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Exhibit 4(p)
FORM OF GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT (this "Guarantee"), dated as of May ____,
1995, is executed and delivered by American General Corporation, a corporation
organized under the laws of the State of Texas ("American General"), for the
benefit of the Holders (as hereinafter defined) from time to time of the
Preferred Securities (as hereinafter defined) of American General Delaware,
L.L.C., a Delaware limited liability company ("American General Delaware").
WHEREAS, American General Delaware intends to issue and sell from time
to time, in one or more series, preferred limited liability company interests
(the "Preferred Securities"), and American General desires to issue this
Guarantee for the benefit of the Holders of the Preferred Securities, as
provided herein;
WHEREAS, American General Delaware will purchase the Junior
Subordinated Debentures (as hereinafter defined) issued pursuant to the Junior
Subordinated Indenture (as hereinafter defined) with substantially all of the
proceeds from the issuance and sale of the Preferred Securities and its other
common limited liability company interests (the "Common Securities"); and
WHEREAS, American General desires hereby to unconditionally and
irrevocably guarantee, to the extent set forth herein, the payment in full to
the Holders of the Guarantee Payments (as hereinafter defined) and the
performance of the other obligations set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of the
Preferred Securities, which purchase American General hereby agrees shall
benefit American General, American General executes and delivers this Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS
As used in this Guarantee, the terms set forth below shall, unless the
context otherwise requires, have the following meanings. Capitalized terms used
herein but not otherwise defined herein shall have the meanings ascribed to such
terms in the Amended and Restated Limited Liability Company Agreement of
American General Delaware, L.L.C., dated as of May ____, 1995 (the "LLC
Agreement").
1.1 "Additional Dividends" shall mean Dividends (as hereinafter
defined) that shall be declared and paid by American General Delaware on any
Dividend arrearages in respect of the Preferred Securities of any series at the
rate set forth in the Declaration (as hereinafter defined) with respect to such
series of Preferred Securities.
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1.2 "American General Common Stock" shall mean the shares of common
stock, par value $.50 per share, of American General.
1.3 "American General Preferred Stock" shall mean the series of
Preferred Stock, par value $1.50 per share, of American General exchangeable for
the related series of Junior Subordinated Debentures.
1.4 "Conversion Agent" shall mean Chemical Bank and its successors (or
such substitute entity as may be designated from time to time by the Manager (as
hereinafter defined), acting as agent of the Holders in effecting the conversion
of Junior Subordinated Debentures into shares of American General Common Stock
or the exchange of Preferred Securities of any series for the related series of
the American General Preferred Stock, in each case as and in the manner set
forth in the LLC Agreement and the Declaration with respect to such series of
Preferred Securities.
1.5 "Declaration" shall mean, with respect to any series of Preferred
Securities, the Written Action adopted by the Manager pursuant to Section 7.1(b)
of the LLC Agreement relating to such series of Preferred Securities.
1.6 "Dividends" shall mean, with respect to any series of Preferred
Securities, the cumulative cash distributions from American General Delaware
with respect to such series of Preferred Securities, accruing and payable in the
manner set forth in the Declaration with respect to such series of Preferred
Securities.
1.7 "Guarantee Payments" shall mean, with respect to any series of
Preferred Securities, the following payments, without duplication, to the extent
not paid by American General Delaware: (a) any accumulated and unpaid Dividends,
including any Additional Dividends, which are required to be paid on such
Preferred Securities, but only if and to the extent that such Dividends have
been declared on such Preferred Securities from funds of American General
Delaware legally available therefor; (b) the Redemption Price (including all
accumulated and unpaid Dividends (whether or not earned or declared), including
any Additional Dividends) payable with respect to any such Preferred Securities
called for redemption by American General Delaware, but only to the extent
payable out of funds of American General Delaware legally available therefor;
and (c) upon the voluntary or involuntary liquidation, dissolution or winding-up
of American General Delaware other than in connection with the exchange of such
Preferred Securities for the related series of Junior Subordinated Debentures,
the lesser of (i) the Liquidation Distribution and (ii) the amount of assets of
American General Delaware available for distribution to Holders of such
Preferred Securities in liquidation, dissolution or winding-up of American
General Delaware.
1.8 "Holder" shall mean the registered holder from time to time of any
Preferred Securities of American General Delaware; provided, however, that in
determining whether the Holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include American General or any majority-owned entity thereof, either
directly or indirectly.
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1.9 "Junior Subordinated Debentures" shall mean the series of Junior
Subordinated Debentures issued by American General pursuant to the Junior
Subordinated Indenture and delivered to American General Delaware in connection
with the issuance and sale by American General Delaware of the related series of
Preferred Securities. The Junior Subordinated Debentures will evidence the loan
made by American General Delaware to American General of substantially all of
the proceeds received by American General Delaware from the issuance and sale of
the related series of Preferred Securities and the Common Securities.
1.10 "Junior Subordinated Indenture" shall mean the Indenture, dated as
of May ____, 1995, between American General and Chemical Bank.
1.11 "Manager" means American General Delaware Management Corporation,
in its capacity as the manager of American General Delaware, or any permitted
successor manager of American General Delaware admitted as such pursuant to the
applicable provisions of the LLC Agreement.
1.12 "Special Trustee" shall mean, with respect to any series of
Preferred Securities, a special trustee appointed by the Holders of the
Preferred Securities of such series pursuant to Section 8.1 of the LLC Agreement
and authorized, among other things, to enforce American General Delaware's
rights under the related series of Junior Subordinated Debentures against
American General and to enforce the obligations undertaken with respect to such
series of Preferred Securities by American General under this Guarantee.
ARTICLE II
GUARANTEE
2.1 GENERAL. American General irrevocably and unconditionally agrees to
pay in full to the Holders of each series of Preferred Securities the Guarantee
Payments with respect to such series of Preferred Securities, as and when due
(except to the extent previously paid by American General Delaware), regardless
of any defense, right of set-off or counterclaim which American General Delaware
may have or assert. American General's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by American General
to the Holders of such series of Preferred Securities or by causing American
General Delaware to pay such amounts to such Holders.
2.2 WAIVER OF CERTAIN RIGHTS. American General hereby waives, to the
fullest extent permitted by applicable law, notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
2.3 OBLIGATIONS NOT AFFECTED. The obligations, covenants, agreements
and duties of American General under this Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
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(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by American General Delaware of any
express or implied agreement, covenant, term or condition relating to
the Preferred Securities of any series to be performed or observed by
American General Delaware;
(b) the extension of time for the payment by American General
Delaware of all or any portion of the Dividends, Additional Dividends,
Redemption Price, Liquidation Distribution or any other sums payable
under the terms of the Preferred Securities of any series or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities of such
series;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders of Preferred Securities of any series or the
Special Trustee to enforce, assert or exercise any right, privilege,
power or remedy conferred on such Holders or such Special Trustee
pursuant to the terms of the Preferred Securities of such series, or
any action on the part of American General Delaware granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
winding-up, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, American General Delaware or any of the assets
of American General Delaware;
(e) any invalidity of, or defect or deficiency in, any of the
Preferred Securities of any series;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) to the fullest extent permitted by applicable law, any
other circumstance whatsoever that might otherwise constitute a legal
or equitable discharge or defense of a guarantor, it being the intent
of this Section 2.3 that the obligations of American General hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of any Holders of Preferred Securities to give
notice to, or obtain any consent of, American General with respect to the
happening of any of the foregoing.
2.4 PROCEEDING DIRECTLY AGAINST AMERICAN GENERAL. This Guarantee is a
guarantee of payment and not of collection. A Holder of Preferred Securities of
any series or the Special Trustee may enforce this Guarantee with respect to
such series of Preferred Securities directly against American General, and
American General waives any right or remedy to require that any action be
brought against American General Delaware or any
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other person or entity before proceeding against American General. Subject to
Section 2.5 hereof, all waivers herein contained shall be without prejudice to
the right of a Holder or the Special Trustee, at its option, to proceed against
American General Delaware, whether by separate action or by joinder. American
General agrees that this Guarantee shall not be discharged except by payment of
the Guarantee Payments in full (to the extent not previously paid by American
General Delaware) and by complete performance of all obligations under this
Guarantee.
2.5 SUBROGATION. American General shall be subrogated to all (if any)
rights of the Holders of Preferred Securities against American General Delaware
in respect of any amounts paid to such Holders by American General under this
Guarantee and shall have the right to waive payment by American General Delaware
of any amount of Dividends in respect of which payment has been made to the
Holders by it pursuant to Section 2.1 hereof; provided, however, that American
General shall not (except to the extent required by mandatory provisions of law)
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of a payment under
this Guarantee, if, at the time of any such payment, any amounts are due and
unpaid under this Guarantee. If any amount shall be paid to American General in
violation of the preceding sentence, American General agrees to hold such amount
in trust for the Holders and to pay over such amount promptly to the Holders.
2.6 INDEPENDENT OBLIGATIONS. American General acknowledges that its
obligations hereunder are independent of the obligations of American General
Delaware with respect to the Preferred Securities and that American General
shall be liable as principal and sole debtor under this Guarantee to make
Guarantee Payments in full pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.3 hereof.
2.7 TERMINATION. This Guarantee shall terminate and be of no further
force and effect as to the Preferred Securities of any series upon (a) full
payment of the Redemption Price of all outstanding Preferred Securities of such
series, (b) the exchange (in the manner provided in the LLC Agreement and the
applicable Declaration) of all of the Preferred Securities of such series for
the Junior Subordinated Debentures and the conversion or exchange (in the manner
provided in the Junior Subordinated Indenture), as the case may be, of Junior
Subordinated Debentures of such series for American General Common Stock or the
series of American General Preferred Stock related to such series of Preferred
Securities, as the case may be, and the related transfer thereof or (c) the
exchange (in the manner provided in the LLC Agreement or such Declaration) of
all of the Preferred Securities of such series for the Junior Subordinated
Debentures of the related series and the transfer thereof. In addition, this
Guarantee will terminate completely upon full payment of the aggregate
Liquidation Distributions applicable to all outstanding series of Preferred
Securities. Notwithstanding the foregoing, this Guarantee shall continue to be
effective or, to the fullest extent permitted by applicable law, shall be
reinstated, as the case may be, with respect to the Preferred Securities of any
series if at any time any Holder of such Preferred Securities must restore
payment of any sums recovered on account of, or
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must redeliver any securities received on account of, such Preferred Securities
or under this Guarantee for any reason whatsoever.
ARTICLE III
CERTAIN COVENANTS OF AMERICAN GENERAL
3.1 DIVIDENDS AND OTHER PAYMENTS. So long as the Preferred Securities
of any series remain outstanding, American General will not declare or pay any
dividend on, and American General will not, and American General will not permit
any of its majority-owned subsidiaries to, redeem, purchase, acquire or make a
liquidation payment with respect to, any of American General's capital stock
(other than (i) acquisitions of shares of American General Common Stock in
connection with the satisfaction by American General of its obligations under
any employee benefit plans or pursuant to any outstanding put contracts, (ii) as
a result of a reclassification of capital stock or the exchange or conversion of
one class or series of capital stock for another class or series of capital
stock, (iii) redemptions of any share purchase rights issued by American General
pursuant to the Rights Agreement dated as of July 27, 1989, as amended from time
to time, or the declaration of a dividend of similar share purchase rights in
the future or (iv) the purchase of fractional interests in shares of capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged) or make any guarantee payments with
respect to the foregoing, if at such time American General has exercised its
option to extend an interest payment period on the series of Junior Subordinated
Debentures related to such series of Preferred Securities and such extension is
continuing, American General is in default with respect to its payment or other
obligations hereunder or there shall have occurred any Event of Default (as
defined in the Junior Subordinated Indenture) with respect to the series of
Junior Subordinated Debentures related to such series of Preferred Securities.
American General shall take all actions necessary to ensure the compliance of
its majority-owned subsidiaries with this Section 3.1.
3.2 CERTAIN OTHER COVENANTS. So long as the Preferred Securities of any
series remain outstanding, American General shall: (a) not cause or permit any
Common Securities to be transferred (other than in connection with a merger or
consolidation of a holder of the Common Securities), (b) maintain direct or
indirect ownership of all outstanding Common Securities and any other limited
liability company interests in American General Delaware other than any series
of Preferred Securities (except as permitted in the LLC Agreement); (c) cause at
least 21% of all interests in the capital, income, gain, loss, deduction and
credit of American General Delaware to be represented by Common Securities; (d)
not voluntarily liquidate, dissolve or wind-up itself (other than following a
transfer of all of American General's assets), the Manager (other than following
a transfer of all or substantially all of its assets) or American General
Delaware (other than in connection with an exchange of all outstanding series of
Preferred Securities for the related series of Junior Subordinated Debentures,
if so provided in the Declaration relating to each such series of Preferred
Securities); (e) except as may be otherwise permitted by the LLC Agreement,
cause American General Delaware Management Corporation to remain the Manager and
to timely perform all of its duties as Manager (including the duty
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to cause American General Delaware to declare and pay dividends on all
outstanding series of Preferred Securities to the extent set forth in the LLC
Agreement and the applicable Declaration), unless a permitted successor Manager
is appointed pursuant to the LLC Agreement; and (f) subject to the terms of the
Preferred Securities of any series, use reasonable efforts to cause American
General Delaware to remain a Delaware limited liability company and otherwise
continue to be treated as a partnership for United States federal income tax
purposes.
ARTICLE IV
STATUS
4.1 STATUS. American General covenants and agrees that this Guarantee
constitutes an unsecured obligation of American General ranking (i) subordinate
and junior in right of payment to all other liabilities of American General
other than the guarantees referred to in clause (ii) or (iii) of this Section
4.1, (ii) pari passu with the most senior preferred stock issued by American
General and with any other guarantee executed by American General in respect of
any preferred stock or interest of any affiliate of American General that
provides that such guarantee is pari passu in right of payment with this
Guarantee and (iii) senior to American General Common Stock and any other class
or series of capital stock issued by American General which by its express terms
ranks junior to the most senior preferred stock issued by American General as to
the payment of dividends or the distribution of assets upon the liquidation,
dissolution or winding-up of American General and any guarantee executed by
American General that provides that such guarantee is junior in right of payment
to this Guarantee.
ARTICLE V
CONVERSION AND EXCHANGE OF PREFERRED SECURITIES
5.1 ISSUANCE OF AMERICAN GENERAL COMMON STOCK. If the Preferred
Securities of any series are convertible into shares of American General Common
Stock pursuant to the applicable Declaration, American General hereby agrees
that, upon the request of the Conversion Agent (on behalf of one or more Holders
of such Preferred Securities), to convert Junior Subordinated Debentures of the
series related to such series of Preferred Securities into American General
Common Stock pursuant to the request of such Holders to effect such conversion
in accordance with the terms of the LLC Agreement and such Declaration, American
General shall deliver to the Conversion Agent certificates representing the
number of full shares of American General Common Stock issuable upon conversion
of such Junior Subordinated Debentures in accordance with the terms of the
Junior Subordinated Indenture and such Junior Subordinated Debentures. American
General shall reserve and keep available out of its authorized and unissued
American General Common Stock (solely for issuance upon the conversion of such
Junior Subordinated Debentures), free of any preemptive or other similar rights,
the number of full shares of American General Common Stock deliverable by the
Conversion Agent to the
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Holders upon the conversion of all outstanding Preferred Securities not
theretofore converted by the Holders.
5.2 VALIDITY OF AMERICAN GENERAL COMMON STOCK. All shares of American
General Common Stock delivered by American General upon such conversion will be
duly authorized, validly issued and fully paid and nonassessable.
5.3 ISSUANCE OF AMERICAN GENERAL PREFERRED STOCK. American General
hereby agrees, upon the making of an Exchange Election (as such term is defined
in the applicable Declaration) by the Holders of a majority of the aggregate
liquidation preference of the outstanding Preferred Securities of the related
series in accordance with the terms of the LLC Agreement and such Declaration,
to issue one share of American General Preferred Stock of the related series in
respect of the applicable principal amount (as set forth in such Declaration) of
Junior Subordinated Debentures of the related series. American General further
agrees, upon receipt of a Notice of Exchange Election (as defined in such
Declaration), to deliver to the Conversion Agent the number of shares of
American General Preferred Stock of the related series issuable upon exchange of
such Junior Subordinated Debentures. American General shall reserve and keep
available out of its authorized and unissued American General Preferred Stock
(solely for issuance upon exchange of such Junior Subordinated Debentures), free
of any preemptive or other similar rights, the number of shares of American
General Preferred Stock of the related series deliverable by the Conversion
Agent to the Holders upon exchange of all outstanding Preferred Securities.
5.4 VALIDITY OF AMERICAN GENERAL PREFERRED STOCK. All such shares of
American General Preferred Stock issued by American General upon such exchange
will be duly authorized, validly issued and fully paid and nonassessable.
5.5 TERMINATION OF OBLIGATION TO ISSUE AMERICAN GENERAL COMMON STOCK.
American General's obligations under this Article V to issue American General
Common Stock shall terminate upon the termination of the right of Holders of
Preferred Securities to request the Conversion Agent to effect such conversion
as set forth in the LLC Agreement and the applicable Declaration(s).
ARTICLE VI
MISCELLANEOUS
6.1 THIRD PARTY BENEFICIARIES. All of American General's obligations
under this Guarantee shall be directly enforceable by the Holders from time to
time of the applicable series of Preferred Securities. Each Holder of Preferred
Securities of the applicable series is an intended third-party beneficiary of
this Guarantee.
6.2 SUCCESSORS AND ASSIGNS. All provisions contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
American General and shall inure to the benefit of the Holders. Except as
permitted by Section 6.4, American General shall not assign its rights or
delegate its obligations hereunder without the prior
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approval (obtained in the manner set forth in the LLC Agreement) of the Holders
of not less than 66-2/3% of the aggregate liquidation preference of all
Preferred Securities of all series then outstanding voting as a single class.
6.3 AMENDMENTS. Except with respect to any changes which do not
adversely affect the rights of any Holders of Preferred Securities (in any of
which cases no vote will be required), this Guarantee may be amended with
respect to the Preferred Securities of any series affected by such amendment
only with the prior approval (obtained in the manner set forth in the LLC
Agreement and the applicable Declaration) of the Holders of not less than
66-2/3% of the aggregate liquidation preference of the outstanding Preferred
Securities of such series.
6.4 MERGER OR CONSOLIDATION. American General may consolidate with,
merge with or into, or convey, transfer or lease all or substantially all of its
assets to any other person or entity, provided that such consolidation, merger,
conveyance, transfer or lease is permitted under Section 801 of the Junior
Subordinated Indenture.
6.5 NOTICES. Any notice, request or other communication required or
permitted to be given hereunder to American General shall be given in writing by
delivering the same against receipt therefor by registered mail, hand delivery,
facsimile transmission (confirmed by registered mail) or telex, addressed to
American General, as follows (and if so given, shall be deemed given when
mailed; upon receipt of facsimile confirmation, if sent by facsimile
transmission; or upon receipt of an answer-back, if sent by telex):
American General Corporation
2929 Allen Parkway
Houston, Texas 77019
Attention: Treasury
Telecopy: (713) 522-3487
Any notice, request or other communication required or permitted to be
given hereunder to the Holders shall be given by American General in the same
manner as notices are sent by American General Delaware to the Holders.
6.6 GENDERS. The masculine and neuter genders used herein shall include
the masculine, feminine and neuter genders.
6.7 GUARANTEE NOT SEPARATELY TRANSFERABLE. This Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Preferred
Securities.
6.8 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6.9 SEVERABILITY. In case any provision of this Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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6.10 HEADINGS. The Article and section headings herein are for
convenience only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, American General has caused this Guarantee to be
duly executed as of the day and year first above written.
AMERICAN GENERAL CORPORATION
By:
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Name:
Title:
ATTEST:
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Secretary
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