EXHIBIT 1.1
AMERICAN INTERNATIONAL GROUP, INC.
ZERO COUPON CONVERTIBLE SENIOR DEBENTURES DUE 2031
UNDERWRITING AGREEMENT
XXXXXX XXXXXXX & CO. INCORPORATED, NOVEMBER 7, 2001
0000 XXXXXXXX,
XXX XXXX, XXX XXXX 00000.
Ladies and Gentlemen:
1. American International Group, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you (the "Underwriter"), an aggregate of $1,519,734,000
principal amount of Zero Coupon Convertible Senior Debentures Due 2031 (the
"Firm Securities"), convertible into shares of common stock, par value $2.50 per
share (the "Stock"), of the Company and, at the election of the Underwriter, up
to an aggregate of $227,960,000 additional principal amount of Zero Coupon
Convertible Senior Debentures Due 2031 (the "Optional Securities"). The Firm
Securities and the Optional Securities which the Underwriter elects to purchase
pursuant to Section 3 hereof are herein collectively called the "Securities".
The Company has prepared and filed on the date hereof with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"),
a registration statement on Form S-3 relating to the Securities and shares of
the Stock issuable upon conversion of the Securities (the "Initial Registration
Statement"). The various parts of the Initial Registration Statement, any
post-effective amendment thereto and a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement")
filed pursuant to Rule 462(b) under the Securities Act, including all exhibits
thereto, the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement and any information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act and deemed by virtue of Rule 430A under the Securities Act to be
part of the registration statement at the time it was declared effective but
excluding Form T-1 (as defined below), each as amended at the time such part of
the Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes effective
are hereinafter collectively referred to as the "Registration Statement". The
related prospectus covering the Securities and the shares of the Stock
initially issuable upon conversion of the Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Prospectus".
Any reference in this Agreement to the Prospectus or any preliminary form of
Prospectus (a "preliminary prospectus") previously filed with the Commission
pursuant to Rule 424 shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act which were filed under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") on or before the date
of this Agreement or the date of the Prospectus or any preliminary prospectus,
as the case may be; any reference to "amend", "amendment" or "supplement" with
respect to the Initial 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 Initial Registration
Statement that is incorporated by reference in the Registration Statement; and
any reference to "amend", "amendment" or "supplement" with respect to the
Prospectus or any preliminary prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Prospectus or any preliminary prospectus, as the case may be,
which are deemed to be incorporated by reference therein.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) The Initial Registration Statement has become effective;
no stop order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, is in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(b) The Registration Statement and the Prospectus (as amended
or supplemented) conform in all material respects to the requirements
of the Securities Act and the Trust Indenture Act of 1939, as amended
("Trust Indenture Act") and did not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of its date as to the Prospectus and any amendment or
supplement thereto, include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; except that
the foregoing representations and warranties 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) statements or omissions in the Registration Statement or
the Prospectus made in reliance upon and in conformity with information
furnished in writing by the Underwriter expressly for use therein and
(iii) any statement which does not constitute part of the Registration
Statement or Prospectus pursuant to Rule 412 under the Securities Act.
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained an
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untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and any
further documents so filed and incorporated by reference, when they are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and will not contain an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they are 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 the Underwriter expressly for
use therein or to any statement in any such document which does not
constitute part of the Registration Statement or Prospectus pursuant to
Rule 412 under the Securities 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 disclosed in the Prospectus.
(e) The Securities have been duly authorized and when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company, entitled to the benefits
provided by the indenture to be dated as of November , 2001 (the
"Indenture"), between the Company and The Bank of New York, as Trustee
(the "Trustee"), under which they are to be issued, and enforceable in
accordance with their 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.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and, when executed and delivered by the Company and the
Trustee, will have been duly authorized, executed and delivered by the
Company and will constitute a valid and legally binding instrument 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 Securities
and the Indenture will conform in all material respects to the
descriptions thereof in the Prospectus.
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of Stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable. The shares of Stock initially issuable upon conversion
of the Securities have been duly and validly authorized and reserved
for issuance and, when issued and delivered
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in accordance with the provisions of the Securities and the Indenture,
will be duly and validly issued, fully paid and non-assessable and will
conform to the description of the Stock contained in the Prospectus.
(h) The issue and sale of the Securities and the shares of the
Stock initially issuable upon conversion of the Securities and the
compliance by the Company with all of the terms thereof and of the
Indenture and this Agreement, and the consummation of the transactions
contemplated herein and therein 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 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, 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 or 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
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
considered as an entirety (a "Material Adverse Effect") or affect the
validity of the Securities or the shares of Stock initially issuable
upon conversion of the Securities; and no consent, approval,
authorization, order, registration or qualification of or with any
court or any such regulatory authority or other governmental agency or
body is required for the issue and sale of the Securities and the
shares of Stock initially issuable upon conversion of the Securities or
the consummation of the other transactions contemplated by this
Agreement or the Indenture, except such consents, approvals,
authorizations, registrations or qualifications the failure to obtain
or make would not have a Material Adverse Effect or affect the validity
of the Securities or the shares of Stock initially issuable upon
conversion of the Securities and except as may be required under state
securities or Blue Sky or insurance securities laws in connection with
the purchase and distribution by the Underwriter of the Securities and
the shares of Stock initially issuable upon conversion of the
Securities.
(i) 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 on the
current or prospective consolidated business or condition (financial or
other) of the Company and its subsidiaries taken as a whole, except as
set forth or contemplated in the Prospectus as supplemented on the date
hereof.
(j) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, as amended or
supplemented on the date of this Agreement, there has not been (i) any
material change in the capital
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stock or (ii) any material increase in the consolidated long-term debt
of the Company or (iii) any material adverse change in or affecting the
financial position, shareholders' equity or results of operations of
the Company and its consolidated subsidiaries considered as an entirety
otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented on the date of this Agreement (any such change
described in clause (iii) is referred to as a "Material Adverse
Change").
3. Purchase, Offering and Delivery. Subject to the terms and conditions
herein set forth, (a) the Company agrees to issue and sell to the Underwriter,
and the Underwriter, on the basis of the representations and warranties
contained herein, agrees to purchase from the Company $1,519,734,000 principal
amount of Securities, at a purchase price of ....% of the principal amount
thereof, plus any accrued original issue discount from November , 2001 to the
date of payment and delivery, and (b) in the event and to the extent that the
Underwriter shall exercise the election to purchase Optional Securities as
provided below, the Company agrees to issue and sell to the Underwriter, and the
Underwriter agrees to purchase from the Company, at the same purchase price set
forth in clause (a) of this Section plus any accrued original issue discount
from November , 2001 to the date of payment and delivery, that portion of the
aggregate principal amount of the Optional Securities as to which such election
shall have been exercised.
The Securities to be purchased by the underwriter will be represented
by one or more definitive global Securities in book-entry form which will be
deposited by or on behalf of the Company with the Depository Trust Company
("DTC") or its designated custodian. The Company will deliver the Securities to
the Underwriter, against payment by the Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Company to the Underwriter at least twenty-four hours in advance, by
causing DTC to credit the Securities to the account of the Underwriter at DTC.
The Company will cause the certificates representing the Securities to be made
available to the Underwriter for checking at least twenty-four hours prior to
the Closing Date (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on November , 2001 or such other time and date as the Underwriter and
the Company may agree upon in writing and, with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by the
Underwriter in the written notice given by the Underwriter of the Underwriter's
election to purchase such Optional Securities, or such other time and date as
the Underwriter and the Company may agree upon in writing. Such time and date
for delivery of the Firm Securities is herein called the "First Closing Date",
such time and date for delivery of the Optional Securities, if not the First
Closing Date, is herein called the "Second Closing Date" and each time and date
for delivery is herein called a "Closing Date".
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The Company hereby grants to the Underwriter the right to purchase at
its election up to $227,960,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 3 plus any accrued original issue discount from November , 2001
to the date of payment and delivery, for the sole purpose of covering sales of
Securities in excess of the aggregate principal amount of the Firm Securities.
Any such election to purchase Optional Securities may be exercised by written
notice from the Underwriter to the Company, given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate principal
amount of Optional Securities to be purchased and the date on which such
Optional Securities are to be delivered, as determined by the Underwriter but in
no event earlier than the First Closing Date or, unless the Underwriter and the
Company otherwise agree in writing, earlier than two or later than ten business
days after the date of such notice.
4. Offering by Underwriter. The Underwriter will offer the Securities
for sale to the public as set forth in the Prospectus. The Underwriter
represents and warrants to, and agrees with, the Company that any offer or sale
of the Securities through an electronic medium has been and will be made in
compliance with the Securities Act.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) The Company will advise the Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and prior to the completion of the distribution of the
Securities provide the Underwriter with a reasonable opportunity to
review such proposed amendment or supplement prior to any filing
thereof (other than any filing required to be made pursuant to the
Exchange Act); prior to the completion of the distribution of the
Securities, the Company will also advise the Underwriter promptly of
any amendment or supplementation of the Registration Statement or the
Prospectus, and of the institution by the Commission or any state
securities regulatory authority of any stop order proceedings or
similar proceedings in respect of the Registration Statement, and will
use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(b) If at any time when a prospectus relating to the
Securities is required to be delivered under the Securities Act any
event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company promptly will prepare and file with the
Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. The
expense of complying with the
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requirements of this Section 5(b) shall be borne (i) during the period
of six months after the first date of the public offering of the
Securities, by the Company, and (ii) after the expiration of such
six-month period, by the Underwriter.
(c) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earning statement or statements
(which need not be audited, and may be furnished in accordance with
Rule 158) covering a period of at least 12 months beginning not later
than the first day of the Company's fiscal quarter next following the
date of any sale of the Securities hereunder.
(d) The Company will furnish to the Underwriter copies of the
Registration Statement (one of which will include all exhibits), each
related preliminary prospectus, the Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as the Underwriter reasonably requests.
(e) The Company will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such United States jurisdictions as the
Underwriter reasonably designates and will continue such qualifications
in effect so long as required for the distribution.
(f) 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 and the shares of Stock
issuable upon conversion of the Securities under the
Securities 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 mailing and
delivering of copies thereof to the Underwriter and dealers;
(ii) the cost of printing this Agreement, the Indenture and
any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iii) all expenses in
connection with the qualification of the Securities and the
shares of Stock initially issuable upon conversion of the
Securities for offering and sale under state securities laws
as provided in Section 5(e) hereof; (iv) the cost of preparing
the Securities; (v) 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 the Indenture and
the Securities; and (vi) all other costs and expenses incident
to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section,
Section 7 and Section 11 hereof, the Underwriter will pay all
of
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its own costs and expenses, including the fees of its counsel,
transfer taxes on resale of any of the Securities and the
shares of Stock initially issuable upon conversion of the
Securities by them, and any advertising expenses connected
with any offers they may make.
(g) During the period beginning on the date hereof and
continuing to and including the Closing Date the Company will not,
without the prior consent of the Underwriter, offer or sell any of its
United States dollar-denominated unsecured and unsubordinated
convertible debt securities that are substantially similar to the
Securities. The restriction imposed by this Section 5(g) shall not
apply to securities offered outside the United States.
(h) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Securities Act.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Securities will be subject to the
accuracy, at and as of such Closing Date, in all material respects, of the
representations and warranties on the part of the Company herein, to the
accuracy, in all material respects, of the statements of Company officers made
pursuant to the provisions hereof, to the performance, in all material respects,
by the Company of its obligations hereunder and to the following additional
conditions:
(a) Prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the executive officers of the Company, shall be
contemplated by the Commission.
(b) Since the respective dates as of which information is
given in the Prospectus there shall not have occurred any material
change in or affecting particularly the business or properties of the
Company or its material subsidiaries which, in the judgment of the
Underwriter, materially impairs the investment quality of the
Securities.
(c) Subsequent to the execution and delivery of this Agreement
and prior to such Closing Date, 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;
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(ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York
State authorities;
(iii) 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
Securities Act;
(iv) the suspension in trading the Stock on the New
York Stock Exchange, if the effect of such event in the
reasonable judgment of the Underwriter makes it impracticable
or inadvisable to market the Securities on the terms and in
the manner contemplated in the Prospectus as amended or
supplemented; or
(v) the outbreak or escalation of hostilities
involving the United States or the declaration by the United
States of a national emergency or war, other than any such
outbreak, escalation or declaration arising out of or relating
to the terrorist attacks of September 11, 2001 that does not
represent a significant departure from the conditions that
exist on the date hereof, if the effect of any such event in
the judgment of the Underwriter makes it impracticable or
inadvisable to market the Securities on the terms and in the
manner contemplated in the Prospectus as amended or
supplemented.
(d) The Underwriter shall have received an opinion or opinions
of Xxxxxxxx & Xxxxxxxx, counsel for the Company, dated such Closing
Date, 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;
(ii) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and
legally binding instrument 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;
(iii) The Securities are convertible into shares of
Stock in accordance with the terms of the Indenture, and the
shares of Stock, initially issuable upon conversion of the
Securities have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion,
will be validly issued, fully paid and nonassessable;
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(iv) Each part of the Registration Statement, when
such part became effective, and the Prospectus as of its date,
appeared on their face to be appropriately responsive in all
material respects relevant to the Securities to the
requirements of the Securities Act (except that no opinion
need be expressed as to financial statements and financial and
statistical data);
(v) Nothing has come to the attention of such counsel
in their review (as described in such opinion) that has caused
them to believe that, insofar as relevant to the Securities,
any part of the Registration Statement, when such part became
effective, contained any untrue statement of a 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 of its date contained,
or on such Closing Date contains, any untrue statement of a
material fact or on its date omitted, or on such Closing Date
omits, to state any 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 and statistical data 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 Capital Stock",
"Description of Debentures" and "Certain United States Federal
Income Tax Consequences" in the Prospectus as amended or
supplemented, insofar as they relate to provisions of
documents or of United States federal tax law therein
described);
(vi) The Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute
valid and legally binding obligations of the Company
enforceable in accordance with their 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
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
(e) The Underwriter shall have received an opinion of Xxxxxxxx
X. Xxxxxxx, Vice President, Secretary and Associate General Counsel of
the Company, dated such Closing Date, to the effect that:
(i) 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 summarized or
described in the Registration Statement or filed
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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
which are not disclosed and properly described therein;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented;
(iii) The issue and sale of the Securities, and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this 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 agreement or
instrument 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, 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 except for such breaches, defaults and
violations that would not have a Material Adverse Effect or
affect the validity of the Securities or the shares of Stock
initially issuable upon conversion of the Securities; and no
consent, approval, authorization, order, registration or
qualification of or with any court or any regulatory authority
or other governmental body is required for the issue and sale
of the Securities except the registration under the Securities
Act of the Securities and the shares of Stock initially
issuable upon conversion of the Securities, the qualification
of the Indenture under the Trust Indenture Act, the listing of
the shares of Stock issuable upon conversion of the Securities
and such consents, approvals, authorizations, registrations or
qualifications the failure to obtain or make would not have a
Material Adverse Effect or affect the validity of the
Securities or the shares of Stock initially issuable upon
conversion of the Securities and as may be required under
state securities or Blue Sky or insurance securities laws in
connection with the public offering by the Underwriter of the
Securities and the shares of Stock initially issuable upon
conversion of the Securities;
(iv) Nothing which came to the attention of such
counsel has caused her to believe that insofar as relevant to
the Securities, any part of the Registration Statement, when
such part 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
contained, or on such Closing Date contains, or any document
incorporated by reference in the Prospectus on the date of its
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 light of the
circumstances under which they were made, not misleading
(except that
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(A) no opinion need be expressed as to financial statements
and financial and statistical data 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 or
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 "Description of Capital
Stock" and "Description of Debentures" in the Prospectus as
amended or supplemented, insofar as they relate to provisions
of documents therein described).
(f) The Underwriter shall have received from Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriter, such opinion, dated such Closing
Date, with respect to the incorporation of the Company, the validity of
the Securities and the shares of Stock initially issuable upon
conversion of the Securities, the Registration Statement, the
Prospectus, and other related matters as the Underwriter may 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.
(g) The Underwriter shall have received a certificate of the
Chairman, the President, Vice-Chairman, or any Executive or Senior Vice
President and a principal financial or accounting officer of the
Company, dated such Closing Date, 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, 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 Closing 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 threatened by the Commission, and that,
since the respective dates as of which information is given in the
Prospectus there has not been any Material Adverse Change, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented.
(h) The Underwriter shall have received a letter of
PricewaterhouseCoopers LLP, dated such Closing Date, to the effect set
forth in Schedule I attached hereto.
The Company will furnish the Underwriter with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter reasonably
requests.
7. Indemnification. (a) The Company will indemnify and hold harmless
the Underwriter and each person, if any, who controls the Underwriter within the
meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which the Underwriter or such controlling
person may become subject, under the
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Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, 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 the Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by the Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will 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 of such documents in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter specifically for use therein; 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 inure to the benefit of the
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities (or to the benefit of any person
controlling such Underwriter), to the extent that any such loss, claim, damage
or liability of the Underwriter or controlling person results from the fact that
a copy of the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, against any losses, claims, damages or liabilities to
which the Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the 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 reliance upon and in conformity with written information furnished to
the Company by the Underwriter specifically for use therein; and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Underwriter may
otherwise have.
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(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
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 will not be liable to such indemnified party under this
Section for any legal or other expenses 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 the Underwriter 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 the Underwriter 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 the Underwriter 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 the Underwriter 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 the Underwriter 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
the Underwriter 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
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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), the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased by the Underwriter were sold
exceeds the amount of any damages which the Underwriter 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the Underwriter set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Securities.
9. Notices. All communications hereunder will be in writing, and, if
sent to the Underwriter will be mailed, delivered or telegraphed and confirmed
to the Underwriter, at the address set forth above or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Secretary; provided, however, that any
notice to the Underwriter pursuant to Section 7 will be mailed or delivered to
such Underwriter at its address furnished to the Company by such Underwriter.
10. Successors. This Underwriting Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder. No
purchaser of the Securities from the Underwriter shall be deemed a successor or
assign merely by reason of such purchase.
11. Termination. If for any reason, other than the occurrence of an
event described in Section 6(c), the Securities are not delivered by or on
behalf of the Company as provided herein, the Company will reimburse the
Underwriter for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) approved in writing by the Underwriter reasonably
incurred by the Underwriter in making preparations for the purchase, sale and
delivery of such Securities, but the Company shall then be under no further
liability to the Underwriter with respect to the Securities except as provided
in Section 5(f) and Section 7 hereof.
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12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York.
13. Counterparts. This 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 deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us four counterparts hereof, whereupon it will become
a binding agreement between the Company and the Underwriter in accordance with
its terms.
Very truly yours,
AMERICAN INTERNATIONAL GROUP, INC.
By
-------------------------
Name:
Title
-------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
XXXXXX XXXXXXX & CO. INCORPORATED
By
-----------------------------
Name:
Title:
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SCHEDULE I
Pursuant to Section 6(h) of the Underwriting Agreement, the accountants
shall provide a comfort letter to the effect that:
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Securities Act and
the applicable rules and regulations thereunder adopted by the Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited by them and
included or incorporated by reference in the Registration Statement and
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Securities Act or the Exchange Act, as
applicable, and the related rules and regulations thereunder;
(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; 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 (iv)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the related
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 Securities Act and the Exchange Act and the
related rules and regulations adopted by the Commission;
(iv) 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 and/or incorporated by reference in the Prospectus
and included 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 rules and regulations adopted by the
Commission, 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 statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) 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 as amended and supplemented discloses have occurred or may
occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the end of the last period for which financial statements are
available there were any decreases in net revenues or the total or per
share amount 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 as amended and supplemented discloses have occurred or may
occur or which are described in such letter; and
(v) Other than those set forth above, they will not perform any
other procedures on any other amounts, percentages or financial information
included in or incorporated by reference in the Registration Statement or
the Prospectus.
