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Exhibit 4.4
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PREFERRED SECURITIES GUARANTEE AGREEMENT
AMERICAN ANNUITY GROUP CAPITAL TRUST II
Dated as of May __, 1997
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TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION AND DEFINITIONS.................................................1
SECTION 1.1 INTERPRETATION AND DEFINITIONS......................1
ARTICLE 2
TRUST INDENTURE ACT............................................................5
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.................................5
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES...................................5
SECTION 2.3 REPORTS BY PREFERRED GUARANTEE TRUSTEE...........................6
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE..................6
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.................6
SECTION 2.6 GUARANTEE EVENT OF DEFAULT; WAIVER...............................6
SECTION 2.7 GUARANTEE EVENT OF DEFAULT; NOTICE...............................6
SECTION 2.8 CONFLICTING INTERESTS............................................7
SECTION 2.9 DISCLOSURE OF INFORMATION........................................7
SECTION 2.10 PREFERRED GUARANTEE TRUSTEE MAY FILE PROOFS OF CLAIM.............7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE....................................................7
SECTION 3.1 POWERS AND DUTIES OF PREFERRED GUARANTEE TRUSTEE.................7
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE....................9
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE...........11
ARTICLE 4
PREFERRED GUARANTEE TRUSTEE...................................................11
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY........................11
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.........................................................12
ARTICLE 5
GUARANTEE.....................................................................13
SECTION 5.1 GUARANTEE.......................................................13
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.....................................13
SECTION 5.3 OBLIGATIONS NOT AFFECTED........................................14
SECTION 5.4 RIGHTS OF HOLDERS...............................................15
SECTION 5.5 GUARANTEE OF PAYMENT............................................15
SECTION 5.6 SUBROGATION.....................................................15
SECTION 5.7 INDEPENDENT OBLIGATIONS.........................................16
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ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION.....................................16
SECTION 6.1 LIMITATION OF TRANSACTIONS......................................16
SECTION 6.2 RANKING.........................................................16
ARTICLE 7
TERMINATION...................................................................17
SECTION 7.1 TERMINATION.....................................................17
ARTICLE 8
INDEMNIFICATION...............................................................17
SECTION 8.1 EXCULPATION.....................................................17
SECTION 8.2 INDEMNIFICATION.................................................18
ARTICLE 9
MISCELLANEOUS.................................................................18
SECTION 9.1 SUCCESSORS AND ASSIGNS..........................................18
SECTION 9.2 AMENDMENTS......................................................18
SECTION 9.3 NOTICES.........................................................18
SECTION 9.4 BENEFIT.........................................................19
SECTION 9.5 GOVERNING LAW...................................................19
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CROSS REFERENCE TABLE*
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
310(a)...................................................................4.1(a)
310(b)...................................................................4.1(c)
310(c).............................................................Inapplicable
311(a)...................................................................2.2(b)
311(b)...................................................................2.2(b)
311(c).............................................................Inapplicable
312(a)...................................................................2.2(a)
312(b)...................................................................2.2(b)
312(c)......................................................................2.9
313(a)......................................................................2.3
313(b)......................................................................2.3
313(c)......................................................................2.3
313(d)......................................................................2.3
314(a)......................................................................2.4
314(b).............................................................Inapplicable
314(c)......................................................................2.5
314(d).............................................................Inapplicable
314(e)......................................................................2.5
314(f).............................................................Inapplicable
315(a)...........................................................3.1(d); 3.2(a)
315(b)...................................................................2.7(a)
315(c)...................................................................3.1(c)
315(d)...................................................................3.1(d)
316(a)..............................................................2.6; 5.4(a)
317(a)................................................................2.10; 5.4
318(a)...................................................................2.1(b)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not have any bearing upon the interpretation of any of
its terms or provisions.
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the
"Guarantee"), dated as of May __, 1997, is executed and delivered by American
Annuity Group, Inc., a Delaware corporation (the "Guarantor"), and The Bank of
New York, a New York banking corporation, as trustee (the "Preferred Guarantee
Trustee"), for the benefit of the Holders (as defined herein) of the New
Preferred Securities (as defined herein) of American Annuity Group Capital Trust
II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to the Declaration (as defined herein), the
Issuer is issuing on the date hereof 75,000 preferred securities (liquidation
amount $1,000 per preferred security) which have been registered under the
Securities Act of 1933 (the "Securities Act") and which are designated the
8 7/8% Capital Trust Preferred Securities (the "New Preferred Securities") in
exchange for an issue of preferred securities which are identical in all
material respects to the New Preferred Securities except that such issue of
preferred securities was not registered under the Securities Act (the "Old
Preferred Securities," and with the New Preferred Securities, the "Preferred
Securities");
WHEREAS, by a Preferred Securities Guarantee Agreement dated
as of March 11, 1997 (the "Old Guarantee Agreement") and as an incentive for the
Holders to acquire the Old Preferred Securities, the Guarantor irrevocably and
unconditionally agreed, to the extent set forth in such Old Guarantee Agreement,
to pay to Holders of the Old Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments as set forth in such Old
Guarantee Agreement;
WHEREAS, by a certain Registration Rights Agreement dated as
of March 11, 1997 among the Issuer, AAG Holding, the Guarantor and the
purchasers named therein, the Issuer, AAG Holding and the Guarantor agreed that
if they filed a registration statement to exchange the Old Preferred Securities
for New Preferred Securities, then the Issuer, AAG Holding and the Guarantor
would simultaneously exchange the Old Guarantee Agreement for the Guarantee for
the benefit of the holders of the Preferred Securities; and
NOW, THEREFORE, in consideration of the exchange by each
Holder of Old Preferred Securities for New Preferred Securities, which exchange
the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes
and delivers this Guarantee for the benefit of the Holders.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions.
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In this Guarantee, unless the context otherwise requires:
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(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee, unless otherwise defined
in this Guarantee or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice
versa.
"AAG Holding" means AAG Holding Company, Inc., an Ohio
corporation.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Guarantee is located at 0000
Xxxxxxx Xxxxxx, Xxxxx 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration; telecopy no. (000) 000-0000.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the series of subordinated deferrable
interest debentures to be issued by AAG Holding designated the 8 7/8%
Subordinated Debentures due January 15, 2027 held by the Property Trustee (as
defined in the Declaration) of the Issuer.
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"Declaration" means the Declaration of Trust, dated as of
March __, 1997, as amended, modified or supplemented from time to time, among
the trustees of the Issuer named therein, the AAG Holding, as sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of the
Issuer.
"Guarantee Event of Default" means a default by the Guarantor
on any of its payment or other obligations under this Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration or the redemption of all the
Preferred Securities upon maturity or redemption of the Debentures as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid Distributions on the Preferred Securities to the date
of payment, to the extent the Issuer shall have funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Declaration) has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments under
this Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; 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 the Guarantor or any Affiliate of the Guarantor; and provided
further, that in determining whether the Holders of the requisite liquidation
amount of Preferred Securities have voted on any matter provided for in this
Guarantee, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Preferred Securities remain in the form of one
or more Global Certificates (as defined in the Declaration), the term "Holders"
shall mean the holder of the Global Certificate acting at the direction of the
Preferred Security Beneficial Owners (as defined in the Declaration).
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of March 11, 1997,
among AAG Holding, the Guarantor, as guarantor, and The Bank of New York, as
trustee, and any indenture
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supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee (as defined in the Declaration) of the Issuer.
"Majority in Liquidation Amount of the Preferred Securities"
means, except as provided in the terms of the Preferred Securities or by the
Trust Indenture Act, Holder(s) of outstanding Preferred Securities, voting
separately as a class, who are the record holders of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Preferred Securities. In determining whether the Holders of the requisite amount
of Preferred Securities have voted, Preferred Securities which are owned by the
Guarantor or any Affiliate of the Guarantor or any other obligor on the
Preferred Securities shall be disregarded for the purpose of any such
determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York,
until a Successor Preferred Guarantee Trusteeo has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee and thereafter
means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee,
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any officer within the Corporate Trust Office of the Preferred Guarantee
Trustee. including any vice-president, any assistant vice-president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
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(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities.
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(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders"), (i) within one Business Day after January 15 and
July 15 of each year and current as of such date, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request from the
Preferred Guarantee Trustee for a List of Holders as of a date no more than 14
days before such List of Holders is given to the Preferred Guarantee Trustee;
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it, provided that it may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
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(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by Preferred Guarantee Trustee.
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Within 60 days after May 15 of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), the
Preferred Guarantee Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
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The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
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The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Guarantee that relate to any of the matters set forth in Section 314(c)
of the Trust Indenture Act. Any certificate or opinion required to be given by
an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver.
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The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Guarantee Event of Default and its
consequences. Upon such waiver, any such Guarantee Event of Default shall cease
to exist, and any Guarantee Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee, but no such waiver
shall extend to any subsequent or other default or Guarantee Event of Default or
impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice.
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(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of a Guarantee Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Preferred Securities, notices of
all Guarantee Events of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, unless such defaults have been cured before the
giving of such notice; provided, that the Preferred Guarantee Trustee shall be
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protected in withholding such notice if and so long as a Responsible Officer of
the Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Guarantee Event of Default unless the Preferred Guarantee
Trustee shall have received written notice thereof or a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge thereof.
SECTION 2.8 Conflicting Interests.
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The Declaration shall be deemed to be specifically described
in this Guarantee for the purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
SECTION 2.9 Disclosure of Information.
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The disclosure of information as to the names and addresses of
the Holders of the Preferred Securities in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law, or any law
hereafter enacted which does not specifically refer to Section 312 of the Trust
Indenture Act, nor shall the Preferred Guarantee Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim.
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Upon the occurrence of a Guarantee Event of Default, the
Preferred Guarantee Trustee is hereby authorized to (a) recover judgment, in its
own name and as trustee of an express trust, against the Guarantor for the whole
amount of any Guarantee Payments remaining unpaid and (b) file such proof of
claim and other papers or documents as may be necessary or advisable in order to
have its claims and those of the Holders of the Preferred Securities allowed in
any judicial proceedings relative to the Guarantor, its creditors or its
property.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Preferred Guarantee Trustee.
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(a) The Guarantee shall be held by the Preferred Guarantee
Trustee on behalf of the Issuer for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Preferred
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Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee in and
to this Guarantee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall enforce this Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Guarantee Event of Default of all Guarantee Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the Preferred Guarantee Trustee. In case a Guarantee Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee, and use the same degree of care and skill
in its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Guarantee Event of Default
and after the curing or waiving of all such Guarantee Events of Default
that may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the
express provisions of this Guarantee, and the
Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Guarantee. and no implied covenants or obligations
shall be read into this Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and
conforming to the requirements of this Guarantee; but
in the case of any such certificates or opinions that
by any provision hereof are specifically required to
be furnished to the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall be under a duty to
examine
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the same to determine whether or not they conform to
the requirements of this Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee unless it shall be
proved that the Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in Liquidation Amount of the
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Guarantee; and
(iv) no provision of this Guarantee shall require the
Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if the Preferred Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under
the terms of this Guarantee or indemnity, reasonably
satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Preferred Guarantee Trustee
(unless other evidence is herein specifically prescribed) may,
in the
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absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions
concerning the administration of this Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the
Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided, that nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of a
Guarantee Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Preferred Guarantee Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians
or attorneys, and the Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
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(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee
Trustee or its agents alone shall be sufficient and effective
to perform any such action. No third party shall be required
to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or
its agent's taking such action.
(x) Whenever in the administration of this Guarantee the
Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in Liquidation Amount of the Preferred Securities,
(ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the Preferred Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal or in which the Preferred
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
-------------------------------------------
Guarantee.
----------
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Guarantee.
ARTICLE 4
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.
-----------------------------------------
(a) There shall be at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation organized and doing business
under the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the
requirements of the supervising or examining
authority referred to above, then, for the purposes
of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred
-------------------------------------------------
Guarantee Trustee.
------------------
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
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(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts owing for
fees and reimbursement of expenses which have accrued to the date of such
termination, removal or resignation.
(g) The Guarantor shall promptly notify the Holders of the
resignation, removal or appointment of a Preferred Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
----------
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands. Notwithstanding anything to the contrary herein, the Guarantor, if and
to the extent that it assumes the obligations of AAG Holding under the
Indenture, retains all of its rights under the Indenture to (i) extend the
interest payment period on the Debentures and the Guarantor shall not be
obligated hereunder to make any Guarantee Payments during any Extended Interest
Payment Period (as defined in the Indenture) with respect to the Distributions
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(as defined in the Declaration) on the Preferred Securities, and (ii) change the
maturity date of the Debentures to the extent permitted by the Indenture.
SECTION 5.3 Obligations Not Affected.
-------------------------
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee shall be absolute and unconditional and shall
remain in full force and effect until the entire liquidation amount of all
outstanding Preferred Securities shall have been paid and such obligation shall
in no way be affected or impaired by reason of the happening from time to time
of any event, including without limitation, the following, whether or not with
notice to, or the consent of the Guarantor:
(a) The release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express
or implied agreement, covenant, term or condition relating to
the Preferred Securities to be performed or observed by the
Issuer;
(b) The extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Preferred Securities or the extension of time for
the performance of any other obligation under, arising out of,
or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on
the Debentures or any change to the maturity date of the
Debentures permitted by the Indenture);
(c) Any failure, omission, delay or lack of diligence on the
part of the Property Trustee or the Holders to enforce, assert
or exercise any right, privilege, power or remedy conferred on
the Property Trustee or the Holders pursuant to the terms of
the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) The voluntary or involuntary liquidation, dissolution,
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, the Issuer or any of the assets
of the Issuer;
(e) Any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) The settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) 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
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5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Preferred Guarantee
Trustee or the Holders to give notice to, or obtain consent of the Guarantor or
any other Person with respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction or diminution of any
obligation, or any defense of any kind or nature that the Guarantor has or may
have against any Holder shall be available hereunder to the Guarantor against
such Holder to reduce the payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
------------------
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Guarantee or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Guarantee, then any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Guarantee without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
person or entity. Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a Holder of Preferred Securities may directly
institute a proceeding against the Guarantor for enforcement of the Guarantee
for such payment to the Holder of the Preferred Securities of the principal of
or interest on the Debentures on or after the respective due dates specified in
the Debentures, and the amount of the payment will be based on the Holder's pro
rata share of the amount due and owing on all of the Preferred Securities. The
Guarantor hereby waives any right or remedy to require, that any action on this
Guarantee be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
---------------------
This Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation.
------------
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases
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as a result of 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 the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Preferred Guarantee Trustee for the benefit of the Holders.
SECTION 5.7 Independent Obligations.
------------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
---------------------------
So long as any Preferred Securities remain outstanding, if
there shall have occurred a Guarantee Event of Default or an event of default
under the Declaration, then (a) the Guarantor shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock,
(b) the Guarantor shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Guarantor which rank pari passu with or junior to the
Debentures and (c) the Guarantor shall not make any guarantee payments with
respect to the foregoing (other than pursuant to this Guarantee); provided,
however, the Guarantor may declare and pay a stock dividend where the dividend
stock is the same stock as that on which the dividend is being paid.
SECTION 6.2 Ranking.
--------
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank: (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, except those liabilities of the Guarantor
made pari passu or subordinate by their terms, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
If an Event of Default has occurred and is continuing under
the Declaration, the rights of the holders of the Common Securities to receive
any payments under the Common
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Securities Guarantee Agreement shall be subordinated to the rights of the
Holders of Preferred Securities to receive Guarantee Payments hereunder.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.
------------
This Guarantee shall terminate upon (i) full payment of the
Redemption Price of all Preferred Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Preferred Securities or (iii) upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or under this Guarantee.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 Exculpation.
------------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified 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 Guarantor, 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 Holders of Preferred Securities
might properly be paid.
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SECTION 8.2 Indemnification.
----------------
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Guarantee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
-----------------------
All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding.
SECTION 9.2 Amendments.
-----------
Except with respect to any changes that do not adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities. The provisions of Section 11.2 of the Declaration with respect to
meetings of, and action by written consent of the Holders of the Securities
apply to the giving of such approval.
SECTION 9.3 Notices.
--------
All notices provided for in this Guarantee 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:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below
(or such other address as the Preferred Guarantee Trustee may
give notice of to the Guarantor and the Holders of the
Preferred Securities):
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
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(b) If given to the Guarantor, at the Guarantor's mailing
addresses set forth below (or such other address as the
Guarantor may give notice of to the Preferred Guarantee
Trustee and the Holders of the Preferred Securities):
American Annuity Group, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
Telecopy No. (000) 000-0000
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by: first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
--------
This Guarantee is solely for the benefit of the Holders of the
Preferred Securities and, subject to Section 3.1(a), is not separately
transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
--------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, this Guarantee is executed as of the day and year
first above written.
AMERICAN ANNUITY GROUP, INC.,
as Guarantor
By:
-----------------------------------------
Xxxx X. Xxxxxxxx
Senior Vice President, General Counsel and
Secretary
THE BANK OF NEW YORK,
as Preferred Guarantee Trustee
By:
-----------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
(Signature Page to the Preferred Securities Guarantee Agreement)
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