AMERICAN INTERNATIONAL GROUP, INC.
72,000,000 Equity
Units
Underwriting
Agreement
May 12, 2008
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.,
As Representatives of the several
Underwriters
named in Schedule I
hereto.
c/o
Citigroup Global Markets Inc.,
388 Greenwich Street
New York, NY 10013
c/o J.P.
Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
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 to the firms named in Schedule I hereto (the
“ Underwriters ”), for whom you are acting as
Representatives (the “ Representatives ”), an
aggregate of 72,000,000 Equity Units of the Company (the “
Firm Securities ”) and, at the election of the
Representatives acting on behalf of the Underwriters, to issue and
sell to the Underwriters up to an additional 6,400,000 Equity Units
of the Company (the “ Optional Securities ”,
and, together with the Firm Securities, the “
Securities ”), solely to cover over-allotments.
Each Equity Unit has an initial
stated amount of $75 (“ Stated Amount ”) and
initially consists of (i) a stock purchase contract (“
Stock Purchase Contract ”) pursuant to which the
holder will agree to purchase and the Company will agree to sell on
each of February 15, 2011, May 1, 2011 and August 1,
2011 (each, a “ Purchase Contract Settlement Date
”), for $25 a variable number of shares (the “Issuable
Common Stock”) of the Company’s common stock, par value
$2.50 per share (the “ Common Stock ”), equal to
the applicable settlement rate, subject to anti-dilution
adjustments, as determined pursuant to the terms of the Stock
Purchase Contract and, initially, (ii) a 1/40, or 2.5%,
undivided beneficial ownership interest in $1,000 principal amount
of (a) the Company’s 5.67% Series B-1 Junior
Subordinated Debentures (a “ Series B-1
Debentures ”), (b) the Company’s 5.82%
Series B-2 Junior Subordinated Debentures (a “
Series B-2 Debentures ”), and (c) the
Company’s 5.89% Series B-3 Junior Subordinated
Debentures (a “ Series B-3 Debentures ”
and, together with the Series B-1 Debentures and the
Series B-2 Debentures, the " Debentures ”); or on
or after the applicable remarketing settlement date for any series
of Debentures and prior to the applicable Purchase Contract
Settlement Date, an interest in U.S. Treasury securities or a
short-term note issued by an affiliate of the Company purchased
with the net proceeds of the remarketing of such series of
Debentures that matures on or prior to the applicable Purchase
Contract Settlement Date, pursuant to the Purchase Contract
Agreement (as defined below).
The Purchase Contracts will be issued
pursuant to the Purchase Contract Agreement, to be dated as of the
Closing Date (as defined herein) (“ Purchase Contract
Agreement ”), between the Company and The Bank of New
York, as Purchase Contract Agent (the “ Purchase Contract
Agent ”). The Stock Purchase Contracts together with the
related Debentures are herein referred to as the “
Corporate Units .”
A holder of Corporate Units, at its
option, may elect to create “ Treasury Units ”
in accordance with the Purchase Contract Agrement by substituting
U.S. Treasury securities for any pledged ownership interests in the
Debentures. Unless otherwise indicated, the term “ Equity
Units ” includes both Corporate Units and Treasury
Units.
The Debentures are to be issued under
the Junior Subordinated Debt Indenture, dated as of March 13,
2007 (“ Base Indenture ”), between the Company
and The Bank of New York, as Trustee (the " Trustee
”), as amended and supplemented by the Sixth, Seventh, and
Eighth supplemental indentures each to be dated as of the Closing
Date, between the Company and the Trustee (collectively, the "
Supplemental Indentures, ” and together with the Base
Indenture, “ Indenture ”).
A holder’s ownership interest
in each Debenture initially will be pledged to secure such
holder’s obligation to purchase the Issuable Common Stock on
the applicable Purchase Contract Settlement Date, such pledge to be
on the terms and conditions set forth in the Pledge Agreement (the
“ Pledge Agreement ”), to be dated as of the
Closing Date, among the Company, Wilmington Trust Company, as
Collateral Agent, Custodial Agent and Securities Intermediary (the
“ Collateral Agent ”), and The Bank of New York,
as the Purchase Contract Agent.
Pursuant to a Remarketing Agreement,
to be dated as of the Closing Date (“ Remarketing
Agreement ”), among the Company, The Bank of New York, as
the Purchase Contract Agent, and the remarketing agents named
therein (“ Remarketing Agents ”), the Debentures
will be remarketed, subject to certain terms and conditions.
The “ Component
Securities ” means, collectively, the Stock Purchase
Contracts, the Debentures and the Issuable Common Stock.
The terms and rights of any
particular issuance of the Securities and/or Component Securities
shall be as specified in (i) the Indenture, (ii) the
Purchase Contract Agreement and (iii) the Pledge Agreement, as
applicable (each document listed in clauses (i) through (iii),
together with the Remarketing Agreement, a “ Securities
Agreement ” and collectively the “ Securities
Agreements ”).
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The Company is concurrently publicly
offering shares of Common Stock (the “ Common Stock
Offering ”) through other underwriters. The offering of
the Securities is not contingent upon the completion of the Common
Stock Offering and the Common Stock Offering is not contingent upon
the offering of the Securities.
1. The Company represents and
warrants to, and agrees with, each of the Underwriters that:
(a) Registration
statements on Form S-3 (Registration Nos. 333-143992 and
333-106040) in respect of the Securities have been filed with the
Securities and Exchange Commission (the " Commission
”); the latest filed of such registration statements
(Registration No. 333-143992), in the form heretofore
delivered to the Representatives (excluding exhibits to such latest
filed registration statement, but including all documents
incorporated by reference in the prospectus describing Common Stock
included in that registration statement, the “ latest
filed registration statement ”), has been declared
effective by the Commission in such form, the earlier filed
registration statement also has been declared effective by the
Commission; other than a registration statement, if any, increasing
the size of the offering (a “ Rule 462(b)
Registration Statement ”), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the " Act
”), which became effective upon filing, since the delivery to
the Representatives no other document with respect thereto or
document incorporated by reference therein has been filed or
transmitted for filing with the Commission (other than filings by
the Company under the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”), and other than
preliminary prospectuses, preliminary prospectus supplements and
other prospectuses filed pursuant to Rule 424(b) or Rule 433
of the rules and regulations of the Commission under the Act that
relate to securities other than the Securities); and no stop order
suspending the effectiveness of the latest filed registration
statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (the basic prospectus filed as part
of the latest filed registration statement is hereinafter called
the “ Basic Prospectus ”; any preliminary
prospectus (including the Basic Prospectus as supplemented by any
preliminary prospectus supplement) relating to the Securities filed
with the Commission pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act is hereinafter called a
“ Preliminary Prospectus" ; the various parts of the
latest filed registration statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
the documents incorporated by reference in the Basic Prospectus at
the time such registration statement became effective, and any
prospectus supplement relating to the Securities that is filed with
the Commission and deemed by virtue of Rule 430B to be part of
that registration statement, each as amended at the time that
registration statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the “
Registration Statement ”; the Basic Prospectus as
amended and supplemented immediately prior to the Applicable Time
(as defined in Section 1(c) hereof), is hereinafter called the
“ Pricing Prospectus ”; the form of the final
prospectus relating to the Securities filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof is hereinafter called the “
Prospectus” but excluding any Statement of Eligibility
under the Trust Indenture Act of 1939, as amended; any reference
herein to the Basic Prospectus, the Pricing Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date
of such prospectus; any reference to any amendment or supplement to
the Basic Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any post-effective
amendment to the Registration Statement, any prospectus supplement
relating to
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the
Securities filed with the Commission pursuant to Rule 424(b) under
the Act and any documents filed under the Exchange Act and
incorporated therein, in each case after the date of the Basic
Prospectus, such Preliminary Prospectus or the Prospectus, as the
case may be; 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 “issuer free writing prospectus” as defined in
Rule 433 under the Act relating to the Securities is
hereinafter called an “ Issuer Free Writing Prospectus
”;
(b) No
order preventing or suspending the use of any Preliminary
Prospectus or any 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 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 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 an
Underwriter through the Representatives expressly for use therein
;
(c) For
the purposes of this Agreement, the “ Applicable Time
” is 5 p.m. (Eastern time) on the date of this Agreement; the
Pricing Prospectus, as supplemented by the information contained in
the final term sheet prepared and filed pursuant to Section 5(a)
hereof, taken together (collectively, the “ Pricing
Disclosure Package ”) as of the Applicable Time, did 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 were
made, not misleading; and each other Issuer Free Writing Prospectus
listed on Schedule II(a) hereto does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus, and each such other Issuer Free
Writing Prospectus, as supplemented by and taken together with the
Pricing Disclosure Package as of the Applicable Time, did 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 were
made, not misleading; provided, however , that this
representation and warranty shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein;
(d) The
documents incorporated by reference in the Pricing Prospectus and
the Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the 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
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which
they were made, not misleading; provided , however ,
that this representation and warranty shall not apply to
(i) any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by
an Underwriter through the Representatives expressly for use
therein, or (ii) any statement in any such document which does
not constitute part of the Registration Statement, Pricing
Prospectus or Prospectus pursuant to Rule 412 under the
Act;
(e) The
Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus will conform, in all material respects to the
requirements of the 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) any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by any
Underwriter through the Representatives expressly for use in the
Prospectus or any amendment or supplement thereto, or (ii) any
statement which does not constitute part of the Registration
Statement or Prospectus pursuant to Rule 412 under the
Act;
(f) The
Company and each of its Significant Subsidiaries (as defined in
Rule 1.02(w) of Regulation S-X) have been duly
incorporated or organized and are validly existing corporations or
other entities in good standing under the laws of their respective
jurisdiction of incorporation or organization and have full power
and authority to own their respective properties and to conduct
their respective businesses as described in the Prospectus, except,
in the case of any Significant Subsidiary, where the failure to be
so duly incorporated or organized, validly existing, in good
standing or have such power or authority would not, individually or
in the aggregate, have a Material Adverse Effect (as defined in
Section 1(i) below);
(g) Since
the date of the latest audited financial statements incorporated by
reference in the Basic 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 plans and upon conversion of convertible
securities, repurchased by the Company pursuant to any previously
announced stock repurchase program or issued pursuant to the Common
Stock Offering and the offering of approximately $5 billion of
non-dilutive capital securities or long-term debt), or
(ii) any material adverse change in or affecting the business,
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 Basic Prospectus as amended or
supplemented prior to the Applicable Time (any such change
described in clause (ii) is referred to as a “
Material Adverse Change ”);
(h) The
Company has an authorized equity capitalization as set forth in the
Pricing Prospectus;
(i) The
issue and sale of the Securities and the Component Securities and
the compliance by the Company with all of the provisions of this
Agreement and the Securities Agreements, and the consummation of
the transactions contemplated herein and therein, will not
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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 conflicts, breaches, defaults and violations that would not
have a material adverse effect on the business, financial position,
shareholders’ equity or results of operations of the Company
and its subsidiaries considered as an entirety (a “
Material Adverse Effect ”) or affect the validity of
the Securities or the Component 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 issue and sale of
the Securities and the Component Securities or the consummation by
the Company of the transactions contemplated by this Agreement and
the Securities Agreements, except the listing of the Securities on
the New York Stock Exchange and 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 or the Component Securities,
and such consents, approvals, authorizations, orders, registrations
or qualifications as have been, or will have been prior to the
First Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals,
authorizations, orders, registrations or qualifications as may be
required in connection with the transactions contemplated by the
Remarketing Agreement, which will be obtained or made as provided
by the Remarketing Agreement, and 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
purchase and distribution of the Securities by the
Underwriters;
(j) The
consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included in the
Preliminary Prospectus, the Prospectus and the Registration
Statement present fairly, in all material respects, the financial
condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form, in
all material respects, with the applicable accounting requirements
of the Act and have been prepared in conformity with U.S. generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted
therein);
(k) The
Company and its subsidiaries maintain “disclosure controls
and procedures” (as such term is defined in
Rule 13a-15(e) under the Exchange Act); as disclosed in the
Registration Statement, Preliminary Prospectus and the Prospectus,
such disclosure controls and procedures were not effective at
March 31, 2008;
(l) Neither
the Company nor any of its Significant Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Significant Subsidiaries is
currently subject to any sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department, except for
any such sanction that individually or in the aggregate would not
have a Material Adverse Effect;
(m) The
Company and its Significant Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that
are necessary for the ownership or lease of their respective
properties or the conduct of their respective
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businesses as described in the Registration Statement, the
Preliminary Prospectus and the Prospectus, except where the failure
to possess or make the same would not, individually or in the
aggregate, have a Material Adverse Effect; and except as described
in the Registration Statement, the Preliminary Prospectus and the
Prospectus, neither the Company nor any of its Significant
Subsidiaries has received notice of any revocation or modification
of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, in each
case, except where the failure to posses the same or the
modification to the same would not, individually or in the
aggregate, have a Material Adverse Effect;
(n) 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 Pricing Disclosure Package or
the Prospectus as amended or supplemented in accordance with
Section 5(a) hereof;
(o) The
Base 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 against the Company 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; each Supplemental Indenture has been
duly authorized by the Company and, when executed and delivered by
the Company and the Trustee will constitute a valid and legally
binding obligation of the Company enforceable against the Company
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 Debentures have
been duly authorized, and when issued and delivered by the Company
and authenticated by the Trustee pursuant to this Agreement and the
Indenture, will have been duly executed, authenticated, issued and
delivered by the Company and will constitute valid and legally
binding obligations of the Company, enforceable against the Company
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. The Indenture conforms and
the Debentures will conform in all material respects to the
descriptions thereof contained in the Pricing Disclosure Package
and in the Prospectus;
(p) The
Securities have been duly authorized, and when executed, issued and
delivered by the Company and authenticated by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement, will have been
duly executed, authenticated, issued and delivered by the Company
and will constitute valid and legally binding obligations of the
Company enforceable against the Company 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; provided, however , that upon
the occurrence of a Termination Event (as defined in the Purchase
Contract Agreement), Section 365(e)(2) of the Bankruptcy Code
(11 U.S.C. §§ 101-1330, as amended) would provide that
Section 365(e)(1) would not apply to substantively limit the
provisions of the Purchase Contract Agreement or the Pledge
Agreement that require termination of the Stock Purchase Contracts
and release of the Collateral Agent’s security interest in
(1) the Debentures, (2) the U.S. Treasury securities
underlying the Treasury Units or (3) any Treasury Portfolio
(as defined in the Purchase Contract Agreement), as applicable, and
the transfer of such securities to the
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Purchase
Contract Agent (for the benefit of the holders of the Securities);
provided, further, however, that (x) the foregoing is
subject to the equitable powers of the Bankruptcy Court and the
Bankruptcy Court’s power under Section 105(a) and 510(c) of
the Bankruptcy Code and (y) procedural restrictions respecting
relief from the automatic stay under Section 362 of the
Bankruptcy Code may delay the timing of the exercise of such rights
and remedies. The Securities will conform in all material respects
to the descriptions thereof contained in the Pricing Disclosure
Package and in the Prospectus;
(q) The
Stock Purchase Contracts and the Purchase Contract Agreement have
been duly authorized by the Company, and in the case of the Stock
Purchase Contracts, when executed, issued and delivered by the
Company and authenticated by the Purchase Contract Agent, and in
the case of the Purchase Contract Agreement, when executed and
delivered by the Company and the Purchase Contract Agent, will
constitute valid and legally binding obligations of the Company
enforceable against the Company 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; provided, however , that upon
the occurrence of a Termination Event, Section 365(e)(2) of
the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended)
would provide that Section 365(e)(1) would not apply to
substantively limit the provisions of the Purchase Contract
Agreement or the Pledge Agreement that require termination of the
Stock Purchase Contracts and release of the Collateral
Agent’s security interest in (1) the Debentures,
(2) the U.S. Treasury securities underlying the Treasury Units
or (3) any Treasury Portfolio, as applicable, and the transfer
of such securities to the Purchase Contract Agent (for the benefit
of the holders of the Securities); provided, further,
however , that (x) the foregoing is subject to the
equitable powers of the Bankruptcy Court and the Bankruptcy
Court’s power under Section 105(a) and 510(c) of the
Bankruptcy Code and (y) procedural restrictions respecting
relief from the automatic stay under Section 362 of the
Bankruptcy Code may delay the timing of the exercise of such rights
and remedies. The Stock Purchase Contracts will conform in all
material respects to the descriptions thereof contained in the
Pricing Disclosure Package and in the Prospectus;
(r) The
Remarketing Agreement has been duly authorized by the Company and,
when executed and delivered by the Company and the Remarketing
Agents, will constitute a valid and legally binding obligation of
the Company enforceable against the Company 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. The Remarketing Agreement will
conform in all material respects to the descriptions thereof
contained in the Pricing Disclosure Package and in the
Prospectus.
(s)
(i) The Pledge Agreement has been duly authorized, and when
executed and delivered by the Company, the Purchase Contract Agent
and the Collateral Agent, 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; provided, however, that upon
the occurrence of a Termination Event, Section 365(e)(2) of
the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended)
would provide that Section 365(e)(1) would not apply to
substantively limit the provisions of the Purchase Contract
Agreement or of the Pledge Agreement that require termination of
the Stock Purchase Contracts and release of the Collateral
Agent’s security interest in (1) the Debentures,
(2) the U.S. Treasury securities underlying the Treasury Units
or (3) any Treasury Portfolio, as applicable, and the transfer
of such
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securities to the Purchase Contract Agent (for the benefit of the
holders of the Securities); provided, further, however ,
that (x) the foregoing is subject to the equitable powers of
the Bankruptcy Court and the Bankruptcy Court’s power under
Section 105(a) and 510(c) of the Bankruptcy Code and
(y) procedural restrictions respecting relief from the
automatic stay under Section 362 of the Bankruptcy Code may
delay the timing of the exercise of such rights and remedies. The
Pledge Agreement will conform in all material respects to the
descriptions thereof contained in the Pricing Disclosure Package
and in the Prospectus.
(t) The
Isssuable Common Stock has been duly authorized and reserved for
issuance upon delivery in accordance with the Stock Purchase
Contracts and the Purchase Contract Agreement; and when issued and
paid for in accordance with the provisions of the Purchase Contract
Agreement and the Stock Purchase Contracts, such Issuable Common
Stock will be validly issued, fully paid and nonassessable; and the
Issuable Common Stock will conform in all material respects to the
descriptions thereof contained in the Pricing Disclosure Package
and in the Prospectus.
2. (a) Subject to the terms
and conditions herein set forth, (i) the Company agrees to
issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price set forth in Exhibit A to
Schedule II, the number of Firm Securities set forth opposite
such Underwriter’s name in Schedule I and (ii) in
the event and to the extent that the Representatives shall exercise
the election to purchase Optional Securities as provided below, the
Company agrees to issue and sell to the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase
from the Company, at the same purchase price set forth in clause
(i) of this Section 2(a), the number of the Optional
Securities as to which such election shall have been exercised (to
be adjusted by the Representatives, if necessary, so as to
eliminate fractions of Equity Units) determined by multiplying the
number of such Optional Securities by a fraction, the numerator of
which is the maximum number of Firm Securities which such
Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Firm Securities that all of the
Underwriters are entitled to purchase hereunder.
(b) Each
Underwriter 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 the manner in which, the Securities
may be offered, sold, resold or delivered.
(c) The
Company hereby grants to the Underwriters the one-time right to
purchase at the election of the Representatives up to 6,400,000
Optional Securities, solely for the purpose of covering
over-allotments, if any, in connection with the offer and sale of
the Firm Securities, at the purchase price set forth in clause
(i) of Section 2(a). Any such election to purchase
Optional Securities may be exercised by written notice from the
Representatives to the Company, given within a period of
13 days after the First Time of Delivery, setting forth the
number of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by the
Representatives, which shall in no event be earlier than the First
Time of Delivery (as defined in Section 4 hereof) or, unless
the Representatives and the Company otherwise agree in writing,
earlier than three or later than five New York Business Days after
the date of such notice. For the purposes of this Agreement,
“ New York Business Day ” shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which
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banking
institutions in New York are generally authorized or obligated by
law or executive order to close.
3. Upon the authorization by the
Representatives of the release of such Securities, the several
Underwriters propose to offer such Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. The Company will deliver the
Securities to one or more of the Representatives for the account of
each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to
the Representatives at least twenty-four hours in advance, by
causing The Bank of New York, as registrar, to register the
Securities in global book entry form in the name of Cede & Co.,
or such other nominee as The Depository Trust Company (“
DTC ”) may designate, and shall cause DTC to credit
the Securities to the account of one or more of the Representatives
at DTC. The time and date of such delivery and payment, with
respect to the Firm Securities, shall be 9:30 a.m., New York City
time, on May 16, 2008 or such other time and date as the
Representatives and the Company may agree upon in writing, and,
with respect to the Optional Securities, shall be 9:30 a.m., New
York City time, on the date specified by the Representatives in the
written notice given by the Representatives of the
Underwriters’ election to purchase the Optional Securities,
or at such other time and date as the Representatives and the
Company may agree upon in writing. Such time and date for delivery
of the Firm Securities is herein called the “ First Time
of Delivery ”, such time and date for delivery of the
Optional Securities, if not the First Time of Delivery, is herein
called an “ Optional Time of Delivery ”, and
each such time and date for delivery is herein called a “
Time of Delivery ”.
The
documents to be delivered at a Time of Delivery by or on behalf of
the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the Securities, will be delivered at the offices
of Sullivan & Cromwell LLP, 125 Broad Street, New York, NY
10004 (the “ Closing Location ”), and the
Securities will be credited to the account of the Representatives
at DTC, all at such Time of Delivery. A meeting will be held at the
Closing Location at 4:00 p.m., New York City time, on the New York
Business Day next preceding such Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties
hereto.
5. The Company covenants and
agrees with each of the Underwriters:
(a) To
prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission’s close of business on the
second business day following the date of this Agreement; to make
no further amendment or supplement (other than an amendment or
supplement as a result of filings by the Company under the Exchange
Act and other than amendments or supplements in connection with the
Common Stock Offering or offerings of unsecured debt securities of
or guaranteed by the Company) to the Registration Statement or the
Prospectus prior to the First Time of Delivery which shall be
disapproved by the Representatives promptly after reasonable notice
thereof; between the signing of this Agreement and the First Time
of Delivery, to give reasonable advance notice to the
Representatives of any filings by the Company under the Exchange
Act that are incorporated by reference into the Prospectus and any
filings by the Company under Item 2.02 or 7.01 of Current
Report on Form 8-K; between the signing of this Agreement and the
First Time of Delivery, to advise the Representatives promptly
after it receives notice thereof, of the time when any
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amendment to the Registration Statement has been filed or becomes
effective or any amendment or supplement to the Prospectus has been
filed (other than an amendment or supplement as a result of filings
by the Company under the Exchange Act and other than amendments or
supplements in connection with the Common Stock Offering or
offerings of unsecured debt securities of or guaranteed by the
Company) and to furnish the Representatives with copies thereof; to
prepare a final term sheet, containing solely a description of the
Securities, in the form set forth in Exhibit A to
Schedule II hereto 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 other material required to be filed by the
Company with the Commission 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 (or in
lieu thereof, the notice referred to in Rule 173(a) under the Act)
is required in connection with the offering or sale of the
Securities, and during such same period to advise the
Representatives, 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 to the Prospectus or
any amended Prospectus has been filed with the Commission (other
than an amendment or supplement as a result of filings by the
Company under the Exchange Act and other than the filing of
prospectuses, preliminary prospectuses, preliminary prospectus
supplements, issuer free-writing prospectuses and other documents
pursuant to Rule 424(b) or Rule 433 under the Act that relate
to the Common Stock Offering or securities other than the
Securities), 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 amending or
supplementing 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 relating to the Securities 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 the Representatives may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings in such jurisdictions
for as long as may be necessary to complete the distribution 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) From
time to time, to furnish the Underwriters with written and
electronic copies of the Prospectus in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is required at any time prior to the
expiration of nine months after the time of issuance of the
Prospectus in connection with the offering or sale of the
Securities 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 (or in lieu thereof, the notice referred
to in Rule 173(a) under the Act) 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 or the Exchange Act, to
notify the
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Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is
required to deliver a prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Act) in connection with sales
of any of the Securities at any time nine months or more after the
time of issue of the Prospectus, upon the request of the
Representatives but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many written and electronic
copies as the Representatives may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To
make generally available to its security holders as soon as
practicable, but in any event not later than sixteen months after
the effective date of the Registration Statement (as defined in
Rule 158(c)), an earnings statement 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);
(e) During
the period beginning from the date hereof, and continuing to and
including the date 90 days after the date hereof or such
earlier time as the Representatives may notify the Company, not to
offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose of, or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or
any person in privity with the Company, directly or indirectly, or
establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act in respect of, any shares of
Common Stock, or any options or warrants to purchase any shares of
Common Stock, or any securities convertible into, exchangeable for
or that represent the right to receive shares of Common Stock, or
otherwise publicly announce an intention to effect any such
transaction (other than (1) the offer and sale of Securities
pursuant to this Agreement and the Common Stock Offering,
(2) the grant of awards pursuant to the Company’s
employee benefit, employee stock purchase and other similar plans,
in each case, as existing on the date hereof (the “
Employee Benefit Plans ”), (3) the offering,
sale, settlement or issuance of securities pursuant to any award or
security issued under or pursuant to an Employee Benefit Plan or
the Assurance Agreement, by the Company in favor of eligible
employees, dated as of June 27, 2005, relating to certain
obligations of Starr International Company, Inc., (4) the
issue of shares of Common Stock or options, contracts or rights to
acquire Common Stock in connection with the acquisition of a
business or assets so long as the total number of shares of Common
Stock issued or issuable does not exceed 3% of the Company’s
then outstanding shares of Common Stock, or (5) with the
consent of the Representatives;
(f) To
use all commercially reasonable efforts to ensure that, no later
than the First Time of Delivery, the Securities will be approved
for listing on the New York Stock Exchange; and
(g) The
Company shall reserve shares of Issuable Common Stock to satisfy
the obligation of the Company to issue Common Stock pursuant to the
Stock Purchase Contracts.
6. (a) The Company and each
Underwriter agree that the Underwriters may prepare and use one or
more preliminary term sheets relating to the Securities containing
customary
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information; provided that such information has been
approved by the Company before the first communication with
prospective investors in the Securities containing such information
is used;
(b) Each
Underwriter 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) the final term sheet prepared and filed
pursuant to Section 5(a) hereof, or (C) any written
communication prepared by such Underwriter and approved in writing
by the Company in advance;
(c) The
Company represents to the Underwriters 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) the final term sheet prepared and filed
pursuant to Section 5(a) hereof, (C) a press release or other
announcement relating to the Securities that complies with
Rule 134 or Rule 135 under the Act and that the Company
issues after giving notice to the Representatives of its intent to
issue a press release, or (D) any written communication
approved by the Representatives in advance in writing;
(d) Any
such free writing prospectus the use of which has been consented to
by the Company or the Representatives, as the case may be
(including the final term sheet prepared and filed pursuant to
Section 5(a) hereof), is listed on Schedule II(a)
hereto;
(e) 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, and legending; and
(f) The
Company agrees that if at any time following the issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a
result of which such Issuer Free Writing Prospectus would conflict
with the information in the Registration Statement, the Pricing
Prospectus or the Prospectus, or 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, if
the Underwriters are then required to deliver a prospectus under
the Act in respect of sales of Securities (or, in lieu thereof, the
notice referred to in Rule 173 under the Act), give prompt
notice thereof to the Representatives and, if requested by the
Representatives, will prepare and furnish without charge to each
Underwriter 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 Underwriter through the Representatives expressly for use
therein.
7. The Company covenants and
agrees with the several Underwriters 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, the Basic Prospectus, any
Preliminary Prospectus, any Issuer Free Writing Prospectus, the
Pricing Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies
thereof to the Underwriters; (ii) the cost of printing,
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word-processing or reproducing this Agreement, the Securities
Agreements, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof,
including the fees and disbursements of the Underwriters’
counsel in connection with such qualification and in connection
with the Blue Sky and legal investment surveys; (iv) any
filing fees incident to any required review and clearance by the
Financial Industry Regulatory Authority of the terms of the sale of
the Securities; (v) the fees and expenses of the Trustee,
Purchase Contract Agent, Collateral Agent and the Remarketing
Agents; (vi) the fees and expenses of the Company’s
registrar and transfer agent; and (vii) all other costs and
expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this
Section 7, but the Company shall not in any event be liable to
any of the Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Securities. It is
understood, however, that, except as provided in this
Section 7, Section 9 and Section 12 hereof, the
Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses
connected with any offers they may make.
8. The obligations of the
Underwriters shall be subject, in the discretion of the
Representatives, to the condition that all representations and
warranties (except in the case of the Optional Time of Delivery the
representations and warranties in Sections 1(c), 1(g) and
1(n)) and other statements of the Company herein shall be true and
correct at and as of each Time of Delivery (it being understood,
however, that in the case of the Optional Time of Delivery the
representations and warranties in Sections 1(i), 1(o) through
and including 1(q), 1(s) and 1(t) shall be limited to the Optional
Securities), the condition that the Company shall have performed,
in all material respects, all of its obligations hereunder
theretofore to be performed and the following additional
conditions:
(a) No
stop order suspending the effectiveness of the Registration
Statement or any part thereof 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; the
Prospectus and each Issuer Free Writing Prospectus shall have been
timely filed with the Commission under the Act (in the case of an
Issuer Free Writing Prospectus to the extent required by
Rule 433 under the Act) and all requests for additional
information on the part of the Commission shall have been complied
with to the reasonable satisfaction of the Representatives;
(b) Davis
Polk & Wardwell, counsel to the Underwriters, shall have
furnished to the Representatives such opinion, dated each Time of
Delivery, with respect to the validity of the Securities, the
Securities Agreements, the Registration Statement, the Pricing
Disclosure Package, the Prospectus, and other related matters as
the Representatives may reasonably request (it being understood,
however, that in the case of the Optional Time of Delivery,
that
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