<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1995
REGISTRATION NO. 33-48996
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
<TABLE>
<S> <C>
AIG LIQUIDITY CORP. AMERICAN INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
PENDING 13-2592361
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
100 NYALA FARM 70 PINE STREET
WESTPORT, CONNECTICUT 06880 NEW YORK, NEW YORK 10270
(203) 222-4700 (212) 770-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
KATHLEEN E. SHANNON, ESQ.
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time on or after the effective date of this Registration Statement.
------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) FEE(3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Liquidity Facility Obligations(4)....................... $93,750,000 100% $93,750,000 $32,328
- ---------------------------------------------------------------------------------------------------------------------
Guarantee Obligations(4)................................ $93,750,000 100% $93,750,000 $32,328
=====================================================================================================================
</TABLE>
(1) Maximum fee receivable by Registrants over the life of the Liquidity
Facility Obligations and Guarantee Obligations (collectively, the
"Obligations") issued hereunder, estimated as product of (a) $1,500,000,000
(expected maximum amount of principal of and interest on Bonds subject to
the Obligations), (b) .0025 (expected maximum per annum fee per $1.00 of
principal of and interest on Bonds subject to the Obligations and (c) 25
(expected maximum number of years any Obligations will be outstanding).
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Previously remitted.
(4) This Registration Statement also covers Obligations issued in connection
with any remarketing of Bonds purchased by the Registrants or their
affiliates.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 1, 1995
LIQUIDITY FACILITY OBLIGATIONS
OF
AIG LIQUIDITY CORP.
AND
GUARANTEE OBLIGATIONS
OF
AMERICAN INTERNATIONAL GROUP, INC.
IN SUPPORT OF PAYMENT OF THE PURCHASE PRICE
OF TENDERED VARIABLE RATE
MUNICIPAL SECURITIES
AIG Liquidity Corp. ("AIG-LC") may from time to time enter into standby bond
purchase agreements (each, a "Standby Agreement") with issuers of or ultimate
obligors (each, an "Issuer") in respect of one or more series of variable rate
municipal securities (each such issue, a series of "Bonds") and, in some cases,
the tender and paying agent (each, a "Tender Agent") for the Bonds and/or the
trustee (each, a "Trustee") under the indenture, resolution or ordinance (each,
an "Indenture") pursuant to which the Bonds are being or have been issued. The
Bonds of each such series, including any Bonds remarketed by a remarketing agent
(each, a "Remarketing Agent") as described herein, will be subject, at the
option of the holder of the Bonds, to tender for purchase and, under certain
circumstances, will be subject to mandatory tender for purchase, in each case at
the times and on the terms and conditions set forth in the Indenture for such
Bonds. Pursuant to any such Standby Agreement, AIG-LC will be obligated to
purchase tendered Bonds which have not been remarketed by a Remarketing Agent as
described in, and subject to any conditions described in the accompanying
Prospectus Supplement (the "Prospectus Supplement"). Any tendered Bonds so
purchased by AIG-LC would again be subject to tender for purchase at the option
of the holder if such Bonds are remarketed by the Remarketing Agent. The payment
obligations of AIG-LC under each Standby Agreement will be unconditionally
guaranteed pursuant to a general guarantee relating to all Standby Agreements
and a specific guarantee relating to the relevant Standby Agreement (the general
guarantee and each such specific guarantee, a "Guarantee") issued by American
International Group, Inc. ("AIG").
The Prospectus Supplement with respect to a Standby Agreement and a
Guarantee will set forth the title of the relevant series of Bonds, the name of
the Issuer and any Insurer (as hereinafter defined), a summary of certain terms
of the Bonds relevant to the operation of the Standby Agreement and the
Guarantee, and specific terms of such Standby Agreement and Guarantee, including
whether and under what circumstances the obligations under the Standby Agreement
and Guarantee may be suspended or terminated without or prior to a mandatory
tender of Bonds.
This Prospectus and the Prospectus Supplement together constitute an
offering of the obligations of AIG-LC under the relevant Standby Agreement (the
"Liquidity Facility Obligations") and the obligations of AIG under the relevant
Guarantee (the "Guarantee Obligations" and, together with the Liquidity Facility
Obligations, the "Obligations") but do not constitute an offering of the Bonds
related thereto, which have been or will be offered pursuant to a separate
offering document (the "Official Statement"). AIG-LC and AIG undertake no
responsibility with respect to the accuracy or completeness of any Official
Statement or any information set forth therein. The Obligations may not be
traded separately from the Bonds to which they relate. This Prospectus and the
Prospectus Supplement may be delivered at the time of initial issuance of the
Bonds of a series or the remarketing thereof in connection with the replacement
by the Obligations of another liquidity facility in effect with respect to such
Bonds and, when appropriately supplemented, if required, may also be delivered
in connection with a remarketing of any Bonds purchased by AIG-LC or any
affiliate thereof.
Payment of principal of and interest on the Bonds of a series to which the
Obligations relate is solely the obligation of the Issuer and is not insured or
guaranteed by AIG-LC, AIG or any affiliate thereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
FOR NORTH CAROLINA RESIDENTS ONLY
THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED OF THE OFFERING, NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
This Prospectus may not be delivered unless accompanied by the Prospectus
Supplement.
The date of this Prospectus is March , 1995
<PAGE> 3
AVAILABLE INFORMATION
AIG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission, Room
1024, 450 Fifth Street, N.W., 13th Floor, Washington, D.C. 20549, as well as the
following Regional Offices: 7 World Trade Center, 13th Floor, New York, New York
10048 and Northwestern Atrium, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies can be obtained by mail at prescribed rates.
Requests should be directed to the Commission's Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements and
other information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which AIG's common stock
is listed. This Prospectus does not contain all of the information set forth in
the Registration Statement, of which this Prospectus is a part, and exhibits
thereto which AIG-LC and AIG have filed with the Commission under the Securities
Act of 1933 (the "1933 Act"), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document has been filed by AIG with the Commission (File No.
0-4652) and is incorporated herein by reference:
(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1993;
(2) AIG's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1994, June 30, 1994 and September 30, 1994;
(3) AIG's Proxy Statement dated March 30, 1994; and
(4) AIG's Report on Form 8-K dated February 23, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15 of the 1934
Act after the date of this Prospectus and prior to the termination of the
Obligations shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
AIG will provide without charge to each person to whom this Prospectus is
delivered, upon the written or oral request of any such person, a copy of the
documents (excluding exhibits thereto, unless such exhibits are specifically
incorporated by reference into such documents) referred to above which have been
or may be incorporated herein by reference and not furnished herewith. Requests
for such documents should be directed to AIG's Director of Investor Relations,
70 Pine Street, New York, New York 10270, telephone (212) 770-6667.
This Prospectus constitutes a prospectus with respect to the Obligations of
AIG-LC and AIG specified in the Prospectus Supplement. No Registration Statement
has been filed under the 1933 Act with respect to the Bonds specified in the
Prospectus Supplement.
2
<PAGE> 4
DESCRIPTION OF THE OBLIGATIONS
GENERAL
Standby Agreements may be entered into from time to time (guaranteed by
Guarantees which may be issued from time to time) with respect to one or more
series of Bonds specified in the Prospectus Supplement. The Bonds of each series
and any municipal bond insurance policy purchased by the Issuer with respect to
such Bonds (an "Insurance Policy") have been or will be described in a separate
Official Statement of the Issuer. AIG-LC and AIG undertake no responsibility
with respect to the accuracy or completeness of any Official Statement or any
information set forth therein.
The obligations of AIG-LC under each Standby Agreement and the obligations
of AIG under each Guarantee will rank equally with all other general unsecured
and unsubordinated obligations of AIG-LC and AIG, respectively. The Obligations
are not being issued pursuant to an indenture.
In connection with each Standby Agreement, AIG will agree to provide, or
cause to be provided, by means of capital contributions, purchases of assets,
loans or otherwise, funds to AIG-LC to the extent necessary to enable AIG-LC to
meet its obligations under the Standby Agreement. Any such agreement to provide
or cause to be provided funds will be solely for the benefit of and enforceable
by AIG-LC and AIG.
AIG depends on its subsidiaries for cash flow in the form of loans,
advances and dividends. Some AIG subsidiaries, namely those in the insurance
business, are subject to regulatory restrictions on the amount of dividends
which can be issued to AIG. These restrictions vary by state. For example,
unless permitted by the New York Superintendent of Insurance, general insurance
companies domiciled in New York may not pay dividends to shareholders which in
any twelve month period exceed the lesser of 10 percent of the company's
statutory policyholders' surplus or 100 percent of its "adjusted net investment
income," as defined. Generally, less severe restrictions applicable to both
general and life insurance companies exist in most of the other states in which
AIG's insurance subsidiaries are domiciled. Certain foreign jurisdictions have
restrictions which generally cause only a temporary delay in the remittance of
dividends. There are also various local restrictions limiting cash loans and
advances to AIG by its subsidiaries. Largely as a result of the restrictions,
approximately 53 percent of consolidated capital funds were restricted from
immediate transfer to AIG at December 31, 1993.
The Prospectus Supplement will set forth the specific terms of the
Obligations in respect of which this Prospectus is being delivered, including
among other things: (1) the timing, terms and method of purchase of Bonds to
which such Obligations relate under the Standby Agreement; (2) whether and under
what circumstances such Obligations will be terminable without, prior to or
after a mandatory tender for purchase of the related Bonds; (3) any limitations
on the rights of AIG-LC to resell Bonds purchased by AIG-LC under the Standby
Agreement; (4) the commitment fee payable to AIG-LC under the Standby Agreement;
and (5) any other relevant terms of the Standby Agreement and the Guarantee. The
term of each Standby Agreement shall be set forth in the Prospectus Supplement,
and will be at least 360 days, unless the final maturity of the Bonds occurs
prior to the end of such 360 day period, in which case the term of the Standby
Agreement would end on the date of such final maturity of the Bonds. See "Tender
of Bonds -- Mandatory Tender."
The Prospectus Supplement will also specify the following terms of the
Bonds to which the Obligations relate: (1) the Issuer and title of such Bonds;
(2) the aggregate principal amount of such Bonds; and (3) certain other terms of
the Bonds or any Insurance Policy relevant to the operation of the Standby
Agreement or the Guarantee.
Neither AIG-LC nor AIG will be responsible for the payment of the principal
of, premium, if any, or interest on the Bonds of any series. Under certain
circumstances, the Obligations with respect to the purchase of Bonds of any
series may be terminated or suspended upon an Event of Default (as defined in
the relevant Standby Agreement and described in the Prospectus Supplement). See
"The Standby Agreements -- Events of Default and Nature of Obligations."
3
<PAGE> 5
Each holder of Bonds will be responsible for acting individually with
respect to, among other things, the giving of notices, responding to any
requests for consents, waivers or other amendments pertaining to the Bonds,
enforcing covenants and taking action upon a default.
The following descriptions under "Tender of Bonds," "The Standby
Agreements" and "The Guarantees" are general in nature and qualified in their
entirety by reference to, and may be superseded to the extent described in, the
Prospectus Supplement relating to any particular series of Bonds.
TENDER OF BONDS
Tender Option
The Bonds of each series will be subject, at the option of the holder of
the Bonds, to tender for purchase with funds available to the Tender Agent (the
"Tender Option"). The terms of the Bonds of a series may permit such tenders at
any time upon notice or at specified times relating to the reset of the interest
rate with respect to the Bonds of such series. On the date on which the Bonds of
any series are issued and on each interest reset date for such Bonds, in
general, the Remarketing Agent will determine the interest rate for the Bonds
which is necessary to remarket tendered Bonds at a price equal to 100% of the
principal amount thereof plus any accrued interest. The Bonds will bear interest
at such rate for the next succeeding interest rate period. Tenders of the Bonds
will be made to the Tender Agent for purchase at a price equal to 100% of the
principal amount thereof plus any accrued interest to the date of tender (the
"Purchase Price").
Mandatory Tender
Bonds with respect to which the interest rate period has been changed or
which have been converted to a fixed rate may be subject to mandatory tender to
the Tender Agent for purchase. In addition, the Bonds may be subject to
mandatory tender for purchase immediately prior to the termination or expiration
of the relevant Standby Agreement, unless the Issuer makes provision for the
delivery of an alternate liquidity facility meeting the criteria of the
Indenture. Unless otherwise provided in the Prospectus Supplement, if such Bonds
are not delivered when due for tender, they will nevertheless be deemed to be
tendered and purchased at the Purchase Price with funds available to the Tender
Agent.
THE STANDBY AGREEMENTS
Each Standby Agreement will be entered into concurrently with or subsequent
to the original issuance of the Bonds described in the Prospectus Supplement, in
either case as set forth in the Prospectus Supplement, and will expire on the
stated termination date set forth in the Prospectus Supplement unless earlier
terminated upon the conditions set forth in the Prospectus Supplement.
Method of Purchase of Bonds by AIG-LC
On the purchase date for the Bonds of any series, the Tender Agent or the
Trustee as set forth in the Prospectus Supplement shall give AIG-LC notice of
the aggregate Purchase Price of that portion of the tendered Bonds of such
series that remain unsold. After receipt of such notice, AIG-LC shall (unless
its obligations have been terminated or suspended and subject to any conditions
described in the Prospectus Supplement, including its Available Commitment as
set forth therein), by the time set forth in the Prospectus Supplement, make
such amount available to the party so designated in the Prospectus Supplement,
in immediately available funds or such other funds as shall be permitted as
described in the Prospectus Supplement. As soon as practicable thereafter, but
in any event not later than the time set forth in the Prospectus Supplement on
each purchase date, the Tender Agent will be required under the Indenture to
purchase such Bonds, for the account of AIG-LC, at the Purchase Price. The
Tender Agent will be required to remit to AIG-LC such funds which are not so
used to purchase tendered Bonds.
During the period that the Bonds are owned by AIG-LC or a qualified
purchaser from AIG-LC (including AIG), such Bonds will bear interest at a rate
based on a reference rate or an index as described in the Prospectus Supplement,
subject in certain cases to a maximum rate, or will bear interest as otherwise
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<PAGE> 6
described in the Prospectus Supplement. AIG-LC or its affiliates may, to hedge
its interest rate exposure in connection therewith, enter into interest rate
swaps or similar transactions that would have the effect of converting interest
on the purchased Bonds into a LIBOR based rate (subject in certain cases to no
such maximum rate or to a different maximum rate). Unless otherwise set forth in
the Prospectus Supplement, the Remarketing Agent will have a continuing
obligation to use its best efforts to find purchasers for any Bonds owned by
AIG-LC or such qualified purchaser.
The Indenture will in general provide that if sufficient funds are duly
deposited on such date, then such Bond shall be deemed to have been purchased
for all purposes under the related Indenture and that thereafter such holder
will have no further rights under the related Indenture, except to receive the
Purchase Price from the funds so deposited upon surrender thereof. Neither
AIG-LC nor AIG will have any liability to a holder for the failure by the Tender
Agent to apply funds received by it to the Purchase Price of the related Bonds.
Amount of Commitment
Except as otherwise described in the Prospectus Supplement, each Standby
Agreement will have an initial stated amount which is equal to the sum of (a)
the aggregate principal amount of the Bonds and (b) an amount at least equal to
the interest that would accrue on the Bonds during the period specified in the
Prospectus Supplement, computed as though the Bonds bore interest at the maximum
rate of interest permitted to be borne by the Bonds for such period as set forth
in the related Prospectus Supplement (collectively, the "Available Commitment").
Upon the purchase of any Bonds under a Standby Agreement, the Available
Commitment will be adjusted as described in the Prospectus Supplement.
Events of Default and Nature of Obligations
Unconditional Obligations
If the Liquidity Facility Obligations are unconditional, as described in
the Prospectus Supplement, the occurrence and continuance of certain Events of
Default (as defined in the Standby Agreement and described in the Prospectus
Supplement) shall, except as otherwise described in the Prospectus Supplement,
give AIG-LC the right to terminate its obligations under the Standby Agreement
upon written notice to the Issuer and Tender Agent specifying a date on which
the Standby Agreement shall terminate. In such event, a mandatory tender of the
Bonds may take place pursuant to the Indenture prior to the date specified for
termination and AIG-LC will be obligated, subject to the terms and conditions of
the Standby Agreement and except as otherwise described in the Prospectus
Supplement, to provide funds for the payment of the Purchase Price of tendered
Bonds that are not remarketed.
Conditional Obligations
If the Liquidity Facility Obligations are conditional, as described in the
Prospectus Supplement, the occurrence and continuance of certain Events of
Default will, except as otherwise described in the Prospectus Supplement, result
in either immediate suspension or termination of AIG-LC's obligation to purchase
without further action by AIG-LC or give AIG-LC the right to suspend or
terminate its obligations under the Standby Agreement. In such event, except as
otherwise described in the Prospectus Supplement, either no mandatory tender of
Bonds will take place prior to such a suspension or termination or if a
mandatory tender does occur the Standby Agreement will have terminated prior to
the purchase date. Except as otherwise described in the Prospectus Supplement,
neither AIG-LC nor AIG will be obligated to provide funds for the payment of the
Purchase Price of tendered Bonds during such a suspension or following such
termination.
Obligation of Tender Agent to Obtain Funds Under the Standby Agreement
The Tender Agent will be entitled under the Standby Agreement to demand
funds for the payment of Purchase Price and the Standby Agreement will expressly
provide that the Standby Agreement is for the benefit of the Tender Agent. The
Indenture will provide that the Tender Agent is obligated to take such
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<PAGE> 7
actions as may be necessary to obtain immediately available funds on each
Purchase Date under the Standby Agreement sufficient in amount to enable the
Tender Agent to pay the Purchase Price on such Purchase Date.
THE GUARANTEES
The payment obligations of AIG-LC under each Standby Agreement will be
unconditionally guaranteed by AIG pursuant to a Guarantee. Each Guarantee will
terminate upon the termination of AIG-LC's obligations pursuant to the relevant
Standby Agreement.
AIG LIQUIDITY CORP.
AIG Liquidity Corp. was incorporated on June 29, 1992 in the State of
Delaware. All outstanding capital stock of AIG-LC is owned by AIG. AIG-LC's
principal executive offices are located at 100 Nyala Farm, Westport, Connecticut
06880, Telephone No. (203) 222-4700.
The business of AIG-LC consists of providing liquidity for the payment of
the tender price of certain variable rate municipal securities through Standby
Agreements and certain related activities.
AMERICAN INTERNATIONAL GROUP, INC.
American International Group, Inc., a Delaware corporation ("AIG"), is a
holding company which through its subsidiaries is primarily engaged in a broad
range of insurance and insurance-related activities in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities are financial services and agency and
service fee operations. The principal executive offices of AIG are located at 70
Pine Street, New York, New York 10270, telephone (212) 770-7000.
The following table sets forth the historical ratios of earnings to fixed
charges of AIG and its consolidated subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
- -----------------------------------------
1993 1992 1991 1990 1989
- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C>
3.08 2.67 3.00 3.63 4.31
</TABLE>
Earnings represent income from operations before income taxes and cumulative
effect of accounting changes plus fixed charges less capitalized interest and
the equity in undistributed income of less than fifty percent owned persons.
Fixed charges include interest, whether expensed or capitalized, and one-third
of rental expense, which is the proportion deemed representative of the interest
factor.
The decline in the ratios over the period from 1989 to 1992 is primarily
the result of the inclusion of the fixed charges and operating results of AIG
Financial Products Corp. and its subsidiaries ("AIG-FP") which structures
borrowings through guaranteed investment agreements and engages in other complex
financial transactions, including interest rate and currency swaps. In the
course of its business, AIG-FP enters into borrowings that are primarily used to
purchase assets that yield rates greater than the rates on the borrowings with
the intent of earning a profit on the spread and to finance the acquisition of
securities utilized to hedge certain transactions. Due to the comparable level
of interest costs for 1993 and 1992 and the growth in earnings, the ratio shown
has increased in 1993. The pro forma ratios of earnings to fixed charges,
excluding the effects of the operating results of AIG-FP, are 5.66, 5.15, 5.40,
7.27 and 10.10 for 1993, 1992, 1991, 1990 and 1989, respectively. As AIG-FP will
continue to be a subsidiary, AIG expects that these ratios will continue to be
lower than they would be if the fixed charges and operating results of AIG-FP
were not included therein.
6
<PAGE> 8
USE OF PROCEEDS
In consideration for issuing the Liquidity Facility Obligations, AIG-LC
will receive fees from the Issuer described in the relevant Prospectus
Supplement. AIG-LC expects that any such fees so received would be transferred
to AIG or an affiliate of AIG by means of dividends, loans or otherwise and used
by AIG or such affiliate for general corporate purposes. Except as otherwise
described in the Prospectus Supplement relating to a particular series of Bonds,
AIG will not receive separate fees from the Issuer of such Bonds in
consideration for issuing the Guarantee Obligations.
PLAN OF DISTRIBUTION
The Obligations will be offered from time to time in connection with the
initial issuance of the Bonds of any series or the remarketing thereof in
connection with the replacement by the Obligations of another liquidity facility
in effect with respect to such Bonds. The Obligations may not be traded
separately from the Bonds specified in the Prospectus Supplement. Such Bonds
have been or will be offered pursuant to a separate Official Statement through
any underwriters or agents named therein. AIG-LC and AIG undertake no
responsibility with respect to the accuracy or completeness of any Official
Statement or any information set forth therein.
Payment of principal of and interest on the Bonds of a series to which the
Liquidity Facility Obligations relate is solely the obligation of the Issuer and
is not insured or guaranteed by AIG-LC, AIG or any affiliate thereof.
VALIDITY OF OBLIGATIONS
Unless otherwise specified in the Prospectus Supplement relating to any
Obligations, the validity of the Liquidity Facility Obligations will be passed
upon for AIG-LC by Mudge Rose Guthrie Alexander & Ferdon, New York, New York and
the validity of the Guarantee Obligations will be passed upon for AIG by
Kathleen E. Shannon, Esq., Vice President and Senior Counsel of AIG. Carla
Hills, a director of AIG, is a partner of Mudge Rose Guthrie Alexander & Ferdon.
EXPERTS
The consolidated financial statements of AIG and its subsidiaries and the
related financial statement schedules included in its Annual Report on Form 10-K
for the year ended December 31, 1993, incorporated herein by reference, are so
incorporated in reliance upon the report of Coopers & Lybrand, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
7
<PAGE> 9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fee.......................................................... $ 32,328
Printing and Engraving.................................................... 15,000
Legal Fees and Expenses................................................... 530,000
Rating Agency Fees........................................................ N/A
Miscellaneous............................................................. N/A
--------
Total........................................................... $577,328
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of AIG provides:
"The Company shall indemnify to the full extent permitted by law any
person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Company or serves or served any other enterprise
at the request of the Company."
The Certificate of Incorporation of AIG-LC provides:
"The Corporation shall indemnify to the full extent permitted by law
any person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Corporation or serves or served any other
enterprise at the request of the Corporation."
Section 145 of the Delaware General Corporation Law permits indemnification
against expenses, fines, judgments and settlements incurred by any director,
officer or employee of the registrant in the event of pending or threatened
civil, criminal administrative or investigative proceedings, if such person was,
or was threatened to be made, a party by reason of the fact that he is or was a
director, officer or employee of the registrant. Section 145 also provides that
the indemnification provided for therein shall not be deemed exclusive of any
other rights to which those seeking indemnification may otherwise be entitled.
In addition, AIG and its subsidiaries maintain a directors' and officers'
liability insurance policy.
II-1
<PAGE> 10
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
4.2 Form of Specific Guarantee of American International Group, Inc.
4.3 Form of General Guarantee of American International Group, Inc.
*5.1 Opinion of Mudge Rose Guthrie Alexander & Ferdon with respect to the Liquidity
Facility Obligations
*5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee Obligations
*10 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement
12 Computation of ratio of earnings to fixed charges (filed as exhibit to Annual
Report on Form 10-K for the year ended December 31, 1993, and incorporated
herein by reference)
23.1 Consent of Coopers & Lybrand, independent accountants
*23.2 Consent of Mudge Rose Guthrie Alexander & Ferdon (included in Exhibit 5.1)
*23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
24.1 Power of Attorney for American International Group, Inc. (included on the
signature page hereof)
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December 31,
1993 and incorporated herein by reference)
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
AIG pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and incorporated herein by reference,
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by AIG pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference, and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration
Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of AIG's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration
II-2
<PAGE> 11
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of AIG
or AIG-LC pursuant to the foregoing provisions, or otherwise, AIG and AIG-LC
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by AIG or AIG-LC of expenses incurred
or paid by a director, officer or controlling person of AIG or AIGLC in the
successful defense of any action, suit or proceeding) is asserted against AIG or
AIG-LC by such director, officer or controlling person in connection with the
securities being registered, AIG or AIG-LC, as the case may be, will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 12
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE TOWN OF WESTPORT, STATE OF CONNECTICUT, ON THE 1ST DAY OF
MARCH, 1995.
AIG LIQUIDITY CORP.
By: /s/ JOSEPH J. CASSANO
-----------------------------
JOSEPH J. CASSANO,
MANAGING DIRECTOR,
VICE PRESIDENT, AND TREASURER
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ EDWARD E. MATTHEWS Director and Co-Chairman March 1, 1995
-------------------------------
(EDWARD E. MATTHEWS)
/s/ PETROS K. SABATACAKIS Director and Co-Chairman March 1, 1995
------------------------------- (Principal Executive Officer)
(PETROS K. SABATACAKIS)
/s/ JOSEPH J. CASSANO Managing Director, March 1, 1995
------------------------------- Vice President, and Treasurer
(JOSEPH J. CASSANO) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ THOMAS R. SAVAGE Managing Director and March 1, 1995
------------------------------- Vice President
(THOMAS R. SAVAGE)
</TABLE>
II-4
<PAGE> 13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK, ON THE 1ST DAY OF
MARCH, 1995.
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ M.R. GREENBERG*
-------------------------------------
(M.R. GREENBERG, CHAIRMAN)
------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: that each person whose signature appears
below constitutes and appoints M.R. Greenberg, Edward E. Matthews and Howard I.
Smith, and each of them, as true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing required and necessary to be done in
and about the foregoing, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ M.R. GREENBERG* Chairman and Director March 1, 1995
- ------------------------------------------ (Principal Executive Officer)
(M.R. GREENBERG)
/s/ EDWARD E. MATTHEWS Vice Chairman and Director March 1, 1995
- ------------------------------------------ (Principal Financial Officer)
(EDWARD E. MATTHEWS)
/s/ HOWARD I. SMITH Senior Vice President March 1, 1995
- ------------------------------------------ and Comptroller
(HOWARD I. SMITH) (Principal Accounting Officer)
/s/ M. BERNARD AIDINOFF* Director March 1, 1995
- ------------------------------------------
(M. BERNARD AIDINOFF)
Director
- ------------------------------------------
(LLOYD BENTSEN)
/s/ MARSHALL A. COHEN* Director March 1, 1995
- ------------------------------------------
(MARSHALL A. COHEN)
</TABLE>
II-5
<PAGE> 14
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ BARBER B. CONABLE, JR.* Director March 1, 1995
------------------------------
(BARBER B. CONABLE, JR.)
/s/ MARTIN S. FELDSTEIN* Director March 1, 1995
------------------------------
(MARTIN S. FELDSTEIN)
/s/ HOUGHTON FREEMAN* Director March 1, 1995
------------------------------
(HOUGHTON FREEMAN)
/s/ LESLIE L. GONDA* Director March 1, 1995
------------------------------
(LESLIE L. GONDA)
Director
------------------------------
(CARLA HILLS)
/s/ FRANK HOENEMEYER* Director March 1, 1995
------------------------------
(FRANK HOENEMEYER)
/s/ JOHN I. HOWELL* Director March 1, 1995
------------------------------
(JOHN I. HOWELL)
/s/ DEAN P. PHYPERS* Director March 1, 1995
------------------------------
(DEAN P. PHYPERS)
/s/ JOHN J. ROBERTS* Director March 1, 1995
------------------------------
(JOHN J. ROBERTS)
/s/ ERNEST E. STEMPEL* Director March 1, 1995
------------------------------
(ERNEST E. STEMPEL)
/s/ THOMAS R. TIZZIO* Director March 1, 1995
------------------------------
(THOMAS R. TIZZIO)
*By: /s/ HOWARD I. SMITH
------------------------------
(HOWARD I. SMITH)
(ATTORNEY-IN-FACT)
</TABLE>
II-6
<PAGE> 15
- --------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY , 1995)
- --------------------------------------------------------------------------------
$100,000,000
(SUBJECT TO REDUCTION)
AVAILABLE PRINCIPAL COMMITMENT
AND
$1,438,356.10
(SUBJECT TO REDUCTION)
AVAILABLE INTEREST COMMITMENT
LIQUIDITY FACILITY OBLIGATIONS
OF
AIG LIQUIDITY CORP.
AND
GUARANTEE OBLIGATIONS
OF
AMERICAN INTERNATIONAL GROUP, INC.
IN SUPPORT OF THE PAYMENT OF
PURCHASE PRICE OF TENDERED
[MUNICIPAL ISSUER
REVENUE BONDS]
Date of the Bonds: July 1, 1995 Maturity Date of the Bonds: July 1, 2020
Date of Expiration of Obligations: June 30, 1996 First Possible Tender Date:
July 8, 1995
(unless extended or sooner terminated)
The [Municipal Issuer Revenue Bonds] (the "Bonds"), bearing interest at a
variable weekly rate, are subject to optional and mandatory tender for purchase
to [Tender Agent], as tender agent for the Bonds (the "Tender Agent"), as
described herein. Payment by the Tender Agent of the purchase price of Bonds (in
an amount equal to the principal amount of the Bonds plus accrued interest
thereon in an amount not to exceed 35 days' accrued interest assuming the
maximum rate of 15% per annum) tendered for purchase and not remarketed by
[Remarketing Agent], as remarketing agent or its successor (the "Remarketing
Agent"), as described herein will be supported by the payment obligations under
the Standby Bond Purchase Agreement dated as of July 1, 1995 (the "Standby
Agreement") provided by
AIG LIQUIDITY CORP.
which obligations are unconditionally guaranteed by
AMERICAN INTERNATIONAL GROUP, INC.
The payment obligations of AIG Liquidity Corp. ("AIG-LC") under the Standby
Agreement (the "Liquidity Facility Obligations") and the unconditional guarantee
thereof by American International Group, Inc. ("AIG") (the "Guarantee
Obligation", and together with the Liquidity Facility Obligations, the
"Obligations") are not being offered separately from the Bonds, which are being
offered pursuant to a separate Official Statement of [Municipal Issuer] (the
"Issuer"). The Obligations will expire on June 30, 1996 unless extended or
sooner terminated as described herein. The Obligations are not severable from
the Bonds and may not be separately traded. The Bonds are obligations solely of
the Issuer and are not issued or guaranteed by AIG-LC or AIG. This Prospectus
Supplement is being delivered in connection with the initial issuance of the
Bonds and, when appropriately supplemented, may also be delivered in connection
with any remarketing of the Bonds purchased by AIG-LC under the Standby
Agreement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
[REMARKETING AGENT]
REMARKETING AGENT
------------------------
The date of this Prospectus Supplement is , 1995.
<PAGE> 16
INTRODUCTION
AIG-LC has entered into the Standby Agreement with the Issuer. Pursuant to
the Standby Agreement, AIG-LC will be obligated, subject to certain conditions
hereinafter described, to purchase at a purchase price (the "Purchase Price")
equal to the aggregate principal amount thereof plus interest accrued and unpaid
thereon to the purchase date all the Bonds which have been tendered to the
Tender Agent for purchase but not remarketed by the Remarketing Agent. Any
tendered Bonds so purchased by AIG-LC would again be subject to tender for
purchase at the option of the holder if such Bonds are remarketed by the
Remarketing Agent. The payment obligations of AIG-LC under the Standby Agreement
are unconditionally guaranteed by AIG pursuant to a Guarantee, dated as of July
1, 1995 (the "Guarantee"). The Trustee under the Indenture for the Bonds
(currently [Trustee]) and the Remarketing Agent are not parties to the
Obligations. The Obligations will expire on June 30, 1996 unless extended or
sooner terminated as hereinafter described.
All capitalized terms used herein and not otherwise defined herein or in
the Prospectus have the meanings set forth in Appendix A.
PLAN OF DISTRIBUTION
The Obligations are not being sold separately from the Bonds, which are
being initially offered pursuant to the Official Statement of the Issuer dated
, 1995 relating to the Bonds (the "Official Statement"). AIG-LC and
AIG undertake no responsibility with respect to the accuracy or completeness of
the Official Statement or any information set forth therein.
THE BONDS
The Bonds will be issued on , 1995 pursuant to the Issuer's
Trust Indenture, dated as of July 1, 1995, between the Issuer and the Trustee
(the "Indenture") in fully registered form in the aggregate principal amount of
$100,000,000 and mature on July 1, 2020.
The Bonds will initially bear interest at the Weekly Interest Rate. The
Weekly Interest Rate is a rate equal to the rate determined by the Remarketing
Agent to be the minimum interest rate which would enable the Remarketing Agent
to sell such Bonds at the time of such determination at a price equal to the
principal amount thereof, plus accrued interest, if any. Interest on the Bonds
purchased by AIG-LC pursuant to the Standby Agreement will bear interest at the
Purchased Bonds Rate so long as they constitute Purchased Bonds (as defined in
Appendix A). The maximum interest rate on the Bonds (including Purchased Bonds)
at any time shall be 15% per annum. The Purchased Bonds Rate (defined generally
as the Base Rate subject to adjustment in certain circumstances to 2% above the
Base Rate) will normally be higher than the Weekly Interest Rate. The Indenture
provides that the Issuer may elect at any time to convert the Weekly Interest
Rate to a rate fixed to the maturity of the Bonds (the "Fixed Interest Rate")
determined by the Remarketing Agent upon delivery of Favorable Opinions of Bond
Counsel (as defined in Appendix A). Neither AIG-LC nor AIG will participate in
the determination of any Weekly Interest Rate or the Fixed Interest Rate, and
under the Indenture the determination by the Remarketing Agent of each Weekly
Interest Rate and the Fixed Interest Rate is conclusive and binding upon the
Remarketing Agent, the Trustee, the Standby Purchaser, any insurer of the Bonds,
the Issuer, the Tender Agent and the owners of the Bonds.
The Bonds are subject to mandatory and optional redemption prior to
maturity and to optional and mandatory tender for purchase under the
circumstances set forth in the Indenture and described in the Official
Statement.
Concurrently with the issuance of the Bonds, [Insurer] ("the Insurer") will
issue its Municipal Bond Insurance Policy which unconditionally guarantees the
regularly scheduled payment of the principal (when due at maturity or upon any
mandatory sinking fund redemption) of and interest on the Bonds (the "Policy"),
including interest at the Purchased Bonds Rate. The Policy does not guarantee
payment of the Purchase Price of tendered Bonds.
Neither AIG-LC nor AIG is responsible for payment of the principal of or
interest due on the Bonds.
S-1
<PAGE> 17
STANDBY AGREEMENT
AVAILABLE COMMITMENT; PURCHASE PERIOD
Under the Standby Agreement, the Available Principal Commitment, which is
initially equal to $100,000,000, will be available, subject to certain
conditions hereinafter described, for the portion of the Purchase Price
representing principal of the Bonds, and the Available Interest Commitment,
which is initially equal to $1,438,356.10, will be available, subject to certain
conditions hereinafter described, for the portion of the Purchase Price
representing interest on the Bonds (which amount represents 35 days' accrued
interest thereon assuming the maximum rate of 15% per annum). The Available
Principal Commitment and the Available Interest Commitment are subject to
adjustment from time to time as set forth in the definition of such terms in
Appendix A.
The obligation of AIG-LC to provide funds to purchase tendered Bonds
pursuant to the Standby Agreement will be effective for the period (the
"Purchase Period") commencing on the date the Standby Agreement becomes
effective and ending on the earliest of: (a) June 30, 1996 or such later expiry
date as may become effective pursuant to the terms of the Standby Agreement, (b)
the date of receipt by AIG-LC of a certificate purportedly signed by an officer
of the Tender Agent stating that the Purchase Period has been terminated
pursuant to the terms of the Indenture because (i) an Alternate Standby
Agreement has been provided under the Indenture or (ii) no Bonds remain
Outstanding, (c) the day after AIG-LC receives notice from an officer of the
Tender Agent regarding the effective date of the Fixed Interest Rate Period for
all the Bonds or the day after the Fixed Interest Rate takes effect, whichever
occurs last, (d) the date specified in a written notice delivered by the Issuer
to AIG-LC that the Purchase Period has been terminated pursuant to the Standby
Agreement or (e) the date of termination of the Available Commitment and
AIG-LC's obligation to purchase Bonds following certain events of default under
the Standby Agreement, as described herein. No extension of the Purchase Period
shall take effect under the Standby Agreement unless agreed to in writing by
AIG-LC.
FUNDING OF PURCHASE OF TENDERED BONDS BY THE TENDER AGENT FOR THE ACCOUNT OF
AIG-LC
During the Purchase Period, in the event the Remarketing Agent has notified
the Tender Agent that it has not remarketed all of the Bonds that have been
tendered or are deemed tendered for purchase on any purchase date in accordance
with the terms of the Indenture, the Tender Agent shall give AIG-LC notice no
later than 11:30 a.m. (New York City time) on such purchase date of the
aggregate Purchase Price of tendered Bonds required to be purchased pursuant to
the Standby Agreement. After receipt of such notice, AIG-LC will, by 3:00 p.m.
(New York City time) on the purchase date, make such amount available to the
Tender Agent in immediately available funds for the payment of Purchase Price of
such Bonds (as further defined in Appendix A, the "Purchased Bonds") by the
Tender Agent for the account of AIG-LC. The aggregate amount of the Purchase
Price comprising interest on any date of purchase shall not exceed the lesser of
(i) the Available Interest Commitment and (ii) the actual amount of interest
accrued on the Bonds so purchased. In no event may the Available Interest
Commitment be available for or used for the payment of interest on Purchased
Bonds at the Purchased Bonds Rate.
PURCHASED BONDS
Sale of Purchased Bonds. AIG-LC expressly reserves the right to sell, at
any time, any Purchased Bond subject, however, to the express terms of the
Standby Agreement. AIG-LC agrees that such sales of Purchased Bonds (other than
sales following a remarketing thereof by the Remarketing Agent) will be made
only to institutional investors or other entities or individuals which
customarily purchase commercial paper or tax-exempt securities in large
denominations. AIG-LC shall provide the Tender Agent with the written agreement
of each Purchased Bondholder purchasing a Purchased Bond from the Purchaser (i)
acknowledging the terms of the Standby Agreement relating to Purchased Bonds and
(ii) agreeing not to sell such Purchased Bond except for sales to AIG-LC, sales
to a purchaser identified by the Remarketing Agent pursuant to the Standby
Agreement and sales made in accordance with the terms of the Standby Agreement
applicable to sales of Purchased Bonds by AIG-LC.
S-2
<PAGE> 18
Remarketing of Purchased Bonds. The Remarketing Agent is authorized to
sell Purchased Bonds received by the Tender Agent on behalf of AIG-LC (and any
subsequent owner of the Purchased Bonds, as provided in the Standby Agreement)
pursuant to the Indenture at a price which, together with moneys to be provided
under the Indenture, will equal the principal amount thereof plus interest
accrued and unpaid thereon to the date of sale. Notwithstanding the foregoing or
anything else contained in the Standby Agreement, AIG-LC or such purchasers will
have the right, by notice to the Remarketing Agent, to elect not to sell the
Purchased Bonds or any portion thereof. After any such sale by the Remarketing
Agent, or any such election not to sell the Purchased Bonds or any portion
thereof, the Purchased Bonds so sold or as to which such election is made will
cease to bear interest at the Purchased Bonds Rate and will bear the Weekly
Interest Rate provided for in the Indenture.
COMMITMENT FEE
The Issuer has agreed that it will be responsible for and will pay to
AIG-LC a commitment fee under the Standby Agreement equal to .25% per annum
commencing on the Closing Date and continuing for the duration of the Purchase
Period on the average daily amount of the Available Commitment during the
relevant payment period. Such fee shall be payable in immediately available
funds in arrears on each January 1, April 1, July 1 and October 1, commencing
October 1, 1995.
EVENTS OF DEFAULT; TERMINATION OF STANDBY AGREEMENT BY AIG-LC
Each of the following will constitute an event of default under the Standby
Agreement:
(a) any principal or interest due on the Bonds is not paid by the
Issuer when due and such principal or interest is not paid by the Insurer
when, as, and in the amounts required to be paid pursuant to the terms of
the Policy;
(b) nonpayment of the commitment fee or the purchase demand fee
payable under the Standby Agreement within five Business Days after the
Insurer and the Issuer have received notice from AIG-LC that the same were
not paid when due;
(c) nonpayment of any other fees, or any other amount, when due under
the Standby Agreement, if such failure to pay when due shall continue for
seven Business Days after written notice thereof to the Issuer and the
Insurer by AIG-LC;
(d) any representation or warranty made by the Issuer under or in
connection with the Standby Agreement or any of the Bond Documents shall
prove to be untrue in any material respect on the date as of which it was
made;
(e) the breach by the Issuer of any of the terms or provisions of the
negative covenants in the Standby Agreement;
(f) a proceeding is instituted in a court having jurisdiction over the
Issuer, any of its activities or any of its properties seeking an order for
relief, rehabilitation, reorganization, conservation, liquidation or
dissolution in respect of the Issuer under applicable law and such
proceeding is not terminated for a period of 60 consecutive days or such
court enters an order granting the relief sought in such proceeding or the
Issuer shall institute or take any corporate action for the purposes of
instituting any such proceeding; or the Issuer shall become insolvent or
unable to pay its debts as they mature or shall commence a voluntary case
under applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law or shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or other similar official) of the Issuer, or for
any substantial part of its property, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts or
claims as they become due, or shall take any corporate action in
furtherance of any of the foregoing;
(g) (1) the Issuer shall default in any payment of principal of or
interest on any obligation for borrowed money (or of any obligation under
conditional sale or other title retention agreement or of any
S-3
<PAGE> 19
obligation secured by purchase money mortgage or of any obligation under
notes payable or drafts accepted representing extensions of credit) payable
from the Pledged Revenues (as defined in the Indenture) beyond any period
of grace provided with respect thereto; or (2) the Issuer shall default in
the performance or observance of any other agreement, term or condition
contained in any agreement under which any such obligation is created (or
if any other event of default thereunder or under such agreement shall
occur and be continuing) and the effect of such event of default is to
cause, or to permit the holder or holders of such obligation (or a trustee
on behalf of such holder or holders) to cause, such obligation to become
due prior to its stated maturity;
(h) the failure on the part of the Issuer to perform or observe any
other term, covenant or agreement contained in the Standby Agreement or any
of the other Bond Documents on its part to be performed or observed and (a)
with respect to any such term, covenant or agreement contained in the
Standby Agreement (other than any of the terms or provisions of the
affirmative covenants or the negative covenants), any such failure remains
unremedied for 30 days; and (b) with respect to any such term, covenant or
agreement contained in any of the other Bond Documents, any such failure
remains unremedied after any applicable grace period specified in such Bond
Document;
(i) the Indenture shall terminate or cease to be of full force and
effect, other than as a result of any redemption or defeasance in full of
the Bonds; or the Issuer shall in writing to the Trustee claim that its
obligations under the Bonds, the Indenture, any Bond Document or the
Standby Agreement are not valid and binding on the Issuer or repudiate such
obligations; or the Issuer shall initiate any legal proceedings to seek an
adjudication that any such obligations are not valid and binding on the
Issuer; or any court or governmental authority with jurisdiction to rule on
the validity of such obligations shall announce, find or rule that any such
obligations are not valid and binding on the Issuer;
(j) the occurrence of any "Event of Default" as defined in the
Indenture;
(k) the occurrence of an Insurer Event of Insolvency;
(l) the President or an Executive Vice President of the Insurer shall
in writing to the Trustee claim that the Policy with respect to the payment
of principal of or interest on the Bonds is not valid and binding on the
Insurer, and repudiate the obligations of the Insurer under the Policy with
respect to payment of principal of or interest on the Bonds, or the Insurer
shall initiate any legal proceedings to seek an adjudication that the
Policy, with respect to the payment of principal of or interest on the
Bonds, is not valid and binding on the Insurer;
(m) any court or governmental authority with jurisdiction to rule on
the validity of the Policy shall announce, find or rule that the Policy is
not valid and binding on the Insurer;
(n) any default by the Insurer in making payment when, as and in the
amounts required to be made pursuant to the express terms and provisions of
any other municipal insurance policy or surety bond issued by the Insurer;
or
(o) Moody's or S&P shall withdraw or suspend its respective long-term
rating of the Bonds or shall reduce such rating to less than "Aa3" and
"AA-" (or the then current equivalent thereof), as the case may be.
Upon the occurrence of an Event of Default as specified in clause (l) or
(m) above, AIG-LC's obligation to purchase bonds under the Standby Agreement
will be immediately suspended without notice or demand and thereafter AIG-LC
shall be under no obligation to purchase hereunder until the Available
Commitment is reinstated as described below. Promptly upon AIG-LC's obtaining
knowledge of any such Event of Default, AIG-LC will notify the Issuer, the
Tender Agent, the Trustee and the Remarketing Agent of such suspension in
writing; provided, that AIG-LC shall incur no liability or responsibility
whatsoever by reason of its failure to give such notice and such failure shall
in no way affect the suspension of AIG-LC's obligations under the Standby
Agreement. If a court with jurisdiction to rule on the validity of the Policy
shall thereafter enter a final, nonappealable judgment that the Policy is not
valid and binding on the Insurer then the Available Commitment and AIG-LC's
obligation to purchase Bonds under the Standby Agreement will immediately
S-4
<PAGE> 20
terminate without notice or demand. If a court with jurisdiction to rule on the
validity of the Policy shall find or rule that Policy is valid and binding on
the Insurer, then AIG-LC's obligation to purchase Bonds under the Standby
Agreement will thereupon be reinstated (unless the Purchase Period shall
otherwise have been terminated or suspended as provided in the Standby
Agreement). Notwithstanding the foregoing, if three years after the effective
date of suspension of AIG-LC's obligation to purchase Bonds under the Standby
Agreement litigation is still pending and a final, nonappealable judgment
regarding the validity of the Policy has not been entered by a court with
jurisdiction to rule on the validity of the Policy, then the Available
Commitment and AIG-LC's obligation to purchase Bonds under the Standby Agreement
will, unless previously terminated pursuant to any other provision of this
Agreement, at such time terminate without notice or demand.
Upon the occurrence of an Event of Default as specified in clause (a), (k)
or (n) above, the Available Commitment and the obligation of AIG-LC to purchase
Bonds under the Standby Agreement will immediately terminate and expire without
notice or demand. Promptly upon AIG-LC's obtaining knowledge of any such Event
of Default, AIG-LC must give written notice of the same to the Issuer, the
Tender Agent, the Trustee and the Remarketing Agent; provided that AIG-LC will
incur no liability or responsibility whatsoever by reason of its failure to give
such notice and such failure will in no way affect the termination of the
Available Commitment and the obligation of AIG-LC to purchase Bonds.
Upon the occurrence of an Event of Default as specified in clause (b), (c)
or (o) above, AIG-LC may give written notice of such Event of Default to the
Issuer, the Tender Agent, the Trustee and the Remarketing Agent specifying a
date on which its obligations to purchase Bonds thereunder will terminate, which
may not be less than 30 days after the receipt of such notice. The Available
Commitment and the obligation of
AIG-LC to purchase Bonds under the Standby Agreement will terminate on the date
so specified in such written notice from AIG-LC. Prior to such date of
termination, the Bonds will be subject to mandatory tender (regardless of
whether the Event of Default is cured prior to such date) as set forth in the
Official Statement. The giving of such notice by AIG-LC will not affect the
obligation of AIG-LC to purchase Bonds prior to close of business on the date on
which such obligation terminates.
Upon the occurrence of any Event of Default specified above, AIG-LC will
have all remedies provided at law or equity, including without limitation,
specific performance, and remedies may be pursued in any order determined by
AIG-LC; provided, however, that AIG-LC will not have the right to terminate the
Available Commitment and its obligation to purchase Bonds except as provided in
the three preceding paragraphs.
S-5
<PAGE> 21
APPENDIX A
DEFINED TERMS
Terms not otherwise defined in this Prospectus Supplement shall have the
meaning set forth below:
"Available Interest Commitment" initially means $1,438,356.10 (an amount
equal to 35 days' interest on the Bonds, assuming the Bonds bore interest at the
rate of 15% per annum (computed in accordance with the Indenture) and thereafter
means said amount adjusted from time to time as follows: (a) downward by an
amount that bears the same proportion to such initial amount as the amount of
any reduction in the Available Principal Commitment pursuant to the definition
of "Available Principal Commitment" bears to the initial Available Principal
Commitment; and (b) upward by an amount that bears the same proportion to such
initial amount as the amount of any increase in the Available Principal
Commitment bears to the initial Available Principal Commitment.
"Available Principal Commitment" initially means $100,000,000 and
thereafter means said amount adjusted from time to time as follows: (a) downward
by the amount of any reduction of the Available Principal Commitment pursuant to
Bonds redeemed, paid or with respect to which provision for the payment thereof
has been made pursuant to the Indenture; (b) downward by the principal amount of
any Bonds purchased with moneys made available to the Tender Agent by AIG-LC
pursuant to the Standby Agreement; (c) upward by the principal amount of any
Bonds purchased with moneys made available to the Tender Agent by AIG-LC
pursuant to the Standby Agreement which are sold by a Purchased Bondholder
through the Remarketing Agent pursuant to or as contemplated by the Standby
Agreement or which a Purchased Bondholder elects to retain pursuant to the
Standby Agreement following notice of a successful remarketing thereof by the
Remarketing Agent; and (d) downward at the times and to the extent provided in
the Standby Agreement described under "STANDBY AGREEMENT -- Events of Default;
Termination of Standby Agreement by AIG-LC". Any adjustments pursuant to clauses
(a), (b), (c) and (d) above shall occur simultaneously with the event requiring
such adjustments.
"Base Rate" shall mean the Prime Rate.
"Bond Documents" means the Indenture, the Standby Agreement, the
Remarketing Agreement, the Tender Agency Agreement and the Policy.
"Business Day" means a day (i) other than a day on which banks located in
the City of New York, New York or the cities in which the principal office of
the Trustee, the Paying Agent, the Tender Agent, the Remarketing Agent or the
Standby Purchaser are located, are required or authorized by law or executive
order to close, and (ii) on which the New York Stock Exchange is not closed.
"Event of Default" means an event as described herein under "STANDBY
AGREEMENT -- Events of Default; Termination of Standby Agreement by AIG-LC."
"Favorable Opinion of Bond Counsel" shall mean one or more opinions of
nationally recognized bond counsel, addressed to the parties indicated in the
Indenture, to the effect that the action proposed to be taken is authorized or
permitted by the Indenture and the Issuer's enabling legislation and will not
adversely affect the exclusion of interest on the Bonds from gross income for
purposes of federal income taxation under Section 103 of the Internal Revenue
Code of 1986, as amended.
"Insurer Event of Insolvency" shall mean the occurrence and continuance of
one or more of the following events: (a) the issuance, under the laws of the
state of incorporation or formation of the Insurer, of an order for relief,
rehabilitation, reorganization, conservation, liquidation or dissolution of the
Insurer; (b) the commencement by the Insurer of a voluntary case or other
proceeding seeking an order for relief, liquidation, rehabilitation,
conservation, reorganization or dissolution with respect to itself or its debts
under the laws of the state of incorporation or formation of the Insurer or any
bankruptcy, insolvency or other similar law now or hereafter in effect
including, without limitation, the appointment of a trustee, receiver,
liquidator, custodian or other similar official for itself or any substantial
part of its property; (c) the consent of the Insurer to any relief referred to
in the preceding clause (b) in an involuntary case or other proceeding commenced
against it;
A-1
<PAGE> 22
(d) the making by the Insurer of an assignment for the benefit of creditors; (e)
the failure of the Insurer to generally pay its debts or claims as they become
due; or (f) the initiation by the Insurer of any actions to authorize any of the
foregoing.
"Maximum Rate" means 15% per annum.
"Prime Rate" means the rate per annum announced by from time to
time at its principal office as its prime lending rate for unsecured commercial
loans within the United States (which rate is calculated on a 365-day year
basis), any change in such rate to be effective on the effective date of any
change in such prime lending rate.
"Purchase Date" means a Business Day during the Purchase Period on which
the Purchaser purchases Bonds pursuant to the Standby Agreement.
"Purchase Period" has the meaning set forth under "STANDBY
AGREEMENT -- Available Commitment; Purchase Period."
"Purchase Price" means, with respect to the Bonds or portions thereof to be
purchased on any Purchase Date, the aggregate principal amount thereof plus
interest accrued and unpaid thereon to such date.
"Purchased Bond" means each Bond purchased by the Tender Agent under the
Indenture with funds provided by the Purchaser hereunder until the remarketing
of such Bond pursuant to the Standby Agreement or the effective date of an
election by the Purchased Bondholder that owns such Bond to retain such Bond in
accordance with the Standby Agreement following notice of a successful
remarketing thereof.
"Purchased Bondholder" means the Purchaser (but only in its capacity as
owner of Purchased Bonds pursuant to the Standby Agreement) and any other Person
that has purchased Purchased Bonds from the Purchaser or from another Purchased
Bondholder pursuant to the Standby Agreement so long as such Bonds are owned by
the Purchaser or by such Person and such Bonds are Purchased Bonds.
"Purchased Bonds Day" means any day on which, at 4:00 p.m., New York time,
any Bond is a Purchased Bond.
"Purchased Bonds Rate" means the Base Rate; provided, however, that upon
the first to occur of (i) an Event of Default, (ii) the date on which the
aggregate amount of Purchased Bonds Days since the effective date of the Standby
Agreement equals 60 and (iii) the end of the Purchase Period if any Bond is then
a Purchased Bond, the Purchased Bonds Rate shall be equal to the Base Rate plus
2% for any period thereafter; and provided further, however, that at no time
shall the Purchased Bonds Rate exceed the Maximum Rate or be less than the then
applicable rate of interest on the Bonds, if any, that are not Purchased Bonds.
The rate set forth in the immediately preceding paragraph, without giving
effect to the reference therein to this paragraph or to the last proviso therein
limiting the Purchased Bonds Rate to the Maximum Rate, is referred to as the
"Section 3.01(a) Rate". The amount of interest, if any, that would accrue on the
Bonds at the Section 3.01(a) Rate on any date but which does not so accrue due
to such limitation of the Purchased Bonds Rate to the Maximum Rate shall
constitute "Excess Bond Interest." As of any date, the cumulative Excess Bond
Interest, if any, on all days since the effective date hereof, reduced as set
forth in the next sentence, shall constitute the "Excess Bond Interest Amount".
If there is any Excess Bond Interest Amount on any date when the Section 3.01(a)
Rate is less than the Maximum Rate, the Purchased Bonds Rate for such date shall
be the Maximum Rate rather than the Section 3.01(a) Rate and the Excess Bond
Interest Amount shall be reduced on such date by the excess of the amount of
interest accrued on such date at the Maximum Rate over the amount of interest
that would have accrued on such date at the Section 3.01(a) Rate; provided,
however, that if the accrual of interest on Purchased Bonds at the Maximum Rate
on any date would result in a reduction of the Excess Bond Interest Amount to a
negative number, such Purchased Bonds shall accrue interest on such date at such
lesser rate as shall result in the reduction of the Excess Bond Interest Amount
on such date to zero.
"Weekly Interest Rate" means a variable interest rate established weekly in
accordance with the Indenture.
A-2
<PAGE> 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY AIG LIQUIDITY CORP. OR AMERICAN
INTERNATIONAL GROUP, INC. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
INTRODUCTION.......................... S-1
PLAN OF DISTRIBUTION.................. S-1
THE BONDS............................. S-1
STANDBY AGREEMENT..................... S-2
APPENDIX A............................ A-1
PROSPECTUS
AVAILABLE INFORMATION................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... 2
DESCRIPTION OF THE OBLIGATIONS........ 3
AIG LIQUIDITY CORP. .................. 6
AMERICAN INTERNATIONAL GROUP, INC. ... 6
USE OF PROCEEDS....................... 7
PLAN OF DISTRIBUTION.................. 7
VALIDITY OF OBLIGATIONS............... 7
EXPERTS............................... 7
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$100,000,000
(subject to reduction)
Available Principal Commitment
and
$1,438,356.10
(subject to reduction)
Available Interest Commitment
LIQUIDITY FACILITY
OBLIGATIONS
OF
AIG LIQUIDITY CORP.
AND
GUARANTEE OBLIGATIONS
OF
AMERICAN INTERNATIONAL
GROUP, INC.
in support of the payment of
Purchase Price of tendered
[Municipal Issuer
Revenue Bonds]
-----------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------
dated , 1995
[Remarketing Agent]
Remarketing Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------ ---------------------------------------------------------------------------- ----
<S> <C> <C>
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
4.2 Form of Specific Guarantee of American International Group, Inc.
4.3 Form of General Guarantee of American International Group, Inc.
*5.1 Opinion of Mudge Rose Guthrie Alexander & Ferdon with respect to the
Liquidity Facility Obligations
*5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee
Obligations
*10 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement
12 Computation of ratio of earnings to fixed charges (filed as exhibit to
Annual Report on Form 10-K for the year ended December 31, 1993, and
incorporated herein by reference)
23.1 Consent of Coopers & Lybrand, independent accountants
*23.2 Consent of Mudge Rose Guthrie Alexander & Ferdon (included in Exhibit 5.1)
*23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
24.1 Power of Attorney for American International Group, Inc. (included on the
signature page hereof)
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December
31, 1993 and incorporated herein by reference)
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 4.2
FORM OF SPECIFIC
GUARANTEE OF AMERICAN
INTERNATIONAL GROUP, INC.
Guarantee, dated as of , by American International Group, Inc., a
Delaware corporation (the "Guarantor"), in favor of , a (the
"Guaranteed Party").
(1) GUARANTEE. To induce the Guaranteed Party to enter into a Standby Bond
Purchase Agreement, dated the date hereof (the "Agreement"), with AIG Liquidity
Corp., a Delaware corporation (the "Company"), the Guarantor absolutely,
unconditionally and irrevocably guarantees to the Guaranteed Party and its
successors, endorsees and assigns the prompt payment when due, subject to any
applicable grace period, of all present and future payment obligations of the
Company to the Guaranteed Party under the Agreement (the "Obligations").
(2) NATURE OF GUARANTEE. The Guarantor's obligations hereunder shall not
be affected by the existence, validity, enforceability, perfection or extent of
any collateral therefor or by any other circumstance relating to the Obligations
that might otherwise constitute a legal or equitable discharge of or defense to
the Guarantor not available to the Company. The Guarantor agrees that the
Guaranteed Party may resort to the Guarantor for payment of any of the
Obligations whether or not the Guaranteed Party shall have resorted to any
collateral therefor or shall have proceeded against the Company or any other
obligor principally or secondarily obligated with respect to any of the
Obligations. The Guaranteed Party shall not be obligated to file any claim
relating to the Obligations in the event that the Company becomes subject to a
bankruptcy, reorganization or similar proceeding, and the failure of the
Guaranteed Party to so file shall not affect the Guarantor's obligations
hereunder. This Guarantee shall remain in full force and effect and shall be
binding on the Guarantor, its successors and assigns until all of the
Obligations have been satisfied in full. In the event that any payment to the
Guaranteed Party in respect of any Obligations is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to such Obligations as if such payment had not been made. The
Guarantor reserves the right to (a) set-off against any payment owing hereunder
any amounts owing by the Guaranteed Party [add related parties, if any, that the
underlying agreements allow to be included in set-off calculations] to the
Company and (b) assert defenses which the Company may have to payment of any
Obligations other than defenses arising from the bankruptcy or insolvency of the
Company and other defenses expressly waived hereby.
(3) CHANGES IN OBLIGATIONS, COLLATERAL THEREFOR AND AGREEMENTS RELATING
THERETO; WAIVER OF CERTAIN NOTICES. The Guarantor agrees that the Guaranteed
Party may at any time and from time to time, either before or after the maturity
thereof, without notice to or further consent of the Guarantor, extend the time
of payment of, exchange or surrender any collateral for, or renew any of the
Obligations, and may also make any agreement with the Company or with any other
party to or person liable on any of the Obligations or interested therein, for
the extension, renewal, payment, compromise, discharge or release thereof, in
whole or in part, or for any modification of the terms thereof or of any
agreement between the Guaranteed Party and the Company or any such other party
or person, without in any way impairing or affecting this Guarantee. The
Guarantor waives notice of the acceptance of this Guarantee and of the
Obligations, presentment, demand for payment, notice of dishonor and protest.
(4) EXPENSES. The Guarantor agrees to pay on demand all fees and out of
pocket expenses (including the reasonable fees and expenses of the Guaranteed
Party's counsel) in any way relating to the enforcement or protection of the
rights of the Guaranteed Party hereunder; provided, that the Guarantor shall not
be liable for any expenses of the Guaranteed Party if no payment under this
Guarantee is due.
(5) SUBROGATION. Upon payment of all of the Obligations owing to any
Guaranteed Party, the Guarantor shall be subrogated to the rights of the
Guaranteed Party against the Company with respect to such Obligations, and the
Guaranteed Party agrees to take at the Guarantor's expense such steps as the
Guarantor may reasonably request to implement such subrogation.
(6) NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed
Party to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Guaranteed Party of any right, remedy or power hereunder
preclude any other or
1
<PAGE> 2
future exercise of any right, remedy or power. Each and every right, remedy and
power hereby granted to the Guaranteed Party or allowed it by law or other
agreement shall be cumulative and not exclusive of any other, and may be
exercised by the Guaranteed Party at any time or from time to time.
(7) REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants that:
(a) the Guarantor is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate
power to execute, deliver and perform this Guarantee;
(b) the execution, delivery and performance of this Guarantee have
been and remain duly authorized by all necessary corporate action and do
not contravene any provision of the Guarantor's certificate of
incorporation or by-laws, as amended to date, or any law, regulation, rule,
decree, order, judgment or contractual restriction binding on the Guarantor
or its assets;
(c) all consents, licenses, clearances, authorizations and approvals
of, and registrations and declarations with, any governmental authority or
regulatory body necessary for the due execution, delivery and performance
of this Guarantee have been obtained and remain in full force and effect
and all conditions thereof have been duly complied with, and no other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required in connection with the execution, delivery or
performance of this Guarantee; and
(d) this Guarantee constitutes a legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(8) ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign
its rights, interests or obligations hereunder to any other person (except by
operation of law) without the prior written consent of the Guarantor or the
Guaranteed Party, as the case may be, provided, however, that the Guaranteed
Party may assign its rights, interests and obligations hereunder to an assignee
or transferee to which it has transferred its interests and obligations under
the Agreement pursuant to Section thereof.
(9) NOTICES. All notices or demands on the Guarantor shall be deemed
effective when received, shall be in writing and shall be delivered by hand or
by registered mail, or by facsimile transmission promptly confirmed by
registered mail, addressed to the Guarantor at:
American International Group, Inc.
70 Pine Street
New York, NY 10270
Attention: Secretary
Fax: (212) 514-6894
or to such other address or fax number as the Guarantor shall have notified the
Guaranteed Party in a written notice delivered to the Guaranteed Party in
accordance with the Agreement.
(10) GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered by
the Guarantor to the Guaranteed Party as of the date first above written.
AMERICAN INTERNATIONAL GROUP, INC.
By
----------------------------------
By
----------------------------------
2
<PAGE> 1
EXHIBIT 4.3
AMERICAN INTERNATIONAL GROUP, INC.
GENERAL GUARANTY
AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation (the
"Guarantor") for value received and hereby acknowledged, hereby unconditionally
and irrevocably guarantees to each party (a "Party") entering into a standby
bond purchase agreement or letter of credit, line of credit or similar credit
facility (each, a "Liquidity Facility") with AIG Liquidity Corp., a Delaware
corporation ("AIG-LC"), the obligations of AIG-LC under which have been
registered under the Securities Act of 1933 pursuant to the Registration
Statement on Form S-3, Registration No. 33-48996, and to such Party's
successors, endorsees and assigns, the prompt payment when due of all present
and future obligations and liabilities of all kinds of AIG-LC to such Party
arising out of the Liquidity Facilities (the "Obligations").
The Guarantor hereby waives any requirements that a Party, in the event of
a default in any payment by AIG-LC under a Liquidity Facility, first make demand
upon or seek to enforce remedies against AIG-LC or first realize upon the
collateral, if any, available to such Party before demanding payment under or
seeking to enforce this Guarantee. In the event that any payment to a Party in
respect to any Obligations is rescinded or must otherwise be returned for any
reason whatsoever, the Guarantor shall remain liable hereunder with respect to
such Obligations as if such payment has not been made. The Guarantor agrees and
consents that without the necessity for any additional endorsement or guaranty
of the Obligations hereby guaranteed, or any reservation of rights against the
Guarantor, and without further notice to, or assent by the Guarantor, the
Obligations hereby guaranteed may, from time to time, in whole or in part be
renewed, extended, modified, accelerated, compromised, or released by the Party
with the agreement of AIG-LC, and any changes may be made by such Party with the
agreement of AIG-LC in the maturity dates, interest rates or other terms of the
Obligations guaranteed hereunder without impairing, abridging, affecting,
diminishing or releasing the liability of the Guarantor hereunder, which
liability shall also extend to such Obligations as renewed, extended, modified,
accelerated, compromised or otherwise changed. The Guarantor waives any and all
notices of acceptance of this Guarantee or of the creation, renewal, extension,
modification, acceleration, compromising or releasing of any of the Obligations
hereby guaranteed.
The Guarantor reserves the right to assert defenses which AIG-LC may have
to payment of any obligations other than defenses arising from the bankruptcy or
insolvency of AIG-LC and other defenses expressly waived hereby.
Upon payment of all of the Obligations owing to any Party, the Guarantor
shall be subrogated to the rights of such Party against AIG-LC with respect to
such Obligations, and such Party agrees to take at the Guarantor's expense such
steps as the Guarantor may reasonably request to implement such subrogation.
All dealings between AIG-LC and a Party or between AIG-LC and any
authorized brokers, dealers, placement agents or remarketing agents of
securities which are the subject of a Liquidity Facility, their successors, and
assigns, shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. The Guarantor waives presentment, demand for
payment, notice of dishonor or non-payment to or on the Guarantor or AIG-LC,
protest and all other notices and demands whatsoever. Nothing but prompt payment
in full of the Obligations hereby guaranteed shall discharge the Guarantor of
its obligations hereunder.
This Guarantee may not be amended orally and all rights and obligations of
the parties hereunder shall be construed and interpreted in accordance with the
laws of the State of New York. The Guarantor warrants and represents that there
are no mortgages, deeds of trust, indentures, note or loan agreements, or any
other agreements of undertaking to which it is a party or by which any of its
property is bound which limit or in any way restrict its capacity, right or
power to execute and deliver this Guarantee and to discharge by prompt payment
in full its obligations hereunder.
1
<PAGE> 2
IN WITNESS WHEREOF, AMERICAN INTERNATIONAL GROUP, INC. has authorized and
caused this Guarantee to be duly executed and delivered by its authorized
officers as of the day of , 19 .
AMERICAN INTERNATIONAL GROUP, INC.
By:
-----------------------------------
Edward E. Matthews
Vice Chairman
By:
-----------------------------------
Kathleen E. Shannon
Vice President and Secretary
2
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 (Registration No. 33-48996) of our report dated February 24, 1994,
on our audits of the consolidated financial statements and financial statement
schedules of American International Group, Inc. and subsidiaries included in
Annual Report on Form 10-K for the year ended December 31, 1993. We also consent
to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
New York, New York
March 1, 1995
