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                                                                     EXHIBIT 4.3

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                           AMERICAN GENERAL CAPITAL II

                            DATED AS OF JUNE 27, 2000

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                             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)...............................................................................................5.3(c)
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>                                                                                          <C>
                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

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

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1       Trust Indenture Act; Application................................................................6
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............................................................7
SECTION 2.5       Evidence of Compliance with Conditions Precedent................................................7
SECTION 2.6       Events of Default; Waiver.......................................................................7
SECTION 2.7       Event of Default; Notice........................................................................9

                                   ARTICLE III
                                  ORGANIZATION

SECTION 3.1       Name............................................................................................9
SECTION 3.2       Office..........................................................................................9
SECTION 3.3       Purpose.........................................................................................9
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...........................................12
SECTION 3.8       Powers and Duties of the Property Trustee......................................................13
SECTION 3.9       Certain Duties and Responsibilities of the Property Trustee....................................15
SECTION 3.10      Certain Rights of Property Trustee.............................................................16
SECTION 3.11      Delaware Trustee...............................................................................18
SECTION 3.12      Execution of Documents.........................................................................18
SECTION 3.13      Not Responsible for Recitals or Issuance of Securities.........................................18
SECTION 3.14      Duration of Trust..............................................................................18
SECTION 3.15      Mergers........................................................................................19

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1       Sponsor's Purchase of Common Securities........................................................20
SECTION 4.2       Responsibilities of the Sponsor................................................................20
SECTION 4.3       Right to Proceed...............................................................................21
</TABLE>

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<TABLE>
<CAPTION>

                                    ARTICLE V
                                    TRUSTEES

<S>               <C>                                                                                           <C>
SECTION 5.1       Number of Trustees; Appointment of Co-trustee..................................................21
SECTION 5.2       Delaware Trustee...............................................................................21
SECTION 5.3       Property Trustee; Eligibility..................................................................22
SECTION 5.4       Certain Qualifications of Administrative Trustees and Delaware Trustee Generally...............22
SECTION 5.5       Administrative Trustees........................................................................23
SECTION 5.6       Delaware Trustee...............................................................................23
SECTION 5.7       Appointment, Removal and Resignation of Trustees...............................................23
SECTION 5.8       Vacancies Among Trustees.......................................................................24
SECTION 5.9       Effect of Vacancies............................................................................25
SECTION 5.10      Meetings.......................................................................................25
SECTION 5.11      Delegation of Power............................................................................25
SECTION 5.12      Merger, Conversion, Consolidation or Succession to Business....................................25

                                   ARTICLE VI
                                  DISTRIBUTIONS

SECTION 6.1       Distributions..................................................................................26

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1       General Provisions Regarding Securities........................................................26
SECTION 7.2       Execution and Authentication...................................................................26
SECTION 7.3       Form and Dating................................................................................27
SECTION 7.4       Registrar and Paying Agent.....................................................................28
SECTION 7.5       Paying Agent to Hold Money in Trust............................................................28
SECTION 7.6       Replacement Securities.........................................................................29
SECTION 7.7       Outstanding Preferred Securities...............................................................29
SECTION 7.8       Preferred Securities in Treasury...............................................................29
SECTION 7.9       Temporary Securities...........................................................................29
SECTION 7.10      Cancellation...................................................................................30
SECTION 7.11      CUSIP Numbers..................................................................................30

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

SECTION 8.1       Dissolution of Trust...........................................................................30

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

SECTION 9.1       Transfer of Securities.........................................................................31
SECTION 9.2       Deemed Security Holders........................................................................32
SECTION 9.3       Book-Entry Interests...........................................................................32
SECTION 9.4       Notices to Clearing Agency.....................................................................33
SECTION 9.5       Appointment of Successor Clearing Agency.......................................................33
</TABLE>

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<TABLE>
<CAPTION>
                                                      ARTICLE X
                                             LIMITATION OF LIABILITY OF
                                      HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

<S>              <C>                                                                                            <C>
SECTION 10.1      Liability......................................................................................33
SECTION 10.2      Exculpation....................................................................................33
SECTION 10.3      Fiduciary Duty.................................................................................34
SECTION 10.4      Indemnification................................................................................34
SECTION 10.5      Outside Businesses.............................................................................37

                                                     ARTICLE XI
                                                     ACCOUNTING

SECTION 11.1      Fiscal Year....................................................................................37
SECTION 11.2      Certain Accounting Matters.....................................................................37
SECTION 11.3      Banking........................................................................................38
SECTION 11.4      Withholding....................................................................................38

                                                     ARTICLE XII
                                               AMENDMENTS AND MEETINGS

SECTION 12.1      Amendments.....................................................................................38

                                                    ARTICLE XIII
                                         REPRESENTATIONS OF PROPERTY TRUSTEE
                                                AND DELAWARE TRUSTEE

SECTION 13.1      Representations and Warranties of Property Trustee.............................................41
SECTION 13.2      Representations and Warranties of Delaware Trustee.............................................41

                                                     ARTICLE XIV
                                                    MISCELLANEOUS

SECTION 14.1      Notices........................................................................................42
SECTION 14.2      Governing Law..................................................................................43
SECTION 14.3      Intention of the Parties.......................................................................43
SECTION 14.4      Headings.......................................................................................43
SECTION 14.5      Successors and Assigns.........................................................................43
SECTION 14.6      Partial Enforceability.........................................................................43
SECTION 14.7      Counterparts...................................................................................44
</TABLE>

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<PAGE>   6

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST
                                       OF
                           AMERICAN GENERAL CAPITAL II

                                  June 27, 2000

     AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated and
effective as of June 27, 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 II (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;

     (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;

<PAGE>   7

     (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. Codess. 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 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).

                                        2

<PAGE>   8

     "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 1/2% Junior Subordinated Debentures due 2030 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).

     "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.

                                       3
<PAGE>   9

     "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.

     "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.

                                       4
<PAGE>   10

     "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.

     "Subsequent Closing Time" means the time of settlement with respect any
sale of Securities subsequent to the Closing Time contemplated by Section
3.6(a).

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

     "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).

                                       5
<PAGE>   11

     "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 June 22, 2000
among the Sponsor, the Trust, Salomon Smith Barney Inc., Banc of America
Securities LLC, Chase Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (including the form of Underwriting Agreement attached thereto)
relating to the initial offering and sale of the Preferred Securities.

                                   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.

                                       6
<PAGE>   12

     (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,
2000, 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.

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.

                                       7
<PAGE>   13

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:

          (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)

                                       8
<PAGE>   14

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

          (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 II", 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.

                                       9
<PAGE>   15

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 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; provided, that, the Administrative Trustees, at
the direction of the Sponsor, may cause the Trust to issue additional Preferred
Securities and Common Securities at one or more Subsequent Closing Times;
provided, however, that in no event shall a Subsequent Closing Time occur after
90 days following 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;

                                       10
<PAGE>   16

          (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;

     (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;

                                       11
<PAGE>   17

     (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

     (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:

                                       12
<PAGE>   18

          (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.

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

                                       13
<PAGE>   19

     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; in either case, any and all earnings attributable to
     such funds shall, in addition to any other fees charged hereunder, be
     retained by the Property Trustee as payment for its services as Property
     Trustee;

          (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 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

                                       14
<PAGE>   20

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 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;

                                       15
<PAGE>   21

          (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;

          (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;

                                       16

<PAGE>   22

         (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 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 not 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

                                       17
<PAGE>   23

          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 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 is 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.

                                       18
<PAGE>   24

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:

               (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

                                       19
<PAGE>   25

               (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.

     (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 Sponsor's Purchase of Common Securities.

     At the Closing Time and any Subsequent 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;

                                       20
<PAGE>   26
         (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, and any
underwriting or similar agreement relating to the sale of Preferred Securities
at any Subsequent Closing Time in accordance with Section 3.6(a).

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 Co-Trustee.

         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

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<PAGE>   27

         (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.

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 provision 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.

                                       22
<PAGE>   28

SECTION 5.5 Administrative Trustees.

         (a) The initial Administrative Trustees shall be:

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

         (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

                                       23
<PAGE>   29

                  (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.

         (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.

                                       24
<PAGE>   30

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.

                                       25
<PAGE>   31

                                   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 and on each Subsequent 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.

                                       26
<PAGE>   32

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 registered in the name of the Clearing Agency or a
nominee of the Clearing Agency, duly executed by the Trust and authenticated by

                                       27
<PAGE>   33

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.

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

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<PAGE>   34

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.

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<PAGE>   35

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.

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<PAGE>   36

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.

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

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<PAGE>   37

                                   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;

         (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

                                       32
<PAGE>   38

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.

         (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.

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<PAGE>   39

         (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 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.

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<PAGE>   40

         (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.

                  (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.

                                       35
<PAGE>   41

                  (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.

                  (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

                                       36
<PAGE>   42

         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 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.

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<PAGE>   43

                                   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 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

                                       38
<PAGE>   44

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:

                           (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:

                                       39
<PAGE>   45

                           (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;

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

                                       40
<PAGE>   46

         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;

                  (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.

                                       41
<PAGE>   47

                                  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 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);

                                       42
<PAGE>   48

         (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 II
                           c/o American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019
                           Attention:  Treasury 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):

                           Bankers Trust (Delaware)
                           E. A. Delle Donne Corporate Center
                           Montgomery Building
                           1011 Centre Road, Suite 200
                           Wilmington, Delaware 19805-1266
                           Attention:  M. Lisa Wilkins
                           Telecopy: (302) 636-3222

         (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):

                                       43
<PAGE>   49

                           American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019
                           Attention:  Treasury 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.

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.

                                       44
<PAGE>   50

                  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:
                                         ---------------------------------------
                                         Nicholas R. Rasmussen
                                         Executive Vice President,
                                         Chief Financial Officer and Treasurer

                                       45
<PAGE>   51

                                     ANNEX I

                                    TERMS OF
                  8 1/2% CAPITAL TRUST PASS-THROUGH SECURITIES
                            8 1/2% COMMON SECURITIES

         Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of June 27, 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. 300,000 Preferred Securities of the
         Trust, with an aggregate Liquidation Amount with respect to the assets
         of the Trust of THREE HUNDRED MILLION dollars ($300,000,000), and with
         a Liquidation Amount with respect to the assets of the Trust of $1,000
         per security, are hereby designated for the purposes of identification
         only as "8 1/2% Capital Trust Pass-through Securities" (the "Preferred
         Securities"), provided that the authorized number and aggregate
         Liquidation Amount of such Preferred Securities may be increased from
         time to time by notice filed by the Administrative Trustees with the
         Property Trustee to provide for any sale of Preferred Securities at a
         Subsequent Closing Time in accordance with Section 3.6(a) of the
         Declaration. 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. 9,279 Common Securities of the Trust
         with an aggregate Liquidation Amount with respect to the assets of the
         Trust of NINE MILLION TWO HUNDRED SEVENTY-NINE THOUSAND dollars
         ($9,279,000) and a Liquidation Amount with respect to the assets of the
         Trust of $1,000 per Security, are hereby designated for the purposes of
         identification only as "8 1/2% Common Securities" (the "Common
         Securities"), provided that the authorized number and aggregate
         Liquidation Amount of such Common Securities may be increased from time
         to time by notice filed by the Administrative Trustees with the
         Property Trustee to provide for any sale of Common Securities at a
         Subsequent Closing Time in accordance with Section 3.6(a) of the
         Declaration. 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 1/2% (the "Coupon Rate") of the Liquidation Amount
         of $1,000 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 semiannual period
         will bear additional distributions thereon compounded semiannually 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

                                       I-1

<PAGE>   52

         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 June
         27, 2000, to but excluding the related Distribution Date (as defined
         below) or the date of redemption, and will be payable semiannually in
         arrears on January 1 and July 1 of each year, commencing on January 1,
         2001, except as otherwise described below. The amount of 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 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 10 consecutive semiannual periods,
         including the first such semiannual 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 semiannually 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 10 consecutive semiannual periods,
         including the first semiannual 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

                                       I-2

<PAGE>   53

         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 semiannual 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 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 $1,000 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

                                       I-3

<PAGE>   54

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, 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 Date
         thereof or the date of earlier redemption thereof prior thereto in
         accordance with their terms, 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 the redemption price specified below (the "Redemption
         Price"), plus accumulated and unpaid Distributions thereon, if any, to
         the date of redemption.

                  (b) The Redemption Price per Security shall be equal to (i) in
         the case of a redemption of the Securities upon the repayment of the
         Debentures at the Maturity Date thereof, the Liquidation Amount, and
         (ii) in the case of a redemption of the Securities upon the earlier
         redemption of the Debentures, the redemption price applicable to $1,000
         principal amount of Debentures being so redeemed in accordance with
         their terms.

                  The Debentures may be redeemed by the Debenture Issuer before
         their Maturity Date (i) in whole but not in part within 90 days
         following the occurrence of a Tax Event or an Investment Company Event
         (each, a "Special Event"), (ii) in whole or in part on one or more
         occasions at any time. The redemption price for the Debentures is equal
         to the greater of (1) 100% of the principal amount of the Debentures to
         be redeemed or (2) the sum, as determined by the Quotation Agent, of
         the present values of the principal amount of the Debentures to be
         redeemed and the remaining scheduled payments of interest thereon from
         the redemption date to July 1, 2030 (the "Remaining Life"), discounted
         from their respective scheduled payment dates to the redemption date on
         a semi-annual basis (assuming a 360-day year consisting of 30-day
         months) at the Adjusted Treasury Rate. In either case, holders of
         redeemed Debentures will also receive accrued and unpaid interest
         thereon to the date of redemption.

                  "Adjusted Treasury Rate" means (a) with respect to a
         redemption of Debentures in whole but not in part effected within 90
         days following the occurrence of a Special Event, the Treasury Rate
         plus .50%, or (b) in the case of any other redemption of Debentures,
         the Treasury Rate plus .25%.

                  "Comparable Treasury Issue" means the United States Treasury
         security selected by the Quotation Agent as having a maturity
         comparable to the Remaining Life of the Debentures to be redeemed that
         would be utilized, at the time of selection and in accordance with
         customary financial practice, in pricing new issues of corporate debt
         securities of comparable maturity with the Remaining Life of the
         Debentures. If no United States Treasury security has a maturity which
         is within a period from three months before to three months after the
         Remaining Life, the two most closely corresponding United States
         Treasury securities shall be used as the Comparable Treasury Issue, and
         the Treasury Rate shall be interpolated or extrapolated on a
         straight-line basis, rounding to the nearest month using such
         securities.

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<PAGE>   55

                  "Comparable"Treasury Price" means, with respect to any
         redemption date, (1) the average of the bid and asked prices for the
         Comparable Treasury Issue (expressed in each case as a percentage of
         its principal amount) on the third Business Day preceding such
         redemption date, as set forth in the daily statistical release (or any
         successor release) published by the Federal Reserve Bank of New York
         and designated "Composite 3:30 p.m. Quotations for U.S. Government
         Securities" or (2) if such release (or any successor release) is not
         published or does not contain such prices on such Business Day, (a) the
         average of the five Reference Treasury Dealer Quotations for such
         redemption date, after excluding the highest and lowest of such
         Reference Treasury Dealer Quotations, or (b) if the Debenture Trustee
         obtains fewer than three such Reference Treasury Dealer Quotations, the
         average of all such quotations.

                  "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 June 22, 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.

                  "Quotation Agent" means Salomon Smith Barney Inc. and its
         successors; provided, however, that if the foregoing shall cease to be
         a primary U.S. Government securities dealer in New York City (a
         "Primary Treasury Dealer"), the Debenture Trustee shall substitute
         therefor another Primary Treasury Dealer after consultation with the
         Debenture Issuer.

                  "Reference Treasury Dealer" means: (1) the Quotation Agent;
         and (2) any other Primary Treasury Dealer selected by the Debenture
         Trustee.

                  "Reference Treasury Dealer Quotations" means, with respect to
         each Reference Treasury Dealer and any redemption date, the average, as
         determined by the Debenture Trustee, of the bid and asked prices for
         the Comparable Treasury Issue (expressed in each case as a percentage
         of its principal amount) quoted in writing to the Debenture Trustee by
         such Reference Treasury Dealer at 5:00 p.m., New York City time, on the
         third Business Day preceding such redemption date.

                  "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 June 22, 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.

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<PAGE>   56

                  "Treasury Rate" means, with respect to any redemption date,
         the rate per annum equal to (1) the yield, under the heading which
         represents the average for the immediately prior week, appearing in the
         most recently published statistical release designated "H.15 (519)" or
         any successor publication which is published weekly by the Federal
         Reserve Board and which establishes yields on actively traded United
         States Treasury securities adjusted to constant maturity under the
         caption "Treasury Constant Maturities," for the maturity corresponding
         to the Remaining Life (if no maturity is within three months before or
         after the Remaining Life, yields for the two published maturities most
         closely corresponding to the Remaining Life shall be interpolated and
         the Treasury Rate shall be interpolated or extrapolated from such
         yields on a straight-line basis rounding to the nearest month) or (2)
         if such release (or any successor release) is not published during the
         week preceding the calculation date or does not contain such yields,
         the rate per annum equal to the semiannual equivalent yield to maturity
         of the Comparable Treasury Issue, calculated using a price for the
         Comparable Treasury Issue (expressed as a percentage of its principal
         amount) equal to the Comparable Treasury Price for such redemption
         date, in each case calculated on the third Business Day preceding the
         redemption date.

                  (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

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<PAGE>   57

                  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.

                           (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

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<PAGE>   58

         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 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

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<PAGE>   59

         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.

         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

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<PAGE>   60

         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.

                  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
assets of the Trust except as contemplated by the Declaration, (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

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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 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-11

<PAGE>   62

                                   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 II

                  8 1/2% Capital Trust Pass-through Securities
               (Liquidation Amount $1,000 per Preferred Security)

         American General Capital II, 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 1/2% Capital Trust Pass-through
Securities (Liquidation Amount $1,000 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 June 27, 2000, as the same may be

                                      A1-1

<PAGE>   63

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
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 II

                                     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>   64

                     [FORM OF REVERSE OF PREFERRED SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of 8 1/2% (the "Coupon Rate") of the Liquidation Amount of $1,000
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 semiannual period will themselves accumulate distributions thereon
compounded semiannually 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 June 27,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable semiannually in arrears on January 1 and July 1
of each year, commencing on January 1, 2001, 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 10 consecutive semiannual periods,
including the first such semiannual period during such period (each, an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity Date 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 semiannually 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 10 consecutive semiannual periods, including the first semiannual period
during such Extension Period, or extend beyond the Maturity Date 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 upon repayment of the Debentures on the Maturity Date thereof or the
date of earlier redemption thereof prior thereto in accordance with their terms.
The Redemption Price per Security shall be equal to (i) in the case of a
redemption of the Securities upon the repayment of the Debentures at the
Maturity Date thereof, the Liquidation Amount, and (ii) in the case of a
redemption of the Securities upon the earlier redemption of the Debentures, the
redemption price applicable to $1,000 principal amount of Debentures being so
redeemed in accordance with their terms, in each case plus accrued and unpaid
Distributions thereon, if any, to the date of redemption. The Debentures may be
redeemed by the Debenture Issuer before their Maturity Date (i) in whole but not
in part within 90 days following the occurrence of a Tax Event or an Investment
Company Event (each, a "Special Event"), or (ii) in whole or in part on one or
more occasions at any time. The redemption price for

                                      A1-3

<PAGE>   65

the Debentures is equal to the greater of (1) 100% of the principal amount of
the Debentures to be redeemed or (2) the sum, as determined by the Quotation
Agent (as defined in the Indenture), of the present values of the principal
amount of the Debentures to be redeemed and the remaining scheduled payments of
interest thereon from the redemption date to July 1, 2030 (the "Remaining
Life"), discounted from their respective scheduled payment dates to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
30-day months) at the Adjusted Treasury Rate. "Adjusted Treasury Rate" means
(a) with respect to a redemption of Debentures in whole but not in part
effected within 90 days following the occurrence of a Special Event, the
Treasury Rate (as defined in the Indenture) plus .50%, or (b) in the case of any
other redemption of Debentures, the Treasury Rate plus .25%. In either case,
holders of redeemed Debentures will also receive accrued and unpaid interest
thereon to the date of redemption.

                                      A1-4

<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.

                                      A1-5

<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 II
                            8 1/2% Common Securities
                 (Liquidation Amount $1,000 per Common Security)

         American General Capital II, 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 1/2% Common Securities (Liquidation Amount
$1,000 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 June 27, 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 II

                                 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 1/2% (the "Coupon Rate") of the Liquidation Amount of $1,000 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
semiannual period will themselves accumulate distributions thereon compounded
semiannually 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 June 27,
2000, to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable semiannually in arrears on January 1 and July 1
of each year, commencing on January 1, 2001, 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 10 consecutive semiannual periods,
including the first such semiannual 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 semiannually 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 10 consecutive semiannual periods, including the first semiannual 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 upon repayment of the Debentures on the Maturity Date thereof or the
date of earlier redemption thereof prior thereto in accordance with their terms.
The Redemption Price per Security shall be equal to (i) in the case of a
redemption of the Securities upon the repayment of the Debentures at the
Maturity Date thereof, the Liquidation Amount, and (ii) in the case of a
redemption of the Securities upon the earlier redemption of the Debentures, the
redemption price applicable to $1,000 principal amount of Debentures being so
redeemed in accordance with their terms, in each case plus accrued and unpaid
Distributions thereon, if any, to the date of redemption. The Debentures may be
redeemed by the Debenture Issuer before their Maturity Date (i) in whole but not
in part within 90 days following the occurrence of a Tax Event or an Investment
Company Event (each, a

                                      A2-2

<PAGE>   69

"Special Event"), or (ii) in whole or in part on one or more occasions at any
time. The redemption price for the Debentures is equal to the greater of (1)
100% of the principal amount of the Debentures to be redeemed or (2) the sum, as
determined by the Quotation Agent (as defined in the Indenture), of the present
values of the principal amount of the Debentures to be redeemed and the
remaining scheduled payments of interest thereon from the redemption date to
July 1, 2030 (the "Remaining Life"), discounted from their respective scheduled
payment dates to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate. "Adjusted
Treasury Rate" means (a) with respect to a redemption of Debentures in whole
but not in part effected within 90 days following the occurrence of a Special
Event, the Treasury Rate (as defined in the Indenture) plus .50%, or (b) in the
case of any other redemption of Debentures, the Treasury Rate plus .25%. In
either case, holders of redeemed Debentures will also receive accrued and unpaid
interest thereon to the date of redemption.

                                      A2-3<PAGE>   1
                                                                     EXHIBIT 4.5

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

                                   ----------

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                                     BETWEEN

                          AMERICAN GENERAL CORPORATION

                                 (AS GUARANTOR)

                                       AND

                              BANKERS TRUST COMPANY
                   (AS PREFERRED SECURITIES GUARANTEE TRUSTEE)

                        RELATING TO PREFERRED SECURITIES

                                       OF

                           AMERICAN GENERAL CAPITAL II

                            DATED AS OF JUNE 27, 2000

                                   ----------

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

<PAGE>   2

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>

Section of                                                                                               Section of
Trust Indenture Act                                                                                       Guarantee
of 1939, as amended                                                                                       Agreement
-------------------------------------------------------------------------------------------------------------------

<S>                                                                                                         <C>
310(a).......................................................................................................4.1(a)
310(b)................................................................................................. 4.1(c), 2.8
310(c) ................................................................................................Inapplicable
311(a) ......................................................................................................2.2(b)
311(b) ..................................................................................................... 2.2(b)
311(c) ............................................................................................... Inapplicable
312(a) ......................................................................................................2.2(a)
312(b) ......................................................................................................2.2(b)
313 ............................................................................................................2.3
314(a) .........................................................................................................2.4
314(b) ............................................................................................... Inapplicable
314(c) .........................................................................................................2.5
314(d) ............................................................................................... Inapplicable
314(e) ...............................................................................................1.1, 2.5, 3.2
314(f) ....................................................................................................2.1, 3.2
315(a) ..................................................................................................... 3.1(d)
315(b) .........................................................................................................2.7
315(c) .........................................................................................................3.1
315(d) ......................................................................................................3.1(d)
316(a) ...............................................................................................1.1, 2.6, 5.4
316(b) .........................................................................................................5.3
316(c) ................................................................................................Inapplicable
317(a) ............................................................................................... Inapplicable
317(b) ............................................................................................... Inapplicable
318(a) ..................................................................................................... 2.1(b)
318(b) .........................................................................................................2.1
318(c) ......................................................................................................2.1(b)
</TABLE>

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

<PAGE>   3

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               Page
                                                                                                               ----
<S>                        <C>            <C>                                                                   <C>
                                                     ARTICLE I
                                          DEFINITIONS AND INTERPRETATION

         SECTION 1.1       Definitions and Interpretation.......................................................-1-

                                                    ARTICLE II
                                                TRUST INDENTURE ACT

         SECTION 2.1       Trust Indenture Act; Application.....................................................-4-
         SECTION 2.2       Lists of Holders of Preferred Securities.............................................-4-
         SECTION 2.3       Reports by the Preferred Securities Guarantee Trustee................................-5-
         SECTION 2.4       Periodic Reports to Preferred Securities Guarantee Trustee...........................-5-
         SECTION 2.5       Evidence of Compliance with Conditions Precedent.....................................-5-
         SECTION 2.6       Events of Default; Waiver............................................................-5-
         SECTION 2.7       Event of Default; Notice.............................................................-6-
         SECTION 2.8       Conflicting Interests................................................................-6-

                                                    ARTICLE III
                                           POWERS, DUTIES AND RIGHTS OF
                                      PREFERRED SECURITIES GUARANTEE TRUSTEE

         SECTION 3.1       Powers and Duties of the Preferred Securities Guarantee Trustee......................-6-
         SECTION 3.2       Certain Rights of Preferred Securities Guarantee Trustee.............................-8-
         SECTION 3.3       Not Responsible for Recitals or Issuance of Preferred Securities
                           Guarantee...........................................................................-10-

                                                    ARTICLE IV
                                      PREFERRED SECURITIES GUARANTEE TRUSTEE

         SECTION 4.1       Preferred Securities Guarantee Trustee; Eligibility.................................-10-
         SECTION 4.2       Appointment, Removal and Resignation of Preferred Securities Guarantee
                           Trustee.............................................................................-11-

                                                     ARTICLE V
                                                     GUARANTEE

         SECTION 5.1       Guarantee...........................................................................-12-
         SECTION 5.2       Waiver of Notice and Demand.........................................................-12-
         SECTION 5.3       Obligations Not Affected............................................................-12-
         SECTION 5.4       Rights of Holders...................................................................-13-
         SECTION 5.5       Guarantee of Payment................................................................-14-
         SECTION 5.6       Subrogation.........................................................................-14-
         SECTION 5.7       Independent Obligations.............................................................-14-

                                                    ARTICLE VI
                                     LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 6.1       Limitation of Transactions..........................................................-14-
         SECTION 6.2       Ranking.............................................................................-15-
</TABLE>

                                       i

<PAGE>   4

<TABLE>

<S>                        <C>            <C>                                                                   <C>
                                                    ARTICLE VII
                                                    TERMINATION

         SECTION 7.1       Termination.........................................................................-15-

                                                   ARTICLE VIII
                                                  INDEMNIFICATION

         SECTION 8.1       Exculpation.........................................................................-16-
         SECTION 8.2       Indemnification.....................................................................-16-

                                                    ARTICLE IX
                                                   MISCELLANEOUS

         SECTION 9.1       Successors and Assigns..............................................................-16-
         SECTION 9.2       Amendments..........................................................................-17-
         SECTION 9.3       Notices.............................................................................-17-
         SECTION 9.4       Benefit.............................................................................-18-
         SECTION 9.5       Governing Law.......................................................................-18-
         SECTION 9.6       Counterparts........................................................................-18-
</TABLE>

                                       ii

<PAGE>   5

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                  THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of June 27, 2000, is executed and delivered by
American General Corporation, a Texas corporation (the "Guarantor"), and Bankers
Trust Company, a New York banking corporation, as trustee (the "Preferred
Securities Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
American General Capital II, a Delaware statutory business trust (the "Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of the date hereof, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 300,000 preferred securities, having an
aggregate liquidation amount of $300,000,000, such preferred securities being
designated the 8 1/2% Capital Trust Pass-through Securities (the "Preferred
Securities").

                  WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay to
the Holders of the Preferred Securities the Guarantee Payments (as defined
below) and to make certain other payments on the terms and conditions set forth
herein.

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.

                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

         In this Preferred Securities Guarantee, unless the context otherwise
requires:

         (a)      capitalized terms used in this Preferred Securities Guarantee
                  but not defined in the preamble above have the respective
                  meanings assigned to them in this Section 1.1;

         (b)      terms defined in the Declaration as at the date of execution
                  of this Preferred Securities Guarantee have the same meaning
                  when used in this Preferred Securities Guarantee unless
                  otherwise defined in this Preferred Securities Guarantee;

         (c)      a term defined anywhere in this Preferred Securities Guarantee
                  has the same meaning throughout;

         (d)      all references to "the Preferred Securities Guarantee" or
                  "this Preferred Securities Guarantee" are to this Preferred
                  Securities Guarantee as modified, supplemented or amended from
                  time to time;

<PAGE>   6

         (e)      all references in this Preferred Securities Guarantee to
                  Articles and Sections are to Articles and Sections of this
                  Preferred Securities Guarantee, unless otherwise specified;

         (f)      a term defined in the Trust Indenture Act has the same meaning
                  when used in this Preferred Securities Guarantee, unless
                  otherwise defined in this Preferred Securities Guarantee or
                  unless the context otherwise requires; and

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

         "Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.

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

         "Corporate Trust Office" means the office of the Preferred Securities
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee 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, Attention: Corporate Trust and
Agency Group - Corporate Market Services.

         "Covered Person" means any Holder or beneficial owner of Preferred
Securities.

         "Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the 8 1/2% Junior Subordinated Debentures due 2030 held
by the Property Trustee (as defined in the Declaration) of the Issuer.

         "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities, to the extent the Issuer has funds on hand legally available
therefor, (ii) the redemption price with respect to any Preferred Securities
called for redemption by the Issuer, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds on hand legally available therefor, and (iii) upon a
voluntary or involuntary termination and liquidation of the Issuer (other than
in connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
Liquidation Distribution (as defined in the Declaration), and (b) the amount of
assets of the Issuer remaining available for distribution to Holders of
Preferred Securities.

                                       -2-

<PAGE>   7

         "Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.

         "Indemnified Person" means the Preferred Securities Guarantee Trustee,
any Affiliate of the Preferred Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Securities Guarantee Trustee.

         "Indenture" means the Junior Subordinated Indenture, dated as of
November 15, 1997, between the Guarantor (the "Debenture Issuer") and Bankers
Trust Company, as trustee, as amended or supplemented, pursuant to which the
Debentures are to be issued to the Property Trustee of the Issuer.

         "List of Holders" has the meaning set forth in Section 2.2.

         "Majority in Liquidation Amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
liquidation amount (including the stated 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 Preferred
Securities.

         "Officers' Certificate" means a certificate signed by the Chairman, any
Vice Chairman, the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Guarantor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee shall include:

                  (a) a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b) a 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

                  (c) a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

         "Other Guarantees" means (i) guarantees issued by the Guarantor with
respect to preferred securities (if any) similar to the Preferred Securities
issued by other trusts established or to be established by the Guarantor (if
any), in each case similar to the Issuer, including the guarantees issued by the
Guarantor with respect to the preferred securities issued by American General
Institutional Capital A, American General Institutional Capital B and American
General Capital I and (ii) guarantees by the Guarantor relating to the preferred
securities of American General Capital, L.L.C. and American General Delaware,
L.L.C.

                                       -3-

<PAGE>   8

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.

         "Preferred Securities Guarantee Trustee" means Bankers Trust Company, a
New York banking corporation, until a Successor Preferred Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Preferred Securities Guarantee and thereafter means each such
Successor Preferred Securities Guarantee Trustee.

         "Responsible Officer" means, with respect to the Preferred Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Securities Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

         "Successor Preferred Securities Guarantee Trustee" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.1.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application

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

                  (b) If and to the extent that any provision of this Preferred
         Securities Guarantee limits, qualifies or conflicts with the duties
         imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
         such imposed duties shall control.

SECTION 2.2 Lists of Holders of Preferred Securities

                  (a) The Guarantor shall provide the Preferred Securities
         Guarantee Trustee (unless the Preferred Securities Guarantee Trustee is
         otherwise the registrar of the Preferred Securities) with a list, in
         such form as the Preferred Securities Guarantee Trustee may reasonably
         require, of the names and addresses of the Holders of the Preferred
         Securities ("List of Holders"), (i) within 14 days after each record
         date for the payment of Distributions on the Preferred Securities as of
         such date, and (ii) at any other time within 30 days of receipt

                                       -4-

<PAGE>   9

         by the Guarantor 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
         Preferred Securities Guarantee Trustee; provided that the Guarantor
         shall not be obligated to provide such List of Holders at any time the
         List of Holders does not differ from the most recent List of Holders
         given to the Preferred Securities Guarantee Trustee by the Guarantor.
         The Preferred Securities Guarantee Trustee may destroy any List of
         Holders previously given to it on receipt of a new List of Holders.

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

SECTION 2.3 Reports by the Preferred Securities Guarantee Trustee

         Within 60 days after December 31 of each year, commencing December 31,
2000, the Preferred Securities Guarantee Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.

SECTION 2.4 Periodic Reports to Preferred Securities Guarantee Trustee

         The Guarantor shall provide to the Preferred Securities Guarantee
Trustee, the Securities and Exchange Commission and the Holders such documents,
reports and information, if any, as 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 Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with such conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.

SECTION 2.6 Events of Default; Waiver

         The Holders of a Majority in Liquidation Amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

                                       -5-

<PAGE>   10

SECTION 2.7 Event of Default; Notice

                  (a) The Preferred Securities Guarantee Trustee shall, within
         90 days after the occurrence of a default with respect to this
         Preferred Securities Guarantee, mail by first class postage prepaid, to
         all Holders of the Preferred Securities, notices of all defaults
         actually known to a Responsible Officer of the Preferred Securities
         Guarantee Trustee, unless such defaults have been cured before the
         giving of such notice; provided that except in the case of default in
         the payment of any Guarantee Payment, the Preferred Securities
         Guarantee Trustee shall be protected in withholding such notice if and
         so long as the board of directors, the executive committee or a trust
         committee of directors and/or Responsible Officers of the Preferred
         Securities Guarantee Trustee in good faith determines that the
         withholding of such notice is in the interests of the Holders of the
         Preferred Securities.

                  (b) The Preferred Securities Guarantee Trustee shall not be
         deemed to have knowledge of any Event of Default unless the Preferred
         Securities Guarantee Trustee shall have received written notice, or a
         Responsible Officer of the Preferred Securities Guarantee Trustee
         charged with the administration of this Preferred Securities Guarantee
         shall have obtained actual knowledge, of such Event of Default.

SECTION 2.8 Conflicting Interests

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

                                   ARTICLE III
                          POWERS, DUTIES AND RIGHTS OF
                     PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Preferred Securities Guarantee Trustee

                  (a) This Preferred Securities Guarantee shall be held by the
         Preferred Securities Guarantee Trustee for the benefit of the Holders
         of the Preferred Securities, and the Preferred Securities Guarantee
         Trustee shall not transfer this Preferred Securities Guarantee to any
         Person except a Holder of Preferred Securities exercising his or her
         rights pursuant to Section 5.4(b) or to a Successor Preferred
         Securities Guarantee Trustee on acceptance by such Successor Preferred
         Securities Guarantee Trustee of its appointment to act as Successor
         Preferred Securities Guarantee Trustee. The right, title and interest
         of the Preferred Securities Guarantee Trustee shall automatically vest
         in any Successor Preferred Securities Guarantee Trustee, and such
         vesting and succession of title shall be effective whether or not
         conveyancing documents have been executed and delivered pursuant to the
         appointment of such Successor Preferred Securities Guarantee Trustee.

                  (b) If an Event of Default actually known to a Responsible
         Officer of the Preferred Securities Guarantee Trustee has occurred and
         is continuing, the Preferred

                                       -6-

<PAGE>   11

         Securities Guarantee Trustee shall enforce this Preferred Securities
         Guarantee for the benefit of the Holders of the Preferred Securities.

                  (c) The Preferred Securities Guarantee 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 Preferred Securities
         Guarantee, and no implied covenants shall be read into this Preferred
         Securities Guarantee against the Preferred Securities Guarantee
         Trustee. In case an Event of Default has occurred (that has not been
         cured or waived pursuant to Section 2.6) and is actually known to a
         Responsible Officer of the Preferred Securities Guarantee Trustee, the
         Preferred Securities Guarantee Trustee shall exercise such of the
         rights and powers vested in it by this Preferred Securities Guarantee,
         and use the same degree of care and skill in its exercise thereof, as a
         prudent person would exercise or use under the circumstances in the
         conduct of his or her own affairs. Notwithstanding anything to the
         contrary in this Preferred Securities Guarantee, in no event shall the
         Preferred Securities Guarantee Trustee be deemed to be an ERISA
         fiduciary, and in the event that the Preferred Securities Guarantee
         Trustee believes it appropriate to take or omit to take any action
         hereunder that would cause it to be deemed an ERISA fiduciary, it shall
         obtain and follow the direction of the Sponsor, the Administrative
         Trustee or Holders, as the case may be.

                  (d) No provision of this Preferred Securities Guarantee shall
         be construed to relieve the Preferred Securities Guarantee Trustee from
         liability for its own negligent action, its own negligent failure to
         act or its own willful misconduct, except that:

                           (i) prior to the occurrence of any 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
                           Preferred Securities Guarantee Trustee shall be
                           determined solely by the express provisions of this
                           Preferred Securities Guarantee, and the Preferred
                           Securities Guarantee Trustee shall not be liable
                           except for the performance of such duties and
                           obligations as are specifically set forth in this
                           Preferred Securities Guarantee, and no implied
                           covenants or obligations shall be read into this
                           Preferred Securities Guarantee against the Preferred
                           Securities Guarantee Trustee; and

                                    (B) in the absence of bad faith on the part
                           of the Preferred Securities Guarantee Trustee, the
                           Preferred Securities Guarantee Trustee may
                           conclusively rely, as to the truth of the statements
                           and the correctness of the opinions expressed
                           therein, upon any certificates or opinions furnished
                           to the Preferred Securities Guarantee Trustee and
                           conforming to the requirements of this Preferred
                           Securities Guarantee; but in the case of any such
                           certificates or opinions that by any provision hereof
                           or of the Trust Indenture Act are specifically
                           required to be furnished to the Preferred Securities
                           Guarantee Trustee, the Preferred Securities Guarantee
                           Trustee shall be under a duty to

                                       -7-

<PAGE>   12

                           examine the same to determine whether or not they
                           conform to the requirements of this Preferred
                           Securities Guarantee;

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

                           (iii) the Preferred Securities Guarantee Trustee
                  shall not be liable with respect to any action taken or
                  omitted to be taken by it in good faith in accordance with the
                  direction of the Holders of a Majority in Liquidation Amount
                  of the Preferred Securities relating to the time, method and
                  place of conducting any proceeding for any remedy available to
                  the Preferred Securities Guarantee Trustee, or exercising any
                  trust or power conferred upon the Preferred Securities
                  Guarantee Trustee under this Preferred Securities Guarantee;
                  and

                           (iv) no provision of this Preferred Securities
                  Guarantee shall require the Preferred Securities Guarantee
                  Trustee to expend or risk its own funds or otherwise incur
                  personal financial liability in the performance of any of its
                  duties or in the exercise of any of its rights or powers, if
                  the Preferred Securities Guarantee Trustee shall have
                  reasonable grounds for believing that the repayment of such
                  funds or liability is not reasonably assured to it under the
                  terms of this Preferred Securities Guarantee or indemnity,
                  reasonably satisfactory to the Preferred Securities Guarantee
                  Trustee, against such risk or liability is not reasonably
                  assured to it.

SECTION 3.2 Certain Rights of Preferred Securities Guarantee Trustee

                  (a) Subject to the provisions of Section 3.1:

                           (i) the Preferred Securities Guarantee Trustee may
                  conclusively rely, and shall be fully protected in acting or
                  refraining from acting, upon any resolution, certificate,
                  statement, instrument, opinion, report, notice, request,
                  direction, consent, order, bond, debenture, note, other
                  evidence of indebtedness or other paper or document reasonably
                  believed by it to be genuine and to have been signed, sent or
                  presented by the proper party or parties;

                           (ii) any direction or act of the Guarantor
                  contemplated by this Preferred Securities Guarantee shall be
                  sufficiently evidenced by an Officers' Certificate;

                           (iii) whenever, in the administration of this
                  Preferred Securities Guarantee, the Preferred Securities
                  Guarantee Trustee shall deem it desirable that a matter be
                  proved or established before taking, suffering or omitting to
                  take any action hereunder, the Preferred Securities Guarantee
                  Trustee (unless other evidence is herein specifically
                  prescribed) may, in the absence of bad faith on its part,
                  request and

                                       -8-

<PAGE>   13

                  conclusively rely upon an Officers' Certificate which, upon
                  receipt of such request, shall be promptly delivered by the
                  Guarantor;

                           (iv) the Preferred Securities Guarantee Trustee shall
                  have no duty to see to any recording, filing or registration
                  of any instrument (or any rerecording, refiling or
                  registration thereof);

                           (v) the Preferred Securities Guarantee Trustee may
                  consult with legal counsel of its selection, and the written
                  advice or opinion of such legal counsel with respect to legal
                  matters shall be full and complete authorization and
                  protection in respect of any action taken, suffered or omitted
                  to be taken by it hereunder in good faith and in accordance
                  with such advice or opinion. Such legal counsel may be legal
                  counsel to the Guarantor or any of its Affiliates and may
                  include any of its employees. The Preferred Securities
                  Guarantee Trustee shall have the right at any time to seek
                  instructions concerning the administration of this Preferred
                  Securities Guarantee from any court of competent jurisdiction;

                           (vi) the Preferred Securities Guarantee Trustee shall
                  be under no obligation to exercise any of the rights or powers
                  vested in it by this Preferred Securities Guarantee at the
                  request or direction of any Holder, unless such Holder shall
                  have provided to the Preferred Securities Guarantee Trustee
                  such security and indemnity, reasonably satisfactory to the
                  Preferred Securities Guarantee Trustee, against the costs,
                  expenses (including attorneys' fees and expenses and the
                  expenses of the Preferred Securities Guarantee Trustee's
                  agents, nominees or custodians) and liabilities that might be
                  incurred by it in complying with such request or direction,
                  including such reasonable advances as may be requested by the
                  Preferred Securities Guarantee Trustee; provided that, nothing
                  contained in this Section 3.2(a)(vi) shall be taken to relieve
                  the Preferred Securities Guarantee Trustee, upon the
                  occurrence of an Event of Default, of its obligation to
                  exercise the rights and powers vested in it by this Preferred
                  Securities Guarantee;

                           (vii) the Preferred Securities Guarantee Trustee
                  shall not be bound to make any investigation into the facts or
                  matters stated in any resolution, certificate, statement,
                  instrument, opinion, report, notice, request, direction,
                  consent, order, bond, debenture, note, other evidence of
                  indebtedness or other paper or document, but the Preferred
                  Securities Guarantee Trustee, in its discretion, may make such
                  further inquiry or investigation into such facts or matters as
                  it may see fit;

                           (viii) the Preferred Securities Guarantee Trustee may
                  execute any of the trusts or powers hereunder or perform any
                  duties hereunder either directly or by or through agents,
                  nominees, custodians or attorneys, and the Preferred
                  Securities Guarantee Trustee shall not be responsible for any
                  misconduct or negligence on the part of any agent or attorney
                  appointed with due care by it hereunder;

                                       -9-

<PAGE>   14

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

                           (x) whenever in the administration of this Preferred
                  Securities Guarantee the Preferred Securities Guarantee
                  Trustee shall deem it desirable to receive instructions with
                  respect to enforcing any remedy or right or taking any other
                  action hereunder, the Preferred Securities Guarantee Trustee
                  (i) may request instructions from the Holders of a Majority in
                  Liquidation Amount of the Preferred Securities, (ii) may
                  refrain from enforcing such remedy or right or taking such
                  other action until such instructions are received and (iii)
                  shall be protected in conclusively relying on or acting in
                  accordance with such instructions; and

                           (xi) the Preferred Securities Guarantee Trustee shall
                  not be liable for any action taken 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 Preferred Securities
                  Guarantee.

                  (b) No provision of this Preferred Securities Guarantee shall
         be deemed to impose any duty or obligation on the Preferred Securities
         Guarantee Trustee to perform any act or acts or exercise any right,
         power, duty or obligation conferred or imposed on it in any
         jurisdiction in which it shall be illegal, or in which the Preferred
         Securities Guarantee Trustee shall be unqualified or incompetent in
         accordance with applicable law, to perform any such act or acts or to
         exercise any such right, power, duty or obligation. No permissive power
         or authority available to the Preferred Securities Guarantee Trustee
         shall be construed to be a duty.

SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities
Guarantee

         The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Preferred
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.

                                   ARTICLE IV
                     PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 4.1 Preferred Securities Guarantee Trustee; Eligibility

                  (a) There shall at all times be a Preferred Securities
         Guarantee Trustee which shall:

                                      -10-

<PAGE>   15

                           (i) not be an Affiliate of the Guarantor; 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 Securities and Exchange
                  Commission to act as an institutional trustee under the Trust
                  Indenture Act, authorized under such laws to exercise
                  corporate trust powers, having a combined capital and surplus
                  of at least fifty million U.S. dollars ($50,000,000), and
                  subject to supervision or examination by federal, state,
                  territorial or District of Columbia authority. If such
                  corporation publishes reports of condition at least annually,
                  pursuant to law or to the requirements of the supervising or
                  examining authority referred to above, then, for the purposes
                  of this Section 4.1(a)(ii), the combined capital and surplus
                  of such corporation shall be deemed to be its combined capital
                  and surplus as set forth in its most recent report of
                  condition so published.

                  (b) If at any time the Preferred Securities Guarantee Trustee
         shall cease to be eligible to so act under Section 4.1(a), the
         Preferred Securities Guarantee Trustee shall immediately resign in the
         manner and with the effect set out in Section 4.2(c).

                  (c) If the Preferred Securities Guarantee Trustee has or shall
         acquire any "conflicting interest" within the meaning of Section 310(b)
         of the Trust Indenture Act, the Preferred Securities Guarantee Trustee
         and Guarantor shall in all respects comply with the provisions of
         Section 310(b) of the Trust Indenture Act.

SECTION 4.2 Appointment, Removal and Resignation of Preferred Securities
Guarantee Trustee

                  (a) Subject to Section 4.2(b), the Preferred Securities
         Guarantee Trustee may be appointed or removed without cause at any time
         by the Guarantor except during an Event of Default.

                  (b) The Preferred Securities Guarantee Trustee shall not be
         removed in accordance with Section 4.2(a) until a Successor Preferred
         Securities Guarantee Trustee has been appointed and has accepted such
         appointment by written instrument executed by such Successor Preferred
         Securities Guarantee Trustee and delivered to the Guarantor.

                  (c) The Preferred Securities Guarantee Trustee shall hold
         office until a Successor Preferred Securities Guarantee Trustee shall
         have been appointed or until its removal or resignation. The Preferred
         Securities Guarantee Trustee may resign from office (without need for
         prior or subsequent accounting) by an instrument in writing executed by
         the Preferred Securities Guarantee Trustee and delivered to the
         Guarantor, which resignation shall not take effect until a Successor
         Preferred Securities Guarantee Trustee has been appointed and has
         accepted such appointment by instrument in writing executed by such
         Successor Preferred Securities Guarantee Trustee and delivered to the
         Guarantor and the resigning Preferred Securities Guarantee Trustee.

                                      -11-

<PAGE>   16

                  (d) If no Successor Preferred Securities Guarantee Trustee
         shall have been appointed and accepted appointment as provided in this
         Section 4.2 within 60 days after delivery of an instrument of removal
         or resignation, the Preferred Securities Guarantee Trustee resigning or
         being removed may petition any court of competent jurisdiction for
         appointment of a Successor Preferred Securities Guarantee Trustee. Such
         court may thereupon, after prescribing such notice, if any, as it may
         deem proper, appoint a Successor Preferred Securities Guarantee
         Trustee.

                  (e) No Preferred Securities Guarantee Trustee shall be liable
         for the acts or omissions to act of any Successor Preferred Securities
         Guarantee Trustee.

                  (f) Upon termination of this Preferred Securities Guarantee or
         removal or resignation of the Preferred Securities Guarantee Trustee
         pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
         Securities Guarantee Trustee all amounts due to the Preferred
         Securities Guarantee Trustee accrued to the date of such termination,
         removal or resignation.

                                    ARTICLE V
                                    GUARANTEE

SECTION 5.1 Guarantee

         The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

SECTION 5.2 Waiver of Notice and Demand

         The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3 Obligations Not Affected

         The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

                                      -12-

<PAGE>   17

                  (a) the release or waiver, by operation of law or otherwise,
         of the performance or observance by the Issuer of any express or
         implied agreement, covenant, term or condition relating to the
         Preferred Securities to be performed or observed by the Issuer;

                  (b) the extension of time for the payment by the Issuer of all
         or any portion of the Distributions, Redemption Price, Liquidation
         Distribution or any other sums payable under the terms of the Preferred
         Securities or the extension of time for the performance of any other
         obligation under, arising out of, or in connection with, the Preferred
         Securities (other than an extension of time for payment of
         Distributions, Redemption Price, Liquidation Distribution or other sum
         payable that results from the extension of any interest payment period
         on the Debentures permitted by the Indenture);

                  (c) any failure, omission, delay or lack of diligence on the
         part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Preferred Securities, or any action on the part of the
         Issuer granting indulgence or extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment of debt of, or other similar proceedings
         affecting, the Issuer or any of the assets of the Issuer;

                  (e) any invalidity of, or defect or deficiency in, the
         Preferred Securities;

                  (f) the settlement or compromise of any obligation guaranteed
         hereby or hereby incurred; or

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor,

it being the intent of this Section 5.3 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4 Rights of Holders

                  (a) The Holders of a Majority in Liquidation Amount of the
         Preferred Securities have the right to direct the time, method and
         place of conducting any proceeding for any remedy available to the
         Preferred Securities Guarantee Trustee in respect of this Preferred
         Securities Guarantee or exercising any trust or power conferred upon
         the Preferred Securities Guarantee Trustee under this Preferred
         Securities Guarantee.

                                      -13-

<PAGE>   18

                  (b) Any Holder of Preferred Securities may institute a legal
         proceeding directly against the Guarantor to enforce the Preferred
         Securities Guarantee Trustee's rights under this Preferred Securities
         Guarantee, without first instituting a legal proceeding against the
         Issuer, the Preferred Securities Guarantee Trustee or any other person
         or entity. The Guarantor waives any right or remedy to require that any
         action be brought first against the Issuer or any other person or
         entity before proceeding directly against the Guarantor.

SECTION 5.5 Guarantee of Payment

         This Preferred Securities Guarantee creates a guarantee of payment and
not of collection. This Preferred Securities Guarantee will not be discharged
except by payment of the Guarantee Payments in full (without duplication of
amounts theretofore paid by the Issuer) or upon distribution of Debentures to
Holders as provided in the Declaration.

SECTION 5.6 Subrogation

         The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

SECTION 5.7 Independent Obligations

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.

                                   ARTICLE VI
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions

         So long as any Preferred Securities remain outstanding, the Guarantor
shall not, and shall not permit any subsidiary of the Guarantor to, (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Guarantor's capital stock,
(ii) make any payment of principal, interest or premium, if any, on, or repay or
repurchase or redeem any debt securities of the Guarantor that rank pari passu
in all respects with or junior in interest to the Debentures or (iii) make any
guarantee payments with respect to any

                                      -14-

<PAGE>   19

guarantee by the Guarantor of the debt securities of any subsidiary of the
Guarantor if such guarantee ranks pari passu or junior in interest to the
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants, rights to subscribe for or purchase shares of, common stock of the
Guarantor, (b) any declaration of a dividend in connection with the
implementation or extension of a stockholder's rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of any
such rights pursuant thereto, (c) payments under this Preferred Securities
Guarantee, (d) as a result of a reclassification of the Guarantor's capital
stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) acquisitions of
common stock of the Guarantor in connection with the satisfaction of its
obligations under any benefit plan for its directors, officers or employees), if
at such time (i) there shall have occurred and be continuing any event of which
the Guarantor has actual knowledge (a) that is, or with the giving of notice or
the lapse of time, or both, would be an Event of Default under the Indenture and
(b) in respect of which the Guarantor shall not have taken reasonable steps to
cure, (ii) the Guarantor shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or (iii) the Guarantor
shall have given notice of its election of an Extension Period (as defined in
the Indenture) pursuant to the terms of the Debentures and shall not have
rescinded such notice, and any such Extension Period, or any extension thereof,
shall be continuing.

SECTION 6.2 Ranking

         This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XIII of the Indenture shall apply to the obligations of the Guarantor
under this Preferred Securities Guarantee as if (x) such Article XIII were set
forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XIII, and (ii) pari passu with the
Debentures and with any Other Guarantee.

                                   ARTICLE VII
                                   TERMINATION

SECTION 7.1 Termination

         This Preferred Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price (as
defined in the Declaration) of all Preferred Securities, (ii) the distribution
of the Debentures to the Holders of all of the Preferred Securities, or (iii)
full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.

                                      -15-

<PAGE>   20

                                  ARTICLE VIII
                                 INDEMNIFICATION

SECTION 8.1 Exculpation

                  (a) No Indemnified Person shall be liable, responsible or
         accountable in damages or otherwise to the Guarantor or any Covered
         Person for any loss, damage or claim incurred by reason of any act or
         omission performed or omitted by such Indemnified Person in good faith
         in accordance with this Preferred Securities Guarantee and in a manner
         that such Indemnified Person reasonably believed to be within the scope
         of the authority conferred on such Indemnified Person by this Preferred
         Securities Guarantee or by law, except that an Indemnified Person shall
         be liable for any such loss, damage or claim incurred by reason of such
         Indemnified Person's negligence or willful misconduct with respect to
         such acts or omissions.

                  (b) An Indemnified Person shall be fully protected in relying
         in good faith upon the records of the Guarantor and upon such
         information, opinions, reports or statements presented to the Guarantor
         by any Person as to matters the Indemnified Person reasonably believes
         are within such other Person's professional or expert competence and
         who has been selected with reasonable care by or on behalf of the
         Guarantor, including information, opinions, reports or statements as to
         the value and amount of the assets, liabilities, profits, losses, or
         any other facts pertinent to the existence and amount of assets from
         which Distributions to Holders of Preferred Securities might properly
         be paid.

SECTION 8.2 Indemnification

         The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee or resignation or removal of the Preferred
Securities Guarantee Trustee.

                                   ARTICLE IX
                                  MISCELLANEOUS

SECTION 9.1 Successors and Assigns

         All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.

                                      -16-

<PAGE>   21

SECTION 9.2 Amendments

         Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Preferred Securities apply to the giving
of such approval.

SECTION 9.3 Notices

         All notices provided for in this Preferred Securities Guarantee 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 Issuer, in care of the Administrative
         Trustees at the Issuer's mailing address set forth below:

                           American General Capital II
                           c/o American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019-2155
                           Attention: Treasury Department
                           Telecopy: (713) 522-3847

                  (b) If given to the Preferred Securities Guarantee Trustee, at
         the Preferred Securities Guarantee Trustee's mailing address set forth
         below (or such other address as the Preferred Securities Guarantee
         Trustee may give notice of to the Holders of the Preferred 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

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

                           American General Corporation
                           2929 Allen Parkway
                           Houston, Texas 77019-2155
                           Attention: Treasury Department
                           Telecopy: (713) 522-3847

                                      -17-

<PAGE>   22

                  (d) If given to any Holder of Preferred Securities, at the
         address set forth on the books and records of the Issuer.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 9.4 Benefit

         This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.

SECTION 9.5 Governing Law

         THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

SECTION 9.6 Counterparts.

         This Preferred Securities Guarantee may contain more than one
counterpart of the signature page and this Preferred Securities Guarantee may be
executed by the affixing of the signature of each of the parties 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.

                                      -18-

<PAGE>   23

         THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                          AMERICAN GENERAL CORPORATION,
                                          as Guarantor

                                          By:
                                             -----------------------------------
                                          Name: Nicholas R. Rasmussen
                                          Title: Executive Vice President,
                                                   Chief Financial Officer and
                                                   Treasurer

                                          BANKERS TRUST COMPANY,
                                          as Preferred Securities Guarantee
                                          Trustee

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

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