Distribution Agreement - American International Group Inc.
AMERICAN INTERNATIONAL GROUP, INC.
U.S. $780,546,000
Medium-Term Notes, Series F
Due Nine Months or More
from Date of Issue
Distribution Agreement
January 26, 2001
Chase Securities Inc.,
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated,
Salomon Smith Barney Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
American International Group, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell up to U.S. $780,546,000 aggregate
principal amount (or the equivalent thereof in one or more foreign currencies or
currency units) of its Medium-Term Notes, Series F, due nine months or more from
date of issue (the "Securities") and agrees with each of you (individually, an
"Agent", and collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein, the Company
hereby (i) appoints each Agent as an agent of the Company for the purpose of
soliciting and receiving offers to purchase the Securities from the Company and
(ii) agrees that whenever it determines to sell Securities directly to any Agent
as principal for resale to others, it will, if requested by such Agent, enter
into a separate agreement, substantially in the form of Annex I hereto, relating
to such sale or another agreement (which may be oral and confirmed in writing)
relating to the purchase by such Agent as principal (each a "Terms Agreement"),
in each case in accordance with Section 2(b) hereof. The Company reserves the
right to sell Securities directly on its own behalf and to enter into agreements
substantially identical hereto with other broker-dealers as Agents. This
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of the Agents to purchase
Securities as principal.
The terms and rights of the Securities shall be as specified
in or established pursuant to the Indenture, dated as of July 15, 1989, between
the Company and The Bank of New York as Trustee (the "Trustee"), and is referred
to
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herein as the "Indenture". The Securities shall have the maturity ranges, annual
interest rates (if any), redemption provisions and other terms set forth in the
Prospectus referred to below as it may be supplemented from time to time. The
Securities will be issued, and the terms thereof established, from time to time
by the Company in accordance with the Indenture and the Administrative Procedure
attached hereto as Annex II (the "Procedure") and, if applicable, will be
specified in a related Terms Agreement.
1. The Company represents and warrants to, and agrees with
each Agent that:
(a) Two registration statements on Form S-3 (Registration No.
33-60827 and Registration No. 333-31024) in respect of the Securities have been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statements and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to such Agent, excluding exhibits
to such registration statements, but including all documents incorporated by
reference in the prospectus included in the latest registration statement, have
been declared effective by the Commission in such form; no other document with
respect to the latest registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with the
Commission (other than the prospectuses filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Act")); and no stop order suspending
the effectiveness of any such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in the latest registration statement or
filed with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statements, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the registration statements at the time such part of the
registration statements became effective but excluding Form T-1, each as amended
at the time such part of the registration statements became effective, are
hereinafter collectively called the "Registration Statement"; the prospectus
(including, if applicable, any prospectus supplement) relating to the
Securities, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable form
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the Prospectus that
sets forth only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to and include the Prospectus
as amended or supplemented (including by the applicable Pricing Supplement filed
in accordance with Section 4(a) hereof) in relation to Securities to be sold
pursuant to this Agreement, in the form filed or
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transmitted for filing with the Commission pursuant to Rule 424(b) under the Act
and in accordance with Section 4(a) hereof, including any documents incorporated
by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or, in the case of an Annual Report on Form 10-K,
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or, in the case of any other document
filed under the Exchange Act, omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by any Agent
expressly for use in the Prospectus as amended or supplemented to relate to a
particular issuance of Securities, or to any statements in any such document
which does not constitute part of the Registration Statement or Prospectus
pursuant to Rule 412 under the Act;
(c) The Registration Statement and the Prospectus conform, and
any amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any supplement thereto, contain an untrue
statement of a material fact or, in the case of the Registration Statement, omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or, in the case of the Prospectus, omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility (Form T-1)
under the Trust Indenture Act of the Trustee, (ii) any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by any Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of Securities and (iii) any
statement which does not constitute part of the Registration Statement or
Prospectus pursuant to Rule 412 under the Act;
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of Delaware, and has full power and
authority to own its properties and to conduct its business as described in the
Prospectus;
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(e) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, as amended or
supplemented, there has not been any material change in the capital stock (other
than as occasioned by Common Stock having been issued pursuant to the Company's
employee stock purchase plans, employee stock option plans and upon conversion
of convertible securities) or any material increase in the consolidated
long-term debt of the Company or any material adverse change in or affecting the
consolidated financial position, shareholders' equity or results of operations
of the Company and its consolidated subsidiaries otherwise than as set forth or
contemplated in such Prospectus, as amended or supplemented (a "Material Adverse
Change");
(f) The series constituting the Securities has been duly
authorized and established in conformity with the Indenture and, when the terms
of a particular Security and of the issue and sale thereof have been duly
authorized and established by all necessary corporate action in conformity with
the Indenture and such Security has been duly completed, executed, authenticated
and issued in accordance with the Indenture, and delivered against payment
therefor as contemplated by this Agreement and any applicable Terms Agreement,
such Security will have been duly executed, authenticated, issued and delivered
and will constitute a valid and legally binding obligation of the Company
entitled to the benefits provided by the Indenture; the Indenture has been duly
authorized and qualified under the Trust Indenture Act and constitutes a valid
and legally binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture conforms and the Securities will conform in all material respects to
the descriptions thereof in the Prospectus;
(g) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, or result
in any violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties, except, in each case, for such conflicts, breaches, defaults and
violations that would not have a material adverse effect on the business,
financial position, shareholders' equity or results of operations of the Company
and its Subsidiaries taken as a whole (a "Material Adverse Effect") or affect
the validity of the Securities, nor will such action result in any violation of
the provisions of the Restated Certificate of Incorporation, as amended, or the
By-Laws of the Company; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required by the Company for the solicitation of offers to purchase
Securities and the issue and sale of the Securities or the consummation by the
Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such consents, approvals, authorizations,
orders, registrations, or qualifications the failure to obtain or make would not
have a Material Adverse Effect or affect the validity of the Securities, and
such consents, approvals, authorizations, orders, registrations or
qualifications as have been, or will have been prior to the date of this
Agreement,
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obtained under the Act or the Trust Indenture Act and such consents, approvals,
authorizations, orders, registrations or qualifications as may be required under
state securities or Blue Sky laws (including insurance laws of any state
relating to offers and sales of securities in such state) in connection with the
solicitation by such Agent of offers to purchase the Securities from the Company
and with purchases of the Securities by such Agent as principal, as the case may
be, both in the manner contemplated hereby;
(h) There is no action, suit or proceeding pending, or to the
knowledge of the executive officers of the Company, threatened against the
Company or any of its subsidiaries, which has, or may reasonably be expected in
the future to have, a Material Adverse Effect, except as set forth or
contemplated in the Prospectus, as amended or supplemented; and, at each Time of
Delivery (as defined in Section 2(b) hereof), there will not be any action, suit
or proceeding pending, or to the knowledge of the executive officers of the
Company, threatened against the Company or any of its subsidiaries, which will
have had, or may reasonably be expected in the future to have, a Material
Adverse Effect except as set forth or contemplated in the Prospectus, as amended
or supplemented;
2. (a) On the basis of the representations and warranties, and
subject to the terms and conditions, herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its best
efforts to solicit and receive offers to purchase the Securities from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. Upon receipt
of instructions from the Company, the Agents will forthwith suspend solicitation
of offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed. During such time
as the solicitation of offers to purchase the Securities shall be suspended, the
Company shall not be required to comply with the provisions of Sections 4(g),
4(h) and 4(i).
The Company agrees to pay each Agent a commission, at the time
of settlement of each sale of Securities by the Company as a result of a
solicitation made by such Agent, in an amount to be agreed to by the Company and
such Agent at the time of solicitation, it being understood and agreed that the
commissions may not be the same for each Agent.
As Agents, you are authorized to solicit offers to purchase
the Securities only in authorized denominations as set forth in the Prospectus
at a purchase price equal to 100% of their principal amount unless otherwise
indicated on the applicable pricing supplement to the Prospectus. Each Agent
shall communicate to the Company, orally or in writing, each offer to purchase
Securities other than those rejected by such Agent. The Company shall have the
sole right to accept offers to purchase Securities and may reject any proposed
purchase of Securities as a whole or in part. The Agents shall have the right,
in their discretion reasonably exercised, to reject any offer to purchase
Securities, as a whole or in part, and any such rejection by the Agents shall
not be deemed a breach of their agreements contained herein.
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(b) Unless the Company and the Agents otherwise agree, each
sale of Securities to any Agent as principal shall be made in accordance with
the terms of this Agreement and a Terms Agreement which will provide for the
sale of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent. The commitment of any Agent to purchase Securities
pursuant to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms Agreement
shall include a specification of the principal amount of Securities to be
purchased by any Agent pursuant thereto, the price to be paid to the Company for
such Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities, and the time (each a "Time of Delivery") and place of delivery of
and payment for such Securities. Such Terms Agreement shall also specify any
requirements for officers' certificates, opinions of counsel and accountants'
letters pursuant to Section 4 hereof.
(c) Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase, and purchases by any Agent
as principal of, Securities, and the payment in each case therefor, are set
forth in the Procedure. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by each
of them in the Procedure as it may be amended from time to time by written
agreement between the Agents and the Company.
(d) Each Agent agrees, with respect to any Security
denominated in a currency other than U.S. dollars, as agent, directly or
indirectly, not to solicit offers to purchase, and as a principal under any
Terms Agreement or otherwise, directly or indirectly, not to offer, sell or
deliver, such Security in, or to residents of, the country issuing such currency
(or if such Security is denominated in euros, not to residents of the 11 member
states of the European Monetary Union; or if such Security is denominated in a
composite currency, not to residents in any country issuing a currency
comprising a portion of such composite currency), except, in each case, as
permitted by applicable law.
3. Any documents required to be delivered pursuant to Section
6 hereof shall be made available to the Agents at the office of the Company's
counsel, Sullivan & Cromwell, 125 Broad Street, New York, New York 10004.
4. The Company covenants and agrees with each Agent:
(a) To make no amendment or supplement (other than an
amendment or supplement as a result of the Company's filing of its periodic
reports under the Exchange Act) to the Registration Statement or the Prospectus
after the date of any Terms Agreement and prior to the related Time of Delivery
which shall be disapproved by any Agent promptly after reasonable notice
thereof; to make no such amendment or supplement at any other time prior to
having afforded each Agent a reasonable opportunity to review it; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and during
such same period to advise each Agent, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
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has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with, or transmitted for filing to, the
Commission (other than an amendment or supplement as a result of the Company's
filing of its periodic reports under the Exchange Act), of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Securities, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any such prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such
Agent may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as such Agent may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the distribution or sale of
the Securities; provided, however, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, and with copies of the Prospectus as each
time amended or supplemented, other than any Pricing Supplement (except as
provided in the Procedure), in the form in which it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the Act,
both in such quantities as such Agent may reasonably request from time to time;
and, if the delivery of a prospectus is required at any time within nine (9)
months after sale of the Securities (including Securities purchased from the
Company by such Agent as principal) and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify such Agent
as promptly as practicable and request such Agent to suspend solicitation of
offers to purchase Securities from the Company, in its capacity as agent of the
Company and, if so notified, such Agent shall forthwith cease such
solicitations; and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal, the Company shall promptly prepare and file with the Commission such
an amendment or supplement, the expense of such preparation and filing to be
borne by the Company if such amendment or supplement occurs within six months of
the
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date of the relevant Pricing Supplement and if after such six month period, by
such Agent;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than 90 days after the close of
the period covered thereby, an earnings statement or statements of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder (including,
at the option of the Company, Rule 158) and covering each twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the date of any sale of Securities hereunder;
(e) That, from the date of any Terms Agreement with such Agent
and continuing to and including the earlier of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as notified to the
Company by such Agent and (ii) the related Time of Delivery, the Company will
not, without the prior written consent of such Agent, offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which mature
more than nine months after such Time of Delivery and which are substantially
similar to the Securities; provided, however, the foregoing restriction shall
not apply to an issue of debt securities denominated in a currency other than
U.S. dollars or to an issue of debt securities at least 90% of which is offered
and sold outside the United States;
(f) That each acceptance by the Company of an offer to
purchase Securities hereunder, and each sale of Securities to such Agent
pursuant to a Terms Agreement, shall be deemed to be an affirmation to such
Agent that the representations and warranties of the Company contained in or
made pursuant to this Agreement are true and correct, in all material respects,
as of the date of such acceptance or of such Terms Agreement as though made at
and as of such time (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented at
such time);
(g) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment or
supplement relating solely to the terms of the Securities offered and other than
the filing by the Company of a report under the Exchange Act), and each time, if
so indicated in the applicable Terms Agreement, the Company sells Securities to
such Agent as principal, the Company shall furnish or cause to be furnished
forthwith to such Agent, upon its request, a certificate of officers of the
Company satisfactory to such Agent, dated the date of such supplement,
amendment, incorporation or Time of Delivery related to such sale, in form
satisfactory to such Agent in its reasonable judgment to the effect that the
statements contained in the certificate referred to in Section 6(g) hereof which
were last furnished to such Agent are true and correct, in all material
respects, at such date, as though made at and as of such date (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, certificates of the same tenor as the certificates referred to in
said Section 6(g) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(h) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment or
supplement relating solely to the terms of the Securities offered and other than
the filing by the
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Company of a report under the Exchange Act), and each time, if so indicated in
the applicable Terms Agreement, the Company sells Securities to such Agent as
principal, the Company shall furnish or cause to be furnished forthwith to such
Agent, upon its request, a written opinion of Sullivan & Cromwell, counsel for
the Company, and a written opinion of Kathleen E. Shannon, Vice President,
Secretary and Associate General Counsel of the Company, or, in either case,
other counsel satisfactory to such Agent in its reasonable judgment, dated the
date of such amendment, supplement, incorporation or Time of Delivery relating
to such sale, each in form satisfactory to such Agent in its reasonable judgment
to the effect that such Agent may rely on the opinion referred to in Section
6(c) or (d) hereof, as the case may be, which was last furnished to such Agent
to the same extent as though it were dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of either such opinion, an opinion of the same tenor as
the opinion referred to in Section 6(c) or (d) hereof, as the case may be, but
modified to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by the filing of a
report under the Exchange Act) to set forth financial information included in or
derived from the Company's consolidated financial statements, or, if so
indicated in the applicable Terms Agreement, each time the Company sells
Securities to such Agent as principal, the Company shall cause its independent
public accountants forthwith to furnish such Agent, upon its request, a letter,
dated the date of such amendment, supplement, incorporation or Time of Delivery
relating to such sale, in form satisfactory to such Agent in its reasonable
judgment, of the same tenor as the letter referred to in Section 6(e) hereof but
modified to relate to the Registration Statement and the Prospectus as amended
or supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other information
derived from the accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more than five
business days prior to the date of such letter; provided, however, that where
such amendment or supplement only sets forth unaudited quarterly financial
information, the scope of such letter may be limited to relate to such unaudited
financial information unless any other accounting or financial information
included therein is of a character that, in the reasonable judgment of the
Agents, such other information should be addressed by such letter; and
(j) In addition to the situations described in Sections (g),
(h) and (i) of this Section 4, any Agent may request in writing the
certificates, opinions and letters contemplated by these Sections, on an annual
basis, after the filing of the Company of its Annual Report on Form 10-K. If
such request is made, the Company may either comply with such request or
exercise its right to instruct the requesting Agent to suspend solicitations as
contemplated by Section 2.
5. The Company covenants and agrees with each Agent that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the
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mailing and delivering of copies thereof to such Agent; (ii) the reasonable fees
and expenses of counsel for the Agents in connection with the transactions
contemplated hereunder; (iii) the cost of printing, word-processing or
reproducing this Agreement, any Terms Agreement, any Indenture, any Blue Sky and
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses in
connection with the qualification of the Securities for offering and sale under
state securities laws as provided in Section 4(b) hereof, including fees and
disbursements of the Company's counsel in connection with such qualification and
in connection with the Blue Sky and legal investment surveys; (v) any fees
charged by security rating services for rating the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with any Indenture and the Securities; (viii) any advertising
expenses connected with the solicitation of offers to purchase and the sale of
Securities so long as such advertising expenses have been approved by the
Company; and (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. Each Agent shall pay all other fees and expenses it incurs.
6. The obligation of any Agent, as agent of the Company, to
solicit offers to purchase the Securities and the obligation of any Agent to
purchase Securities as principal, pursuant to any Terms Agreement, shall be
subject, in such Agent's reasonable discretion, to the condition that all
representations and warranties and other statements of the Company herein are
true and correct, in all material respects, at and as of the date of this
Agreement, the date of each such solicitation, any settlement date related to
the acceptance of such an offer, and each Time of Delivery, the condition that
the Company shall have performed, in all material respects, all of its
obligations hereunder theretofore in each case to be performed and the following
additional conditions, where applicable:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission or to the knowledge of
the executive officers of the Company, shall be contemplated by the Commission;
and all requests for additional information on the part of the Commission shall
have been complied with to the reasonable satisfaction of such Agent;
(b) Such Agent shall have received, upon its request, from
Davis Polk & Wardwell, counsel to the Agents, such opinion, dated the date of
this agreement and the Time of Delivery as specified in the applicable Terms
Agreement, with respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus as amended or
supplemented, and other related matters as such Agent may reasonably require,
and the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such matters;
(c) Such Agent shall have received an opinion or opinions of
Sullivan & Cromwell, counsel for the Company, dated any applicable date referred
to in Section 4(h) to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware;
10
<PAGE> 11
(ii) The Registration Statement, as of the date it became
effective, and the Prospectus as amended or supplemented, as of the
date of such opinion, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder (except that no opinion need be expressed as to financial
statements and other financial data derived from the Company's
accounting records);
(iii) Nothing has come to the attention of such counsel in
their review (as described in such opinion) that has caused them to
believe that the Registration Statement, as of the date the
Registration Statement became effective, contained any untrue statement
of material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as amended or supplemented, as of
the date of such opinion, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, (except that (A) no opinion need be expressed as
to financial statements and other financial data derived from the
Company's accounting records or as to the statement of the eligibility
of the Trustee and (B) such counsel may state that they assume no
responsibility for the accuracy or fairness of the statements contained
in the Registration Statement and the Prospectus as amended or
supplemented except for those made under the captions "Description of
Debt Securities AIG May Offer" in the Prospectus and "Description of
Notes AIG May Offer" and "Supplemental Plan of Distribution" in the
Prospectus as amended or supplemented, insofar as they relate to
provisions of documents therein described);
(iv) The series constituting the Securities has been duly
authorized and established in conformity with the Indenture, and, when
the terms of a particular Security and of the issue and sale thereof
have been duly authorized and established by all necessary corporate
action in conformity with the Indenture and such Security has been duly
completed, executed, authenticated and issued in accordance with the
Indenture, and delivered against payment therefor as contemplated by
this Agreement and any applicable Terms Agreement, such Security will
constitute a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(v) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture Act; and
(vi) This Agreement (and any applicable Terms Agreement) has
been duly authorized, executed and delivered by the Company;
11
<PAGE> 12
In providing such opinion, such counsel may assume, in
connection with their opinion set forth in paragraph (iv) above, that at or
prior to the time of the delivery of each Security the authorization of the
series constituting the Securities will not have been modified or rescinded and,
with respect to each Security, that such Security will conform to the form of
the Securities examined by such counsel. Such counsel may also assume that none
of the terms of any Security nor the issuance and delivery of such Security, nor
the compliance by the Company with the terms of such Security will result in a
violation of any agreement or instrument then binding upon the Company, or
violate any applicable law or any restriction imposed by any court or
governmental body having jurisdiction over the Company. Such counsel may also
state in rendering their opinion set forth in paragraph (iv) above, that, as of
the date of such opinion, a judgment for money in an action based on Securities
denominated in foreign currencies or currency units in a Federal or State court
in the United States ordinarily would be enforced in the United States only in
U.S. dollars and that the date used to determine the rate of conversion of the
foreign currency or currency unit in which a particular Security is denominated
into U.S. dollars will depend upon various factors, including which court
renders the judgment;
(d) Such Agent shall have received an opinion of Kathleen E.
Shannon, Vice President, Secretary and Associate General Counsel of the Company,
dated any applicable date referred to in Section 4(i) to the effect that:
(i) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented;
(ii) To the best knowledge and information of such counsel,
there are no contracts or other documents required to be summarized or
disclosed or filed as exhibits to the Registration Statement other than
those filed as exhibits thereto, and there are no legal or governmental
proceedings pending or threatened of a character required to be
disclosed in the Registration Statement and the Prospectus as amended
or supplemented which are not disclosed and properly described therein;
(iii) The issue and sale of the Securities (provided that the
terms of such securities shall have been established by all necessary
corporate action in conformity with the Indenture), and the compliance
by the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Terms Agreement, will not result in a
breach of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, loan agreement,
or other material agreement or instrument in effect on the date of such
opinion and known to such counsel, to which the Company is a party or
by which the Company may be bound or to which any of the property or
assets of the Company is subject or violate any judgment, order or
decree of any court or governmental body applicable to the Company,
except for such breaches and defaults that would not have a Material
Adverse Effect or affect the validity of the Securities, nor will such
action result in any violation of the provisions of the Restated
Certificate of Incorporation, as amended, or the By-Laws of the Company
in effect on the date of such opinion; and no consent, approval,
authorization, order, registration or qualification of or with any
court or any regulatory authority
12
<PAGE> 13
or other governmental body is required for the issue and sale of the
Securities or the consummation by the Company of the other transactions
contemplated by this Agreement (and any applicable Terms Agreement) or
the Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
orders, registrations or qualifications the failure to obtain or make
would not have a Material Adverse Effect or affect the validity of the
Securities and as may be required under state securities or Blue Sky
laws (including insurance laws of any state relating to offers and
sales of securities in such state) in connection with solicitation by
the Agents of the Company of offers to purchase Securities and with
purchases of Securities by the Agents and any other firms as
principals, as the case may be, both as contemplated by this Agreement
(and any applicable Terms Agreement); and
(iv) Nothing which came to the attention of such counsel has
caused her to believe that the Registration Statement, as of the date
the Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented, as of the date of such opinion, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that any
document incorporated by reference in the Prospectus, as amended or
supplemented on the date of such document's filing with the Commission,
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(except that (A) no opinion need be expressed as to financial
statements and financial data derived from the Company's accounting
records or as to the statement of the eligibility of the Trustee and
(B) such counsel may state that she assumes no responsibility for the
accuracy and fairness of the statements contained in the Registration
Statement or the Prospectus as amended or supplemented or any document
incorporated by reference in the Prospectus except for those made under
the captions relating to the "Description of Debt Securities AIG May
Offer" in the Prospectus and "Description of Notes AIG May Offer" and
"Supplemental Plan of Distribution" in the Prospectus as amended or
supplemented, insofar as they relate to provisions of documents therein
described); and the documents incorporated by reference in the
Prospectus as amended or supplemented (except that no opinion need be
expressed as to financial statements and financial data derived from
the Company's accounting records), as of the date they became effective
or were filed with the Commission, as the case may be, complied as to
form in all material respects with the Act and the Exchange Act and the
rules and regulations thereunder;
(e) At 11:00 A.M., New York City time, on any applicable date
referred to in Section 4(i), the independent accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
such Agent a letter, dated such applicable date, in form and substance
satisfactory to such Agent, to the effect set forth in Annex III hereto;
(f) Since the respective dates as of which information is
given in the Prospectus, as amended or supplemented, there shall not have
occurred any material
13
<PAGE> 14
change in or affecting the business or properties of the Company or its material
subsidiaries which, in the judgment of the Agents, materially impairs the
investment quality of the Securities;
(g) The Company shall have furnished or caused to be furnished
to such Agent a certificate of the Chairman of the Board, the President, any
Vice Chairman, or any Executive or Senior Vice President and a principal
financial or accounting officer of the Company, dated any applicable date
referred to in Section 4(g) in which such officers, to the best of their
knowledge after reasonable investigation, shall state that the representations
and warranties of the Company in this Agreement are true and correct, in all
material respects, as of such applicable date, that the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied, in all material respects, at or prior to such applicable date, that
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
threatened by the Commission, and that, since the respective dates as of which
information is given in the Prospectus, as amended or supplemented, there has
not been any Material Adverse Change, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented; and
(h) During the period between the date of any Terms Agreement
and the related Time of Delivery, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange if the effect of any such event, in the
reasonable judgment of such Agent, is to make it impracticable or inadvisable to
proceed with the solicitation by such Agent of offers to purchase Securities or
the purchase by such Agent of Securities from the Company, as principal; (ii) a
general moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war if the effect of any such event in the
reasonable judgment of such Agent is to make it impracticable or inadvisable to
proceed with the solicitation by such Agent of offers to purchase Securities or
the purchase of Securities by such Agent from the Company as principal on the
terms and in the manner contemplated by the Prospectus, as amended or
supplemented; (iv) the suspension in trading in the common stock of the Company
on the New York Stock Exchange if the effect of such event in the reasonable
judgment of such Agent is to make it impracticable or inadvisable to proceed
with the solicitation by such Agent of offers to purchase Securities or the
purchase of Securities by such Agent from the Company as principal; or (v) any
downgrading in the rating accorded the Company's senior debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus as amended or supplemented, and any other
prospectus relating to the Securities or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such
14
<PAGE> 15
Agent for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such action or claim as incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the Securities
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly for use in
the Prospectus as amended or supplemented; and provided, further, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any Preliminary Prospectus, the indemnity agreement contained
in this Section 7(a) shall not apply to any such losses, claims, damages or
liabilities asserted against such Agent by any purchaser of Securities to the
extent that such losses, claims, damages or liabilities result from the fact
that a copy of the Prospectus furnished by the Company (excluding any documents
incorporated by reference therein) was not sent or given to such purchaser at or
prior to the written confirmation of the sale of such Securities to such
purchaser.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any
15
<PAGE> 16
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities purchased by or through it were sold exceeds the amount of any
damages which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the
16
<PAGE> 17
Company and to each person, if any, who controls the Company within the meaning
of the Act.
8. In soliciting offers by others to purchase Securities from
the Company, each Agent is acting solely as agent for the Company, and not as
principal (other than in respect of any purchase by an Agent pursuant to a Terms
Agreement). Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company has been accepted by the Company, but such Agent shall not have any
liability to the Company in the event such purchase for any reason is not
consummated. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall hold
each Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company or its officers set
forth in or pursuant to this Agreement, shall remain in full force and effect
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Agent or the Company or any of its officers or
directors or any controlling person, and shall survive each delivery of and
payment for any of the Securities.
10. The provisions of this Agreement relating to the
solicitation of offers to purchase the Securities may be suspended or terminated
at any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of any such suspension or
termination, with respect to any Agent, this Agreement shall remain in full
force and effect with respect to any Agent as to which such suspension or
termination has not occurred and no party shall have any liability to the other
party hereto, except as provided in the third paragraph of Section 2(a), Section
5, Section 7, Section 8 and Section 9 and except that, if at the time of such
suspension or termination, an offer for the purchase of Securities shall have
been accepted by the Company but the delivery of the Securities relating thereto
to the purchaser or his agent shall not yet have occurred, the Company shall
have the obligations provided in subsections (f), (g), (h) and (i) of Section 4.
11. Except as otherwise specifically provided herein or in the
Procedure, all statements, requests, notices and advices hereunder shall be in
writing, or by telephone if promptly confirmed in writing, and if to Chase
Securities Inc. shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to 270 Park Avenue, 8th Floor, New
York, New York 10017, Facsimile Transmission No. (212) 834-6170, Attention:
Louis DeCaro, and if to Goldman, Sachs & Co. shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 363-7609,
Attention: Credit Department, and if to Merrill Lynch, Pierce, Fenner & Smith
Incorporated shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to World Financial Center at North
Tower, 10th Floor, 250 Vesey Street, New York, New York 10281, Facsimile
Transmission No. (212) 449-2234, Attention: MTN Product Management, and if to
Morgan Stanley & Co. Incorporated shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 1585 Broadway,
2nd Floor, New York, New York 10036, Facsimile Transmission No. (212) 761-0785,
Attention: Manager - Continuously Offered Products, with a copy to: Morgan
Stanley &
17
<PAGE> 18
Co. Incorporated, 1585 Broadway, 34th Floor, New York, New York 10036,
Attention: Peter Cooper - Investment Banking Information Center, Facsimile
Transmission No. (212) 761-0260 and if to Salomon Smith Barney Inc. shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to Seven World Trade Center, 32nd Floor, New York, New York,
10048, Facsimile Transmission No. (212) 783-2274, Attention: Medium-Term Note
Department, and if to the Company shall be sufficient in all respects when
delivered or sent by registered mail to 70 Pine Street, New York, New York
10270, Facsimile Transmission No.(212) 785-1584, Attention: Corporate Secretary.
12. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and the Company, and to the
extent provided in Section 7 and Section 9 hereof, the officers and directors of
the Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason of such purchase.
13. This Agreement and any Terms Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
14. Time shall be of the essence in this Agreement and any
Terms Agreement.
15. This Agreement and any Terms Agreement may be executed by
any one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
18
<PAGE> 19
If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, whereupon this letter and
the acceptance by each of you thereof shall constitute a binding agreement
between the Company and each of you in accordance with its terms.
Very truly yours,
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ Carol A. McFate
----------------------------
Name: Carol A. McFate
Title: Vice President and Treasurer
Accepted in New York, New York, as of the date hereof:
Chase Securities Inc.
By /s/ Louis DeCaro
-------------------------------------
Name: Louis DeCaro
Title: Managing Director
/s/ Goldman, Sachs & Co.
-----------------------------------------
(Goldman, Sachs & Co.)
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
By /s/ Scott G. Primrose
--------------------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
Morgan Stanley & Co. Incorporated
By /s/ Geoffrey Fitzgerald
--------------------------------------
Name: Geoffrey Fitzgerald
Title: Principal
Salomon Smith Barney Inc.
By /s/ Martha D. Bailey
--------------------------------------
Name: Martha D. Bailey
Title: First Vice President & Counsel
19
<PAGE> 20
ANNEX I
American International Group, Inc.
$780,546,000
Medium-Term Notes, Series F
Terms Agreement
[Date]
[Name(s) and Address(es) of other Agent(s)]
Ladies and Gentlemen:
American International Group, Inc. (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement, dated
January 26, 2001 (the "Distribution Agreement"), between the Company on the one
hand and [Name(s) of Agent(s)] (individually, an "Agent" and collectively, the
"Agents") on the other, to issue and sell to [Name(s) of Agent(s)] the
securities specified in the Schedule hereto (the "Purchased Securities"). Each
of the provisions of the Distribution Agreement not specifically related to the
solicitation by the Agents, as agents of the Company, of offers to purchase
Securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the solicitation
of offers to purchase Securities from the Company, solely by virtue of its
execution of this Terms Agreement. Each of the representations and warranties
set forth therein shall be deemed to have been made at and as of the date of
this Terms Agreement, except that each representation and warranty in Section 1
of the Distribution Agreement which makes reference to the Prospectus shall be
deemed to be a representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission. [It shall be a condition to closing that after the date of this
Agreement and prior to the Time of Delivery specified in the Schedule hereto,
there shall not have occurred any material change in or affecting the business
or properties of the Company or its material subsidiaries which, in your
judgment, materially impairs the investment quality of the Securities.]
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Name(s) of Agent(s)] and [Name(s) of Agent(s)] agree[s] to
purchase from the Company the Purchased Securities, at the time and place, in
the principal amount and at the purchase price set forth in the Schedule hereto.
Annex I - 1
<PAGE> 21
If the foregoing is in accordance with your understanding, please sign
and return to us [___] counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
American International Group, Inc.
By:________________________________
Name:
Title:
Accepted:
[Name(s) of Agent(s)]
By:_________________________
Name:
Title:
Annex I - 2
<PAGE> 22
Schedule to Annex I
Title of Purchased Securities: Medium-Term Notes, Series F
Aggregate Principal Amount: [$-] or units of other Specified Currency
[Price to Public:]
Purchase Price by [Name(s) of -% of the principal amount of the Purchased
Agent(s)]: Securities[, plus accrued interest from ______
to ______] [and accrued amortization, if any,
from ______ to ______]
Method of and Specified Funds for [By certified or official bank check or checks,
Payment of Purchase Price: payable to the order of the Company, in [New
York] Clearing House] (by wire transfer of immediately
available funds]
[By wire transfer to a bank account specified by
the Company in [next day] [immediately available]
funds]
Indenture: Indenture, dated as of July 15, 1989,
between the Company and The Bank of New
York, as Trustee
Time of Delivery:
Closing Location for Delivery of
Securities:
Maturity:
Interest Rate: [%]
Interest Payment Dates: [months and dates]
Regular Record Date: [month and date]
Documents to be Delivered: The following documents referred to in the
Distribution Agreement shall be delivered as
a condition to the Closing:
1. The officers' certificate referred to in
Section 4(g).
2. The opinions of counsel to the Company
referred to in Section 4(h).
3. The accountants' letter referred to in
Section 4(i).
Annex I - 3
<PAGE> 23
ANNEX II
AMERICAN INTERNATIONAL GROUP, INC.
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated January 26, 2001 (the "Distribution Agreement"),
between American International Group, Inc. (the "Company") and Chase Securities
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated and Salomon Smith Barney Inc. (individually,
an "Agent" and collectively, the "Agents"), to which this Administrative
Procedure is attached as Annex II. Defined terms used herein and not defined
herein shall have the meanings given such terms in the Distribution Agreement,
the Prospectus as amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent, as principal, other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the
Annex II - 1
<PAGE> 24
Company and the Trustee to the Depositary, dated the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and the Depositary,
dated as of April 14, 1989 (the "Certificate Agreement"), and its obligations as
a participant in the Depositary, including the Depositary's Same-Day Funds
Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents. Acceptance of Offers by the
Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Book-Entry Securities. If the Company accepts an offer to purchase Book-Entry
Securities, it will confirm such acceptance in writing to the Selling Agent or
Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be
purchased;
(2) If a Fixed Rate Book-Entry Security, the interest
rate and initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is
other than U.S. dollars, the applicable Exchange Rate
for such Specified Currency;
(7) Issue Price;
(8) Selling Agent's commission or Purchasing Agent's
discount, as the case may be;
Annex II - 2
<PAGE> 25
(9) Net Proceeds to the Company;
(10) If a redeemable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price
shall decline (but not below par) on each
anniversary of the Redemption Commencement
Date;
(11) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Interest Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(12) Name, address and taxpayer identification number of
the registered owner(s);
(13) Denomination of certificates to be delivered at
settlement;
(14) Book-Entry Security or Certificated Security; and
(15) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Ratings Group:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such
time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be, which number
will be supplied by such Selling Agent or Purchasing
Agent;
(5) The interest payment period; and
Annex II - 3
<PAGE> 26
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (or, in
the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days
immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry
Securities, the Regular Record Date, as defined in
the Security) and, if calculable at that time, the
amount of interest payable on such Interest Payment
Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission or discount, as the case may be. The entry of such a deliver order
shall constitute a representation and warranty by the Trustee to the Depositary
that (a) the Global Security representing such Book-Entry Security has been
issued and authenticated and (b) the Trustee is holding such Global Security
pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at The Bank of New York, New York, New
York, DDA Account No. 8230122580, or such other account as the Company may have
previously specified to the Trustee, in funds available for immediate use in the
amount transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
Annex II - 4
<PAGE> 27
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
with a copy to the Trustee, as the case may be, at least ten copies of such
Pricing Supplement, not later than 5:00 p.m., New York City time, on the
Business Day following the Trade Date (as defined below), or if the Company and
the purchaser agree to settlement on the Business Day following the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with, or
transmitted by a means reasonably calculated to result in filing with, the
Commission via the Commission's EDGAR System pursuant to Rule 424 under the Act.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Trustee Not to Risk Own Funds:
Nothing herein shall be deemed to require the Trustee to risk or expend
its own funds in connection with any payments to the Company, the Agents or the
Depositary or any purchaser, it being understood by all parties that payments
made by the Trustee to the Company or the Agents, or the Depositary, or any
purchaser shall be made only to the extent that funds are provided to the
Trustee for such purpose. Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Annex II - 5
<PAGE> 28
SETTLEMENT
PROCEDURE TIME
---------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:15 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser
Annex II - 6
<PAGE> 29
thereof (or a person, including an indirect participant in the Depositary,
acting on behalf of such purchaser), such participants and, in turn, the Agent
for such Book-Entry Security may enter deliver orders through the Depositary's
Participant Terminal System debiting such Book-Entry Security to such
participant's account and crediting such Book-Entry Security to such Agent's
account and then debiting such Book-Entry Security to such Agent's participant
account and crediting such Book-Entry Security to the Trustee's participant
account and shall notify the Company and the Trustee thereof. Thereafter, the
Trustee will (i) promptly notify the Company of such order and the Company shall
transfer to such Agent funds available for immediate use in an amount equal to
the price of such Book-Entry Security which was credited to the account of the
Company maintained at the Trustee in accordance with Settlement Procedure I, and
(ii) deliver the withdrawal message and take the related actions described in
the preceding paragraph. If such failure shall have occurred for any reason
other than default by the applicable Agent to perform its obligations hereunder
or under the Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for the loss of its use of funds during the period when the
funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will
Annex II - 7
<PAGE> 30
confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as
the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency;
(7) Issue Price;
(8) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(9) Net Proceeds to the Company;
(10) If a redeemable Certificated Security, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date;
(11) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Interest Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(12) Name, address and taxpayer identification number of the
registered owner(s);
(13) Denomination of certificates to be delivered at settlement;
(14) Book-Entry Security or Certificated Security; and
(15) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
Annex II - 8
<PAGE> 31
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
with a copy to the Trustee, as the case may be, at least ten copies of such
Pricing Supplement, not later than 5:00 p.m., New York City time, on the
Business Day following the Trade Date, or if the Company and the purchaser agree
to settlement on the date of acceptance of such offer, not later than noon, New
York City time, on such date. The Company will arrange to have the Pricing
Supplement filed with, or transmitted by a means reasonably calculated to result
in filing with, the Commission via the Commission's EDGAR System pursuant to
Rule 424 under the Act.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Trustee Not to Risk Own Funds:
Nothing herein shall be deemed to require the Trustee to risk or expend
its own funds in connection with any payments to the Company, the Agents or any
purchaser, it being understood by all parties that payments made by the Trustee
to the Company or the Agents, or any purchaser shall be made only to the extent
that funds are provided to the Trustee for such purpose.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Annex II - 9
<PAGE> 32
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, make available for delivery the Certificated
Securities to the Selling Agent for the benefit of the purchaser of such
Certificated Securities against delivery by the Selling Agent of a receipt
therefor. On the Settlement Date the Selling Agent will deliver payment for such
Certificated Securities in immediately available funds to the Company in an
amount equal to the issue price of the Certificated Securities less the Selling
Agent's commission; provided that the Selling Agent reserves the right to
withhold payment for which it has not received funds from the purchaser. The
Company shall not use any proceeds advanced by a Selling Agent to acquire
securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, make
available for delivery the Certificated Securities to the Purchasing Agent
against delivery of payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred and make appropriate entries in its records.
Annex II - 10
<PAGE> 33
ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Sections 4(i) and 6(e), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Agents; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts
Annex III-1
<PAGE> 34
(after restatement where applicable) in the audited consolidated
financial statements for five such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302
and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial
Annex III-2
<PAGE> 35
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or as of the end of the latest period for
which financial statements are available any decreases in
consolidated net assets, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus there were any decreases in consolidated net
revenues or the total or per share amounts of income before
extraordinary items or net income, in each case as compared
with the comparable period of the preceding year, except in
each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Agents or
in documents incorporated by reference in the Prospectus specified by
the Agents, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in
Annex III-3
<PAGE> 36
the Distribution Agreement as of the date referred to in Section 6(e) thereof
and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) as of the date of the amendment, supplement,
incorporation or the Time of Delivery relating to the Terms Agreement requiring
the delivery of such letter under Section 4(i) thereof.
Annex III-4