AMERICAN INTERNATIONAL GROUP, INC. Medium-Term Notes Series G Series AIG-FP Series MP, Matched Investment Program Amended and Restated Distribution Agreement
Exhibit 1.2
AMERICAN INTERNATIONAL GROUP, INC.
U.S. $•
Medium-Term Notes
Series G
Series AIG-FP
Series MP, Matched Investment Program
Series G
Series AIG-FP
Series MP, Matched Investment Program
Amended and Restated Distribution Agreement
June •, 2007
To the Agents named in Annex VI hereto.
Ladies and Gentlemen:
American International Group, Inc., a Delaware corporation (the “Company”), proposes, subject
to the terms and conditions stated herein, to issue and sell at an aggregate initial offering price
of up to U.S. $• or the equivalent thereof in one or more foreign or composite currencies or
currency units, of its Medium-Term Notes, Series G; Medium-Term Notes, Series AIG-FP; and
Medium-Term Notes, Series MP, Matched Investment Program (collectively, the “Securities”), and
agrees with each of you (individually, an “Agent”, and collectively, the “Agents”) as set forth in
this Agreement. Between October 12, 2006, the date of establishment of the series of Securities
referred to in the preceding sentence, and the date hereof, the Company has issued securities at an
aggregate initial offering price equivalent to U.S. $•, which reduced the aggregate amount of
Securities that the Company may offer and sell under this Agreement from the equivalent of U.S.
$25,139,770,000 to the equivalent of U.S. $•, provided, that the Company may increase the amount
of Securities it may sell at any time as provided in Section 10(c) hereof.
Subject to the terms and conditions stated herein, the Company hereby 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 the Company and the Agents agree that whenever the Company
determines to sell Securities directly to any Agent as principal for resale to others, the Company
and such Agent will, unless otherwise agreed by them, enter into either 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 with
other broker-dealers as Agents as contemplated by Section 10(b) hereof. 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 October 12, 2006 (the “Original Indenture”), as supplemented by the First
Supplemental Indenture, dated as of December 19, 2006, the Second Supplemental Indenture, dated as
of January 18, 2007, the Third Supplemental Indenture, dated as of March 23,
2007, and the Fourth Supplemental Indenture, dated as of April 18, 2007 (the Original
Indenture as so supplemented, the “Indenture”), each between the Company and The Bank of New York,
as Trustee (the “Trustee”). 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 may be issued in amounts denominated in
United States dollars or in amounts denominated in foreign currencies, including the Euro, or any
composite currency. References herein to amounts stated in United States dollars shall be deemed
to refer to the equivalent amount of foreign currency or composite currency to the extent
applicable. 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
Attachment A (the “Procedure”) and, if applicable, such terms will be specified in a
related Terms Agreement.
1. The Company represents and warrants to, and agrees with, each Agent that:
(a) The registration statements on Form S-3 (Registration No. 333-• and No. 333-106040) 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; 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 (including the Basic Prospectus or the Prospectus (as hereinafter defined), as the case
may be, as supplemented by any preliminary prospectus supplement) 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 Securities Act of 1933, as amended (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 most recently 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,” other than in Section 1(c)(i)(B) hereof, shall be deemed to refer to and include the
Prospectus as amended or
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supplemented (including by the applicable Pricing Supplement filed in accordance with Section
4(a) hereof and any other prospectus supplement specifically referred to in such Pricing
Supplement) in relation to Securities to be sold pursuant to this Agreement, in the form filed or
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) No order preventing or suspending the use of any Preliminary Prospectus or any “issuer
free writing prospectus” as defined in Rule 433 under the Act relating to the Securities (an
“Issuer Free Writing Prospectus”) has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed 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 did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or 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 therein;
(c) (i) With respect to any issue of Securities, (A) the “Applicable Time” will be such time
on the date of the applicable Terms Agreement as is specified therein as the Applicable Time, or,
if either the Terms Agreement does not specify the Applicable Time or if such Securities are not
being sold pursuant to a Terms Agreement, the Applicable Time shall mean the time immediately prior
to the time of the first sale by an Agent (including, without limitation, a contract of sale by an
Agent) of such Securities or with respect to Securities sold by such Agent as agent, the Applicable
Time shall mean each time of sale (including, without limitation, a contract of sale) of such
Securities, and (B) the “Pricing Disclosure Package” shall mean the Prospectus as amended or
supplemented immediately prior to the Applicable Time taken together with any Term Sheet prepared
pursuant to Section 4(a) hereof in connection with such issue of Securities and any other free
writing prospectus that the Company and such Agent shall expressly agree in writing to include as
part of the Pricing Disclosure Package with respect to such issue of Securities; (ii) with respect
to each issue of Securities, the Pricing Disclosure Package, as of the Applicable Time, will not
include any 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 are made,
not misleading; and (iii) with respect to each issue of Securities, each Issuer Free Writing
Prospectus, if any, included in the Pricing Disclosure Package, will not conflict with the
information contained in the Registration Statement, the Prospectus or the Prospectus as amended or
supplemented and, taken together with the Pricing Disclosure Package, as of the Applicable Time,
will not include any 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 are made, not misleading; provided, however, that the representations and warranties in
clauses (ii) and (iii) of this Section 1(c) shall not apply to statements or omissions made in any
Pricing Disclosure Package or Issuer Free Writing Prospectus in reliance upon and in conformity
with information furnished in writing to the Company by any Agent expressly for use therein;
(d) 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
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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 specifically 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;
(e) 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, 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 its 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;
(f) 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;
(g) 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 (i) 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, equity incentive option plans and upon conversion of
convertible securities), or (ii) 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, in each case, otherwise than as set forth or contemplated
in such Prospectus as amended or supplemented (any such change described in clause (ii) is referred
to as a “Material Adverse Change”);
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(h) 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 as amended or supplemented;
(i) 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 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 breaches, conflicts, 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, 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, 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; and
(j) 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
5
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 herein, in the Prospectus as amended or
supplemented from time to time and in any applicable Term Sheet.
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 or the applicable Pricing Supplement at a purchase
price equal to 100% of their principal amount unless otherwise indicated on the applicable Term
Sheet, if any, and Pricing Supplement. 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.
(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, unless the Company and
such Agent shall otherwise agree, 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. Unless the Company and such
Agent shall otherwise agree, 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, and 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, the currency in which such
Securities are to be denominated, 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.
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(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 12 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.
(e) Each Agent represents and agrees with the Company that it will comply with or observe any
restrictions or limitations set forth in the Prospectus as amended or supplemented on persons to
whom, or the jurisdictions in which, or in the manner in which, the Securities may be offered,
sold, resold or delivered.
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, Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
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 a report 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 party to such Terms Agreement promptly after reasonable notice
thereof; to prepare, with respect to any Securities to be sold by the Company through or to such
Agent pursuant to this Agreement, a Pricing Supplement and, if applicable, a Term Sheet (as defined
below) with respect to such Securities in a form previously approved by such Agent and to file such
Pricing Supplement or Term Sheet pursuant to Rule 424(b) or Rule 433(d) under the Act within the
time required by such rule; to make no amendment or supplement to the Registration Statement or the
Prospectus, other than any Term Sheet (as defined below), Pricing Supplement or any report filed
under the Exchange Act, at any other time prior to having afforded each Agent a reasonable
opportunity to review it; if requested by such Agent prior to the Applicable Time, to prepare an
Issuer Free Writing Prospectus that is a final term sheet relating to such Securities in the form
set forth in Annex II hereto (each a “Term Sheet”), and to file such term sheet pursuant to
Rule 433(d) under the Act within the time required by such rule; to file promptly all material
required to be filed by the Company pursuant to Rule 433(d) under the Act; 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 such Agent, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes effective or any
supplement
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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 a
report under the Exchange Act or any Pricing Supplement that relates to Securities not purchased
through or by such Agent), 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 or Term Sheet (except as provided in the Procedure) or amendment or supplement
relating solely to an offering of securities other than the Securities, 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 90 days 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 which such Agent proposes to sell, upon the reasonable request
of such Agent, 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 90 days of the date of the relevant Pricing Supplement or Term Sheet
and if after such 90-day period, by such Agent;
8
(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 consent of such Agent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company that mature more than nine months after
such Time of Delivery, have the same maturity, and are otherwise substantially similar to the
Securities. The restriction imposed by this Section 4(e) 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 of
which at least 90% (based on gross offering proceeds) is offered and sold outside the United States
or to guarantees by the Company of debt securities of its subsidiaries;
(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 as a result of the filing by the Company of its Annual Report on Form 10-K 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 (as
promptly as reasonably practicable in the case of any such amendment or supplement) to such Agent,
upon its request, a certificate of officers of the Company satisfactory to such Agent, dated the
date of such supplement, amendment 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 as a result of the filing by the Company of its Annual Report on Form 10-K 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 (as
promptly as reasonably practicable in the case of any such amendment or supplement) to such Agent,
upon its request, a written opinion and letter of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company,
and a written opinion of Xxxxxxxx X. Xxxxxxx, Senior Vice
9
President and Deputy 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
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 and letter referred to in
Section 6(c) or the opinion referred to in Section 6(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 or letter 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 and letter of the same tenor as the opinion and
letter referred to in Section 6(c) or an opinion of the same tenor as the opinion referred to in
Section 6(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; and
(i) That each time the Registration Statement or the Prospectus shall be amended or
supplemented as a result of the filing by the Company of its Annual Report on Form 10-K 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
registered public accounting firm to furnish (as promptly as reasonably practicable in the case of
any such amendment or supplement) to such Agent, upon its request, a letter, dated a date which is
as soon as reasonably practicable after the date of such amendment or supplement, or a letter,
dated the Time of Delivery relating to such sale, in either case 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 amendment or supplement or Terms Agreement, as the case may be, 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.
4A. (a) The Company and each Agent agree that the Agents may prepare and use one or more
preliminary term sheets relating to the Securities containing customary information; provided that
such information has been approved by the Company in writing or orally before the first
communication containing such information is used;
(b) Each Agent represents that it has not and will not use, authorize use of, refer to, or
participate in the planning for use of, any written communication that constitutes an offer to sell
or the solicitation of an offer to buy the Securities other than (A) any written communication
permitted under subparagraph (a) above, (B) any Term Sheet or (C) any written communication
prepared by such Agent and approved by the Company in advance in writing;
(c) Except in the case of Securities sold directly by the Company, with respect to any
particular issuance of Securities, the Company represents to the Agent purchasing or soliciting the
purchase of such Securities that it has not and will not use, authorize use of, refer to, or
participate in the planning for use of, any written communication that constitutes an offer to
10
sell or the solicitation of an offer to buy such Securities other than (A) any written
communication permitted under subparagraph (a) above, (B) any Term Sheet or (C) any written
communication approved by such Agent in advance in writing;
(d) The Company represents and agrees that it has complied and will comply with the
requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission where required, legending and record keeping; and
(e) With respect to any issue of Securities, the Company agrees that if at any time following
the relevant Applicable Time until and including the related Time of Delivery any event occurred or
occurs as a result of which an Issuer Free Writing Prospectus included in the relevant Pricing
Disclosure Package would conflict with the information in the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or the Pricing Supplement or, taken together
with the relevant Pricing Disclosure Package, 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 then prevailing, not misleading, the Company will give prompt notice thereof
to the relevant Agents and, if requested by such Agents, will prepare and furnish without charge to
each Agent an Issuer Free Writing Prospectus or other document which will correct such conflict,
statement or omission; provided, however, that this representation and warranty shall not apply to
any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Agent expressly for use
therein.
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, the Prospectus, any Issuer Free Writing Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the 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
11
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 Xxxxx Xxxx & Xxxxxxxx, 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 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 and letter of Xxxxxxxx & Xxxxxxxx LLP, counsel
for the Company, or other counsel satisfactory to such Agent in its reasonable judgment, dated the
date of this Agreement and any applicable date referred to in Section 4(h), to the effect set forth
in Annex III hereto;
(d) Such Agent shall have received an opinion of Xxxxxxxx X. Xxxxxxx, Senior Vice President
and Deputy General Counsel of the Company, or other counsel satisfactory to such Agent in its
reasonable judgment, dated the date of this Agreement and any applicable date referred to in
Section 4(i), to the effect set forth in Annex IV hereto;
(e) At 11:00 A.M., New York City time, on the date of this Agreement and on any applicable
date referred to in Section 4(i), the independent registered public accounting firm who have
audited 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 V hereto;
(f) 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 which, in the judgment of the
Agents, materially impairs the investment quality of the Securities, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented;
(g) The Company shall have furnished or caused to be furnished to such Agent a certificate of
the Chief Executive Officer, the President, any Vice Chairman, any Executive or Senior Vice
President or any Vice President and a principal financial or accounting officer of the Company,
dated the date of this Agreement and any applicable date referred to in Section 4(g), in which such
officers, to the best of their knowledge after reasonable investigation,
12
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 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, other than any such
outbreak, escalation or declaration arising out of or relating to the U.S. war on terrorism that
does not represent a significant departure from the conditions that exist on the date of any Terms
Agreement, 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 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 Company’s common stock, par value $2.50 per
share, 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 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 Xxxxx’x Investors Service, a subsidiary of Xxxxx’x Corporation,
or Standard & Poor’s, a division of the XxXxxx-Xxxx Companies, Inc.
7. (a) The Company will indemnify and hold harmless each Agent and each person, if any, who
controls any of the Agents within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Agent or such controlling person 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 any untrue statement or
alleged untrue statement of any material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any amendment or supplement thereto or any Issuer Free Writing 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 such Agent and such controlling person 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 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 Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any such amendment or supplement, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
13
Company by such Agent expressly for use therein; and provided, further, that the foregoing
indemnity agreement contained in this Section 7(a), with respect to any Preliminary Prospectus,
preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, shall
not inure to the benefit of any Agent from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling such Agent where (i) prior
to the Applicable Time the Company shall have notified such Agent that any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any amendment or supplement thereto or any Issuer Free Writing Prospectus contains
an untrue statement of material fact or omits to state therein a material fact necessary in order
to make the statements therein not misleading, (ii) such untrue statement or omission of a material
fact was corrected in a further amendment or supplement to the Preliminary Prospectus, preliminary
prospectus supplement, Registration Statement, Prospectus as amended or supplemented or, where
permitted by law, an Issuer Free Writing Prospectus, and such corrected Prospectus or Issuer Free
Writing Prospectus was provided to such Agent prior to the Applicable Time, (iii) such corrected
Preliminary Prospectus, preliminary prospectus supplement, Registration Statement, Prospectus or
Issuer Free Writing Prospectus (excluding any document incorporated by reference therein) was not
conveyed to such person at or prior to the contract for sale of the Securities to such person and
(iv) such loss, claim, damage or liability would not have occurred had the corrected Preliminary
Prospectus, preliminary prospectus supplement, Registration Statement, Prospectus or Issuer Free
Writing Prospectus (excluding any document incorporated by reference therein) been conveyed to such
person as provided for in clause (iii) above.
(b) Each Agent, severally and not jointly, will indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or such controlling person 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 any untrue statement or
alleged untrue statement of any material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any amendment or supplement thereto, or any Issuer Free Writing 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 any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any
such amendment or supplement, or any Issuer Free Writing Prospectus, 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 or such controlling person 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 will not
relieve it from any liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action is brought against any
14
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 such subsection for any legal expenses of
other counsel or any 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.
15
(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
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 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 any Agent or the Company or any of its officers or directors or any
controlling person, and will survive each delivery of and payment for any of the Securities.
10. (a) 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 (g), (h) and (i)
of Section 4.
(b) The Company, in its sole discretion, may appoint one or more additional parties to
act as Agents hereunder from time to time. Any such appointment shall be made in a writing signed
by the Company and the party so appointed. Such appointment shall become effective in accordance
with its terms after the execution and delivery of such writing by the Company and such other
party. When such appointment is effective, such other party shall be deemed to be one of the Agents
referred to in, and to have the rights and obligations of an Agent under, this Agreement, subject
to the terms and conditions of such appointment.
(c) The Company, in its sole discretion, may increase the aggregate initial offering price of
the Securities from time to time without consent of, or notice to, any Agent.
16
(d) The Company and any Agent may amend, eliminate or otherwise change any provision of this
Agreement with respect to such Agent without consent of, or notice to, any other Agent. Any such
amendment, elimination or change shall be made in a writing signed by the Company and each Agent
that is a party to such amendment, elimination or change. In the event of such amendment,
elimination or change, this Agreement shall remain in full force and effect with respect to any
Agent that is not a party to such amendment, elimination or change (without giving effect to such
amendment, elimination or change with respect to such Agent) unless suspended or terminated with
respect to such Agent pursuant to clause (a) of this Section 10.
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 an Agent, shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail as set forth in Annex VI hereto under such
Agent’s name, and if to the Company shall be sufficient in all respects when delivered or sent by
registered mail to 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000)
000-0000, Attention: Corporate Secretary.
12. This Agreement and any Terms Agreement shall be binding upon, and inure solely to the
benefit of, each Agent (or the applicable Agent, in the case of a Terms Agreement) 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. The Company acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement and any Terms Agreement is an arm’s-length commercial transaction
between the Company, on the one hand, and the Agents, on the other, (ii) in connection therewith
and with the process leading to such transaction each Agent is acting solely as a principal and not
the agent or fiduciary of the Company, (iii) no Agent has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Agent has advised or is currently advising
the Company on other matters) or any other obligation to the Company except the obligations
expressly set forth in this Agreement and (iv) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim
that the Agent, or any of them, has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Company, in connection with such transaction or the process
leading thereto.
14. This Agreement and any Terms Agreement supersede all prior agreements and understandings
(whether written or oral) between the Company and the Agents, or any of them, with respect to the
subject matter hereof.
15. This Agreement and any Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. Time shall be of the essence in this Agreement and any Terms Agreement.
17
17. 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 deemed to be an original,
but all of such respective counterparts shall together constitute one and the same instrument.
18. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to
any persons the U.S. federal and state income tax treatment and tax structure of any potential
transaction and all materials of any kind (including tax opinions and other tax analyses) provided
to the Company relating to that treatment and structure, without any Agent imposing any limitation
of any kind. However, any information relating to the tax treatment and tax structure shall remain
confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any
person to comply with securities laws. For this purpose, “tax structure” is limited to any facts
that may be relevant to the U.S. federal and state income tax treatment of the potential
transaction.
18
If the foregoing is in accordance with your understanding, please sign and return to us five
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 | ||||
| Name: | ||||
| Title: | ||||
| Accepted in New York, New York | ||||
| AIG FINANCIAL SECURITIES CORP. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| ABN AMRO INCORPORATED | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BANC OF AMERICA SECURITIES LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BANCA IMI S.P.A. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BARCLAYS CAPITAL INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BEAR, XXXXXXX & CO. INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BMO CAPITAL MARKETS CORP. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BNP PARIBAS SECURITIES CORP. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| BNY CAPITAL MARKETS, INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| CALYON SECURITIES (USA) INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| CITIGROUP GLOBAL MARKETS INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| CREDIT SUISSE SECURITIES (USA) LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| DAIWA SECURITIES AMERICA INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| DAIWA SECURITIES SMBC EUROPE LIMITED | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| DEUTSCHE BANK SECURITIES | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| XXXXXXX, SACHS & CO. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| GREENWICH CAPITAL MARKETS, INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| HSBC SECURITIES (USA) INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| X.X. XXXXXX SECURITIES INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| KEY BANC CAPITAL MARKETS INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| XXXXXX BROTHERS INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| XXXXXX XXXXXXX & CO. INCORPORATED | ||||
By |
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| Name: | ||||
| Title: | ||||
| RBC CAPITAL MARKETS CORPORATION | ||||
By |
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| Name: | ||||
| Title: | ||||
| SANTANDER INVESTMENT SECURITIES INC. | ||||
By |
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| Name: | ||||
| Title: | ||||
| SCOTIA CAPITAL (USA) INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| SG AMERICAS SECURITIES, LLC | ||||
By |
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| Name: | ||||
| Title: | ||||
| TD SECURITIES (USA) LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| UBS SECURITIES LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
By |
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| Name: | ||||
| Title: | ||||
| WACHOVIA CAPITAL MARKETS, LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| ANZ SECURITIES, INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| CIBC WORLD MARKETS CORP. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| MIZUHO INTERNATIONAL PLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| MIZUHO SECURITIES USA INC. | ||||
By |
||||
| Name: | ||||
| Title: | ||||
| NATIONAL AUSTRALIA CAPITAL MARKETS, LLC | ||||
By |
||||
| Name: | ||||
| Title: | ||||
ANNEX I
American International Group, Inc.
U.S. $•
U.S. $•
Medium-Term Notes, Series [G][AIG-FP][MP, Matched Investment Program]
Terms Agreement
[Date]
[Name(s) and Address(es) of Agent(s)]
Ladies and Gentlemen:
American International Group, Inc. (the “Company”) proposes, subject to the terms and
conditions stated herein and in the Amended and Restated Distribution
Agreement, dated June •,
2007 (the “Amended 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 Schedule I hereto (the “Purchased
Securities”). Each of the provisions of the Amended 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 Amended 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 Amended Distribution Agreement which makes
reference to the Registration Statement or the Prospectus shall be deemed to be a representation
and warranty as of the date of the Amended Distribution Agreement in relation to the Registration
Statement or the Prospectus (each as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Registration Statement or the Prospectus as
amended and supplemented in relation to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the Prospectus, or a Term
Sheet, 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.
Subject to the terms and conditions set forth herein and in the Amended 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 Schedule I
hereto.
AI-1
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 Amended 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:
Name:
Title:
AI-2
Schedule I to Annex I
Title of Purchased Securities:
|
Medium-Term Notes, Series [G][AIG-FP][MP, Matched Investment Program] | |
Aggregate Principal Amount:
|
[$•] or units of other Specified Currency | |
Price to Public: |
||
Applicable Time:
|
[time of day, month, day and year] | |
Purchase Price by [Name(s) of
Agent(s)]:
|
•% of the principal amount of the Purchased Securities[, plus accrued interest from to ] [and accrued amortization, if any, from to ] | |
Method of and Specified Funds
for Payment of Purchase
Price:
|
[By certified or official bank check or checks, payable to the order of the Company, in [New York] Clearing House] [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 October 12, 2006, as amended or supplemented, between the Company and The Bank of New York, as Trustee | |
Time of Delivery: |
||
Closing Location for Delivery
of Securities: |
||
Maturity Date: |
||
Interest Rate:
|
[%] | |
Interest Payment Dates:
|
[months and dates] | |
Regular Record Dates:
|
[months and dates] |
AI-3
Documents to be Delivered:
|
The following documents referred to in the Amended Distribution Agreement shall be delivered as a condition to the Closing: | |
| [None] | ||
| or | ||
| [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).] |
AI-4
Schedule II to Annex I
(a) Issuer Free Writing Prospectuses:
[Term Sheet in the form set forth in Annex II of the Amended Distribution
Agreement, but only if the Company is requested by the Agent(s) to prepare and file
such term sheet pursuant to Section 4(a) of the Amended Distribution Agreement.]
(b) Additional Information in Pricing Disclosure Package:
[List any free writing prospectus, other than the Term Sheet, that the Company
and the Agent(s) have expressly agreed in writing to include as part of the Pricing
Disclosure Package]
AI-5
ANNEX II
Form of Term Sheet
[To be modified as appropriate and completed prior to the Applicable Time]
American International Group, Inc.
Title of Purchased Securities:
Aggregate Principal Amount Offered:
Price to Public:
Settlement Date:
Managing Underwriter(s):
[Underwriting Discount/Purchase Price by Underwriter(s):]
Maturity Date:
Interest Rate:
Interest Payment Dates:
Interest Reset Dates:
Redemption Provisions:
[Treasury Benchmark/Treasury Price and Yield/Spread to Treasury/Reoffer Yield/Minimum
Denominations/Other Provisions:]
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC website at xxx.xxx.xxx. Alternately, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
toll-free •.
AII-1
ANNEX III
Form of Opinion of Xxxxxxxx & Xxxxxxxx LLP
[Date]
[Name of Agent(s)]
[Address(es)]
[Address(es)]
Ladies and Gentlemen:
[Use the following if the opinion is not being delivered at a Time of Delivery — In
connection with the offering and sale from time to time by you of the Medium-Term Notes, Series [•]
of American International Group, Inc., a Delaware corporation (the “Company”), at an aggregate
initial offering price of up to $[•] or the equivalent thereof in one or more foreign or composite
currencies or currency units (such series of securities being hereinafter referred to as the
“Series” and any securities to be issued from time to time as part of the Series on or after the
date hereof being hereinafter referred to individually as a “Security” and collectively as the
“Securities”), to be issued pursuant to the Indenture, dated as of October 12, 2006 (the “Original
Indenture”), as supplemented by the First Supplemental Indenture, dated as of December 19, 2006,
the Second Supplemental Indenture, dated as of January 18, 2007, the Third Supplemental Indenture,
dated as of March 23, 2007 [,][and] the Fourth Supplemental Indenture, dated as of April 18, 2007
[list any other, later Supplemental Indentures] (the Original Indenture as so supplemented, the
“Indenture”), each between the Company and The Bank of New York, as Trustee (the “Trustee”),]
[Use the following if the opinion is being delivered at a Time of Delivery — In connection
with the [several] purchase[s] today by you [and the other Agents named in Schedule I to][pursuant
to] the Terms Agreement, dated [•], 200[•] (the “Terms Agreement”), between American International
Group, Inc., a Delaware corporation (the Company”), and you (the “Agent[s]”)(which Terms Agreement
incorporates by reference certain provisions of the Amended and Restated Distribution Agreement,
dated June [•], 2007 (the “Amended Distribution Agreement”), between the Company and you), of $[•]
aggregate principal amount of the Company’s [•] Notes due [•] (the “Securities”) issued pursuant to
the Indenture, dated as of October 12, 2006 (the “Original Indenture”), as supplemented by the
First Supplemental Indenture, dated as of December 19, 2006, the Second Supplemental Indenture,
dated as of January 18, 2007, the Third Supplemental Indenture, dated as of March 23, 2007[,][and]
the Fourth Supplemental Indenture, dated as of April 18, 2007 [list any other, later Supplemental
Indentures] (the Original Indenture as so supplemented, the “Indenture”), each between the Company
and The Bank of New York, as Trustee (the “Trustee”),]
we, as counsel for the Company, have examined such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or appropriate for the
purposes of this opinion. Upon the basis of such examination, it is our opinion that:
(1) The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Delaware.
AIII-1
(2) The Indenture has been duly authorized, executed and delivered by the
Company and duly qualified under the Trust Indenture Act of 1939 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.
[Use the following if the opinion is not being delivered at a Time of Delivery
— (3) The Series has been duly authorized and established in conformity with the
Indenture and, when the terms of a particular Security and of its issuance and sale
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 in accordance with the Amended Distribution 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.]
[Use the following if the opinion is being delivered at a Time of Delivery —
(3) 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.]
(4) The Amended Distribution Agreement [Use the following if the opinion is
being delivered at a Time of Delivery — and the Terms Agreement] [has][have] been
duly authorized, executed and delivered by the Company.
[Use the following if the opinion is not being delivered at a Time of Delivery — In
connection with our opinion set forth in paragraph (3) above, we have assumed that at the time of
the issuance, sale and delivery of each particular Security the authorization of the Series will
not have been modified or rescinded and, with respect to each Security, that such Security will
conform to one of the forms of Securities examined by us.
In connection with our opinion set forth in paragraph (3) above, we have assumed that at the
time of the issuance, sale and delivery of each particular Security there will not have occurred
any change in law affecting the validity, legally binding character or enforceability of such
Security and that the issuance, sale and delivery of such Security, all of the terms of such
Security and the performance by the Company of its obligations thereunder will comply with
applicable law and with each requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company and will not result in a default under or a breach of any
agreement or instrument then binding upon the Company.]
[Use the following if the opinion is not being delivered at a Time of Delivery or if the
Securities are denominated in a non-U.S. dollar currency — In connection with our opinion set
forth in paragraph (3) above, we note that, as of the date of this 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. 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. In the case of a Security denominated in a
foreign currency, a state court in the State of New York rendering a judgment on such Security
AIII-2
would be required under Section 27 of the New York Judiciary Law to render such judgment in
the foreign currency in which the Security is denominated, and such judgment would be converted
into U.S. dollars at the exchange rate prevailing on the date of entry of the judgment.]
The foregoing opinion is limited to the Federal laws of the United States, the laws of the
State of New York and the General Corporation Law of the State of Delaware, and we express no
opinion as to the effect of the laws of any other jurisdiction.
[Use the following if the opinion is not being delivered at a Time of Delivery — Also, we
have relied as to certain matters upon information obtained from public officials, officers of the
Company and other sources believed by us to be responsible, and we have assumed that the Indenture
has been duly authorized, executed and delivered by the Trustee and that the signatures on all
documents examined by us are genuine, assumptions which we have not independently verified.]
[Use the following if the opinion is being delivered at a Time of Delivery — Also, we have
relied as to certain matters upon information obtained from public officials, officers of the
Company and other sources believed by us to be responsible, and we have assumed that the Indenture
has been duly authorized, executed and delivered by the Trustee, that the Securities conform to the
specimens thereof examined by us, that the Trustee’s certificates of authentication of the
Securities have been manually signed by one of the Trustee’s authorized officers, and that the
signatures on all documents examined by us are genuine, assumptions which we have not independently
verified.]
| Very truly yours, |
||||
AIII-3
Form of Letter of Xxxxxxxx & Xxxxxxxx LLP
[Date]
[Name of Agent(s)]
[Address]
[Address]
Ladies and Gentlemen:
This is with reference to the registration under the Securities Act of 1933 (the “Act”) and
offering of [Use the following if the letter is not being delivered at a Time of Delivery —
Medium-Term Notes, Series [•](the “Securities”) of American International Group, Inc. (the
“Company”) at an aggregate initial offering price of up to $[•] or the equivalent thereof in one or
more foreign or composite currencies or currency units.] [Use the following if the letter is being
delivered at a Time of Delivery — $[•] aggregate principal amount of [•] Notes due [•] (the
“Securities”) of American International Group, Inc. (the “Company”).]
The Registration Statement relating to the Securities was filed on Form S-3 in accordance with
procedures of the Securities and Exchange Commission (the “Commission”) permitting a delayed or
continuous offering of securities pursuant thereto and, if appropriate, a post-effective amendment,
document incorporated by reference therein or prospectus supplement that provides information
relating to the terms of the securities and the manner of their distribution. [Use the following
if the letter is not being delivered at a Time of Delivery — The Securities will be offered by the
Prospectus dated [•], 2007 (the “Basic Prospectus”), as supplemented by the Prospectus Supplement
dated [•], 2007 (the “Prospectus Supplement”). The Basic Prospectus will be further supplemented
by pricing supplements, each of which will be dated approximately as of the date of sale of
particular Securities and will furnish information as to the specific terms thereof.][Use the
following if the letter is being delivered at a Time of Delivery — The Securities have been
offered by the Prospectus dated [•], 2007 (the “Basic Prospectus”), as supplemented by the
Prospectus Supplement, dated [•], 2007 (the “Prospectus Supplement”), and the Pricing Supplement
No. [•], dated [•] (the “Pricing Supplement”).] The Basic Prospectus, as so supplemented, does not
necessarily contain a current description of the Company’s business and affairs since, pursuant to
Form S-3, it incorporates by reference certain documents filed with the Commission that contain
information as of various dates.
As counsel to the Company, we reviewed the Registration Statement, the Basic Prospectus
[and][,] the Prospectus Supplement [and the Pricing Supplement], [Use the following if the letter
is being delivered at a Time of Delivery — and the documents listed in Schedule A hereto (those
listed documents, taken together with the Basic Prospectus [and][,] the Prospectus Supplement [and
Pricing Supplement], being referred to herein as the “Pricing Disclosure Package”),] [and]
participated in discussions with your representatives and those of the Company and its accountants.
Between the date of the [Prospectus Supplement][Pricing Supplement] and the time of delivery of
this letter, we participated in further discussions with your representatives and those of the
Company and its accountants concerning certain portions of the Prospectus [and] reviewed
certificates of certain officers of the Company [, letters addressed to you from the Company’s
accountants] [and an opinion addressed to you from counsel to the Company]. On the basis of the
information that we gained in the course of the performance of the services referred to above,
considered in the light of our understanding of the applicable law (including the requirements of
Form S-3 and the character of prospectus contemplated thereby) and the experience we have gained
through our practice under the Act, we confirm to you that, in our opinion, each part of the
Registration Statement, as of its latest effective date, and the Basic
AIII-4
Prospectus, as supplemented by the Prospectus Supplement [and the Pricing Supplement], as of [Use
the following if the letter is not being delivered at a Time of Delivery — the date and time of
the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20••
—Describe other triggering filing, if applicable][Use the following if the letter is being
delivered at a Time of Delivery — the date of the Pricing Supplement], appeared on their face to
be appropriately responsive, in all material respects, to the requirements of the Act, the Trust
Indenture Act of 1939 and the applicable rules and regulations of the Commission thereunder.
Further, nothing that came to our attention in the course of such review has caused us to believe
that,
(a) any part of the Registration Statement, as of its latest effective date, 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
[Use the following if the letter is being delivered at a Time of Delivery —— (b) the Pricing
Disclosure Package, as of [___:00] [A/P].M. on [•] (which you have informed us is prior to the time
of the first sale of the Securities by any Agent), [when considered together with the price to the
public and underwriting discount for the Securities set forth on the cover of the Pricing
Supplement [and the statements made under the caption[s] [“Description of Securities” in the
Pricing Supplement] [and [any other disclosure added ][in the Pricing Supplement][to the
final Prospectus]] , contained any untrue statement of a material fact or omitted 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 or]
[(b)][(c)] the Basic Prospectus, as supplemented by the Prospectus Supplement [and the Pricing
Supplement], as of [the date of the Prospectus Supplement][the date of the Pricing Supplement],
contained any untrue statement of a material fact or omitted 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.
[Use the following if the letter is being delivered at a Time of Delivery —— We also advise you
that nothing that came to our attention in the course of the procedures described in the second
sentence of this paragraph has caused us to believe that (a) the Prospectus, as supplemented by the
Pricing Supplement, or (b) the Pricing Disclosure Package, [when considered together with the price
to the public [insert only if underwriting discount is material — and underwriting discount]for
the Securities set forth on the cover of the Pricing Supplement and the statements made under the
caption[s] [“Description of Securities”] in the Pricing Supplement] [and [any other disclosure
added ][in the Pricing Supplement][to the final Prospectus,] as of the time of delivery of
this letter, contained any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the lights of the circumstances under
which they were made, not misleading.]
The limitations inherent in the independent verification of factual matters and the character
of determinations involved in the registration process are such, however, that we do not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, [any Post-Effective Amendment thereto,] the Basic Prospectus [or][,] the
Prospectus Supplement [or][,][the Pricing Supplement][or the Pricing Disclosure Package], except
for those made under the captions “Description of Debt Securities We May Offer” in the Basic
Prospectus and “Description of Notes We May Offer” in the Prospectus Supplement, in each case
insofar as they relate to provisions of the Securities, the Indenture under which the Securities
are to be issued and the Amended and Restated Distribution Agreement relating to the Securities
therein described, and except for those made under the caption “United States Taxation” in the
Prospectus Supplement, insofar as they relate to provisions of U.S. Federal income tax law therein
described. Also, we do not express any opinion or belief as to the financial statements or other
financial data derived from accounting records contained in the Registration Statement, any
Post-Effective Amendment thereto, the Basic Prospectus
AIII-5
[or][,] the Prospectus Supplement [or][,][the Pricing Supplement] [or the Pricing Disclosure
Package], or as to the report of management’s assessment of the effectiveness of internal control
over financial reporting or the auditor’s attestation report thereon, each as included in the
Registration Statement, the Basic Prospectus [or][,] the Prospectus Supplement [or][,][the Pricing
Supplement] [or the Pricing Disclosure Package], or as to the statement of the eligibility and
qualification of the Trustee under the Indenture under which the Securities are being issued.
This letter is furnished by us, as counsel to the Company, to you[, as Representatives of the
Agents,] solely for [your][the] benefit [in your capacity as Agent][of the Agents in their capacity
as such], and may not be relied on by any other person. This letter may not be quoted, referred to
or furnished to any purchaser or prospective purchaser of the Securities and may not be used in
furtherance of any offer or sale of the Securities.
| Very truly yours, |
||||
AIII-6
Schedule A
[List documents other than the Basic Prospectus and the Prospectus Supplement that are included in
the Pricing Disclosure Package]
AIII-7
ANNEX IV
Form of Opinion of In-House Counsel to the Company
(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 summarized or disclosed in the Registration Statement or 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, the Amended
and Restated Distribution 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, defaults and violations 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 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 the Amended and Restated Distribution 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 the Amended and Restated Distribution Agreement (and any applicable Terms
Agreement);
(iv) Nothing which came to the attention of such counsel has caused such counsel to believe
that, insofar as relevant to the offering of the Securities,
(a) 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
[Use the following if the letter is being delivered at a Time of Delivery —— (b) the Pricing
Disclosure Package, as of [___:00] [A/P].M. on [•] (which such Agent has informed
AIV-1
such counsel is prior to the time of the first sale of the Securities by any Agent), [when
considered together with the price to the public and underwriting discount for the Securities set
forth on the cover of the Pricing Supplement and the statements made under the caption
[“Description of Securities” in the Pricing Supplement] [and [any other disclosure added
][in the Pricing Supplement][to the final Prospectus]], contained any untrue statement of a
material fact or omitted 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 or]
[(b)][(c)] the Prospectus as amended and supplemented [including by the Pricing Supplement],
as of [the date of the Pricing Supplement], contained any untrue statement of a material fact or
omitted 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; or
[(c)][(d)] the Pricing Disclosure Package, [when considered together with the price to the
public and underwriting discount for the Securities set forth on the cover of the Pricing
Supplement and the statements made under the caption[s] [“Description of Securities”] in the
Pricing Supplement] [and [any other disclosure added ][in the Pricing Supplement][to the
finalProspectus,], as of the time of delivery of this letter, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the statements
therein, in the lights of the circumstances under which they were made, not misleading; and
(v) the documents incorporated by reference in the Prospectus as amended or supplemented, 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
Such counsel may state that, in rendering his or her opinion in paragraph (iv), such counsel does
not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, [any Post-Effective Amendment thereto,] the Basic
Prospectus [or][,] the Prospectus Supplement [or][,] the Pricing Supplement][or the Pricing
Disclosure Package], except for those made under the captions “Description of Debt Securities We
May Offer” in the Basic Prospectus and “Description of Notes We May Offer” in the Prospectus
Supplement, in each case insofar as they relate to provisions of the Securities, the Indenture
under which the Securities are to be issued and the Amended and Restated Distribution Agreement
relating to the Securities therein described. Also, in rendering his or her opinion in paragraphs
(iv) and (v), such counsel need not express any opinion or belief as to the financial statements or
other financial data derived from accounting records contained in the Registration Statement, [any
Post-Effective Amendment thereto,] the Basic Prospectus [or][,] the Prospectus Supplement [or][,]
[the Pricing Supplement] [or][,] [or the Pricing Disclosure Package], or as to the report of
management’s assessment of the effectiveness of internal control over financial reporting or the
auditor’s attestation report thereon, each as included in the Registration Statement, [any
Post-Effective Amendment thereto,] the Basic Prospectus [or][,] the Prospectus Supplement
[or][,][the Pricing Supplement] [or the Pricing Disclosure Package], or as to the statement of the
eligibility and qualification of the Trustee under the Indenture under which the Securities are
being issued.
AIV-2
ANNEX V
Form of Letter of Independent Registered Public Accounting Firm
American International Group, Inc.
and
The Agents listed on Schedule I
Ladies and Gentlemen:
We have audited:
| 1. | the consolidated financial statements of American International Group, Inc. (the “Company”) and subsidiaries as of December 31, 2006 and 2005 and for each of the three years in the period ended December 31, 2006 included in the Company’s annual report on Form 10-K for the year ended December 31, 2006 (the “Form 10-K”), | ||
| 2. | the related financial statement schedules included in the Form 10-K, | ||
| 3. | management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 included in the Company’s annual report on Form 10-K for the year ended December 31, 2006 and | ||
| 4. | the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 |
The consolidated financial statements, financial statement schedules and management’s
assessment referred to above are all incorporated by reference in the registration statements
(Registration No. 333-• [,][and] No. 333-106040 [and 333-31024]) on Form S-3 filed by the Company
under the Securities Act of 1933 (the “Act”); our report (which contains an adverse opinion on the
effectiveness of internal control over financial reporting) with respect to the audits referred to
above is also incorporated by reference in such registration statement. Such registration
statement as amended as of •, 2007,of which the Prospectus dated •, 2007 forms a part, as
supplemented by the Prospectus Supplement dated •, 2007 for the offering of the Company’s U.S.
$•,000, 000,000 Medium-Term Notes, is herein referred to as the “Registration Statement.”
In connection with the Registration Statement:
| 1. | We are an independent registered public accounting firm with respect to the Company within the meaning of the Act and the applicable rules and regulations thereunder adopted by the Securities and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (United States) (the “PCAOB”). | |
| 2. | In our opinion, the consolidated financial statements and financial statement schedules audited by us and incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and |
AV-1
| the Securities Exchange Act of 1934 and the related rules and regulations adopted by the SEC. |
| 3. | We have not audited any financial statements of the Company as of any date or for any period subsequent to December 31, 2006; although we have conducted an audit for the year ended December 31, 2006, the purpose (and therefore the scope) of such audit was to enable us to express our opinion on the consolidated financial statements as of December 31, 2006 and for the year then ended, but not on the financial statements for any interim period within such year. Therefore, we are unable to and do not express any opinion on the unaudited consolidated balance sheets as of March 31, 2007 and the unaudited consolidated statements of income, of cash flows and of comprehensive income included in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2007 incorporated by reference in the Registration Statement, or on the Company’s financial position, results of operations or cash flows as of any date or for any period subsequent to December 31, 2006. Also, we have not audited the Company’s internal control over financial reporting as of any date subsequent to December 31, 2006. Therefore, we do not express any opinion on the Company’s internal control over financial reporting as of any date subsequent to December 31, 2006. | |
| 4. | For purposes of this letter, we have read the minutes of the 2007 meetings of the shareholders, the Board of Directors and Committees of the Board of Directors of the Company as set forth in the minute books at •, 2007, officials of the Company having advised us that the minutes of all such meetings through that date were set forth therein, except for the minutes of the meetings listed below which were not approved in final form, for which agendas were provided to us; officials of the Company have represented that such agendas include all substantive actions taken at such meetings: | |
| We have carried out other procedures to •, 2007 (our work did not extend to •, 2007) as follows: | ||
| With respect to the three-month period ended March 31, 2007 and 2006, we have |
| (i) | performed the procedures (completed the procedures related to March 31, 2007 on •, 2007) specified by the PCAOB for a review of interim financial information as described in SAS No. 100, Interim Financial Information, on the unaudited consolidated financial statements as of and for the three-month period ended March 31, 2007 and 2006 included in the Company’s quarterly reports on Form 10-Q for the quarter ended March 31, 2007, incorporated by reference in the Registration Statement; and | ||
| (ii) | inquired of certain officials of the Company who have responsibility for financial and accounting matters whether the unaudited consolidated financial statements referred to in (i) above comply as to form in all material respects with the applicable accounting requirements of the Securities Exchange Act of 1934 as it |
AV-2
| applies to Form 10-Q and the related rules and regulations adopted by the SEC. |
| The foregoing procedures do not constitute an audit made in accordance with standards of the PCAOB. Also, they would not necessarily reveal matters of significance with respect to the comments in the following paragraph. Accordingly, we make no representations as to the sufficiency of the foregoing procedures for your purposes. |
| 5. | Nothing came to our attention as a result of the foregoing procedures, however, that caused us to believe that: |
| (i) | Any material modifications should be made to the unaudited consolidated financial statements described in 4(i), incorporated by reference in the Registration Statement, for them to be in conformity with generally accepted accounting principles. | ||
| (ii) | The unaudited consolidated financial statements described in 4(i) do not comply as to form in all material respects with the applicable accounting requirements of the Securities Exchange Act of 1934 as it applies to Form 10-Q and the related rules and regulations adopted by the SEC. |
| 6. | Company officials have advised us that no consolidated financial data as of any date or for any period subsequent to March 31, 2007 are available; accordingly, the procedures carried out by us with respect to changes in financial statement items after March 31, 2007 have, of necessity, been limited. We have inquired of certain officials of the Company who have responsibility for financial and accounting matters as to whether (a) at •, 2007 there was any change in the capital stock, increase in long-term debt, or decrease in consolidated shareholders’ equity of the Company as compared with amounts shown in the March 31, 2007 consolidated balance sheet incorporated by reference in the Registration Statement; or (b) for the period from April 1, 2007 to •, 2007, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated net income. | |
| Those officials referred to above stated that due to the fact that there is no consolidated financial data available subsequent to March 31, 2007, they are not in a position to comment on whether there was any such change, increase or decrease. | ||
| 7. | This letter is solely for the information of the addressees and to assist the agents in conducting and documenting their investigation of the affairs of the Company in connection with the offering of the securities covered by the Registration Statement, and is not to be used, circulated, quoted, or otherwise referred to within or without the underwriting group for any other purpose, including but not limited to the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the Registration Statement or any other document, except that reference may be made to it in the distribution agreement or in any list of closing documents pertaining to the offering of the securities covered by the Registration Statement. |
AV-3
Yours very truly,
AV-4
Schedule I
AIG Financial Securities Corp.
ABN AMRO Incorporated
ANZ Securities, Inc.
Banc of America Securities LLC
Banca IMI S.p.A.
BMO Capital Markets Corp.
Barclays Capital Inc.
Bear, Xxxxxxx & Co. Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
Calyon Securities (USA) Inc.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Daiwa Securities SMBC Europe Limited
Deutsche Bank Securities
Xxxxxxx, Sachs & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
X.X. Xxxxxx Securities Inc.
Key Banc Capital Markets Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Mitsubishi UFJ Securities International plc
Mizuho International plc
Mizuho Securities USA Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
National Australia Capital Markets, LLC
RBC Capital Markets Corporation
Santander Investment Securities Inc.
Scotia Capital (USA) Inc.
SG Americas Securities, LLC
TD Securities (USA) LLC
UBS Securities LLC
Wachovia Capital Markets, LLC
ABN AMRO Incorporated
ANZ Securities, Inc.
Banc of America Securities LLC
Banca IMI S.p.A.
BMO Capital Markets Corp.
Barclays Capital Inc.
Bear, Xxxxxxx & Co. Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
Calyon Securities (USA) Inc.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Daiwa Securities SMBC Europe Limited
Deutsche Bank Securities
Xxxxxxx, Sachs & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
X.X. Xxxxxx Securities Inc.
Key Banc Capital Markets Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Mitsubishi UFJ Securities International plc
Mizuho International plc
Mizuho Securities USA Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
National Australia Capital Markets, LLC
RBC Capital Markets Corporation
Santander Investment Securities Inc.
Scotia Capital (USA) Inc.
SG Americas Securities, LLC
TD Securities (USA) LLC
UBS Securities LLC
Wachovia Capital Markets, LLC
AV-5
ANNEX VI
Agents
AIG Financial Securities Corp.
ABN AMRO Incorporated
ANZ Securities, Inc.
Banc of America Securities LLC
Banca IMI S.p.A.
BMO Capital Markets Corp.
Barclays Capital Inc.
Bear, Xxxxxxx & Co. Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
Calyon Securities (USA) Inc.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Daiwa Securities SMBC Europe Limited
Deutsche Bank Securities
Xxxxxxx, Xxxxx & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
X.X. Xxxxxx Securities Inc.
Key Banc Capital Markets Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Mitsubishi UFJ Securities International plc
Mizuho International plc
Mizuho Securities USA Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
National Australia Capital Markets, LLC
RBC Capital Markets Corporation
Santander Investment Securities Inc.
Scotia Capital (USA) Inc.
SG Americas Securities, LLC
TD Securities (USA) LLC
UBS Securities LLC
Wachovia Capital Markets, LLC
ABN AMRO Incorporated
ANZ Securities, Inc.
Banc of America Securities LLC
Banca IMI S.p.A.
BMO Capital Markets Corp.
Barclays Capital Inc.
Bear, Xxxxxxx & Co. Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
Calyon Securities (USA) Inc.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Daiwa Securities SMBC Europe Limited
Deutsche Bank Securities
Xxxxxxx, Xxxxx & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
X.X. Xxxxxx Securities Inc.
Key Banc Capital Markets Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Mitsubishi UFJ Securities International plc
Mizuho International plc
Mizuho Securities USA Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
National Australia Capital Markets, LLC
RBC Capital Markets Corporation
Santander Investment Securities Inc.
Scotia Capital (USA) Inc.
SG Americas Securities, LLC
TD Securities (USA) LLC
UBS Securities LLC
Wachovia Capital Markets, LLC
AVI-1
ATTACHMENT A
American International Group, Inc.
Administrative Procedure
Administrative Procedure
This Administrative Procedure relates to the Securities defined in the Amended and Restated
Distribution Agreement, dated June •, 2007 (the “Amended Distribution Agreement”), between American
International Group, Inc. (the “Company”) and the Agents listed in Annex VI (individually, an
“Agent” and collectively, the “Agents”), to which this Administrative Procedure is attached as
Attachment A. Defined terms used herein and not defined herein shall have the meanings
given such terms in the Amended 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 Amended Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the Amended 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 Blanket Letter of Representations from the Company and the Trustee to the Depositary, dated
September 30, 2005, 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”).
A-1
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; | ||
| (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 |
A-2
| (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 | ||
| (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 |
A-3
| 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 authenticated and issued 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.
A-4
Preparation of Pricing Supplement and, if applicable, Term Sheet:
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, as the case may be, at least ten copies of such Pricing
Supplement, with a copy to the Trustee, as provided under “Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent” below. If applicable, the Term Sheet reflecting the terms of such
Security will be prepared by such Agent and at least 10 copies will be delivered by such Agent to
the Company, with a copy to the Trustee, as provided under “Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent” below. 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 XXXXX System pursuant to Rule 424 under the Act and, if applicable,
will file the Term Sheet in accordance with Rule 433.
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) and, if applicable, the Term Sheet in relation to such Book-Entry Security
prior to the first contract for sale of 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:
A-5
| 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 xxxx 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.
A-6
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 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
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Company accepts an offer to purchase Certificated 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 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. |
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Preparation of Pricing Supplement and, if applicable, Term Sheet:
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, as provided under “Delivery of Confirmation and Prospectus to
Purchaser by Selling Agent” below. If applicable, the Term Sheet reflecting the terms of such
Security will be prepared by such Agent and at least 10 copies will be delivered by such Agent to
the Company, with a copy to the Trustee, as provided under “Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent” below. 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 XXXXX System pursuant to Rule 424 under the Act and, if applicable,
will file the Term Sheet in accordance with Rule 433.
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) and, if applicable, the Term Sheet 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
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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.
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.
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