<PAGE>   1

                                                                    EXHIBIT  4.3

================================================================================



                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF


                          AMERICAN GENERAL CAPITAL III


                          DATED AS OF DECEMBER 7, 2000


================================================================================


<PAGE>   2


                             CROSS-REFERENCE TABLE*


<TABLE>
<CAPTION>
Section of
Trust Indenture Act                                        Section of
of 1939, as amended                                       Declaration
-------------------                                       -----------
<S>                                                            <C>
310(a) ....................................................... 5.3(a)
310(b) ....................................................... 5.3(c)
310(c) ................................................. Inapplicable
311(a)and (b) ................................................ 2.2(b)
311(c) ................................................. Inapplicable
312(a) ....................................................... 2.2(a)
312(b) ....................................................... 2.2(b)
313 ............................................................. 2.3
314(a) .......................................................... 2.4
314(b) ................................................. Inapplicable
314(c) .......................................................... 2.5
314(d) ................................................. Inapplicable
314(e) ..................................................... 1.1, 2.5
314(f) ................................................. Inapplicable
315(a) ....................................................... 3.9(b)
315(b) ....................................................... 2.7(a)
315(c) ....................................................... 3.9(a)
315(d) ....................................................... 3.9(b)
316(a) and (b) ................... 2.6 and Annex I (Sections 6 and 7)
316(c) ....................................................... 3.6(e)
317(a) ....................................................... 3.8(h)
317(b) ....................................................... 3.8(i)
318(a) ....................................................... 2.1(c)
</TABLE>

*    This Cross-Reference Table does not constitute part of the Declaration and
     shall not affect the interpretation of any of its terms or provisions.



<PAGE>   3



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                              <C>
                                             ARTICLE I
                                  INTERPRETATION AND DEFINITIONS

SECTION 1.1  Definitions ........................................................................  1

                                           ARTICLE II
                                      TRUST INDENTURE ACT

SECTION 2.1  Trust Indenture Act; Application ...................................................  7
SECTION 2.2  Lists of Holders of Securities .....................................................  7
SECTION 2.3  Reports by the Property Trustee ....................................................  7
SECTION 2.4  Periodic Reports to Property Trustee ...............................................  8
SECTION 2.5  Evidence of Compliance with Conditions Precedent ...................................  8
SECTION 2.6  Events of Default; Waiver ..........................................................  8
SECTION 2.7  Event of Default; Notice ...........................................................  9

                                          ARTICLE III
                                         ORGANIZATION

SECTION 3.1  Name ............................................................................... 10
SECTION 3.2  Office ............................................................................. 10
SECTION 3.3  Purpose ............................................................................ 10
SECTION 3.4  Authority .......................................................................... 10
SECTION 3.5  Title to Property of the Trust ..................................................... 10
SECTION 3.6  Powers and Duties of the Administrative Trustees ................................... 10
SECTION 3.7  Prohibition of Actions by the Trust and the Trustees ............................... 13
SECTION 3.8  Powers and Duties of the Property Trustee .......................................... 14
SECTION 3.9  Certain Duties and Responsibilities of the Property Trustee ........................ 16
SECTION 3.10 Certain Rights of Property Trustee ................................................. 17
SECTION 3.11 Delaware Trustee ................................................................... 19
SECTION 3.12 Execution of Documents ............................................................. 19
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities ............................. 19
SECTION 3.14 Duration of Trust .................................................................. 19
SECTION 3.15 Mergers ............................................................................ 19

                                        ARTICLE IV
                                         SPONSOR

SECTION 4.1  Sponsor's Purchase of Common Securities ............................................ 21
SECTION 4.2  Responsibilities of the Sponsor .................................................... 21
SECTION 4.3  Right to Proceed ................................................................... 22

                                         ARTICLE V
                                          TRUSTEES

SECTION 5.1  Number of Trustees; Appointment of Co-Trustee ...................................... 22
SECTION 5.2  Delaware Trustee ................................................................... 23
SECTION 5.3  Property Trustee; Eligibility ...................................................... 23
SECTION 5.4  Certain Qualifications of Administrative Trustees and Delaware Trustee Generally.... 24
SECTION 5.5  Administrative Trustees ............................................................ 24
SECTION 5.6  Delaware Trustee ................................................................... 24
</TABLE>



                                       i
<PAGE>   4


<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                              <C>
SECTION 5.7  Appointment, Removal and Resignation of Trustees ....................................24
SECTION 5.8  Vacancies among Trustees ............................................................26
SECTION 5.9  Effect of Vacancies .................................................................26
SECTION 5.10 Meetings ............................................................................26
SECTION 5.11 Delegation of Power .................................................................26
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business .........................27

                                             ARTICLE VI
                                           DISTRIBUTIONS

SECTION 6.1  Distributions .......................................................................27

                                            ARTICLE VII
                                      ISSUANCE OF SECURITIES

SECTION 7.1  General Provisions Regarding Securities .............................................27
SECTION 7.2  Execution and Authentication ........................................................28
SECTION 7.3  Form and Dating .....................................................................28
SECTION 7.4  Registrar and Paying Agent .........................................................30
SECTION 7.5  Paying Agent to Hold Money in Trust .................................................30
SECTION 7.6  Replacement Securities ..............................................................30
SECTION 7.7  Outstanding Preferred Securities ....................................................30
SECTION 7.8  Preferred Securities in Treasury ....................................................31
SECTION 7.9  Temporary Securities; Certificated Securities .......................................31
SECTION 7.10 Cancellation ........................................................................32
SECTION 7.11 CUSIP Numbers .......................................................................32

                                           ARTICLE VIII
                                       DISSOLUTION OF TRUST

SECTION 8.1  Dissolution of Trust ................................................................32

                                            ARTICLE IX
                                      TRANSFER OF INTERESTS

SECTION 9.1  Transfer of Securities ..............................................................33
SECTION 9.2  Deemed Security Holders .............................................................34
SECTION 9.3  Book-Entry Interests ................................................................34
SECTION 9.4  Notices to Clearing Agency ..........................................................34
SECTION 9.5  Appointment of Successor Clearing Agency ............................................35

                                            ARTICLE X
                                    LIMITATION OF LIABILITY OF
                             HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 Liability ...........................................................................35
SECTION 10.2 Exculpation .........................................................................35
SECTION 10.3 Fiduciary Duty ......................................................................36
SECTION 10.4 Indemnification and Expenses ........................................................36
SECTION 10.5 Outside Businesses ..................................................................39

                                           ARTICLE XI
                                           ACCOUNTING

SECTION 11.1 Fiscal Year .........................................................................39
SECTION 11.2 Certain Accounting Matters ..........................................................39
</TABLE>



                                       ii
<PAGE>   5


<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                              <C>
SECTION 11.3 Banking ........................................................................     40
SECTION 11.4 Withholding ....................................................................     40

                                     ARTICLE XII
                               AMENDMENTS AND MEETINGS

SECTION 12.1 Amendments .....................................................................     41
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent ...............     42

                                     ARTICLE XIII
                         REPRESENTATIONS OF PROPERTY TRUSTEE
                                 AND DELAWARE TRUSTEE

SECTION 13.1 Representations and Warranties of Property Trustee .............................     44
SECTION 13.2 Representations and Warranties of Delaware Trustee .............................     44

                                     ARTICLE XIV
                                    MISCELLANEOUS

SECTION 14.1 Notices ........................................................................     45
SECTION 14.2 Governing Law ..................................................................     46
SECTION 14.3 Intention of the Parties .......................................................     46
SECTION 14.4 Headings .......................................................................     46
SECTION 14.5 Successors and Assigns .........................................................     46
SECTION 14.6 Partial Enforceability .........................................................     46
SECTION 14.7 Counterparts ...................................................................     47

ANNEX I .....................................................................................    I-1
EXHIBIT A-1   FORM OF PREFERRED SECURITY CERTIFICATE ........................................   A1-1
EXHIBIT A-2   FORM OF COMMON SECURITY CERTIFICATE ...........................................   A2-1
</TABLE>



                                      iii
<PAGE>   6


                              AMENDED AND RESTATED
                              DECLARATION OF TRUST
                                       OF
                          AMERICAN GENERAL CAPITAL III

                                December 7, 2000

                  AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of December 7, 2000, by the Trustees (as defined herein),
the Sponsor (as defined herein) and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust (as defined herein) to be issued
pursuant to this Declaration;

                  WHEREAS, the Delaware Trustee (as defined herein), the
Administrative Trustees (as defined herein) and the Sponsor established American
General Capital III (the "Trust"), a trust created under the Business Trust Act
(as defined herein) pursuant to a Declaration of Trust dated as of November 14,
1997 (the "Original Declaration"), and the Certificate of Trust for the Trust
(the "Certificate of Trust") filed with the Secretary of State of the State of
Delaware on November 14, 1997;

                  WHEREAS, the parties hereto, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and

                  NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of the Trust, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration and, in consideration of the
mutual covenants contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:


                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

SECTION 1.1 Definitions.

         Unless the context otherwise requires:

                  (a) capitalized terms used in this Declaration but not defined
         in the preamble above or elsewhere herein have the respective meanings
         assigned to them in this Section 1.1;

                  (b) a term defined anywhere in this Declaration has the same
         meaning throughout;

                  (c) all references to "the Declaration" or "this Declaration"
         are to this Declaration and each Annex and Exhibit hereto, as modified,
         supplemented or amended from time to time;

                  (d) all references in this Declaration to Articles, Sections,
         Annexes and Exhibits are to Articles and Sections of and Annexes and
         Exhibits to this Declaration unless otherwise specified;


<PAGE>   7


                  (e) a term defined in the Trust Indenture Act (as defined
         herein) has the same meaning when used in this Declaration unless
         otherwise defined in this Declaration or the context otherwise
         requires;

                  (f) a term defined in the Indenture (as defined herein) has
         the same meaning when used in this Declaration unless otherwise defined
         in this Declaration or the context otherwise requires; and

                  (g) a reference to the singular includes the plural and vice
         versa.

         "Administrative Trustee" means each of Nicholas R. Rasmussen, C.
Jeffrey Gay and Gregory N. Picard, solely in such Person's capacity as
Administrative Trustee of the Trust created and continued hereunder and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.

         "Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.

         "Agent" means any Paying Agent or Registrar.

         "Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.

         "Book-Entry Interest" means a beneficial interest in a Global Preferred
Security registered in the name of a Clearing Agency or its nominee, ownership
and transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.3.

         "Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in The City of New York, New York are authorized
or required by law or executive order to close.

         "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time or any
successor legislation.

         "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Preferred Security and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

         "Closing Time" means the "Time of Delivery", as such term is defined in
the Underwriting Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.

         "Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and



                                       2
<PAGE>   8


performing the duties now assigned to it under applicable Federal securities
laws, then the body performing such duties at such time.

         "Common Securities" has the meaning specified in Section 7.1(a).

         "Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.

         "Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Four Albany Street, New York, New York
10006, Attn: Corporate Trust and Agency Services - Corporate Market Services.

         "Covered Person" means: (a) any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holders of the Securities.

         "Debenture Issuer" means American General Corporation, a Texas
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.

         "Debenture Trustee" means Bankers Trust Company, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

         "Debentures" means the 8.05% Junior Subordinated Debentures due 2049 of
the Debenture Issuer issued pursuant to the Indenture.

         "Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

         "Definitive Preferred Securities" has the meaning set forth in Section
7.3(c).

         "Delaware Trustee" has the meaning set forth in Section 5.1(b).

         "Direct Action" has the meaning set forth in Section 3.8(e).

         "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

         "Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.

         "Global Preferred Securities" has the meaning set forth in Section
7.3(a).



                                       3
<PAGE>   9


         "Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.

         "Indemnified Person" means a Company Indemnified Person or a Trustee
Indemnified Person.

         "Indenture" means the Junior Subordinated Indenture, dated as of
November 15, 1997, between the Debenture Issuer and the Debenture Trustee, as
supplemented or amended from time to time.

         "Investment Company" means an investment company as defined in the
Investment Company Act.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

         "Investment Company Event" has the meaning set forth in Annex I.

         "Legal Action" has the meaning set forth in Section 3.6(g).

         "Liquidation Amount" with respect to any Security means the amount
designated as such with respect thereto in Annex I hereto.

         "Majority in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of such Person. Any Officers' Certificate
delivered by the Trust shall be signed by at least one Administrative Trustee.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Declaration 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.

         "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, acceptable to the Property Trustee.



                                       4
<PAGE>   10


         "Paying Agent" has the meaning specified in Section 7.4.

         "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 Securities" has the meaning specified in Section 7.1(a).

         "Preferred Securities Guarantee" means the guarantee agreement dated as
of the date hereof of the Sponsor in respect of the Preferred Securities.

         "Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).

         "Property Trustee" has the meaning set forth in Section 5.3(a).

         "Property Trustee Account" has the meaning set forth in Section 3.8(c).

         "Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.

         "Registrar" has the meaning set forth in Section 7.4.

         "Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

         "Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice president, any assistant vice president, any managing director, any
secretary, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Property 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.

         "Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.

         "Special Event" has the meaning set forth in Annex I hereto.

         "Sponsor" means American General Corporation, a Texas corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.

         "Successor Delaware Trustee" has the meaning set forth in Section
5.7(b).



                                       5
<PAGE>   11


         "Successor Entity" has the meaning set forth in Section 3.15(b).

         "Successor Property Trustee" has the meaning set forth in Section
5.7(b).

         "Successor Securities" has the meaning set forth in Section 3.15.

         "Super Majority" has the meaning set forth in Section 2.6(a)(ii).

         "10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holders of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of 10% or more of the aggregate
Liquidation Amount (including the amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.

         "Tax Event" has the meaning set forth in Annex I.

         "Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and the Administrative Trustees), so long as such Person shall continue as
Trustee of the Trust in accordance with the terms hereof, and all other Persons
who may from time to time be duly appointed, qualified and serving as Trustees
in accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.

         "Trustee Indemnified Person" has the meaning set forth in Section
10.4(b).

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

         "Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Trustee Account and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of this
Declaration.

         "Underwriting Agreement" means the Pricing Agreement dated November 30,
2000 among the Sponsor, the Trust, Salomon Smith Barney Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, Prudential Securities Incorporated, UBS Warburg LLC, Banc of
America Securities LLC, Banc One Capital Markets, Inc. and First Union
Securities, Inc., as representatives of the several underwriters named therein
(including the form of Underwriting Agreement attached thereto) relating to the
initial offering and sale of the Preferred Securities.



                                       6
<PAGE>   12


                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application.

                  (a) This Declaration is subject to the provisions of the Trust
         Indenture Act that are required to be part of this Declaration and
         shall, to the extent applicable to such an indenture, be governed by
         such provisions.

                  (b) The Property Trustee shall be the only Trustee which is a
         Trustee for the purposes of the Trust Indenture Act.

                  (c) If and to the extent that any provision of this
         Declaration limits, qualifies or conflicts with the duties imposed by
         Sections 310 to 317, inclusive, of the Trust Indenture Act, such
         imposed duties shall control.

                  (d) The application of the Trust Indenture Act to this
         Declaration shall not affect the nature of the Securities as equity
         securities representing undivided beneficial interests in the assets of
         the Trust.

SECTION 2.2 Lists of Holders of Securities.

                  (a) Each of the Sponsor and the Administrative Trustees on
         behalf of the Trust shall provide the Property Trustee, unless the
         Property Trustee is Registrar for the Securities, (i) within 14 days
         after each record date for payment of Distributions, a list, in such
         form as the Property Trustee may reasonably require, of the names and
         addresses of the Holders of the Securities ("List of Holders") as of
         such record date, provided that neither the Sponsor nor the
         Administrative Trustees on behalf of the Trust shall 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 Property
         Trustee by the Sponsor and the Administrative Trustees on behalf of the
         Trust and written notice of such fact is provided by an Administrative
         Trustee to the Property Trustee, and (ii) at any other time, within 30
         days of receipt by the Trust of a written request for a List of Holders
         as of a date no more than 14 days before such List of Holders is given
         to the Property Trustee. The Property Trustee shall preserve, in as
         current a form as is reasonably practicable, all information contained
         in Lists of Holders given to it or which it receives in the capacity as
         Paying Agent (if acting in such capacity), provided that the Property
         Trustee may destroy any List of Holders previously given to it on
         receipt of a new List of Holders.

                  (b) The Property Trustee shall comply with its obligations
         under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3 Reports by the Property Trustee.

         Within 60 days after December 31 of each year, commencing December 31,
2001, the Property 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 Property Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.



                                       7
<PAGE>   13


SECTION 2.4 Periodic Reports to Property Trustee.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information (if any) as are required by Section 314 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.

         The Sponsor or the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration 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) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.

SECTION 2.6 Events of Default; Waiver.

                  (a) 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 Event of Default in respect of
         the Preferred Securities and its consequences, provided that, if the
         underlying Event of Default under the Indenture:

                           (i) is not waivable under the Indenture, the Event of
                  Default under the Declaration shall also not be waivable; or

                           (ii) requires the consent or vote of greater than a
                  majority in aggregate principal amount of the holders of the
                  Debentures (a "Super Majority") to be waived under the
                  Indenture, the Event of Default under the Declaration may only
                  be waived by the vote of the Holders of at least the
                  proportion in aggregate Liquidation Amount of the Preferred
                  Securities that the relevant Super Majority represents of the
                  aggregate principal amount of the Debentures outstanding.

         The foregoing provisions of this Section 2.6(a) shall be in lieu of
         Section 316(a)(1)(B) of the Trust Indenture Act and such Section
         316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded
         from this Declaration and the Securities, as permitted by the Trust
         Indenture Act. Upon such waiver, any such default shall cease to exist,
         and any Event of Default with respect to the Preferred Securities
         arising therefrom shall be deemed to have been cured, for every purpose
         of this Declaration, but no such waiver shall extend to any subsequent
         or other default or an Event of Default with respect to the Preferred
         Securities or impair any right consequent thereon. Any waiver by the
         Holders of the Preferred Securities of an Event of Default with respect
         to the Preferred Securities shall also be deemed to constitute a waiver
         by the Holders of the Common Securities of any such Event of Default
         with respect to the Common Securities for all purposes of this
         Declaration without any further act, vote, or consent of the Holders of
         the Common Securities.

                  (b) The Holders of a Majority in Liquidation Amount of the
         Common Securities may, by vote, on behalf of the Holders of all of the
         Common Securities, waive any past Event of Default with respect to the
         Common Securities and its consequences, provided, that, if the
         underlying Event of Default under the Indenture:



                                       8
<PAGE>   14


                           (i) is not waivable under the Indenture, except where
                  the Holders of the Common Securities are deemed to have waived
                  such Event of Default under the Declaration as provided below
                  in this Section 2.6(b), the Event of Default under the
                  Declaration shall also not be waivable; or

                           (ii) requires the consent or vote of a Super Majority
                  to be waived, except where the Holders of the Common
                  Securities are deemed to have waived such Event of Default
                  under the Declaration as provided below in this Section
                  2.6(b), the Event of Default under the Declaration may only be
                  waived by the vote of the Holders of at least the proportion
                  in aggregate Liquidation Amount of the Common Securities that
                  the relevant Super Majority represents of the aggregate
                  principal amount of the Debentures outstanding;

         provided further, that each Holder of the Common Securities will be
         deemed to have waived any such Event of Default and all Events of
         Default with respect to the Common Securities and its consequences
         until all Events of Default with respect to the Preferred Securities
         have been cured, waived or otherwise eliminated, and until such Events
         of Default have been so cured, waived or otherwise eliminated, the
         Property Trustee will be deemed to be acting solely on behalf of the
         Holders of the Preferred Securities and only the Holders of the
         Preferred Securities will have the right to direct the Property Trustee
         in accordance with the terms of the Securities. The foregoing
         provisions of this Section 2.6(b) shall be in lieu of Sections
         316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
         Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
         hereby expressly excluded from this Declaration and the Securities, as
         permitted by the Trust Indenture Act. Subject to the foregoing
         provisions of this Section 2.6(b), upon such waiver, any such default
         shall cease to exist and any Event of Default with respect to the
         Common Securities arising therefrom shall be deemed to have been cured
         for every purpose of this Declaration, but no such waiver shall extend
         to any subsequent or other default or Event of Default with respect to
         the Common Securities or impair any right consequent thereon.

                  (c) A waiver of an Event of Default under the Indenture by the
         Property Trustee, at the direction of the Holders of the Preferred
         Securities, constitutes a waiver of the corresponding Event of Default
         under this Declaration. The foregoing provisions of this Section 2.6(c)
         shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
         such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
         expressly excluded from this Declaration and the Securities, as
         permitted by the Trust Indenture Act.

SECTION 2.7 Event of Default; Notice.

                  (a) Within five Business Days after the occurrence of any
         Event of Default actually known to a Responsible Officer of the
         Property Trustee, the Property Trustee shall transmit notice of such
         Event of Default to the Holders of the Preferred Securities, the
         Administrative Trustees and the Sponsor, unless such Event of Default
         shall have been cured, waived or otherwise eliminated. The Sponsor and
         the Administrative Trustees shall file annually with the Property
         Trustee a certification as to whether or not they are in compliance
         with all the conditions and covenants applicable to them under this
         Declaration.

                  (b) For purposes of this Section 2.7, the Property Trustee
         shall not be deemed to have knowledge of any default or Event of
         Default except:

                           (i) a default under Sections 5.1(1) and 5.1(2) of the
                  Indenture; or



                                       9
<PAGE>   15


                           (ii) any default as to which the Property Trustee
                  shall have received written notice or of which a Responsible
                  Officer of the Property Trustee charged with the
                  administration of the Declaration shall have actual knowledge.

                                   ARTICLE III
                                  ORGANIZATION

SECTION 3.1 Name.

         The Trust is named "American General Capital III", as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.

SECTION 3.2 Office.

         The address of the principal office of the Trust is c/o American
General Corporation, 2929 Allen Parkway, Houston, Texas 77019-2155. On ten
Business Days' written notice to the Holders of the Securities and the Property
Trustee, the Administrative Trustees may designate another principal office.

SECTION 3.3 Purpose.

         The exclusive purposes and functions of the Trust are (a) to issue and
sell the Trust Securities, (b) to use the proceeds from the sale of the
Securities to acquire the Debentures, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto.

SECTION 3.4 Authority.

         Except as specifically provided in this Declaration, the Property
Trustee and the Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.

SECTION 3.5 Title to Property of the Trust.

         Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.

SECTION 3.6 Powers and Duties of the Administrative Trustees.

         The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:

                  (a) to execute, deliver, issue and sell the Preferred
         Securities and the Common Securities in accordance with this
         Declaration; provided, however, that (i) the Trust may issue no more
         than one series of Preferred Securities and no more than one series of
         Common Securities, (ii) there shall be



                                       10
<PAGE>   16


         no interests in the Trust other than the Securities, and (iii) the
         issuance of Securities shall be limited to a simultaneous issuance of
         both Preferred Securities and Common Securities at the Closing Time;

                  (b) in connection with the issue and sale of the Preferred
         Securities, at the direction of the Sponsor, to:

                           (i) file with the Commission a registration statement
                  prepared by the Sponsor on the appropriate form in relation to
                  the Preferred Securities, including any amendments thereto and
                  including any supplements or amendments to the form of
                  prospectus included therein, as permitted by the rules and
                  regulations of the Commission;

                           (ii) execute and file any documents prepared by the
                  Sponsor, or take any acts as determined by the Sponsor to be
                  necessary in order to qualify or register all or part of the
                  Preferred Securities in any state in which the Sponsor has
                  determined to qualify or register such Preferred Securities
                  for sale;

                           (iii) at the direction of the Sponsor, execute and
                  file an application, prepared by the Sponsor, to the New York
                  Stock Exchange or any other national stock exchange or the
                  Nasdaq National Market for listing or quotation of the
                  Preferred Securities;

                           (iv) to execute and deliver letters, documents, or
                  instruments with DTC and any other Clearing Agencies relating
                  to the Preferred Securities;

                           (v) if required, execute and file with the Commission
                  a registration statement on Form 8-A, including any amendments
                  thereto, prepared by the Sponsor, relating to the registration
                  of the Preferred Securities under Section 12(b) or 12(g) of
                  the Exchange Act; and

                           (vi) to cause the Trust to enter into such agreements
                  and arrangements as may be necessary or desirable in
                  connection with the sale of Preferred Securities to the
                  underwriters thereof and the consummation thereof, and to take
                  all action as may be necessary or desirable in connection with
                  the consummation thereof;

                  (c) to acquire the Debentures with the proceeds of the sale of
         the Preferred Securities and the Common Securities; provided, however,
         that the Administrative Trustees shall cause legal title to the
         Debentures to be held of record in the name of the Property Trustee for
         the benefit of the Holders of the Preferred Securities and the Holders
         of Common Securities;

                  (d) if applicable, to give the Sponsor and the Property
         Trustee prompt written notice of the occurrence of a Special Event;

                  (e) to establish a record date with respect to all actions to
         be taken hereunder that require a record date be established, including
         and with respect to, for the purposes of Section 316(c) of the Trust
         Indenture Act, Distributions, voting rights, redemptions and exchanges,
         and to issue relevant notices to the Holders of the Preferred
         Securities and the Holders of the Common Securities as to such actions
         and applicable record dates;

                  (f) to take all actions and perform such duties as may be
         required of the Administrative Trustees pursuant to the terms of the
         Securities;



                                       11
<PAGE>   17


                  (g) to bring or defend, pay, collect, compromise, arbitrate,
         resort to legal action, or otherwise adjust claims or demands of or
         against the Trust ("Legal Action"), unless pursuant to Section 3.8(e),
         the Property Trustee has the exclusive power to bring such Legal
         Action;

                  (h) to employ or otherwise engage employees and agents (who
         may be designated as officers with titles) and managers, contractors,
         advisors, and consultants and pay reasonable compensation for such
         services;

                  (i) to cause the Trust to comply with the Trust's obligations
         under the Trust Indenture Act;

                  (j) to give the certificate required by Section 314(a)(4) of
         the Trust Indenture Act to the Property Trustee, which certificate may
         be executed by any Administrative Trustee;

                  (k) to incur expenses that are necessary or incidental to
         carry out any of the purposes of the Trust;

                  (l) to act as, or appoint another Person to act as, Registrar
         for the Securities or to appoint a Paying Agent for the Securities as
         provided in Section 7.4;

                  (m) to give prompt written notice to the Property Trustee and
         to Holders of the Securities of any notice received from the Debenture
         Issuer of its election to defer payments of interest on the Debentures
         by extending the interest payment period under the Indenture;

                  (n) to take all action (provided that such action does not
         materially adversely affect the interests of the Holders) that may be
         necessary or appropriate for the preservation and the continuation of
         the Trust's valid existence, rights, franchises and privileges as a
         statutory business trust under the laws of the State of Delaware and of
         each other jurisdiction in which such existence is necessary to protect
         the limited liability of the Holders of the Preferred Securities or to
         enable the Trust to effect the purposes for which the Trust was
         created;

                  (o) to take any action, not inconsistent with this Declaration
         or with applicable law, that the Administrative Trustees determine in
         their discretion to be necessary or desirable in carrying out the
         activities of the Trust as set out in this Section 3.6, including, but
         not limited to:

                           (i) causing the Trust not to be deemed to be an
                  Investment Company required to be registered under the
                  Investment Company Act;

                           (ii) causing the Trust not to be classified for
                  United States federal income tax purposes as an association
                  taxable as a corporation; and

                           (iii) cooperating with the Debenture Issuer to ensure
                  that the Debentures will be treated as indebtedness of the
                  Debenture Issuer for United States federal income tax
                  purposes;

                  (p) to take all action necessary to cause all applicable tax
         returns and tax information reports that are required to be filed with
         respect to the Trust to be duly prepared and filed by the
         Administrative Trustees, on behalf of the Trust; and



                                       12
<PAGE>   18


                  (q) to execute, deliver and record, file or register, as
         applicable, all documents, certificates, agreements or instruments,
         perform all duties and powers, and do all things for and on behalf of
         the Trust in all matters necessary, advisable or incidental to the
         foregoing.

         The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.

         Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.

         Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor.

SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.

                  (a) The Trust shall not, and the Trustees (including the
         Property Trustee and the Delaware Trustee) shall cause the Trust not
         to, engage in any activity other than as required or authorized by this
         Declaration. The Trust shall not, and the Trustees (including the
         Property Trustee) shall cause the Trust not to:

                           (i) invest any proceeds received by the Trust from
                  holding the Debentures, but shall distribute all such proceeds
                  to Holders of Securities pursuant to the terms of this
                  Declaration and of the Securities;

                           (ii) acquire any assets other than as expressly
                  provided herein;

                           (iii) possess Trust Property for other than a Trust
                  purpose or execute any mortgage in respect of, or pledge, any
                  Trust Property;

                           (iv) make any loans or incur any indebtedness other
                  than loans represented by the Debentures;

                           (v) possess any power or otherwise act in such a way
                  as to vary the Trust assets or the terms of the Securities in
                  any way whatsoever;

                           (vi) issue any securities or other evidences of
                  beneficial ownership of, or beneficial interest in, the Trust
                  other than the Securities; or

                           (vii) other than as provided in this Declaration, (A)
                  direct the time, method and place of conducting any proceeding
                  with respect to any remedy available to the Debenture Trustee,
                  or exercise any trust or power conferred upon the Debenture
                  Trustee with respect to the Debentures, (B) waive any past
                  default that is waivable under the Indenture, (C) exercise any
                  right to rescind or annul any declaration that the principal
                  of all the Debentures shall be due and payable, or (D) consent
                  to any amendment, modification or termination of the Indenture
                  or the Debentures where such consent shall be required unless
                  the Trust shall have received an opinion of independent tax
                  counsel experienced in such matters to the effect that such
                  amendment, modification or termination will not cause the
                  Trust to be classified as an association taxable as a
                  corporation for United States federal income tax purposes.



                                       13
<PAGE>   19


SECTION 3.8 Powers and Duties of the Property Trustee.

                  (a) The legal title to the Debentures shall be owned by and
         held of record in the name of the Property Trustee in trust for the
         benefit of the Trust and the Holders of the Securities. The right,
         title and interest of the Property Trustee to the Debentures shall vest
         automatically in each Person who may hereafter be appointed as Property
         Trustee in accordance with Section 5.7. Such vesting and cessation of
         title shall be effective whether or not conveyancing documents with
         regard to the Debentures have been executed and delivered.

                  (b) The Property Trustee shall not transfer its right, title
         and interest in the Debentures to the Administrative Trustees or to the
         Delaware Trustee (if the Property Trustee does not also act as Delaware
         Trustee).

                  (c) The Property Trustee shall:

                           (i) establish and maintain a segregated non-interest
                  bearing trust account (the "Property Trustee Account") in the
                  name of and under the exclusive control of the Property
                  Trustee, and maintained in the Property Trustee's trust
                  department, on behalf of the Holders of the Securities and,
                  upon the receipt of payments of funds made in respect of the
                  Debentures held by the Property Trustee, deposit such funds
                  into the Property Trustee Account and make or cause the Paying
                  Agent to make payments to the Holders of the Preferred
                  Securities and Holders of the Common Securities from the
                  Property Trustee Account in accordance with Section 6.1. Funds
                  in the Property Trustee Account shall be held uninvested until
                  disbursed in accordance with this Declaration. Unless the
                  Property Trustee Account is held as a trust account in the
                  corporate trust department of the Property Trustee, the
                  Property Trustee Account shall be an account that is
                  maintained with a banking institution the rating on whose
                  long-term unsecured indebtedness is at least equal to the
                  rating assigned to the Preferred Securities by a "nationally
                  recognized statistical rating organization", as that term is
                  defined for purposes of Rule 436(g)(2) under the Securities
                  Act;

                           (ii) engage in such ministerial activities as shall
                  be necessary or appropriate to effect the redemption of the
                  Preferred Securities and the Common Securities to the extent
                  the Debentures are prepaid or mature; and

                           (iii) upon written notice of distribution issued by
                  the Administrative Trustees in accordance with the terms of
                  the Securities, engage in such ministerial activities as shall
                  be necessary or appropriate to effect the distribution of the
                  Debentures to Holders of Securities upon the occurrence of
                  certain events.

                  (d) The Property Trustee shall take all actions and perform
         such duties as may be specifically required of the Property Trustee
         pursuant to the terms of this Declaration and the Securities.

                  (e) Subject to Section 3.9(a), the Property Trustee shall take
         any Legal Action which arises out of or in connection with an Event of
         Default of which a Responsible Officer of the Property Trustee has
         actual knowledge or the Property Trustee's duties and obligations under
         this Declaration or the Trust Indenture Act; provided, however, that if
         an Event of Default has occurred and is continuing and such event is
         attributable to the failure of the Debenture Issuer to pay the
         principal of or premium, if any, or interest on the Debentures on the
         date such principal, premium, if any, or interest is otherwise payable
         (or in the case of redemption, on the redemption date), then a Holder
         of



                                       14
<PAGE>   20


         Preferred Securities may directly institute a proceeding for
         enforcement of payment to such Holder of the principal of or premium,
         if any, or interest on the Debentures having a principal amount equal
         to the aggregate Liquidation Amount of the Preferred Securities of such
         Holder (a "Direct Action") on or after the respective due date
         specified in the Debentures. Notwithstanding any payments made to such
         Holder by the Debenture Issuer in connection with such Direct Action,
         the Debenture Issuer shall remain obligated to pay the principal of,
         premium, if any, or interest on such Debentures, and the Debenture
         Issuer shall be subrogated to the rights of such Holder of Preferred
         Securities to the extent of any payment made by the Debenture Issuer to
         such Holder of Preferred Securities in such Direct Action. Except as
         provided in the preceding sentences, the Holders of Preferred
         Securities will not be able to exercise directly any other remedy
         available to the Holders of the Debentures.

                  (f) The Property Trustee shall continue to serve as a Trustee
         until either:

                           (i) the Trust has been completely liquidated and the
                  proceeds of the liquidation distributed to the Holders of
                  Securities pursuant to the terms of the Securities; or

                           (ii) a Successor Property Trustee has been appointed
                  and has accepted that appointment in accordance with Section
                  5.7.

                  (g) The Property Trustee shall have the legal power to
         exercise all of the rights, powers and privileges of a holder of
         Debentures under the Indenture and, if an Event of Default actually
         known to a Responsible Officer of the Property Trustee occurs and is
         continuing, the Property Trustee shall, for the benefit of Holders of
         the Securities, enforce its rights as holder of the Debentures subject
         to the rights of the Holders pursuant to this Declaration and the terms
         of such Securities.

                  (h) The Property Trustee shall be authorized to undertake any
         actions set forth in Section 317(a) of the Trust Indenture Act.

                  (i) For such time as the Property Trustee is the Paying Agent,
         the Property Trustee may authorize one or more Persons to act as
         additional Paying Agents and to pay Distributions, redemption payments
         or liquidation payments on behalf of the Trust with respect to all
         Securities and any such Paying Agent shall comply with Section 317(b)
         of the Trust Indenture Act. Any such additional Paying Agent may be
         removed by the Property Trustee at any time the Property Trustee
         remains as Paying Agent and a successor Paying Agent or additional
         Paying Agents may be (but are not required to be) appointed at any time
         by the Property Trustee.

                  (j) Subject to this Section 3.8, the Property Trustee shall
         have none of the duties, liabilities, powers or the authority of the
         Administrative Trustees set forth in Section 3.6.

         The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.3.

SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.

                  (a) The Property Trustee, before the occurrence of any Event
         of Default and after the curing of all Events of Default that may have
         occurred, shall undertake to perform only such duties as are
         specifically set forth in this Declaration and in the Securities and no
         implied covenants shall be read into this Declaration against the
         Property Trustee. In case an Event of Default has occurred (that has
         not been cured or waived pursuant to Section 2.6) of which a
         Responsible Officer of the Property



                                       15
<PAGE>   21


         Trustee has actual knowledge, the Property Trustee shall exercise such
         of the rights and powers vested in it by this Declaration, and use the
         same degree of care and skill in their exercise, as a prudent person
         would exercise or use under the circumstances in the conduct of his or
         her own affairs.

                  (b) No provision of this Declaration shall be construed to
         relieve the Property 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 an Event of Default
                  and after the curing or waiving of all such Events of Default
                  that may have occurred:

                                    (A) the duties and obligations of the
                           Property Trustee shall be determined solely by the
                           express provisions of this Declaration and in the
                           Securities and the Property Trustee shall not be
                           liable except for the performance of such duties and
                           obligations as are specifically set forth in this
                           Declaration and in the Securities, and no implied
                           covenants or obligations shall be read into this
                           Declaration against the Property Trustee; and

                                    (B) in the absence of bad faith on the part
                           of the Property Trustee, the Property 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 Property Trustee and conforming to the
                           requirements of this Declaration; provided, however,
                           that in the case of any such certificates or opinions
                           that by any provision hereof are specifically
                           required to be furnished to the Property Trustee, the
                           Property Trustee shall be under a duty to examine the
                           same to determine whether or not they conform to the
                           requirements of this Declaration;

                           (ii) the Property Trustee shall not be liable for any
                  error or judgment made in good faith by a Responsible Officer
                  of the Property Trustee, unless it shall be proved that the
                  Property Trustee was negligent in ascertaining the pertinent
                  facts;

                           (iii) the Property 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
                  Securities relating to the time, method and place of
                  conducting any proceeding for any remedy available to the
                  Property Trustee, or exercising any trust or power conferred
                  upon the Property Trustee under this Declaration;

                           (iv) no provision of this Declaration shall require
                  the Property 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 it 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 Declaration
                  or indemnity reasonably satisfactory to the Property Trustee
                  against such risk or liability is not reasonably assured to
                  it;

                           (v) the Property Trustee's sole duty with respect to
                  the custody, safe keeping and physical preservation of the
                  Debentures and the Property Trustee Account shall be to deal
                  with such property in a similar manner as the Property Trustee
                  deals with similar property for its own account, subject to
                  the protections and limitations on liability afforded to the
                  Property Trustee under this Declaration and the Trust
                  Indenture Act;



                                       16
<PAGE>   22


                           (vi) the Property Trustee shall have no duty or
                  liability for or with respect to the value, genuineness,
                  existence or sufficiency of the Debentures or the payment of
                  any taxes or assessments levied thereon or in connection
                  therewith;

                           (vii) the Property Trustee shall not be liable for
                  any interest on any money received by it except as it may
                  otherwise agree in writing with the Sponsor. Money held by the
                  Property Trustee need not be segregated from other funds held
                  by it except in relation to the Property Trustee Account
                  maintained by the Property Trustee pursuant to Section
                  3.8(c)(i) and except to the extent otherwise required by law;
                  and

                           (viii) the Property Trustee shall not be responsible
                  for monitoring the compliance by the Administrative Trustees
                  or the Sponsor with their respective duties under this
                  Declaration, nor shall the Property Trustee be liable for any
                  default or misconduct of the Administrative Trustees or the
                  Sponsor.

SECTION 3.10 Certain Rights of Property Trustee.

                  (a) Subject to the provisions of Section 3.9:

                           (i) the Property 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 Sponsor or the
                  Administrative Trustees contemplated by this Declaration may
                  be sufficiently evidenced by an Officers' Certificate;

                           (iii) whenever in the administration of this
                  Declaration, the Property Trustee shall deem it desirable that
                  a matter be established before undertaking, suffering or
                  omitting any action hereunder, the Property Trustee (unless
                  other evidence is herein specifically prescribed) may, in the
                  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 Sponsor or the
                  Administrative Trustees;

                           (iv) the Property Trustee shall have no duty to see
                  to any recording, filing or registration of any instrument
                  (including any-financing or continuation statement or any
                  filing under tax or securities laws) or any rerecording,
                  refiling or reregistration thereof;

                           (v) the Property Trustee may consult with counsel or
                  other experts of its selection and the advice or opinion of
                  such counsel and experts with respect to legal matters or
                  advice within the scope of such experts' area of expertise
                  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 Sponsor or any of
                  its Affiliates, and may include any of its employees. The
                  Property Trustee shall have the right at any time to seek
                  instructions concerning the administration of this Declaration
                  from any court of competent jurisdiction;

                           (vi) the Property Trustee shall have no duty to
                  exercise any of the rights or powers vested in it by this
                  Declaration at the request or direction of any Holder, unless
                  such



                                       17
<PAGE>   23


                  Holder shall have provided to the Property Trustee security
                  indemnity, reasonably satisfactory to the Property Trustee,
                  against the costs, expenses (including reasonable attorneys'
                  fees and expenses and the expenses of the Property 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
                  Property Trustee, provided, that nothing contained in this
                  Section 3.10(a)(vi) shall be taken to relieve the Property
                  Trustee, upon the occurrence of an Event of Default, of its
                  obligation to exercise the rights and powers vested in it by
                  this Declaration;

                           (vii) the Property Trustee shall have no duty to make
                  any investigation into the facts or matters stated in any
                  resolution, certificate, statement, instrument, opinion,
                  report, notice, request, direction, consent, order, approval,
                  bond, debenture, note, other evidence of indebtedness or other
                  paper or document, but the Property Trustee may make such
                  further inquiry or investigation into such facts or matters as
                  it may see fit;

                           (viii) the Property Trustee may execute any of the
                  trusts or powers hereunder or perform any duties hereunder
                  either directly or by or through its agents, custodians,
                  nominees or attorneys and the Property 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;

                           (ix) any action taken by the Property Trustee or its
                  agents hereunder shall bind the Trust and the Holders of the
                  Securities, and the signature of the Property Trustee or its
                  agents alone shall be sufficient and effective to perform any
                  such action and no third party shall be required to inquire as
                  to the authority of the Property Trustee to so act or as to
                  its compliance with any of the terms and provisions of this
                  Declaration, both of which shall be conclusively evidenced by
                  the Property Trustee's or its agent's taking such action;

                           (x) whenever in the administration of this
                  Declaration the Property Trustee shall deem it desirable to
                  receive instructions with respect to enforcing any remedy or
                  right or taking any other action hereunder, the Property
                  Trustee (i) may request instructions from the Holders of the
                  Securities which instructions shall be given by the Holders of
                  the same proportion in Liquidation Amount of the Securities as
                  would be entitled to direct the Property Trustee under the
                  terms of the Securities in respect of such remedy, right or
                  action, (ii) may refrain from enforcing such remedy or right
                  or taking such other action until such instructions are
                  received, and (iii) shall be fully protected in conclusively
                  relying on or acting in or accordance with such instructions;

                           (xi) except as otherwise expressly provided in this
                  Declaration, the Property Trustee shall have no duty to take
                  any action that is discretionary under the provisions of this
                  Declaration; and

                           (xii) the Property Trustee shall not be liable for
                  any action taken, suffered, or omitted to be taken by it in
                  good faith, without negligence, and reasonably believed by it
                  to be authorized or within the discretion or rights or powers
                  conferred upon it by this Declaration.

                  (b) No provision of this Declaration shall be deemed to impose
         any duty or obligation on the Property 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 Property Trustee shall be unqualified or incompetent in
         accordance with applicable law, to perform any such



                                       18
<PAGE>   24


         act or acts, or to exercise any such right, power, duty or obligation.
         No permissive power or authority available to the Property Trustee
         shall be construed to be a duty. Notwithstanding anything to the
         contrary in this Declaration, in no event shall the Property Trustee be
         deemed to be an ERISA fiduciary, and in the event that the Property
         Trustee believes it appropriate to take or omit to take any action that
         would cause it to be deemed an ERISA fiduciary, it shall obtain and
         follow the direction of the Sponsor, Administrative Trustees or
         Holders, as the case may be.

SECTION 3.11 Delaware Trustee.

         Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Administrative Trustees, the Property Trustee or of the Trustees generally
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act and taking such actions
as are required to be taken by the Delaware Trustee under the Business Trust
Act.

SECTION 3.12 Execution of Documents.

         Except as otherwise required by the Business Trust Act or applicable
law, any Administrative Trustee is authorized to execute on behalf of the Trust
any documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6.

SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.

         The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.

SECTION 3.14 Duration of Trust.

         The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence up to September 30, 2052.

SECTION 3.15 Mergers.

                  (a) The Trust may not merge or convert with or into,
         consolidate, amalgamate, or be replaced by, or convey, transfer or
         lease its properties and assets substantially as an entirety to any
         Person, except as described in Section 3.15(b) and (c) hereof or in
         Annex I.

                  (b) The Trust may, at the request of the Sponsor, with the
         consent of the Administrative Trustees or, if there are more than two,
         a majority of the Administrative Trustees and without the consent of
         the Holders of the Securities, the Delaware Trustee or the Property
         Trustee, merge or convert with or into, consolidate, amalgamate, or be
         replaced by, or convey, transfer or lease its properties and assets as
         an entirety or substantially as an entirety to, a trust organized as
         such under the laws of any State; provided that:



                                       19
<PAGE>   25


                           (i) such successor entity (the "Successor Entity")
                  either:

                                    (A) expressly assumes all of the obligations
                           of the Trust under the Securities; or

                                    (B) substitutes for the Securities other
                           securities having substantially the same terms as the
                           Securities (the "Successor Securities") so long as
                           the Successor Securities rank the same as the
                           Securities rank with respect to Distributions and
                           payments upon liquidation, redemption and otherwise;

                           (ii) the Sponsor expressly appoints a trustee of the
                  Successor Entity that possesses the same powers and duties as
                  the Property Trustee as the holder of the Debentures;

                           (iii) the Successor Securities are listed or quoted,
                  or any Successor Securities will be listed upon notification
                  of issuance, on any national securities exchange or with
                  another organization on which the Preferred Securities are
                  then listed or quoted, if any;

                           (iv) such merger, conversion, consolidation,
                  amalgamation, replacement, conveyance, transfer or lease does
                  not cause the Preferred Securities (including any Successor
                  Securities) to be downgraded by any nationally recognized
                  statistical rating organization;

                           (v) such merger, conversion, consolidation,
                  amalgamation, replacement, conveyance, transfer or lease does
                  not adversely affect the rights, preferences and privileges of
                  the Holders of the Securities (including any Successor
                  Securities) in any material respect (other than any dilution
                  of such Holders' interests in the new entity);

                           (vi) such Successor Entity has a purpose
                  substantially identical to that of the Trust;

                           (vii) prior to such merger, conversion,
                  consolidation, amalgamation, replacement, conveyance, transfer
                  or lease, the Sponsor has received an opinion of an
                  independent counsel to the Trust experienced in such matters
                  to the effect that:

                                    (A) such merger, conversion, consolidation,
                           amalgamation, replacement, conveyance, transfer or
                           lease does not adversely affect the rights,
                           preferences and privileges of the Holders of the
                           Securities (including any Successor Securities) in
                           any material respect (other than with respect to any
                           dilution of the Holders' interests in the new
                           entity); and

                                    (B) following such merger, conversion,
                           consolidation, amalgamation, replacement, conveyance,
                           transfer or lease, neither the Trust nor the
                           Successor Entity will be required to register as an
                           Investment Company; and

                                    (C) following such merger, conversion,
                           consolidation, amalgamation, replacement, conveyance,
                           transfer, or lease, the Trust (or the Successor
                           Entity) will continue to be classified as a grantor
                           trust for United States federal income tax purposes;
                           and

                           (viii) the Sponsor or any permitted successor or
                  assignee owns all of the common securities of such Successor
                  Entity and guarantees the obligations of such Successor Entity
                  under the Successor Securities at least to the extent provided
                  by the Preferred Securities Guarantee.



                                       20
<PAGE>   26


                  (c) Notwithstanding Section 3.15(b), the Trust shall not,
         except with the consent of all Holders of the Securities, consolidate,
         amalgamate, merge or convert 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 other entity or permit any other
         entity to consolidate, amalgamate, merge or convert with or into, or
         replace it if such consolidation, amalgamation, merger, conversion,
         replacement, conveyance, transfer or lease would cause the Trust or the
         Successor Entity not to be classified as a grantor trust for United
         States federal income tax purposes.

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1 Sponsors Purchase of Common Securities.

         At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are issued
and sold.

SECTION 4.2 Responsibilities of the Sponsor.

         In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

                  (a) to prepare for filing by the Trust, execute and file with
         the Commission a registration statement on the appropriate form in
         relation to the Preferred Securities, the Preferred Securities
         Guarantee and the Debentures, including any amendments or supplements
         thereto and including any supplements or amendments to the form of
         prospectus included therein, as permitted by the rules and regulations
         of the Commission;

                  (b) to determine the states in which to take appropriate
         action to qualify or register for sale all or part of the Preferred
         Securities and to do any and all such acts, other than actions which
         must be taken by the Trust, and advise the Trust of actions it must
         take, and prepare for execution and filing any documents to be executed
         and filed by the Trust, as the Sponsor deems necessary or advisable in
         order to comply with the applicable laws of any such states;

                  (c) if deemed necessary or advisable by the Sponsor, to
         prepare for filing and request the Administrative Trustees to cause the
         filing by the Trust of an application to the New York Stock Exchange or
         any other national stock exchange or the Nasdaq National Market for
         listing or quotation of the Preferred Securities;

                  (d) if required, to prepare for and execute for filing by the
         Trust with the Commission a registration statement on Form 8-A relating
         to the registration of the Preferred Securities under Section 12(b) or
         12(g) of the Exchange Act, including any amendments thereto; and

                  (e) to negotiate the terms of, and execute and deliver on
         behalf of the Trust, the Underwriting Agreement providing for the sale
         of the Preferred Securities and any agreements or instruments
         contemplated thereby.



                                       21
<PAGE>   27


SECTION 4.3 Right to Proceed.

         The Sponsor acknowledges the rights of the Holders of the Preferred
Securities, in the event that a failure of the Trust to pay Distributions on the
Preferred Securities is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures, to institute Direct Actions against
the Debenture Issuer for enforcement of its payment obligations on the
Debentures.

                                    ARTICLE V
                                    TRUSTEES

SECTION 5.1 Number of Trustees; Appointment of CoTrustee.

         The number of Trustees initially shall be five (5), and:

                  (a) at any time before the issuance of any Securities, the
         Sponsor may, by written instrument, increase or decrease the number of
         Trustees; and

                  (b) after the issuance of any Securities, the number of
         Trustees may be increased or decreased by vote of the Holders of a
         Majority in Liquidation Amount of the Common Securities voting as a
         class at a meeting of the Holders of the Common Securities; provided,
         however, that, the number of Trustees shall in no event be less than
         two (2); provided further, that (1) if required by the Business Trust
         Act, one Trustee, in the case of a natural person, shall be a person
         who is a resident of the State of Delaware or that, if not a natural
         person, is an entity which has its principal place of business in the
         State of Delaware (the "Delaware Trustee"); (2) at least one Trustee
         shall be an employee or officer of, or affiliated with the Sponsor (an
         "Administrative Trustee"); and (3) one Trustee shall be the Property
         Trustee, and such Trustee may also serve as Delaware Trustee if it
         meets the applicable requirements. Notwithstanding the above, unless an
         Event of Default shall have occurred and be continuing, at any time or
         times, for the purpose of meeting the requirements of the Trust
         Indenture Act or of any jurisdiction in which any part of the Trust's
         property may at the time be located, the Holders of a Majority in
         Liquidation Amount of the Common Securities acting as a class at a
         meeting of the Holders of the Common Securities shall have power to
         appoint one or more persons either to act as a co-trustee, jointly with
         the Property Trustee, of all or any part of the Trust's property, or to
         act as separate trustee of any such property, in either case with such
         powers as may be provided in the instrument of appointment, and to vest
         in such person or persons in such capacity any property, title, right
         or power deemed necessary or desirable, subject to the provisions of
         this Declaration. In case an Event of Default has occurred and is
         continuing, the Property Trustee alone shall have power to make any
         such appointment of a co-trustee.

SECTION 5.2 Delaware Trustee.

         If required by the Business Trust Act, the Delaware Trustee shall be:

                  (a) a natural person who is a resident of the State of
         Delaware; or

                  (b) if not a natural person, an entity which has its principal
         place of business in the State of Delaware, and otherwise meets the
         requirements of applicable law, provided, that, if the Property Trustee
         has its principal place of business in the State of Delaware and
         otherwise meets the requirements of applicable law, then the Property
         Trustee may also be the Delaware Trustee and Section 3.11 shall have no
         application.



                                       22
<PAGE>   28

SECTION 5.3 Property Trustee; Eligibility.

                  (a) There shall at all times be one Trustee (the "Property
         Trustee") which shall act as Property Trustee and which shall:

                           (i) not be an Affiliate of the Sponsor; and

                           (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 Commission to act as an
                  indenture 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
                  5.3(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 Property Trustee shall cease to be
         eligible to so act under Section 5.3(a), the Property Trustee shall
         immediately resign in the manner and with the effect set forth in
         Section 5.7(c).

                  (c) If the Property Trustee has or shall acquire any
         "conflicting interest" within the meaning of Section 310(b) of the
         Trust Indenture Act, the Property Trustee and the Holder of the Common
         Securities (as if it were the obligor referred to in Section 310(b) of
         the Trust Indenture Act) shall in all respects comply with the
         provisions of Section 310(b) of the Trust Indenture Act.

                  (d) The Preferred Securities Guarantee shall be deemed to be
         specifically described in this Declaration for purposes of clause (i)
         of the first proviso contained in Section 310(b) of the Trust Indenture
         Act.

                  (e) The initial Property Trustee shall be:

                           Bankers Trust Company

SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
            Trustee Generally.

         Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.

SECTION 5.5 Administrative Trustees.

                  (a) The initial Administrative Trustees shall be:

                      Nicholas R. Rasmussen,
                      C. Jeffrey Gay, and
                      Gregory N. Picard



                                       23
<PAGE>   29
                  (b) Except where a requirement for action by a specific number
         of Administrative Trustees is expressly set forth in this Declaration
         and except with respect to any action the taking of which is the
         subject of a meeting of the Administrative Trustees, any action
         required or permitted to be taken by the Administrative Trustees may be
         taken by, and any power of the Administrative Trustees may be exercised
         by, or with the consent of, any one such Administrative Trustee.

                  (c) Except as otherwise required by the Business Trust Act or
         applicable law, any Administrative Trustee is authorized to execute on
         behalf of the Trust any documents which the Administrative Trustees
         have the power and authority to cause the Trust to execute pursuant to
         Section 3.6.

SECTION 5.6 Delaware Trustee.

         The initial Delaware Trustee shall be:

         Bankers Trust (Delaware)

SECTION 5.7 Appointment, Removal and Resignation of Trustees.

                  (a) Subject to Section 5.7(b), any Trustee may be appointed or
         removed without cause at any time:

                           (i) until the issuance of any Securities, by written
                  instrument executed by the Sponsor;

                           (ii) in the case of Administrative Trustees, after
                  the issuance of any Securities, by vote of the Holders of a
                  Majority in Liquidation Amount of the Common Securities voting
                  as a class at a meeting of the Holders of the Common
                  Securities;

                           (iii) in the case of the Property Trustee and the
                  Delaware Trustee, unless an Event of Default shall have
                  occurred and be continuing after the issuance of any
                  Securities, by vote of the Holders of a Majority in
                  Liquidation Amount of the Common Securities voting as a class
                  at a meeting of the Holders of the Common Securities; and

                           (iv) in the case of the Property Trustee and the
                  Delaware Trustee, if an Event of Default shall have occurred
                  and be continuing after the issuance of the Securities, by
                  vote of Holders of a Majority in Liquidation Amount of the
                  Preferred Securities voting as a class at a meeting of Holders
                  of the Preferred Securities.

                  (b) (i) The Trustee that acts as Property Trustee shall not be
         removed in accordance with Section 5.7(a) until a successor Trustee
         possessing the qualifications to act as Property Trustee under Section
         5.3 (a "Successor Property Trustee") has been appointed and has
         accepted such appointment by written instrument executed by such
         Successor Property Trustee and delivered to the Administrative Trustees
         and the Sponsor; and

                           (ii) the Trustee that acts as Delaware Trustee shall
                  not be removed in accordance with Section 5.7(a) until a
                  successor Trustee possessing the qualifications to act as
                  Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
                  Delaware Trustee") has been appointed and has accepted such
                  appointment by written instrument executed by such Successor
                  Delaware Trustee and delivered to the Administrative Trustees
                  and the Sponsor.



                                       24
<PAGE>   30


                  (c) A Trustee appointed to office shall hold office until his
         successor shall have been appointed or until his death, removal or
         resignation. Any Trustee may resign from office (without need for prior
         or subsequent accounting) by an instrument in writing signed by the
         Trustee and delivered to the Sponsor and the Trust, which resignation
         shall take effect upon such delivery or upon such later date as is
         specified therein; provided, however, that:

                           (i) No such resignation of the Trustee that acts as
                  the Property Trustee shall be effective:

                                    (A) until a Successor Property Trustee has
                           been appointed and has accepted such appointment by
                           instrument executed by such Successor Property
                           Trustee and delivered to the Trust, the Sponsor and
                           the resigning Property Trustee; or

                                    (B) until the assets of the Trust have been
                           completely liquidated and the proceeds thereof
                           distributed to the holders of the Securities; and

                           (ii) no such resignation of the Trustee that acts as
                  the Delaware Trustee shall be effective until a Successor
                  Delaware Trustee has been appointed and has accepted such
                  appointment by instrument executed by such Successor Delaware
                  Trustee and delivered to the Trust, the Sponsor and the
                  resigning Delaware Trustee.

                  (d) The Holders of the Common Securities shall use their best
         efforts to promptly appoint a Successor Delaware Trustee or Successor
         Property Trustee, as the case may be, if the Property Trustee or the
         Delaware Trustee delivers an instrument of resignation in accordance
         with this Section 5.7.

                  (e) If no Successor Property Trustee or Successor Delaware
         Trustee shall have been appointed and accepted appointment as provided
         in this Section 5.7 within 60 days after delivery of an instrument of
         resignation or removal, the Property Trustee or Delaware Trustee
         resigning or being removed, as applicable, may petition any court of
         competent jurisdiction for appointment of a Successor Property Trustee
         or Successor Delaware Trustee. Such court may thereupon, after
         prescribing such notice, if any, as it may deem proper and prescribe,
         appoint a Successor Property Trustee or Successor Delaware Trustee, as
         the case may be.

                  (f) No Property Trustee or Delaware Trustee shall be liable
         for the acts or omissions to act of any Successor Property Trustee or
         Successor Delaware Trustee, as the case may be.

SECTION 5.8 Vacancies among Trustees.

         If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.



                                       25
<PAGE>   31

SECTION 5.9 Effect of Vacancies.

         The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.

SECTION 5.10 Meetings.

         If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
and without prior notice by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee.

SECTION 5.11 Delegation of Power.

                  (a) Any Administrative Trustee may, by power of attorney
         consistent with applicable law, delegate to any other natural person
         over the age of 21 his or her power for the purpose of executing any
         documents contemplated in Section 3.6, including any registration
         statement or amendment thereto filed with the Commission, or making any
         other governmental filing; and

                  (b) The Administrative Trustees shall have power to delegate
         from time to time to such of their number or to officers of the Trust
         the doing of such things and the execution of such instruments either
         in the name of the Trust or the names of the Administrative Trustees or
         otherwise as the Administrative Trustees may deem expedient, to the
         extent such delegation is not prohibited by applicable law or contrary
         to the provisions of the Trust, as set forth herein.

SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.

         Any Person into which any Trustee (excluding any Administrative Trustee
that is a natural person) may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee hereunder, provided that such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.



                                       26
<PAGE>   32

                                   ARTICLE VI
                                  DISTRIBUTIONS

SECTION 6.1 Distributions.

         Each Holder shall receive Distributions in accordance with the terms of
such Holder's Securities as set forth herein and in Annex I. If and to the
extent that the Debenture Issuer makes a payment of interest (including
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee or any other payments with respect
to the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders in accordance with the
respective terms of the Securities held by them.

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1 General Provisions Regarding Securities.

                  (a) The Administrative Trustees shall on behalf of the Trust
         issue one class of preferred securities representing undivided
         beneficial interests in the assets of the Trust having such terms as
         are set forth in Annex I (the "Preferred Securities") and one class of
         common securities representing undivided beneficial interests in the
         assets of the Trust having such terms as are set forth in Annex I (the
         "Common Securities"). The Trust shall issue no securities or other
         interests in the assets of the Trust other than the Preferred
         Securities and the Common Securities.

                  (b) The Preferred Securities rank pari passu and payment
         thereon shall be made Pro Rata (as defined in Annex I hereto) with the
         Common Securities except that, where an Event of Default has occurred
         and is continuing, the rights of Holders of the Common Securities to
         payment in respect of Distributions and payments upon liquidation,
         redemption and otherwise are subordinated to the rights to payment of
         the Holders of the Preferred Securities.

                  (c) The consideration received by the Trust for the issuance
         of the Securities shall constitute a contribution to the capital of the
         Trust and shall not constitute a loan to the Trust.

                  (d) Upon issuance of the Securities as provided in this
         Declaration, the Securities so issued shall be deemed to be validly
         issued, fully paid and non-assessable.

                  (e) Every Person, by virtue of having become a Holder or a
         Preferred Security Beneficial Owner in accordance with the terms of
         this Declaration, shall be deemed to have expressly assented and agreed
         to the terms of, and shall be bound by, this Declaration.

                  (f) At the Closing Time, an Administrative Trustee, on behalf
         of the Trust, shall subscribe to and purchase from the Debenture
         Issuer, Debentures registered in the name of the Property Trustee on
         behalf of the Trust and having an aggregate principal amount equal to
         the aggregate Liquidation Amount of the Preferred Securities and Common
         Securities issued and sold on such date, and, in satisfaction of the
         purchase price for such Debentures, the Property Trustee, on behalf of
         the Trust, shall deliver to the Debenture Issuer the amount received on
         such date from the sale by the Trust of the Preferred Securities and
         Common Securities issued on such date.



                                       27
<PAGE>   33

SECTION 7.2 Execution and Authentication.

                  (a) The Securities shall be signed on behalf of the Trust by
         one or more Administrative Trustees by manual or facsimile signature.
         In case any Administrative Trustee of the Trust who shall have signed
         any of the Securities shall cease to be such Administrative Trustee
         before the Securities so signed shall be delivered by the Trust, such
         Securities nevertheless may be delivered as though the person who
         signed such Securities had not ceased to be such Administrative
         Trustee; and any Securities may be signed on behalf of the Trust by
         such persons who, at the actual date of execution of such Security,
         shall be the Administrative Trustees of the Trust, although at the date
         of the execution and delivery of the Declaration any such person was
         not such an Administrative Trustee.

                  (b) A Common Security shall be valid upon execution by an
         Administrative Trustee by manual or facsimile signature without any act
         of the Property Trustee. A Preferred Security shall not be valid until
         authenticated by the manual signature of an authorized signatory of the
         Property Trustee, which signature shall be conclusive evidence that the
         Preferred Security has been authenticated under this Declaration.

         Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in Annex I hereto except as provided in
Section 7.6.

         The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee hereunder with respect to the Sponsor or an Affiliate.

SECTION 7.3 Form and Dating.

         The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be in definitive or global form and
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by one or more of them. The Securities may have letters, CUSIP
or other numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange or quotation system
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee, the Delaware Trustee, the Administrative
Trustees and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to be bound thereby.

                  (a) Global Securities. The Preferred Securities shall be
         issued in the form of one or more permanent global Securities in
         definitive, fully registered form without Distribution coupons with the
         appropriate global legends set forth in Exhibit A-1 hereto (a "Global
         Preferred Security"), which shall be deposited on behalf of the
         purchasers of the Preferred Securities represented thereby with the
         Property Trustee or the Registrar, at its New York office, as custodian
         for the Clearing Agency, and



                                       28
<PAGE>   34

         registered in the name of the Clearing Agency or a nominee of the
         Clearing Agency, duly executed by the Trust and authenticated by the
         Property Trustee as hereinafter provided. The number of Preferred
         Securities represented by the Global Preferred Security may from time
         to time be increased or decreased by adjustments made on the records of
         the Property Trustee and the Clearing Agency or its nominee as
         hereinafter provided.

                  (b) Book-Entry Provisions. This Section 7.3(b) shall apply
         only to the Global Preferred Securities and such other Preferred
         Securities in global form as may be authorized by the Trust to be
         deposited with or on behalf of the Clearing Agency.

                  The Trust shall execute and the Property Trustee shall, in
         accordance with this Section 7.3, authenticate and make available for
         delivery initially one or more Global Preferred Securities that (i)
         shall be registered in the name of Cede & Co. or other nominee of such
         Clearing Agency and (ii) shall be delivered by the Trustee to such
         Clearing Agency or pursuant to such Clearing Agency's written
         instructions or held by the Property Trustee or the Registrar as
         custodian for the Clearing Agency.

                  Members of, or participants in, the Clearing Agency
         ("Participants") shall have no rights under this Declaration with
         respect to any Global Preferred Security held on their behalf by the
         Clearing Agency or by the Property Trustee or the Registrar as the
         custodian of the Clearing Agency or under such Global Preferred
         Security, and the Clearing Agency may be treated by the Trust, the
         Property Trustee and any agent of the Trust or the Property Trustee as
         the absolute owner of such Global Preferred Security for all purposes
         whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
         the Trust, the Property Trustee or any agent of the Trust or the
         Property Trustee from giving effect to any written certification, proxy
         or other authorization furnished by the Clearing Agency or impair, as
         between the Clearing Agency and its Participants, the operation of
         customary practices of such Clearing Agency governing the exercise of
         the rights of a holder of a beneficial interest in any Global Preferred
         Security.

                  (c) Definitive Preferred Securities. Except as provided in
         Section 7.9, owners of beneficial interests in a Global Preferred
         Security will not be entitled to receive physical delivery of
         certificated Preferred Securities ("Definitive Preferred Securities").

SECTION 7.4 Registrar and Paying Agent.

         The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"), and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Administrative Trustees may appoint the Registrar and Paying Agent
and may appoint one or more co-registrars and one or more additional paying
agents in such other locations as it shall determine. The term "Registrar"
includes any additional registrar, the term "Paying Agent" includes any
additional paying agent. The Administrative Trustees may change any Paying Agent
or Registrar without prior notice to any Holder. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Sponsor. The Administrative Trustees shall notify the Property
Trustee of the name and address of any Agent not a party to this Declaration. If
the Administrative Trustees fail to appoint or maintain another entity as
Registrar or Paying Agent, the Property Trustee shall act as such. The Trust or
any of its Affiliates may act as Paying Agent or Registrar. The Trust shall act
as Paying Agent and Registrar for the Common Securities.

         The Trust initially appoints the Property Trustee as Registrar and
Paying Agent for the Preferred Securities.



                                       29
<PAGE>   35

         The Registrar and Paying Agent shall be entitled to all of the rights,
protections, immunities and indemnities afforded to the Property Trustee
hereunder.

SECTION 7.5 Paying Agent to Hold Money in Trust.

         The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions on the Securities, and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.

SECTION 7.6 Replacement Securities.

         If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. An indemnity bond must be provided by
the Holder which, in the judgment of the Property Trustee, is sufficient to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Trust may charge
such holder for its expenses in replacing a Security.

SECTION 7.7 Outstanding Preferred Securities.

         The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.

         If a Preferred Security is replaced pursuant to Section 7.6 hereof, it
ceases to be outstanding unless the Property Trustee receives proof satisfactory
to it that the replaced Preferred Security is held by a bona fide purchaser.

         If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.

         Except as otherwise provided herein, a Preferred Security does not
cease to be outstanding because one of the Trustees, the Sponsor or an Affiliate
of the Sponsor holds the Security.

SECTION 7.8 Preferred Securities in Treasury.

         In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.



                                       30
<PAGE>   36

SECTION 7.9 Temporary Securities; Certificated Securities.

                  (a) Until Definitive Securities are ready for delivery, the
         Trust may prepare and, in the case of the Preferred Securities, the
         Property Trustee shall authenticate, temporary Securities. Temporary
         Securities shall be substantially in the form of Definitive Securities
         but may have variations that the Trust considers appropriate for
         temporary Securities. Without unreasonable delay, the Administrative
         Trustees shall prepare and, in the case of the Preferred Securities,
         the Property Trustee shall authenticate, Definitive Securities in
         exchange for temporary Securities.

                  (b) A Global Preferred Security deposited with the Clearing
         Agency or with the Property Trustee or the Registrar as custodian for
         the Clearing Agency pursuant to Section 7.3 shall be transferred to the
         beneficial owners thereof in the form of certificated Preferred
         Securities only if (i) the Clearing Agency notifies the Company that it
         is unwilling or unable to continue as Clearing Agency for such Global
         Preferred Security or if at any time such Clearing Agency ceases to be
         a "clearing agency" registered under the Exchange Act and a clearing
         agency is not appointed by the Administrative Trustees within 90 days
         of such notice, or (ii) the Administrative Trustees in their sole
         discretion elect to cause the issuance of certificated Preferred
         Securities.

                  (c) Any Global Preferred Security that is transferable to the
         beneficial owners thereof in the form of certificated Preferred
         Securities pursuant to this Section 7.9 shall be surrendered by the
         Clearing Agency to the Property Trustee located in the Borough of
         Manhattan, The City of New York, to be so transferred, in whole or from
         time to time in part, without charge, and the Property Trustee shall
         authenticate and make available for delivery, upon such transfer of
         each portion of such Global Preferred Security, an equal aggregate
         Liquidation Amount of Securities of authorized denominations in the
         form of certificated Preferred Securities. Any portion of a Global
         Preferred Security transferred pursuant to this Section shall be
         registered in such names as the Clearing Agency shall direct.

                  (d) Subject to the provisions of Section 7.9(c), the Holder of
         a Global Preferred Security may grant proxies and otherwise authorize
         any Person, including Participants and Persons that may hold interests
         through Participants, to take any action which such Holder is entitled
         to take under this Declaration or the Securities.

                  (e) In the event of the occurrence of any of the events
         specified in Section 7.9(b), the Trust will promptly make available to
         the Property Trustee or the Registrar a reasonable supply of
         certificated Preferred Securities in fully registered form without
         distribution coupons.

SECTION 7.10 Cancellation.

         The Administrative Trustees at any time may deliver the Securities to
the Property Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Property Trustee any Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Securities surrendered for registration of transfer,
redemption, exchange, payment, replacement or cancellation and shall dispose of
canceled Securities as the Administrative Trustees direct, provided that the
Property Trustee shall not be obligated to destroy Preferred Securities. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or redeemed or that have been delivered to the Property Trustee
for cancellation.



                                       31
<PAGE>   37

SECTION 7.11 CUSIP Numbers.

         The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

SECTION 8.1 Dissolution of Trust.

                  (a) The Trust shall automatically be dissolved and its affairs
         wound up upon the earliest to occur of the following events:

                           (i) the bankruptcy of the Sponsor;

                           (ii) the filing of a certificate of dissolution or
                  liquidation or its equivalent with respect to the Sponsor,
                  upon the dissolution of the Trust after having obtained the
                  consent of at least a Majority in Liquidation Amount of the
                  Securities voting together as a class to dissolve the Trust,
                  or the revocation of the Sponsor's charter and the expiration
                  of 90 days after the date of revocation without a
                  reinstatement thereof;

                           (iii) the distribution, after satisfaction of the
                  liabilities of the Trust to the creditors of the Trust, of a
                  Like Amount of the Debentures to the Holders of the Securities
                  pursuant to the terms thereof upon receipt of a written
                  direction from the Sponsor (which shall be at its sole
                  discretion) while the Debentures are outstanding requiring the
                  Trustees to dissolve the Trust and distribute a Like Amount of
                  the Debentures to Holders of the Securities;

                           (iv) the entry of a decree of judicial dissolution of
                  the Trust by a court of competent jurisdiction;

                           (v) when all of the Securities shall have been called
                  for redemption and the amounts necessary for redemption
                  thereof shall, after satisfaction of the liabilities of the
                  Trust to the creditors of the Trust, have been paid to the
                  Holders in accordance with the terms of the Securities;

                           (vi) the expiration of the term of the Trust provided
                  in Section 3.14; or

                           (vii) before the issuance of any Securities, with the
                  consent of the Administrative Trustees and the Sponsor.

                  (b) As soon as is practicable upon completion of winding up of
         the Trust following the occurrence of an event referred to in Section
         8.1(a) and after satisfaction of all liabilities to creditors of the
         Trust, the Administrative Trustees shall terminate the Trust by filing
         a certificate of cancellation with the Secretary of State of the State
         of Delaware in accordance with the Business Trust Act.



                                       32
<PAGE>   38

                  (c) The provisions of Section 3.9 and Article X shall survive
         the termination of the Trust.

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

SECTION 9.1 Transfer of Securities.

                  (a) Securities may only be transferred, in whole or in part,
         in accordance with the terms and conditions set forth in this
         Declaration and in the terms of the Securities. To the fullest extent
         permitted by law, any transfer or purported transfer of any Security
         not made in accordance with this Declaration shall be null and void.

                  (b) Subject to this Article IX, Preferred Securities shall be
         freely transferable.

                  (c) The Sponsor may not transfer the Common Securities except
         to an Affiliate of the Sponsor and except pursuant to any merger,
         consolidation, sale of all or substantially all of its assets or other
         transaction permitted pursuant to Article VIII of the Indenture.

                  (d) The Administrative Trustees shall provide for the
         registration of Securities and of the transfer of Securities, which
         will be effected without charge but only upon payment (with such
         indemnity as the Trustees may require) in respect of any tax or other
         governmental charges that may be imposed in relation to it. Upon
         surrender for registration of transfer of any Securities, the Trustees
         shall cause one or more new Securities to be issued in the name of the
         designated transferee or transferees. Every Security surrendered for
         registration of transfer shall be accompanied by a written instrument
         of transfer in form satisfactory to the Administrative Trustees duly
         executed by the Holder or such Holder's attorney duly authorized in
         writing. Each Security surrendered for registration of transfer shall
         be canceled by the Administrative Trustees. A transferee of a Security
         shall be entitled to the rights and subject to the obligations of a
         Holder hereunder upon the receipt by such transferee of a Security. By
         acceptance of a Security, each transferee shall be deemed to have
         agreed to be bound by this Declaration.

SECTION 9.2 Deemed Security Holders.

         The Trust, the Trustees, the Paying Agent and the Registrar may treat
the Person in whose name any Security shall be registered on the books and
records of the Trust as the sole owner of such Security for purposes of
receiving Distributions and for all other purposes whatsoever and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Security on the part of any Person, whether or not the Trust, the Trustees,
the Paying Agent or the Registrar shall have actual or other notice thereof.

SECTION 9.3 Book-Entry Interests.

         Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 7.9. Unless and until definitive, fully registered Preferred Securities
certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 7.9:

                  (a) the provisions of this Section 9.3 shall be in full force
         and effect;



                                       33
<PAGE>   39

                  (b) the Trust and the Trustees shall be entitled to deal with
         the Clearing Agency for all purposes of this Declaration (including the
         payment of Distributions on the Global Preferred Securities and
         receiving approvals, votes or consents hereunder) as the Holder of the
         Preferred Securities and the sole holder of the Global Preferred
         Security Certificates and shall have no obligation to the Preferred
         Security Beneficial Owners;

                  (c) to the extent that the provisions of this Section 9.3
         conflict with any other provisions of this Declaration, the provisions
         of this Section 9.3 shall control; and

                  (d) the rights of the Preferred Security Beneficial Owners
         shall be exercised only through the Clearing Agency and shall be
         limited to those established by law and agreements between such
         Preferred Security Beneficial Owners and the Clearing Agency and/or the
         Clearing Agency Participants, including receiving and transmitting
         payments of Distributions on the Global Preferred Securities to such
         Clearing Agency Participants; provided, that solely for the purposes of
         determining whether the Holders of the requisite amount of Preferred
         Securities have voted on any matter provided for in this Declaration,
         so long as any Global Preferred Securities remain outstanding, the
         Trustees may conclusively rely on, and shall be protected in relying
         on, any written instrument (including a proxy) delivered to the
         Trustees by the Clearing Agency setting forth the Preferred Security
         Beneficial Owners' votes or assigning the right to vote on any matter
         to any other Persons either in whole or in part.

SECTION 9.4 Notices to Clearing Agency.

         Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Securities to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.

SECTION 9.5 Appointment of Successor Clearing Agency.

         If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.

                                    ARTICLE X
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 Liability.

                  (a) Except as expressly set forth in this Declaration, the
         Preferred Securities Guarantee and the terms of the Securities, the
         Sponsor shall not be:

                           (i) personally liable for the return of any portion
                  of the capital contributions (or any return thereon) of the
                  Holders of the Securities, which shall be made solely from
                  assets of the Trust; or

                           (ii) required to pay to the Trust or to any Holder of
                  Securities any deficit upon dissolution of the Trust or
                  otherwise.



                                       34
<PAGE>   40

                  (b) The Sponsor shall be liable for all of the debts and
         obligations of the Trust (other than with respect to the Securities) to
         the extent not satisfied out of the Trust's assets.

                  (c) Pursuant to Section 3803(a) of the Business Trust Act,
         the Holders of the Preferred Securities shall be entitled to the same
         limitation of personal liability extended to stockholders of private
         corporations for profit organized under the General Corporation Law of
         the State of Delaware.

SECTION 10.2 Exculpation.

                  (a) No Indemnified Person shall be liable, responsible or
         accountable in damages or otherwise to the Trust 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 on behalf
         of the Trust and in a manner such Indemnified Person reasonably
         believed to be within the scope of the authority conferred on such
         Indemnified Person by this Declaration 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 gross negligence (or,
         in the case of the Property Trustee, 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 Trust and upon such information,
         opinions, reports or statements presented to the Trust 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 Trust, 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 Securities might properly be paid.

SECTION 10.3 Fiduciary Duty.

                  (a) To the extent that, at law or in equity, an Indemnified
         Person has duties (including fiduciary duties) and liabilities relating
         thereto to the Trust or to any other Covered Person, an Indemnified
         Person acting under this Declaration shall not be liable to the Trust
         or to any other Covered Person for its good faith reliance on the
         provisions of this Declaration. The provisions of this Declaration, to
         the extent that they restrict the duties and liabilities of an
         Indemnified Person otherwise existing at law or in equity (other than
         the duties imposed on the Property Trustee under the Trust Indenture
         Act), are agreed by the parties hereto to replace such other duties and
         liabilities of such Indemnified Person.

                  (b) Unless otherwise expressly provided herein:

                           (i) whenever a conflict of interest exists or arises
                  between any Covered Person and any Indemnified Person; or

                           (ii) whenever this Declaration or any other agreement
                  contemplated herein or therein provides that an Indemnified
                  Person shall act in a manner that is, or provides terms that
                  are, fair and reasonable to the Trust or any Holder of
                  Securities,

         each Covered Person or Indemnified Person shall resolve such conflict
         of interest, take such action or provide such terms, considering in
         each case the relative interest of each party (including its own
         interest) to such conflict, agreement, transaction or situation and the
         benefits and burdens relating to such interests, any customary or
         accepted industry practices, and any applicable generally accepted



                                       35
<PAGE>   41

         accounting practices or principles. In the absence of bad faith by the
         Indemnified Person, the resolution, action or term so made, taken or
         provided by the Indemnified Person shall not constitute a breach of
         this Declaration or any other agreement contemplated herein or of any
         duty or obligation of the Indemnified Person at law or in equity or
         otherwise.

                  (c) Whenever in this Declaration an Indemnified Person is
         permitted or required to make a decision:

                           (i) in its "discretion" or under a grant of similar
                  authority, the Indemnified Person shall be entitled to
                  consider such interests and factors as it desires, including
                  its own interests, and shall have no duty or obligation to
                  give any consideration to any interest of or factors affecting
                  the Trust or any other Person; or

                           (ii) in its "good faith" or under another express
                  standard, the Indemnified Person shall act under such express
                  standard and shall not be subject to any other or different
                  standard imposed by this Declaration or by applicable law.

SECTION 10.4 Indemnification and Expenses.

                  (a)      (i) The Sponsor shall indemnify, to the full extent
         permitted by law, any Indemnified Person who was or is a party or is
         threatened to be made a party to any threatened, pending or completed
         action, suit or proceeding, whether civil, criminal, administrative or
         investigative (other than an action by or in the right of the Trust) by
         reason of the fact that he is or was an Indemnified Person against
         expenses (including attorneys' fees and expenses), judgments, fines and
         amounts paid in settlement actually and reasonably incurred by him in
         connection with such action, suit or proceeding if he acted in good
         faith and in a manner he reasonably believed to be in or not opposed to
         the best interests of the Trust, and, with respect to any criminal
         action or proceeding, had no reasonable cause to believe his conduct
         was unlawful. The termination of any action, suit or proceeding by
         judgment, order, settlement, conviction, or upon a plea of nolo
         contendere or its equivalent, shall not, of itself, create a
         presumption that the Indemnified Person did not act in good faith and
         in a manner which he reasonably believed to be in or not opposed to the
         best interests of the Trust, and with respect to any criminal action or
         proceeding, had reasonable cause to believe that his conduct was
         unlawful.

                           (ii) The Sponsor shall indemnify, to the full extent
                  permitted by law, any Indemnified Person who was or is a party
                  or is threatened to be made a party to any threatened, pending
                  or completed action or suit by or in the right of the Trust to
                  procure a judgment in its favor by reason of the fact that he
                  is or was an Indemnified Person against expenses (including
                  attorneys' fees and expenses) actually and reasonably incurred
                  by him in connection with the defense or settlement of such
                  action or suit if he acted in good faith and in a manner he
                  reasonably believed to be in or not opposed to the best
                  interests of the Trust and except that no such indemnification
                  shall be made in respect of any claim, issue or matter as to
                  which such Indemnified Person shall have been adjudged to be
                  liable to the Trust unless and only to the extent that the
                  Court of Chancery of Delaware or the court in which such
                  action or suit was brought shall determine upon application
                  that, despite the adjudication of liability but in view of all
                  the circumstances of the case, such person is fairly and
                  reasonably entitled to indemnity for such expenses which such
                  Court of Chancery or such other court shall deem proper.



                                       36
<PAGE>   42

                           (iii) To the extent that an Indemnified Person shall
                  be successful on the merits or otherwise (including dismissal
                  of an action without prejudice or the settlement of an action
                  without admission of liability) in defense of any action, suit
                  or proceeding referred to in paragraphs (i) and (ii) of this
                  Section 10.4(a), or in defense of any claim, issue or matter
                  therein, he shall be indemnified, to the full extent permitted
                  by law, against expenses (including attorneys' fees) actually
                  and reasonably incurred by him in connection therewith.

                           (iv) Any indemnification of an Administrative Trustee
                  under paragraphs (i) and (ii) of this Section 10.4(a) (unless
                  ordered by a court) shall be made by the Sponsor only as
                  authorized in the specific case upon a determination that
                  indemnification of the Company Indemnified Person is proper in
                  the circumstances because he has met the applicable standard
                  of conduct set forth in paragraphs (i) and (ii). Such
                  determination shall be made (1) by the Administrative Trustees
                  by a majority vote of a Quorum consisting of such
                  Administrative Trustees who were not parties to such action,
                  suit or proceeding, (2) if such a Quorum is not obtainable,
                  or, even if obtainable, if a Quorum of disinterested
                  Administrative Trustees so directs, by independent legal
                  counsel in a written opinion, or (3) by the Common Security
                  Holder of the Trust.

                           (v) Expenses (including attorneys' fees and expenses)
                  incurred by an Indemnified Person in defending a civil,
                  criminal, administrative or investigative action, suit or
                  proceeding referred to in paragraphs (i) and (ii) of this
                  Section 10.4(a) shall be paid by the Sponsor in advance of the
                  final disposition of such action, suit or proceeding upon
                  receipt of an undertaking by or on behalf of such Indemnified
                  Person to repay such amount if it shall ultimately be
                  determined that he is not entitled to be indemnified by the
                  Sponsor as authorized in this Section 10.4(a). Notwithstanding
                  the foregoing, no advance shall be made by the Sponsor if a
                  determination is reasonably and promptly made (i) by the
                  Administrative Trustees by a majority vote of a Quorum of
                  disinterested Administrative Trustees, (ii) if such a Quorum
                  is not obtainable, or, even if obtainable, if a Quorum of
                  disinterested Administrative Trustees so directs, by
                  independent legal counsel in a written opinion or (iii) the
                  Common Security Holder of the Trust, that, based upon the
                  facts known to the Administrative Trustees, counsel or the
                  Common Security Holder, as the case may be, at the time such
                  determination is made, such Indemnified Person acted in bad
                  faith or in a manner that such person did not believe to be in
                  or not opposed to the best interests of the Trust, or, with
                  respect to any criminal proceeding, that such Indemnified
                  Person believed or had reasonable cause to believe his conduct
                  was unlawful. In no event shall any advance be made in
                  instances where the Administrative Trustees, independent legal
                  counsel or Common Security Holder reasonably determine that
                  such Person deliberately breached his duty to the Trust or its
                  Common or Preferred Security Holders.

                           (vi) The indemnification and advancement of expenses
                  provided by, or granted pursuant to, the other paragraphs of
                  this Section 10.4(a) shall not be deemed exclusive of any
                  other rights to which those seeking indemnification and
                  advancement of expenses may be entitled under any agreement,
                  vote of stockholders or disinterested directors of the Sponsor
                  or Preferred Security Holders of the Trust or otherwise, both
                  as to action in his official capacity and as to action in
                  another capacity while holding such office. All rights to
                  indemnification under this Section 10.4(a) shall be deemed to
                  be provided by a contract between the Sponsor and each
                  Indemnified Person who serves in such capacity at any time
                  while this Section 10.4(a) is in effect. Any repeal or
                  modification of this Section 10.4(a) shall not affect any
                  rights or obligations then existing.



                                       37
<PAGE>   43

                           (vii) The Sponsor or the Trust may purchase and
                  maintain insurance on behalf of any Person who is or was a
                  Company Indemnified Person against any liability asserted
                  against him and incurred by him in any such capacity, or
                  arising out of his status as such, whether or not the Sponsor
                  would have the power to indemnify him against such liability
                  under the provisions of this Section 10.4(a).

                           (viii) For purposes of this Section 10.4(a),
                  references to "the Trust" shall include, in addition to the
                  resulting or surviving entity, any constituent entity
                  (including any constituent of a constituent) absorbed in a
                  consolidation or merger, so that any Person who is or was a
                  director, trustee, officer or employee of such constituent
                  entity, or is or was serving at the request of such
                  constituent entity as a director, trustee, officer, employee
                  or agent of another entity, shall stand in the same position
                  under the provisions of this Section 10.4(a) with respect to
                  the resulting or surviving entity as he would have with
                  respect to such constituent entity if its separate existence
                  had continued.

                           (ix) The indemnification and advancement of expenses
                  provided by, or granted pursuant to, this Section 10.4(a)
                  shall, unless otherwise provided when authorized or ratified,
                  continue as to a Person who has ceased to be an Indemnified
                  Person and shall inure to the benefit of the heirs, executors
                  and administrators of such a Person.

                  (b) To the fullest extent permitted by law, the Sponsor agrees
         to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii)
         any Affiliate of the Property Trustee and the Delaware Trustee, and
         (iv) any officers, directors, shareholders, members, partners,
         employees, representatives, custodians, nominees or agents of the
         Property Trustee and the Delaware Trustee (each of the Persons in (i)
         through (iv) being referred to as a "Trustee Indemnified Person") for,
         and to hold each Trustee Indemnified Person harmless against, any and
         all loss, liability, damage, claim or expense including taxes (other
         than taxes based on the income of such Trustee Indemnified Person)
         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 10.4(b) shall survive the
         satisfaction and discharge of this Declaration or the earlier
         resignation or removal of such Trustee Indemnified Person.

                  (c) The Sponsor agrees to pay to the Trustees from time to
         time reasonable compensation for all services rendered by them
         hereunder and, except as otherwise expressly provided herein, to
         reimburse the Trustees upon request for all reasonable expenses,
         disbursements and advances incurred or made by the Trustees in
         accordance with any provision of this Declaration (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence or bad faith.

SECTION 10.5 Outside Businesses.

         Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee, subject to Section 5.3(c), 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 Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration 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
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity



                                       38
<PAGE>   44

to the Trust even if such opportunity is of a character that, if presented to
the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee 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 or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.

                                   ARTICLE XI
                                   ACCOUNTING

SECTION 11.1 Fiscal Year.

         The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.

SECTION 11.2 Certain Accounting Matters.

                  (a) At all times during the existence of the Trust, the
         Administrative Trustees shall keep, or cause to be kept, full books of
         account, records and supporting documents, which shall reflect in
         reasonable detail, each transaction of the Trust. The books of account
         shall be maintained on the accrual method of accounting, in accordance
         with generally accepted accounting principles, consistently applied.
         The Trust shall use the accrual method of accounting for United States
         federal income tax purposes. The books of account and the records of
         the Trust shall be examined by and reported upon as of the end of each
         Fiscal Year of the Trust by a firm of independent certified public
         accountants selected by the Administrative Trustees.

                  (b) The Administrative Trustees shall cause to be prepared and
         delivered to each of the Holders of Securities, within 90 days after
         the end of each Fiscal Year of the Trust, annual financial statements
         of the Trust, including a balance sheet of the Trust as of the end of
         such Fiscal Year, and the related statements of income or loss.

                  (c) The Administrative Trustees shall cause to be duly
         prepared and delivered to each of the Holders of Securities, any annual
         United States federal income tax information statement, required by the
         Code, containing such information with regard to the Securities held by
         each Holder as is required by the Code and the Treasury Regulations.
         Notwithstanding any right under the Code to deliver any such statement
         at a later date, the Administrative Trustees shall endeavor to deliver
         all such information statements within 30 days after the end of each
         Fiscal Year of the Trust.

                  (d) The Administrative Trustees shall cause to be duly
         prepared and filed with the appropriate taxing authority, an annual
         United States federal income tax return, on a Form 1041 or such other
         form required by United States federal income tax law, and any other
         annual income tax returns required to be filed by the Administrative
         Trustees on behalf of the Trust with any state or local taxing
         authority.

SECTION 11.3 Banking.

         The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the



                                       39
<PAGE>   45

Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.

SECTION 11.4 Withholding.

         The Administrative Trustees on behalf of the Trust shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees on behalf
of the Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.

                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

SECTION 12.1 Amendments.

                  (a) Except as otherwise provided in this Declaration or by any
         applicable terms of the Securities, this Declaration may only be
         amended by a written instrument executed by the Administrative Trustees
         (or if there are more than two Administrative Trustees, a majority of
         them) together with:

                           (i) if the amendment affects the rights, powers,
                  duties, obligations or immunities of the Property Trustee, the
                  Property Trustee;

                           (ii) if the amendment affects the rights, powers,
                  duties, obligations or immunities of the Delaware Trustee, the
                  Delaware Trustee; and

                           (iii) if the amendment affects the rights, powers,
                  duties, obligations or immunities of the Sponsor, the Sponsor.

                  (b) No amendment shall be made, and any such purported
         amendment shall be void and ineffective:

                           (i) unless, in the case of any proposed amendment,
                  the Property Trustee shall have first received an Officers'
                  Certificate from each of the Trust and the Sponsor that such
                  amendment is permitted by, and conforms to, the terms of this
                  Declaration (including the terms of the Securities);

                           (ii) unless, in the case of any proposed amendment
                  which affects the rights, powers, duties, obligations or
                  immunities of the Property Trustee, the Property Trustee shall
                  have first received:



                                       40
<PAGE>   46

                                    (A) an Officers' Certificate from each of
                           the Trust and the Sponsor that such amendment is
                           permitted by, and conforms to, the terms of this
                           Declaration (including the terms of the Securities);
                           and

                                    (B) an opinion of counsel (who may be
                           counsel to the Sponsor or the Trust) that such
                           amendment is permitted by, and conforms to, the terms
                           of this Declaration (including the terms of the
                           Securities),

         provided, however, that the Property Trustee shall not be required to
sign any such amendment; or

                           (iii) to the extent the result of such amendment
                  would be to:

                                    (A) cause the Trust to fail to continue to
                           be classified for purposes of United States federal
                           income taxation as a grantor trust;

                                    (B) reduce or otherwise adversely affect the
                           rights, powers, duties or immunities of the Property
                           Trustee in contravention of the Trust Indenture Act;
                           or

                                    (C) cause the Trust to be deemed to be an
                           Investment Company required to be registered under
                           the Investment Company Act.

                  (c) After the Trust has issued any Securities that remain
         outstanding, any amendment that would materially adversely affect the
         rights, privileges or preferences of any Holder of Securities may be
         effected only with such additional requirements as may be set forth in
         the terms of such Securities.

                  (d) Section 10.1(c) and this Section 12.1 shall not be amended
         without the consent of all of the Holders of the Securities.

                  (e) Article IV shall not be amended without the consent of the
         Holders of a Majority in Liquidation Amount of the Common Securities.

                  (f) The rights of the Holders of the Common Securities under
         Article V to increase or decrease the number of, and appoint and remove
         Trustees shall not be amended without the consent of the Holders of a
         Majority in Liquidation Amount of the Common Securities.

                  (g) Notwithstanding Section 12.1(c), this Declaration may be
         amended without the consent of the Holders of the Securities to:

                           (i) cure any ambiguity, correct or supplement any
                  provision in this Declaration that may be inconsistent with
                  any other provision of this Declaration or to make any other
                  provisions with respect to matters or questions arising under
                  this Declaration which shall not be inconsistent with the
                  other provisions of the Declaration;

                           (ii) add to the covenants, restrictions or
                  obligations of the Sponsor; and

                           (iii) modify, eliminate or add to any provisions of
                  the Declaration to such extent as shall be necessary to ensure
                  that the Trust will be classified for United States federal
                  income tax purposes as a grantor trust at all times that any
                  Securities are outstanding or to ensure that the Trust will
                  not be required to register as an Investment Company under the
                  Investment Company Act;



                                       41
<PAGE>   47

         provided that no such amendment may be made pursuant to this Section
         12.1(g) that adversely affects the Holders of the Preferred Securities
         in any material respect.

SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.

                  (a) Meetings of the Holders of any class of Securities may be
         called at any time by the Administrative Trustees (or as provided in
         the terms of the Securities) to consider and act on any matter on which
         Holders of such class of Securities are entitled to act under the terms
         of this Declaration, the terms of the Securities or the rules of any
         stock exchange on which the Preferred Securities are listed or admitted
         for trading. The Administrative Trustees shall call a meeting of the
         Holders of such class if directed to do so by the Holders of at least
         10% in Liquidation Amount of such class of Securities. Such direction
         shall be given by delivering to the Administrative Trustees one or more
         notices in writing stating that the signing Holders of Securities wish
         to call a meeting and indicating the general or specific purpose for
         which the meeting is to be called. Any Holders of Securities calling a
         meeting shall specify in writing the Security certificates held by the
         Holders of Securities exercising the right to call a meeting and only
         those Securities specified shall be counted for purposes of determining
         whether the required percentage set forth in the second sentence of
         this paragraph has been met.

                  (b) Except to the extent otherwise provided in the terms of
         the Securities, the following provisions shall apply to meetings of
         Holders of Securities:

                           (i) notice of any such meeting shall be given to all
                  the Holders of Securities having a right to vote thereat at
                  least seven days and not more than 60 days before the date of
                  such meeting. Whenever a vote, consent or approval of the
                  Holders of Securities is permitted or required under this
                  Declaration or the rules of any stock exchange on which the
                  Preferred Securities are listed or admitted for trading, such
                  vote, consent or approval may be given at a meeting of the
                  Holders of Securities. Any action that may be taken at a
                  meeting of the Holders of Securities may be taken without a
                  meeting if a consent in writing setting forth the action so
                  taken is signed by the Holders of Securities owning not less
                  than the minimum amount of Securities in Liquidation Amount
                  that would be necessary to authorize or take such action at a
                  meeting at which all Holders of Securities having a right to
                  vote thereon were present and voting. Prompt notice of the
                  taking of action without a meeting shall be given to the
                  Holders of Securities entitled to vote who have not consented
                  in writing. The Administrative Trustees may specify that any
                  written ballot submitted to the Security Holder for the
                  purpose of taking any action without a meeting shall be
                  returned to the Trust within the time specified by the
                  Administrative Trustees;

                           (ii) each Holder of a Security may authorize any
                  Person to act for it by proxy on all matters in which a Holder
                  of Securities is entitled to participate, including waiving
                  notice of any meeting, or voting or participating at a
                  meeting. No proxy shall be valid after the expiration of 11
                  months from the date thereof unless otherwise provided in the
                  proxy. Every proxy shall be revocable at the pleasure of the
                  Holder of Securities executing it. Except as otherwise
                  provided herein, all matters relating to the giving, voting or
                  validity of proxies shall be governed by the General
                  Corporation Law of the State of Delaware relating to proxies,
                  and judicial interpretations thereunder, as if the Trust were
                  a Delaware corporation and the Holders of the Securities were
                  stockholders of a Delaware corporation;



                                       42
<PAGE>   48

                           (iii) each meeting of the Holders of the Securities
                  shall be conducted by the Administrative Trustees or by such
                  other Person that the Administrative Trustees may designate;
                  and

                           (iv) unless the Business Trust Act, this Declaration,
                  the terms of the Securities, the Trust Indenture Act or the
                  listing rules of any stock exchange on which the Preferred
                  Securities are at the time listed or trading, otherwise
                  provides, the Administrative Trustees, in their sole
                  discretion, shall establish all other provisions relating to
                  meetings of Holders of Securities, including notice of the
                  time, place or purpose of any meeting at which any matter is
                  to be voted on by any Holders of Securities, waiver of any
                  such notice, action by consent without a meeting, the
                  establishment of a record date, Quorum requirements, voting in
                  person or by proxy or any other matter with respect to the
                  exercise of any such right to vote.

                                  ARTICLE XIII
                       REPRESENTATIONS OF PROPERTY TRUSTEE
                              AND DELAWARE TRUSTEE

SECTION 13.1 Representations and Warranties of Property Trustee.

         The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:

                  (a) The Property Trustee is a national banking association or
         a bank or trust company, duly organized, validly existing and in good
         standing under the laws of the United States or a State of the United
         States, as the case may be, with corporate power and authority to
         execute and deliver, and to carry out and perform its obligations under
         the terms of, this Declaration;

                  (b) The execution, delivery and performance by the Property
         Trustee of the Declaration has been duly authorized by all necessary
         corporate action on the part of the Property Trustee. The Declaration
         has been duly executed and delivered by the Property Trustee and
         constitutes a legal, valid and binding obligation of the Property
         Trustee, enforceable against it in accordance with its terms, subject
         to applicable bankruptcy, reorganization, moratorium, insolvency, and
         other similar laws affecting creditors' rights generally and to general
         principles of equity and the discretion of the court (regardless of
         whether the enforcement of such remedies is considered in a proceeding
         in equity or at law);

                  (c) The execution, delivery and performance of this
         Declaration by the Property Trustee does not conflict with or
         constitute a breach of the charter or by-laws of the Property Trustee;
         and

                  (d) No consent, approval or authorization of, or registration
         with or notice to, any federal or New York State banking authority is
         required for the execution, delivery or performance by the Property
         Trustee of this Declaration.

SECTION 13.2 Representations and Warranties of Delaware Trustee.

         The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the



                                       43
<PAGE>   49

Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee that:

                  (a) The Delaware Trustee is a Delaware banking corporation
         duly organized, validly existing and in good standing under the laws of
         the State of Delaware, with power and authority to execute and deliver,
         and to carry out and perform its obligations under the terms of, this
         Declaration and has its principal place of business in the State of
         Delaware;

                  (b) The execution, delivery and performance by the Delaware
         Trustee of this Declaration has been duly authorized by all necessary
         corporate action on the part of the Delaware Trustee. This Declaration
         has been duly executed and delivered by the Delaware Trustee and
         constitutes a legal, valid and binding obligation of the Delaware
         Trustee, enforceable against it in accordance with its terms, subject
         to applicable bankruptcy, reorganization, moratorium, insolvency, and
         other similar laws affecting creditors' rights generally and to general
         principles of equity and the discretion of the court (regardless of
         whether the enforcement of such remedies is considered in a proceeding
         in equity or at law);

                  (c) No consent, approval or authorization of, or registration
         with or notice to, any Delaware banking authority is required for the
         execution, delivery or performance by the Delaware Trustee of this
         Declaration; and

                  (d) The Delaware Trustee is a natural person who is a resident
         of the State of Delaware or, if not a natural person, an entity which
         has its principal place of business in the State of Delaware, and is a
         person that satisfies the requirements of Section 3807(a) of the
         Business Trust Act.

                                   ARTICLE XIV
                                  MISCELLANEOUS

SECTION 14.1 Notices.

         All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:

                  (a) if given to the Trust, in care of the Administrative
         Trustees at the Trust's mailing address set forth below (or such other
         address as the Trust may give notice of to the Holders of the
         Securities):

                           American General Capital III
                           c/o American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019
                           Attention: Corporate Finance Department
                           Telecopy: (713) 522-3487

                  (b) if given to the Delaware Trustee, at the mailing address
         set forth below (or such other address as Delaware Trustee may give
         notice of to the Holders of the Securities):



                                       44
<PAGE>   50

                           Bankers Trust (Delaware)
                           E. A. Delle Donne Corporate Center
                           Montgomery Building
                           1011 Centre Road, Suite 200
                           Wilmington, Delaware 19805-1266
                           Attention: Elizabeth B. Ferry
                           Telecopy: (302) 636-3333

                  (c) if given to the Property Trustee, at the Property
         Trustee's mailing address set forth below (or such other address as the
         Property Trustee may give notice of to the Holders of the Securities):

                           Bankers Trust Company
                           Four Albany Street
                           New York, New York 10006
                           Attention: Corporate Trust and Agency Services -
                                      Corporate Market Services
                           Telecopy: (212) 250-6961

                  (d) if given to the Holder of the Common Securities, at the
         mailing address of the Sponsor set forth below (or such other address
         as the Holder of the Common Securities may give notice to the Trust):

                           American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019
                           Attention: Corporate Finance Department
                           Telecopy: (713) 522-3487

                  (e) if given to any other Holder, at the address set forth on
         the books and records of the Trust.

         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 14.2 Governing Law.

         This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws. The provisions of Sections 3540 and 3561 of
Title 12 of the Delaware Code shall not apply to this Trust.

SECTION 14.3 Intention of the Parties.

         It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.



                                       45
<PAGE>   51

SECTION 14.4 Headings.

         Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.

SECTION 14.5 Successors and Assigns.

         Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.

SECTION 14.6 Partial Enforceability.

         If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

SECTION 14.7 Counterparts.

         This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees and the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.



                                       46
<PAGE>   52

         IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.


                                       ----------------------------------------
                                       Nicholas R. Rasmussen
                                       not in his individual capacity but
                                       solely as Administrative Trustee


                                       ----------------------------------------
                                       C. Jeffrey Gay
                                       not in his individual capacity but
                                       solely as Administrative Trustee


                                       ----------------------------------------
                                       Gregory N. Picard
                                       not in his individual capacity but
                                       solely as Administrative Trustee


                                       BANKERS TRUST (DELAWARE)
                                       not in its individual capacity but
                                       solely as Delaware Trustee


                                       By:
                                          -------------------------------------
                                       Name:
                                            -----------------------------------


                                       BANKERS TRUST COMPANY
                                       not in its individual capacity but
                                       solely as Property Trustee


                                       By:
                                          -------------------------------------
                                       Name:
                                            -----------------------------------



                                       AMERICAN GENERAL CORPORATION,
                                       as Sponsor


                                       By:
                                          -------------------------------------
                                          C. Jeffrey Gay
                                          Vice President and Assistant Treasurer



                                       47
<PAGE>   53

                                     ANNEX I

                                    TERMS OF
                        8.05% TRUST PREFERRED SECURITIES
                             8.05% COMMON SECURITIES

         Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of December 7, 2000 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration
or, if not defined in such Declaration, as defined in the Indenture):

         1.       Designation and Number.

                  (a) Preferred Securities. 4,000,000 Preferred Securities of
         the Trust, with an aggregate Liquidation Amount with respect to the
         assets of the Trust of ONE HUNDRED MILLION dollars ($100,000,000), and
         with a Liquidation Amount with respect to the assets of the Trust of
         $25.00 per security, are hereby designated for the purposes of
         identification only as "8.05% Trust Preferred Securities" (the
         "Preferred Securities"). The certificates evidencing the Preferred
         Securities shall be substantially in the form of Exhibit A-1 to the
         Declaration, with such changes and additions thereto or deletions
         therefrom as may be required by ordinary usage, custom or practice or
         to conform to the rules of any stock exchange or quotation system on
         which the Preferred Securities are listed or quoted.

                  (b) Common Securities. 123,712 Common Securities of the Trust
         with an aggregate Liquidation Amount with respect to the assets of the
         Trust of THREE MILLION NINETY-TWO THOUSAND EIGHT HUNDRED dollars
         ($3,092,800) and a Liquidation Amount with respect to the assets of the
         Trust of $25.00 per security, are hereby designated for the purposes of
         identification only as "8.05% Common Securities" (the "Common
         Securities"). The certificates evidencing the Common Securities shall
         be substantially in the form of Exhibit A-2 to the Declaration, with
         such changes and additions thereto or deletions therefrom as may be
         required by ordinary usage, custom or practice.

         2.       Distributions.

                  (a) Distributions payable on each Security will be fixed at a
         rate per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount
         of $25.00 per Security (the "Liquidation Amount"), such rate being the
         rate of interest payable on the Debentures to be held by the Property
         Trustee. Distributions in arrears for more than one quarterly period
         will bear additional distributions thereon compounded quarterly at the
         Coupon Rate (to the extent permitted by applicable law). The term
         "Distributions", as used herein, includes any such additional
         distributions unless otherwise stated. A Distribution is payable only
         to the extent that payments are made in respect of the Debentures held
         by the Property Trustee and to the extent the Property Trustee has
         funds on hand legally available therefor.

                  (b) Distributions on the Securities will be cumulative, will
         accumulate from the most recent date to which Distributions have been
         paid or, if no Distributions have been paid, from and including
         December 7, 2000, to but excluding the related Distribution Date (as
         defined below) or the date of redemption, and will be payable quarterly
         in arrears on March 31, June 30, September 30 and December 31 of each
         year, commencing on December 31, 2000, except as otherwise described
         below. The amount of Distributions payable for any period will be
         computed on the basis of a 360-day year


                                       I-1

<PAGE>   54


         consisting of twelve 30-day months and for any period of less than a
         full calendar month on the basis of the actual number of days elapsed
         in such month. If any date on which Distributions are payable on the
         Securities is not a Business Day, then payment of the Distribution
         payable on such date shall be made on the next succeeding day that is a
         Business Day (and without any interest or other payment in respect of
         any such delay), except that, if such Business Day is in the next
         succeeding calendar year, such payment shall be made on the immediately
         preceding Business Day, in each case with the same force and effect as
         if made on the date such payment was originally payable (each date on
         which Distributions are payable in accordance with the foregoing, a
         "Distribution Date").

                  So long as no Event of Default (as defined in the Indenture)
         has occurred and is continuing, the Debenture Issuer has the right
         under the Indenture to defer the payment of interest on the Debentures
         by extending the interest payment period at any time and from time to
         time for a period not exceeding 20 consecutive quarterly periods,
         including the first such quarterly period during such period (each an
         "Extension Period"), provided that no Extension Period shall extend
         beyond the Maturity of the Debentures. Distributions will be deferred
         during any Extension Period. Notwithstanding such deferral,
         Distributions to which holders of Securities are entitled shall
         continue to accumulate additional Distributions thereon (to the extent
         permitted by applicable law but not at a rate greater than the rate at
         which interest is then accruing on the Debentures) at the Coupon Rate
         compounded quarterly from the relevant Distribution Dates during any
         Extension Period. Prior to the expiration of any Extension Period, the
         Debenture Issuer may further defer payments of interest by further
         extending such Extension Period; provided that such Extension Period,
         together with all previous and further extensions, if any, within such
         Extension Period, may not exceed 20 consecutive quarterly periods,
         including the first quarterly period during such Extension Period, or
         extend beyond the Maturity of the Debentures. Upon the expiration of
         any Extension Period (or any extension thereof) and the payment of all
         amounts then due, the Debenture Issuer may commence a new Extension
         Period, subject to the above requirements. Payments of Distributions
         that have accumulated but not been paid during any Extension Period
         will be payable to Holders as they appear on the books and records of
         the Trust on the record date for the first scheduled Distribution Date
         following the expiration of such Extension Period and prior to the
         commencement of any new Extension Period. As long as the Debentures are
         held by the Property Trustee, the Debenture Issuer must give the
         Property Trustee, the Administrative Trustees and the Debenture Trustee
         notice of its election of any Extension Period or any extension thereof
         at least five Business Days prior to the earlier of (i) the date the
         Distributions on the Preferred Securities would have been payable
         except for the election to begin or extend such Extension Period and
         (ii) the date the Administrative Trustees are required to give notice
         to any securities exchange on which the Preferred Securities are listed
         (or any other applicable self regulatory organization) or to Holders of
         the Preferred Securities of the record date or the date such
         Distributions are payable. If the Property Trustee is not the sole
         holder of the Debentures, the Debenture Issuer is required to give the
         holders of the Debentures and the Debenture Trustee written notice of
         its election of an Extension Period at least 10 Business days before
         the earlier of (i) the next succeeding interest payment date on the
         Debentures, or (ii) the date on which the Debenture Issuer is required
         to give notice of the record or payment date of such interest payment
         to any national securities exchange. There is no limitation on the
         number of times that the Debenture Issuer may elect to begin an
         Extension Period.

                  (c) Distributions on the Securities will be payable to the
         Holders thereof as they appear on the books and records of the Trust on
         the record dates, which shall be the Business Day prior to the relevant
         Distribution date as long as the Preferred Securities are held in
         global form by a Clearing Agency, and the 15th day of the last month in
         each quarterly distribution period (even if not a Business Day) if the
         Preferred Securities are issued in certificated form. Subject to any
         applicable laws and regulations and the provisions of the Declaration,
         each such payment in respect of the


                                       I-2

<PAGE>   55


         Preferred Securities will be made as follows: (i) if the Preferred
         Securities are held in global form by a Clearing Agency (or its
         nominee), in accordance with the procedures of the Clearing Agency; and
         (ii) if the Preferred Securities are held in definitive form, by check
         mailed to the address of the Holder thereof as reflected in the records
         of the Registrar unless otherwise agreed by the Trust. The relevant
         record dates for the Common Securities shall be the same as the record
         dates for the Preferred Securities. Distributions payable on any
         Securities that are not punctually paid on any Distribution Date will
         cease to be payable to the Holder on the relevant record date, and such
         defaulted Distribution will instead be payable to the Person in whose
         name such Securities are registered on the special record date or other
         specified date determined in accordance with the Indenture.

                  (d) In the event that there is any money or other property
         held by or for the Trust that is not accounted for hereunder, such
         property shall be distributed Pro Rata (as defined herein) among the
         Holders of the Securities.

         3.       Liquidation Distribution Upon Dissolution.

         The Sponsor will have the right at any time to dissolve the Trust and
cause the Debentures to be distributed to the Holders of the Trust Securities in
Liquidation of the Trust.

         In the event of any dissolution of the Trust pursuant to Sections
8.1(a)(i), (ii), (iv) or (vi) of the Declaration, the Trust shall be liquidated
by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
Distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for Distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount of $25.00 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").

         "Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the dissolution of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.

         On and from the date fixed by the Administrative Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding; (ii) the Clearing Agency or its
nominee, as the Holder of the Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution; and (iii) any Securities not held by the Clearing Agency or
its nominee will be deemed to represent beneficial interests in a Like Amount of
Debentures, and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Securities, until such Securities
are presented to the Registrar or its agent for cancellation, whereupon the
Debenture Issuer will issue, and the Debenture Trustee will authenticate, a
certificate representing such Debentures. If the Debentures are distributed to
Holders of the Preferred Securities, pursuant to the terms of the Indenture, the
Debenture Issuer will use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities
were listed on immediately prior to the distribution of the Debentures.



                                      I-3
<PAGE>   56

         If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.

         4.       Redemption and Distribution.

                  (a) Upon the repayment of the Debentures on the Maturity
         thereof or the date of earlier redemption thereof prior thereto in
         accordance with the terms thereof (such redemption being either at the
         option of the Debenture Issuer on or after December 7, 2005 in whole or
         in part or at the option of the Debenture Issuer in whole but not in
         part prior to December 7, 2005 within 90 days after the occurrence of a
         Special Event as described below), the proceeds from such repayment or
         redemption shall be simultaneously applied by the Property Trustee
         (subject to the Property Trustee having received notice no later than
         30 days prior to such repayment or redemption) to redeem a Like Amount
         of the Securities, on a Pro Rata basis in accordance with Section 9
         hereof, at a redemption price equal to 100% of the Liquidation Amount
         of the Securities to be redeemed, plus accumulated and unpaid
         Distributions thereon, if any, to the date of redemption (the
         "Redemption Price").

                  (b) If, at any time, a Tax Event or an Investment Company
         Event (each as defined below, and each a "Special Event") shall occur
         and be continuing the Debenture Issuer shall have the right, upon not
         less than 30 nor more than 60 days notice, to redeem the Debentures in
         whole but not in part before December 7, 2005, for cash within 90 days
         following the occurrence of such Special Event, and, following such
         redemption, Securities with an aggregate liquidation amount equal to
         the aggregate principal amount of the Debentures so redeemed shall be
         redeemed by the Trust at the Redemption Price on a Pro Rata basis in
         accordance with Section 9 hereof.

                  "Tax Event" means that the Administrative Trustees shall have
         received an opinion of an independent tax counsel experienced in such
         matters to the effect that, as a result of (i) any amendment to, or
         change (including any announced proposed change) in, the laws (or any
         regulations thereunder) of the United States or any political
         subdivision or taxing authority affecting taxation, or (ii) any
         official or administrative pronouncement or action or judicial
         decision, interpreting or applying such laws or regulations, which
         amendment or change becomes effective or such pronouncement, action or
         decision is announced or occurs on or after November 30, 2000, there is
         more than an insubstantial risk that (A) the Trust is or, within 90
         days of the date of such opinion, would be subject to United States
         federal income tax with respect to interest accrued or received on the
         Debentures, (B) interest payable by the Debenture Issuer on the
         Debentures is not or, within 90 days of the date of such opinion, would
         not be deductible, in whole or in part, by the Debenture Issuer for
         United States federal income tax purposes, or (C) the Trust is or,
         within 90 days of the date of such opinion, would be, subject to more
         than a de minimis amount of other taxes, duties, assessments or other
         governmental charges.

                  "Investment Company Event" means that the Administrative
         Trustees shall have received an opinion of an independent counsel
         experienced in practice under the Investment Company Act to the effect
         that, as a result of the occurrence of a change in law or regulation or
         a change in interpretation or application of law or regulation by any
         legislative body, court, governmental agency or regulatory authority (a
         "Change in 1940 Act Law"), there is more than an insubstantial risk
         that the Trust is or will be considered an "Investment Company" that is
         required to be registered under the Investment Company Act, which
         Change in 1940 Act Law becomes effective on or after November 30, 2000.
         For the purpose of the preceding sentence, "Investment Company Act"
         means the Investment Company Act of 1940, as amended from time to time,
         or any successor legislation.



                                      I-4
<PAGE>   57

                  (c) The Trust may not redeem fewer than all the outstanding
         Securities unless all accumulated and unpaid Distributions have been
         paid on all Securities for all Distribution periods that expire on or
         before the date of redemption.

                  (d) The procedure with respect to redemptions or distributions
         of Debentures shall be as follows:

                           (i) Notice of any redemption of, or notice of
                  distribution of Debentures in exchange for, the Securities (a
                  "Redemption/Distribution Notice") will be given by the Trust
                  by mail to each Holder of Securities to be redeemed or
                  exchanged not fewer than 30 nor more than 60 days before the
                  date fixed for redemption or exchange thereof which, in the
                  case of a redemption, will be the date fixed for repayment or
                  redemption of the Debentures. For purposes of the calculation
                  of the date of redemption or exchange and the dates on which
                  notices are given pursuant to this Section 4(d)(i), a
                  Redemption/Distribution Notice shall be deemed to be given on
                  the day such notice is first mailed by first-class mail,
                  postage prepaid, to Holders of Securities. Each
                  Redemption/Distribution Notice shall be addressed to the
                  Holders of Securities at the address of each such Holder
                  appearing in the books and records of the Trust. No defect in
                  the Redemption/Distribution Notice or in the mailing of either
                  thereof with respect to any Holder shall affect the validity
                  of the redemption or exchange proceedings with respect to any
                  other Holder.

                           (ii) In the event that fewer than all the outstanding
                  Securities are to be redeemed, the Securities to be redeemed
                  shall be redeemed Pro Rata from each Holder of Securities, it
                  being understood that, in respect of Preferred Securities
                  registered in the name of and held of record by a Clearing
                  Agency or its nominee, the distribution of the proceeds of
                  such redemption will be made to the Clearing Agency or its
                  nominee and disbursed by such Clearing Agency in accordance
                  with the procedures applied by such agency or nominee.

                           (iii) If Securities are to be redeemed and the Trust
                  gives a Redemption/Distribution Notice, such notice shall be
                  irrevocable and (A) with respect to Preferred Securities
                  registered in the name of or held of record by a Clearing
                  Agency or its nominee, by 12:00 noon, New York City time, on
                  the redemption date, provided that the Debenture Issuer has
                  paid the Property Trustee a sufficient amount of cash in
                  connection with the related maturity or redemption of the
                  Debentures by 10:00 a.m., New York City time, on the Maturity
                  Date or the date of redemption, as the case may be, the
                  Property Trustee or the Paying Agent will pay to the Clearing
                  Agency or its nominee funds sufficient to pay the Redemption
                  Price with respect to such Preferred Securities, and (B) with
                  respect to Preferred Securities issued in certificated form
                  and Common Securities, provided that the Debenture Issuer has
                  paid the Property Trustee a sufficient amount of cash in
                  connection with the related maturity or redemption of the
                  Debentures, the Property Trustee or the Paying Agent will pay
                  the Redemption Price to the Holders of such Securities against
                  presentation to the Registrar of the certificates therefor. If
                  a Redemption/Distribution Notice shall have been given and
                  funds deposited with the Property Trustee to pay the
                  Redemption Price (including all unpaid Distributions) with
                  respect to the Securities called for redemption, then
                  immediately prior to the close of business on the redemption
                  date, Distributions will cease to accumulate on the Securities
                  so called for redemption and all rights of Holders of such
                  Securities so called for redemption will cease, except the
                  right of the Holders of such Securities to receive the
                  Redemption Price, but without interest on such Redemption
                  Price, and such Securities shall cease to be outstanding.



                                      I-5
<PAGE>   58

                           (iv) Payment of accumulated and unpaid Distributions
                  on the redemption date of any Securities will be subject to
                  the rights of Holders of such Securities on the close of
                  business on a regular record date in respect of a Distribution
                  Date occurring on or prior to such Redemption Date.

                           (v) Neither the Administrative Trustees nor the Trust
                  shall be required to register or cause to be registered the
                  transfer of (A) any Securities beginning on the opening of
                  business 15 days before the day of mailing of a
                  Redemption/Distribution Notice or (B) any Securities selected
                  for redemption (except the unredeemed portion of any Security
                  being redeemed). If any date fixed for redemption of
                  Securities is not a Business Day, then payment of the
                  Redemption Price payable on such date will be made on the next
                  succeeding day that is a Business Day (and without any
                  interest or other payment in respect of any such delay) with
                  the same force and effect as if made on such date fixed for
                  redemption. If payment of the Redemption Price in respect of
                  any Securities is improperly withheld or refused and not paid
                  on the date fixed for redemption, either by the Property
                  Trustee or the Paying Agent or by the Sponsor as guarantor
                  pursuant to the Preferred Securities Guarantee, then (A)
                  Distributions on such Securities will continue to accumulate
                  from such redemption date to the actual date of payment, and
                  (B) the actual payment date will be considered the date fixed
                  for redemption for purposes of calculating the Redemption
                  Price.

                           (vi) Subject to the foregoing and applicable law
                  (including, without limitation, United States federal
                  securities laws), the Sponsor or any of its Affiliates may at
                  any time and from time to time purchase outstanding Preferred
                  Securities by tender, in the open market or by private
                  agreement.

         5.       [Intentionally Omitted]

         6.       Voting Rights - Preferred Securities.

                  (a) Except as provided under Sections 6(b) and 8 and as
         otherwise required by law and the Declaration, the Holders of the
         Preferred Securities will have no voting rights.

                  (b) Subject to the requirements set forth in this paragraph,
         the Holders of a Majority in Liquidation Amount of the Preferred
         Securities, voting separately as a class, may direct the time, method
         and place of conducting any proceeding for any remedy available to the
         Property Trustee, or direct the exercise of any trust or power
         conferred upon the Property Trustee under the Declaration, including
         the right to direct the Property Trustee, as Holder of the Debentures,
         to (i) exercise the remedies available under the Indenture with respect
         to the Debentures, (ii) waive any past default and its consequences
         that are waivable under the Indenture, (iii) exercise any right to
         rescind or annul a declaration that the principal of all the Debentures
         shall be due and payable, or (iv) consent to any amendment,
         modification or termination of the Indenture or the Debentures, where
         such consent would be required; provided that where a consent or action
         under the Indenture would require the consent or act of the Holders of
         greater than a majority in principal amount of Debentures affected
         thereby (a "Super Majority"), the Property Trustee may only give such
         consent or take such action at the written direction of the Holders of
         at least the proportion in liquidation amount of the Preferred
         Securities which the relevant Super Majority represents of the
         aggregate principal amount of the Debentures outstanding. In addition,
         if the consent of the Property Trustee, as holder of the Debentures, is
         required in connection with any amendment, modification or termination
         of the Indenture or the Debentures, the Property Trustee will request
         the direction of the Holders of the Preferred Securities and shall vote
         with respect to such amendment, modification or termination as



                                      I-6
<PAGE>   59

         directed by Holders of a Majority in Liquidation Amount of the
         Preferred Securities voting together as a single class, provided that
         where a consent or action under the Indenture would require the consent
         or act of a Super Majority, the Property Trustee may only give such
         consent or take such action at the written direction of the Holders of
         at least the proportion in liquidation amount of the Preferred
         Securities which the relevant Super Majority represents of the
         aggregate principal amount of the Debentures outstanding. The Property
         Trustee shall not revoke any action previously authorized or approved
         by a vote of the Holders of the Preferred Securities. The Property
         Trustee shall notify each Holder of Preferred Securities of any written
         notice of default received from the Indenture Trustee with respect to
         the Debentures. Other than with respect to directing the time, method
         and place of conducting a proceeding for any remedy available to the
         Property Trustee or the Debenture Trustee as set forth above, the
         Property Trustee shall not take any action in accordance with the
         directions of the Holders of the Preferred Securities under this
         paragraph unless the Property Trustee has obtained an opinion of
         independent tax counsel to the effect that for the purposes of United
         States federal income tax the Trust will not be classified as an
         association taxable as a corporation on account of such action.

                   If an Event of Default under the Declaration has occurred and
         is continuing and such event is attributable to the failure of the
         Debenture Issuer to pay principal of or premium, if any, or interest on
         the Debentures on any due date (including any Interest Payment Date or
         redemption date or the Maturity), then a Holder of Preferred Securities
         may directly institute a legal proceeding against the Debenture Issuer
         for enforcement of payment to such Holder of the principal of or
         premium, if any, or interest on a Like Amount of Debentures (a "Direct
         Action") on or after the respective due date specified in the
         Debentures. In connection with such Direct Action, the Holders of the
         Common Securities will be subrogated to such Holder of Preferred
         Securities to the extent of any payment made by the Debenture Issuer to
         such Holder of Preferred Securities in such Direct Action. Except as
         provided in this paragraph, the Holders of Preferred Securities will
         not be able to exercise directly any other remedy available to the
         holders of the Debentures.

                  Any approval or direction of Holders of Preferred Securities
         may be given at a separate meeting of Holders of Preferred Securities
         convened for such purpose, at a meeting of all of the Holders of
         Securities or pursuant to written consent. The Property Trustee will
         cause a notice of any meeting at which Holders of Preferred Securities
         are entitled to vote, or of any matter upon which action by written
         consent of such Holders is to be taken, to be mailed to each Holder of
         record of Preferred Securities. 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 resolution
         proposed for adoption at such meeting on which such Holders are
         entitled to vote or of such matter upon which written consent is
         sought, and (iii) instructions for the delivery of proxies or consent.

                  No vote or consent of the Holders of the Preferred Securities
         will be required for the Trust to redeem and cancel Preferred
         Securities or to distribute the Debentures in accordance with the
         Declaration and the terms of the Securities.

                  Notwithstanding that Holders of Preferred Securities are
         entitled to vote or consent under any of the circumstances described
         above, any of the Preferred Securities that are owned by the Sponsor or
         any Affiliate of the Sponsor shall not be entitled to vote or consent
         and shall, for purposes of such vote or consent, be treated as if they
         were not outstanding.



                                      I-7
<PAGE>   60

         7.       Voting Rights - Common Securities.

                  (a) Except as provided under Sections 7(b), 7(c), and 8 or as
         otherwise required by law and the Declaration, the Holders of the
         Common Securities will have no voting rights.

                  (b) Unless an Event of Default shall have occurred and be
         continuing, any Trustee may be removed at any time by the Holder of the
         Common Securities. If an Event of Default has occurred and is
         continuing, the Property Trustee and the Delaware Trustee may be
         removed at such time by the Holders of a Majority in Liquidation Amount
         of the outstanding Preferred Securities. In no event will the Holders
         of the Preferred Securities have the right to vote to appoint, remove
         or replace the Administrative Trustees, which voting rights are vested
         exclusively in the Sponsor as the Holder of the Common Securities. No
         resignation or removal of a Trustee and no appointment of a successor
         trustee shall be effective until the acceptance of appointment by the
         successor trustee in accordance with the provisions of the Declaration.

                  (c) Subject to Section 2.6 of the Declaration and only after
         any Event of Default with respect to the Preferred Securities has been
         cured, waived or otherwise eliminated and subject to the requirements
         set forth in this paragraph, the Holders of a Majority in Liquidation
         Amount of the Common Securities, voting separately as a class, may
         direct the time, method and place of conducting any proceeding for any
         remedy available to the Property Trustee, or direct the exercise of any
         trust or power conferred upon the Property Trustee under the
         Declaration, including the right to direct the Property Trustee, as
         Holder of the Debentures, to (i) exercise the remedies available under
         the Indenture with respect to the Debentures, (ii) waive any past
         default and its consequences that are waivable under the Indenture,
         (iii) exercise any right to rescind or annul a declaration that the
         principal of all the Debentures shall be due and payable, or (iv)
         consent to any amendment, modification or termination of the Indenture
         or the Debentures, where such consent would be required; provided that,
         where a consent or action under the Indenture would require the consent
         or act of a Super Majority of the Holders of the Debentures affected
         thereby, the Property Trustee may only give such consent or take such
         action at the written direction of the Holders of at least the
         proportion in liquidation amount of the Common Securities which the
         relevant Super Majority represents of the aggregate principal amount of
         the Debentures outstanding. In addition, if the consent of the Property
         Trustee, as holder of the Debentures, is required in connection with
         any amendment, modification or termination of the Indenture or the
         Debentures, the Property Trustee will request the direction of the
         Holders of the Common Securities and shall vote with respect to such
         amendment, modification or termination as directed by Holders of a
         Majority in Liquidation Amount of the Common Securities voting together
         as a single class, provided that where a consent or action under the
         Indenture would require the consent or act of a Super Majority, the
         Property Trustee may only give such consent or take such action at the
         written direction of the Holders of at least the proportion in
         liquidation amount of the Common Securities which the relevant Super
         Majority represents of the aggregate principal amount of the Debentures
         outstanding. The Property Trustee shall not revoke any action
         previously authorized or approved by a vote of the Holders of the
         Common Securities. The Property Trustee shall notify each Holder of
         Common Securities of any written notice of default received from the
         Indenture Trustee with respect to the Indentures. Other than with
         respect to directing the time, method and place of conducting a
         proceeding for any remedy available to the Property Trustee or the
         Debenture Trustee as set forth above, the Property Trustee shall not
         take any action in accordance with the directions of the Holders of the
         Common Securities under this paragraph unless the Property Trustee has
         obtained an opinion of independent tax counsel to the effect that for
         the purposes of United States federal income tax the Trust will not be
         classified as an association taxable as a corporation on account of
         such action.



                                      I-8
<PAGE>   61

                   If an Event of Default under the Declaration has occurred and
         is continuing and such event is attributable to the failure of the
         Debenture Issuer to pay principal of or premium, if any, or interest on
         the Debentures on the due date (including any Interest Payment Date or
         redemption date or the Maturity), then a Holder of Common Securities
         may institute a Direct Action for enforcement of payment to such Holder
         of the principal of or premium, if any, or interest on a Like Amount of
         Debentures on or after the respective due date specified in the
         Debentures. Except as provided in this paragraph, the Holders of Common
         Securities will not be able to exercise directly any other remedy
         available to the holders of the Debentures.

                  Any approval or direction of Holders of Common Securities may
         be given at a separate meeting of Holders of Common Securities convened
         for such purpose, at a meeting of all of the Holders of Securities or
         pursuant to written consent. The Administrative Trustees will cause a
         notice of any meeting at which Holders of Common Securities are
         entitled to vote, or of any matter upon which action by written consent
         of such Holders is to be taken, to be mailed to each Holder of record
         of Common Securities. 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 resolution proposed for adoption
         at such meeting on which such Holders are entitled to vote or of such
         matter upon which written consent is sought and (iii) instructions for
         the delivery of proxies or consents.

                  No vote or consent of the Holders of the Common Securities
         will be required for the Trust to redeem and cancel Common Securities
         or to distribute the Debentures in accordance with the Declaration and
         the terms of the Securities.

         8.       Amendments to Declaration.

         In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended by the Trustees and the Sponsor with
(i) the consent of Holders representing a Majority in Liquidation Amount of all
outstanding Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an investment company under the Investment
Company Act, provided that, without the consent of each Holder of Securities,
the Declaration may not be amended to (i) change the amount or timing of any
Distribution or other payment on the Securities or otherwise adversely affect
the amount of any Distribution or other payment required to be made in respect
of the Securities as of a specified date, (ii) change the purpose of the Trust,
(iii) authorize the issuance of any additional beneficial interests in the
Trust, (iv) change the time or circumstances in which the Securities may be
redeemed or the amount payable upon such a redemption, (v) change the
Liquidation Distribution or other provisions relating to the timing or amount of
such distribution, (vi) affect the limited liability of any Holder of
Securities, or (vii) restrict the right of Holder of Securities to institute
suit for the enforcement of any such payment on or after such date.

         9.       Pro Rata.

         A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to any payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Liquidation Amount of
Preferred Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Preferred Securities outstanding, and



                                      I-9
<PAGE>   62

only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate Liquidation Amount of Common Securities held by the relevant Holder
relative to the aggregate Liquidation Amount of all Common Securities
outstanding.

         10.      Ranking.

         The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.

         11.      Acceptance of Preferred Securities Guarantee and Indenture.

         Each Holder of Preferred Securities by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.

         12.      No Preemptive Rights.

         The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.

         13.      Miscellaneous.

         These terms constitute a part of the Declaration.

         The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture (including any supplemental indenture) to
a Holder without charge on written request to the Sponsor at its principal place
of business.



                                      I-10
<PAGE>   63

                                   EXHIBIT A-1

                     FORM OF PREFERRED SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

         [IF THIS SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER
OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS
A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE
CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

         UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS ITS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

Certificate Number                                Number of Preferred Securities

                                                                CUSIP NO._______

                   Certificate Evidencing Preferred Securities
                                       of
                          American General Capital III

                        8.05% Trust Preferred Securities
               (Liquidation Amount $25.00 per Preferred Security)

         American General Capital III, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that _______
(the "Holder") is the registered owner of _______ securities of the Trust
representing undivided preferred beneficial interests in the assets of the Trust
designated the 8.05% Trust Preferred Securities (Liquidation Amount $25.00 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are set forth herein, on the reverse hereof and in the
Amended and Restated Declaration of Trust of the Trust dated as of December 7,
2000, as the same may be amended from time to time



                                      A1-1
<PAGE>   64

(the "Declaration"), and shall in all respects be subject to the provisions
thereof, including the designation of the terms of the Preferred Securities as
set forth in Annex I to the Declaration. Each capitalized term used but not
defined herein or in any legend, form or certificate hereon shall have the
meaning given to it in the Declaration. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to any Holder
without charge upon written request to the Trust at its principal place of
business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.

         By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.

         IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of _____________.

                                        American General Capital III


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Administrative Trustee


         PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Preferred Securities referred to in the
within-mentioned Declaration.


Dated:
      -------------------

                                             Bankers Trust Company
                                              as Property Trustee


                                             By:
                                                --------------------------------
                                             Authorized Signatory




                                      A1-2
<PAGE>   65

                     [FORM OF REVERSE OF PREFERRED SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount of $25.00
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will themselves accumulate distributions thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes any such additional
distributions payable for any period unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.

         Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including December 7,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 2000,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.

         So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.

         Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.

         The Preferred Securities shall be redeemable as provided in the
Declaration on or after December 7, 2005 or earlier in certain circumstances
upon the occurrence of a Special Event.



                                      A1-3
<PAGE>   66

                                   ----------

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:


-----------------------------------------------------------

-----------------------------------------------------------

-----------------------------------------------------------
(Insert assignee's social security or tax identification number)


-----------------------------------------------------------

-----------------------------------------------------------

-----------------------------------------------------------
(Insert address and zip code of assignee)

and irrevocably appoints


-----------------------------------------------------------

-----------------------------------------------------------

-----------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:
     -----------------------------
Signature:
          ------------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

Signature Guarantee:
                    ---------------------------------------

                                   ----------

* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.




                                      A1-4
<PAGE>   67

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

              THIS COMMON SECURITY CERTIFICATE IS NOT TRANSFERABLE
            EXCEPT AS SET FORTH IN THE DECLARATION REFERRED TO HEREIN

Certificate Number:                                 Number of Common Securities:


                    Certificate Evidencing Common Securities
                                       of
                          American General Capital III
                             8.05% Common Securities
                 (Liquidation Amount $25.00 per Common Security)


         American General Capital III, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that American
General Corporation (the "Holder") is the registered owner of _______ common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 8.05% Common Securities (Liquidation Amount
$25.00 per Common Security) (the "Common Securities"). The Common Securities are
not transferable except as set forth in the Declaration described below. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are set forth herein, on
the reverse hereof and in the Amended and Restated Declaration of Trust of the
Trust dated as of December 7, 2000, as the same may be amended from time to time
(the "Declaration"), and shall in all respects be subject to the provisions
thereof, including the designation of the terms of the Common Securities as set
forth in Annex I to the Declaration. Each capitalized term used but not defined
herein or in any legend, form or certificate hereon shall have the meaning given
to it in the Declaration. The Sponsor will provide a copy of the Declaration and
the Indenture (including any supplemental indenture) to any Holder without
charge upon written request to the Sponsor at its principal place of business.

         Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder to the extent provided
therein.

         By its acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.

         IN WITNESS WHEREOF, the Trust has executed this certificate this
_________ day of _______________, _____.

                                   AMERICAN GENERAL CAPITAL III


                                   By:
                                      -----------------------------------------
                                   Name:
                                        ---------------------------------------
                                   Administrative Trustee



                                      A2-1
<PAGE>   68

                      [FORM OF REVERSE OF COMMON SECURITY]

         Distributions payable on each Common Security will be fixed at a rate
per annum of 8.05% (the "Coupon Rate") of the Liquidation Amount of $25.00 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarterly period will themselves accumulate distributions thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes any such additional distributions
payable for any period unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.

         Distributions on the Common Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including December 7,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 2000,
except as otherwise described below and in the Declaration. Distributions
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.

         So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods,
including the first such quarterly period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity of the Debentures. Distributions will be deferred during any Extension
Period. Notwithstanding such deferral, Distributions to which holders of
Securities are entitled shall continue to accumulate additional Distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly from the relevant Distribution Dates during any
Extension Period. Prior to the expiration of any Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.

         Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.

         The Common Securities shall be redeemable as provided in the
Declaration on or after December 7, 2005 or earlier in certain circumstances
upon the occurrence of a Special Event.


                                      A2-2