and collectively as the
"Third Party Creditors") to the same extent that a general partner of a limited
partnership formed under the LP Act is liable under Section 17-403(b) of the LP
Act to creditors of the limited partnership (other than the other partners in
their capacity as partners), as if the Company were a limited partnership formed
under the LP Act and the Common Members were general partners of the limited
partnership. In furtherance but not in limitation of the generality of the
foregoing, each Common Member is liable for any and all debts, obligations and
other liabilities of the Company, whether arising under contract or by tort,
statute, operation of law or otherwise, all of which shall be enforceable
directly and absolutely against each Common Member by each Third Party Creditor.
SECTION 13.2. LIABILITY OF PREFERRED MEMBERS.
(a) Except as otherwise provided by the Delaware Act, (i) the
debts, obligations and liabilities of the Company, whether arising by contract,
tort, statute, operation of law or otherwise, shall be solely the debts,
obligations and liabilities of the Company and, to the extent set forth in
Section 13.1. of this Agreement, the Common Members and (ii) no Preferred Member
shall be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Preferred Member of the Company.
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(b) A Preferred Member, in its capacity as such, shall have no
liability in excess of (i) the amount of its capital contributions, (ii) its
share of any assets and undistributed profits of the Company, (iii) any amounts
required to be paid by such Preferred Member in the Preferred Securities
Designation for the series of Preferred Securities held by such Preferred Member
and (iv) the amount of any distributions wrongfully distributed to it.
ARTICLE XIV
ASSIGNMENT OF INTERESTS
SECTION 14.1. ASSIGNMENT OF INTERESTS. Notwithstanding anything
to the contrary in this Agreement, after the date hereof Common Securities shall
be non-assignable and non-transferable (other than pursuant to a merger or
consolidation of a Common Member), and may only be issued to a Common Member and
held by the Common Member which holds such Common Security on the date hereof.
Preferred Securities shall be freely assignable and transferable, subject to the
provisions of Section 2.7 of this Agreement.
SECTION 14.2. RIGHT OF ASSIGNEE TO BECOME A MEMBER. An assignee
of a Preferred Security shall become a Preferred Member upon compliance with the
provisions of Section 2.7 of this Agreement.
SECTION 14.3. EVENTS OF CESSATION OF MEMBERSHIP. A Person shall
cease to be a Member upon the lawful assignment of its Interests (including any
redemption, exchange or other repurchase by the Company or the Common Members)
or as otherwise provided herein.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
SECTION 15.1. NO DISSOLUTION. The Company shall not be
dissolved by the admission of Members in accordance with the terms of this
Agreement. Except as provided in Sections 15.2(b) and (c) of this Agreement, the
death, retirement, resignation, expulsion, bankruptcy or dissolution of a
Member, or the occurrence of any other event which terminates the continued
membership of a Member in the Company, shall not cause the Company to be
dissolved and its affairs wound up so long as the Company at all times has at
least two Members. Upon the occurrence of any such event, the business of the
Company shall be continued without dissolution.
SECTION 15.2. EVENTS CAUSING DISSOLUTION. The Company shall be
dissolved and its affairs shall be wound up upon the earliest to occur of any of
the following events:
(a) the expiration of the term of the Company, as provided in
Section 2.3 of this Agreement;
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(b) a decree or order by a court having jurisdiction shall have
been entered adjudging either of the Common Members a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of either of the
Common Members under any applicable Federal or State bankruptcy or
similar law, and such decree or order shall have continued undischarged
and unstayed for a period of 90 days; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of either of the Common Members or of all or
substantially all of its property, or for the winding-up or liquidation
of its affairs, shall have been entered, and such decree or order shall
have continued undischarged and unstayed for a period of 90 days; or
either of the Common Members shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization, arrangement, adjustment or composition
under any applicable Federal or State bankruptcy or similar law, or
shall consent to the filing of any such petition, or shall consent to
the appointment of a receiver, liquidator, trustee, assignee,
sequestrator or similar official in bankruptcy or insolvency of either
of the Common Members or of all or substantially all of its property,
or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due and its willingness to be adjudged a bankrupt, or corporate
action shall be taken by either of the Common Members in furtherance of
any of the aforesaid purposes;
(c) the withdrawal, retirement, resignation, expulsion,
dissolution, winding-up or liquidation of any Common Member or the
occurrence of any other event that terminates the continued membership
of any Common Member under the Delaware Act;
(d) the decision made by the Managing Member (subject to the
voting rights of Preferred Members set forth in Section 8.1 of this
Agreement) to dissolve the Company;
(e) the entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Delaware Act;
(f) the election of the Managing Member, in connection with the
exchange of all series of Preferred Securities outstanding (in
accordance with the Preferred Securities Designation for such series of
Preferred Securities) for the related series of Debentures; or
(g) the written consent of all Members.
SECTION 15.3. NOTICE OF DISSOLUTION. Upon the dissolution of the
Company, the Managing Member shall promptly notify the Members of such
dissolution.
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SECTION 15.4. LIQUIDATION. Upon dissolution of the Company, the
Managing Member or, in the event that the dissolution is caused by an event
described in Sections 15.2(b) and (c) and there is no Managing Member, a Person
or Persons who may be approved by the Preferred Members holding a Majority in
Liquidation Preference of the Preferred Securities, as liquidating trustees,
shall immediately commence to wind-up the Company's affairs; provided, however,
that a reasonable time shall be allowed for the orderly liquidation of the
assets of the Company and the satisfaction of liabilities to creditors so as to
enable the Members to minimize the normal losses attendant upon a liquidation.
The proceeds of liquidation shall be distributed, as realized, in the manner
provided in Section 18-804 of the Delaware Act, subject to the Preferred
Securities Designation for any series of Preferred Securities and Section 15.5
of this Agreement.
SECTION 15.5. CERTAIN RESTRICTIONS ON LIQUIDATION PAYMENTS. In
the event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company other than in connection with the exchange of all series of
Preferred Securities outstanding (in accordance with the Preferred Securities
Designation for each such series of Preferred Securities) for the related series
Debentures, Preferred Members holding Preferred Securities of each series at the
time outstanding will be entitled to receive out of the assets of the Company
legally available for distribution to Members, before any distribution of assets
is made to Common Members or Members holding any other class of Interests in the
Company ranking junior to the Preferred Securities of such series as to the
distribution of assets upon liquidation, dissolution or winding-up of the
Company, but together with Preferred Members holding Preferred Securities of any
other series or any other Interests in the Company then outstanding ranking pari
passu with the Preferred Securities of such series as to the distribution of
assets upon liquidation, dissolution or winding-up of the Company ("Company
Liquidation Parity Securities"), an amount equal to the aggregate liquidation
preference for Preferred Securities of such series as set forth in the
applicable Preferred Securities Designation plus all accumulated and unpaid
dividends (whether or not earned or declared), including any Additional
Dividends, to the date of payment (the "Liquidation Distribution"). If, upon any
such liquidation, dissolution or winding-up, the Liquidation Distributions can
be paid only in part because the Company has insufficient assets available to
pay in full the aggregate Liquidation Distributions and the aggregate maximum
liquidation distributions on the Company Liquidation Parity Securities, then the
amounts payable directly by the Company on the Preferred Securities of such
series and on such Company Liquidation Parity Securities shall be paid on a pro
rata basis, so that the ratio of
(i) (x) the aggregate amount paid as Liquidation Distributions
on the Preferred Securities of such series to (y) the aggregate amount
paid as liquidation distributions on the Company Liquidation Parity
Securities, is the same as the ratio of
(ii) (x) the aggregate Liquidation Distributions on the
Preferred Securities of such series to (y) the aggregate maximum
liquidation distributions on the Company Liquidation Parity Securities.
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SECTION 15.6. TERMINATION. The Company shall terminate when all
of the assets of the Company have been distributed in the manner provided for in
this Article XV, and the Certificate shall have been cancelled in the manner
required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1. AMENDMENTS. Except as otherwise provided in this
Agreement or by any applicable Preferred Securities Designation, this Agreement
may be amended by, and only by, a written instrument executed by the Common
Members.
SECTION 16.2. SUCCESSORS; COUNTERPARTS. This Agreement (a)
shall be binding as to the executors, administrators, estates, heirs and legal
successors, or nominees or representatives, of the Members and (b) may be
executed in several counterparts with the same effect as if the parties
executing the several counterparts had all executed one counterpart. No person
other than the Members and their respective executors, administrators, estates,
heirs and legal successors, or their nominees or representatives, shall obtain
any rights by virtue of this Agreement.
SECTION 16.3. GOVERNING LAW; SEVERABILITY. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws thereof. In
particular, this Agreement shall be construed to the maximum extent possible to
comply with all of the terms and conditions of the Delaware Act. If,
nevertheless, it shall be determined by a court of competent jurisdiction that
any provisions or wording of this Agreement shall be invalid or unenforceable
under the Delaware Act or other applicable law, such invalidity or
unenforceability shall not invalidate the entire Agreement. In that case, this
Agreement shall be construed so as to limit any term or provision so as to make
it enforceable or valid within the requirements of applicable law, and, in the
event such term or provisions cannot be so limited, this Agreement shall be
construed to omit such invalid or unenforceable provisions. If it shall be
determined by a court of competent jurisdiction that any provision relating to
the distributions and allocations of the Company or to any fee payable by the
Company is invalid or unenforceable, this Agreement shall be construed or
interpreted so as (a) to make it enforceable or valid and (b) to make the
distributions and allocations as closely equivalent to those set forth in this
Agreement as is permissible under applicable law.
SECTION 16.4. FILINGS. Following the execution and delivery of
this Agreement, the Managing Member shall promptly prepare any documents
required to be filed and recorded under the Delaware Act, and the Managing
Member shall promptly cause each such document to be filed and recorded in
accordance with the Delaware Act and, to the extent required by local law, to be
filed and recorded or notice thereof to be published in the appropriate place in
each jurisdiction in which the Company may hereafter establish a place of
business. The Managing Member shall also promptly cause to be filed, recorded
and published such statements or other instruments required by any provision of
any applicable
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law of the United States or any state or other jurisdiction which governs the
conduct of its business from time to time.
SECTION 16.5. POWER OF ATTORNEY. Each Preferred Member does
hereby constitute and appoint the Managing Member as its true and lawful
representative and attorney-in-fact, in its name, place and stead to make,
execute, sign, deliver and file (a) any amendment of the Certificate required
because of an amendment to this Agreement or in order to effectuate any change
in the membership of the Company, (b) any amendment to this Agreement made in
accordance with the terms hereof and (c) all such other instruments, documents
and certificates which may from time to time be required by the laws of the
United States of America, the State of Delaware or any other jurisdiction, or
any political subdivision of agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Company or to dissolve the
Company or for any other purpose consistent with this Agreement and the
transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and
shall (a) survive and not be affected by the subsequent death, incapacity,
disability, dissolution, termination or bankruptcy of the Preferred Member
granting the same or the transfer of all or any portion of such Preferred
Member's Interest and (b) extend to such Preferred Member's successors, assigns
and legal representatives.
SECTION 16.6. EXCULPATION. (a) No Covered Person shall be
liable to the Company or any Member for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by this
Agreement.
(b) A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which distributions to
Members might properly be paid.
SECTION 16.7. INDEMNIFICATION. To the fullest extent permitted
by applicable law, an Indemnified Person shall be entitled to indemnification
from the Company for any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by this Agreement; provided, however, that any indemnity under this
Section 16.7 shall be provided out of and to the extent of Company assets only,
and no Member shall have any personal liability on account thereof. The right of
indemnification pursuant to this Section 16.7 shall include the right to be
paid, in advance, or reimbursed
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by the Company for the reasonable expenses incurred by an Indemnified Person who
was, is, or is threatened to be made a named defendant or respondent in a
proceeding.
SECTION 16.8. ADDITIONAL DOCUMENTS. Each Preferred Member, upon
the request of the Managing Member, agrees to perform all further acts and
execute, acknowledge and deliver any documents that may be reasonably necessary
to carry out the provisions of this Agreement.
SECTION 16.9. NOTICES. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(i) If given to the Company, in care of Managing
Member at the Company's mailing address set forth below:
c/o American General Delaware Management Corporation
2590 American General Center
Nashville, Tennessee 37250
Facsimile No.: (713) 749-1251
Attention: Kent E. Barrett
Vice President and Treasurer
(ii) If given to any Member, at the address set forth
on the registration books maintained by or on behalf of the
Company.
Each such notice, request or other communication shall be effective (a) if given
by telecopier, when transmitted to the number specified in such registration
books and the appropriate confirmation is received, (b) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (c) if given by any other means,
when delivered at the address specified in such registration books.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
AMERICAN GENERAL CORPORATION
By: ___________________________
Name: _________________________
Title: ________________________
AMERICAN GENERAL DELAWARE
MANAGEMENT CORPORATION
By: ___________________________
Name: _________________________
Title: ________________________
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