<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN RE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
DELAWARE 6719 13-3672116
<S> <C> <C>
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
------------------------
555 COLLEGE ROAD EAST
PRINCETON, NJ 08543
(609) 243-4200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------------
ROBERT K. BURGESS, ESQ.
AMERICAN RE CORPORATION
555 COLLEGE ROAD EAST
PRINCETON, NJ 08543
(609) 243-4200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------
WITH A COPY TO:
GARY I. HOROWITZ, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 455-2000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER NOTE OFFERING PRICE FEE
<S> <C> <C> <C> <C>
7.45% Senior Notes due 2026, Series B............ $500,000,000 100% 500,000,000 $151,515.15
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
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.
<PAGE>
SUBJECT TO COMPLETION DATED JANUARY 29, 1997
PROSPECTUS
AMERICAN RE CORPORATION
[LOGO]
OFFER TO EXCHANGE UP TO $500,000,000 OF ITS
7.45% SENIOR NOTES DUE 2026, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
7.45% SENIOR NOTES DUE 2026, SERIES A
--------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED.
------------------------
American Re Corporation (the "Company"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange an aggregate of up to $500,000,000 principal amount of 7.45% Senior
Notes due 2026, Series B (the "Exchange Notes"), of the Company for an identical
face amount of the issued and outstanding 7.45% Senior Notes due 2026, Series A
(the "Old Notes" and the Old Notes and the Exchange Notes, collectively, the
"Notes"), of the Company from the holders thereof. As of the date of this
Prospectus, there is $500,000,000 aggregate principal amount of the Old Notes
outstanding. The terms of the Exchange Notes are identical in all material
respects to the Old Notes, except that the Exchange Notes have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
therefore will not bear legends restricting their transfer and will not contain
certain provisions providing for an increase in the interest rate on the Old
Notes under certain circumstances relating to the Registration Rights Agreement
(as defined herein), which provisions will terminate as to all of the Notes upon
the consummation of the Exchange Offer.
Interest on the Old Notes has accrued from the original date of issuance
thereof, December 24, 1996 and will cease to accrue on the date the Exchange
Notes are exchanged for the Old Notes. Interest on the Exchange Notes will
accrue from the date the Exchange Notes are exchanged for the Old Notes and is
payable in cash semi-annually in arrears on June 15 and December 15 of each
year, commencing June 15, 1997.
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 9, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY INVESTORS IN CONNECTION WITH THE EXCHANGE OFFER AND
AN INVESTMENT IN THE EXCHANGE NOTES.
---------------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS ANY STATE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE NORTH CAROLINA COMMISSIONER RULED UPON THE ACCURACY OF THIS OFFERING
CIRCULAR.
------------------------
The Old Notes were issued and sold on December 24, 1996 in a transaction not
registered under the Securities Act in reliance upon an exemption from the
registration requirements thereof. In general, the Old Notes may not be offered
or sold unless registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act. The
Exchange Notes are being offered hereby in order to satisfy certain obligations
of the Company contained in the Registration Rights Agreement. Based on
interpretations by the staff of the Securities and Exchange Commission (the
"Commission") set forth in no-action letters issued to third parties, the
Company believes that the Exchange Notes issued pursuant to the Exchange Offer
in exchange for Old Notes may be offered for resale, resold or otherwise
transferred by any holder thereof (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 promulgated under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such holder's business, such holder has no arrangement
with any person to participate in the distribution of such Exchange Notes and
neither such holder nor any such other person is engaging in or intends to
engage in a distribution of such Exchange Notes. However, the Company has not
sought, and does not intend to seek, its own no-action letter, and there can be
no assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer. Notwithstanding the foregoing, each
broker-dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with any resale of Exchange Notes
received in exchange for such Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities (other than Old Notes acquired directly from the Company). The
Company has agreed that for a period of no greater than 180 days after the
consummation of the Exchange Offer, it will make this Prospectus available to
any broker-dealer for use in connection with any such resale.
The Old Notes are designated for trading in the Private Offerings, Resales
and Trading through Automated Linkages ('PORTAL') market. There is no
established trading market for the Exchange Notes. The Company does not
currently intend to list the Exchange Notes on any securities exchange or to
seek approval for quotation through any automated quotation system. Accordingly,
there can be no assurance as to the development or liquidity of any market for
the Exchange Notes. The certificates representing the Exchange Notes will be
represented by a single, permanent global Exchange Note, in definitive, fully
registered form without interest coupons (the 'Global Note') and will be
deposited with the Trustee as custodian for The Depository Trust Company ('DTC')
and registered in the name of a nominee of DTC. Ownership of beneficial
interests in the Global Note will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its
nominee or participants therein.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange. The date for acceptance and
exchange of the Old Notes (the "Exchange Date") will be the first business day
following the Expiration Date (as defined herein). Old Notes tendered pursuant
to the Exchange Offer may be withdrawn at any time prior to the Expiration Date.
The Company will not receive any proceeds from the Exchange Offer. The Exchange
Offer will expire 5:00 p.m., New York City time, on , 1997, unless the
Exchange Offer is extended, in which case the term "Expiration Date" means the
latest date and time to which the Exchange Offer is extended.
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (together with all amendments, exhibits, schedules and supplements thereto,
the "Registration Statement") under the Securities Act with respect to the
Exchange Notes being offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement. For further information with respect to the Company and
the Exchange Notes, reference is made to the Registration Statement. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and, where such contract or other
document is an exhibit to the Registration Statement, each such statement is
qualified in all respects by the provisions in such exhibit. Copies of the
Registration Statement may be examined without charge at the public reference
facilities maintained by the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the web site (http://www.sec.gov.) maintained by the
Commission and at the Commission's Regional Offices located at Seven World Trade
Center, Suite 1300, New York, New York, 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or any
portion of the Registration Statement can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of certain fees prescribed by the Commission.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, and other information with the Commission. Reports, and
other information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained upon written request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant to
the Exchange Act are incorporated herein by reference in their entirety and are
attached hereto as Annexes I through VII, respectively, without the schedules,
exhibits and annexes appended thereto (except as described below):
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1995 (the "1995 10-K").
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996 (the "March 10-Q").
3. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996 (the "June 10-Q").
4. The Company's Current Report on Form 8-K dated August 13, 1996 (the
"August 8-K").
5. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (the "September 10-Q").
6. The Company's Current Report on Form 8-K dated November 25, 1996 (the
"November 8-K").
7. The Company's Current Report on Form 8-K dated December 11, 1996 (the
"December 8-K"), including the exhibit thereto.
3
<PAGE>
All other documents filed by the Company pursuant to Section 13(a), 13(c),
14, or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the respective dates
of the filing of such documents.
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be 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.
4
<PAGE>
THE EXCHANGE OFFER
<TABLE>
<S> <C>
THE EXCHANGE OFFER........................... The Company is offering to exchange pursuant
to the Exchange Offer up to $500,000,000
aggregate principal amount of its new 7.45%
Senior Notes due 2026, Series B (the
"Exchange Notes") for a like aggregate
principal amount of its outstanding 7.45%
Senior Notes due 2026, Series A (the "Old
Notes"). The terms of the Exchange Notes are
identical in all material respects (including
principal amount, interest rate and maturity)
to the terms of the Old Notes for which they
may be exchanged pursuant to the Exchange
Offer, except that the Exchange Notes are
freely transferrable by holders of such Notes
(each a "holder" or "Holder") other than as
provided herein, and are not subject to any
covenant regarding registration under the
Securities Act. See "The Exchange Offer."
INTEREST PAYMENTS............................ Interest on the Old Notes has accrued from
the original date of issuance thereof,
December 24, 1996, and will cease to accrue
on the date the Exchange Notes are exchanged
for the Old Notes. Interest on the Exchange
Notes will accrue from the date the Exchange
Notes are exchanged for Old Notes and is
payable in cash semi-annually in arrears on
June 15 and December 15 of each year,
commencing June 15, 1997.
MINIMUM CONDITION............................ The Exchange Offer is not conditioned upon
any minimum aggregate principal amount of Old
Notes being tendered for exchange.
EXPIRATION DATE; WITHDRAWAL OF TENDER........ The Exchange Offer will expire 5:00 p.m., New
York City time, on 1997, unless the
Exchange Offer is extended, in which case the
term "Expiration Date" means the latest date
and time to which the Exchange Offer is
extended. Tenders may be withdrawn at any
time prior to 5:00 p.m., New York City time,
on the Expiration Date. See "The Exchange
Offer--Withdrawal of Rights."
EXCHANGE DATE................................ The date of acceptance for exchange of the
Old Notes will be the first business day
following the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER............. The Exchange Offer is subject to certain
customary conditions, which may be waived by
the Company. The Company currently expects
that each of the conditions will be satisfied
and that no waivers will be necessary. See
"The Exchange Offer--Certain Conditions to
the Exchange Offer." The Company reserves the
right to terminate or amend the Exchange
Offer at any time prior to the Expiration
Date upon the occurrence of any such
condition.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
PROCEDURES FOR TENDERING OLD NOTES........... Each holder of Old Notes wishing to accept
the Exchange Offer must complete, sign and
date the Letter of Transmittal, or a
facsimile thereof, in accordance with the
instructions contained herein and therein,
and mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with
the Old Notes and any other required
documentation to the Exchange Agent (as
defined herein) at the address set forth
herein. See "The Exchange Offer--Procedures
for Tendering Old Notes" and "Plan of
Distribution."
USE OF PROCEEDS.............................. There will be no proceeds to the Company from
the exchange of Notes pursuant to the
Exchange Offer.
FEDERAL INCOME TAX CONSEQUENCES.............. The exchange of Notes pursuant to the
Exchange Offer will not be a taxable event
for federal income tax purposes. See "United
States Federal Income Tax Consequences."
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS.......................... Any beneficial owner whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other
nominee and who wishes to tender should
contact such registered holder promptly and
instruct such registered holder to tender on
such beneficial owner's behalf. If such
beneficial owner wishes to tender on such
beneficial owner's own behalf, such
beneficial owner must, prior to completing
and executing the Letter of Transmittal and
delivering the Old Notes, either make
appropriate arrangements to register
ownership of the Old Notes in such beneficial
owner's name or obtain a properly completed
bond power from the registered holder. The
transfer of registered ownership may take
considerable time. See "The Exchange
Offer--Procedures for Tendering Old Notes."
GUARANTEED DELIVERY PROCEDURES............... Holders of Old Notes who wish to tender their
Old Notes and whose Old Notes are not
entirely available or who cannot deliver
their Old Notes, the Letter of Transmittal or
any other documents required by the Letter of
Transmittal to the Exchange Agent prior to
the Expiration Date must tender their Old
Notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Notes."
ACCEPTANCE OF OLD NOTES AND DELIVERY OF
EXCHANGE................................... The Company will accept for exchange any and
all Old Notes which are properly tendered in
the Exchange Offer prior to 5:00 p.m., New
York City time, on the Expiration Date. The
Exchange Notes issued pursuant to the
Exchange Offer will be delivered promptly
following the Expiration Date.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
See "The Exchange Offer--Procedures for
Tendering Old Notes."
EFFECT ON HOLDERS OF OLD NOTES............... As a result of the making of, and upon
acceptance for exchange of all validly
tendered Old Notes pursuant to the terms of,
this Exchange Offer, the Company will have
fulfilled a covenant contained in the
Registration Rights Agreement (the
"Registration Rights Agreement") dated as of
December 24, 1996 among the Company, Goldman,
Sachs & Co., Donaldson, Lufkin & Jenrette
Securities Corporation, J.P. Morgan
Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Brothers
Inc, Smith Barney Inc. and UBS Securities LLC
(the "Initial Purchasers") and, accordingly
there will be no increase in the interest
rate on the Old Notes pursuant to the terms
of the Registration Rights Agreement, and the
holders of the Old Notes will have no further
registration or other rights under the
Registration Rights Agreement. Holders of the
Old Notes who do not tender their Old Notes
in the Exchange Offer will continue to hold
such Old Notes and will be entitled to all
the rights and limitations applicable thereto
under the Indenture between the Company and
State Street Bank and Trust Company relating
to the Old Notes and the Exchange Notes (the
"Indenture") except for any such rights under
the Registration Rights Agreement that by
their terms terminate or cease to have
further effectiveness as a result of the
making of, and the acceptance for exchange of
all validly tendered Old Notes pursuant to,
the Exchange Offer. All untendered Old Notes
will continue to be subject to the
restrictions on transfer provided for in the
Old Notes and in the Indenture. To the extent
that Old Notes are tendered and accepted in
the Exchange Offer the trading market for
untendered Old Notes could be adversely
affected.
CONSEQUENCE OF FAILURE TO EXCHANGE........... Holders of Old Notes who do not exchange
their Notes for Exchange Notes pursuant to
the Exchange Offer will continue to be
subject to the restrictions on transfer of
such Old Notes as set forth in the legend
thereon as a consequence of the offer or sale
of the Old Notes pursuant to an exemption
from, or in a transaction not subject to, the
registration requirements of the Securities
Act and applicable state securities laws. In
general, the Old Notes may not be offered or
sold, unless registered under the Securities
Act, except pursuant to an exemption from, or
in a transaction not subject to, the
Securities Act and applicable state
securities laws. The Company does not
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
currently anticipate that it will register
the Old Notes under the Securities Act.
EXCHANGE AGENT............................... State Street Bank and Trust Company is
serving as exchange agent (the "Exchange
Agent") in connection with the Exchange
Offer. See "The Exchange Offer--Exchange
Agent."
TERMS OF THE EXCHANGE NOTES
SECURITIES OFFERED........................... $500,000,000 principal amount of 7.45% Senior
Notes due 2026, Series B.
MATURITY DATE................................ December 15, 2026.
INTEREST PAYMENT DATES....................... June 15 and December 15 of each year,
commencing June 15, 1997.
OPTIONAL REDEMPTION.......................... The Exchange Notes will be redeemable, in
whole or in part, at the option of the
Company at any time, at a redemption price
equal to the greater of (i) 100% of the
principal amount and (ii) the sum of the
present values of the remaining scheduled
payments of principal and interest thereon
discounted, on a semiannual basis, at the
Treasury Yield (as defined) plus 15 basis
points, together with accrued interest plus
premium, and Liquidated Damages (as defined),
if any, to the date of redemption.
RANKING...................................... The Exchange Notes will be general, unsecured
obligations of the Company and will rank PARI
PASSU with all other senior indebtedness of
the Company.
CERTAIN COVENANTS............................ The Indenture governing the Notes and the
Exchange Notes (the "Indenture")contains
certain covenants, that will, among other
things, limit the ability of the Company and
its Principal Subsidiaries (as defined) to
incur liens securing indebtedness ranking
PARI PASSU with the Notes without equally and
ratably securing the Notes, and to engage in
mergers and consolidations. See "Description
of the Notes."
ABSENCE OF MARKET............................ The Exchange Notes are new securities for
which there is currently no established
market. Accordingly, there can be no
assurance as to the development or liquidity
of any market for the Exchange Notes. The
Company does not intend to apply for a
listing of the Exchange Notes on a securities
exchange.
</TABLE>
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered by Holders of the Old Notes prior to tendering Old Notes in the
Exchange Offer.
8
<PAGE>
RISK FACTORS
HOLDERS OF OLD NOTES SHOULD CONSIDER CAREFULLY, IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS BEFORE DECIDING
TO TENDER OLD NOTES IN THE EXCHANGE OFFER. THE RISK FACTORS SET FORTH BELOW ARE
GENERALLY APPLICABLE TO THE OLD NOTES AS WELL AS THE EXCHANGE NOTES.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for new Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the offer or sale of the Old Notes pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. In general, Old Notes may
not be offered or sold unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. The Company does not
currently intend to register the Old Notes under the Securities Act. Based on
interpretations by the staff of the Commission, the Company believes that
Exchange Notes issued pursuant to the Exchange Offer in exchange for Old Notes
may be offered for resale, resold or otherwise transferred by holders thereof
(other than any such holder which is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Old Notes were acquired in the ordinary course of such Holders'
business and such holders have no arrangement with any person to participate in
the distribution of such Exchange Notes. Each broker-dealer that receives
Exchange Notes for its own account in exchange for Old Notes, where such Old
Notes were acquired by such broker-dealer as a result of market making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution." To the extent that Old Notes are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Old Notes will be adversely affected.
HOLDING COMPANY STRUCTURE
The operations of the Company are conducted through its
insurance/reinsurance subsidiaries. Except to the extent that the Company may
itself be a creditor with recognized claims against its insurance/reinsurance
subsidiaries, claims of creditors of such subsidiaries, including ceding
companies (i.e., primary insurers) under reinsurance agreements, will have
priority with respect to the assets and earnings of such subsidiaries of the
Company, even though such subsidiary obligations do not constitute senior
indebtedness of the Company. Liabilities of the Company's insurance/reinsurance
subsidiaries, including loss reserves and unearned premium reserves, aggregated
$7,249.3 million at September 30, 1996 and assets of such subsidiaries totaled
$8,395.6 million as of such date.
In addition, in the event of a default on the Company's debt or an
insolvency, liquidation or other reorganization of the Company, creditors of the
Company will have no right to proceed against the assets of its
insurance/reinsurance subsidiaries or to cause their liquidation under Federal
and state bankruptcy laws. If the Company's principal insurance/reinsurance
subsidiary, American Re-Insurance Company ("American Re-Insurance"), were to be
liquidated, such liquidation would be conducted under the Delaware Insurance
Code (the "Delaware Code") by the Delaware Insurance Commissioner as the
receiver with respect to such subsidiary's property and business.
The Company is dependent on dividends and tax allocation payments from
American Re-Insurance, and its other insurance/reinsurance subsidiaries to meet
its debt obligations, including its obligations under the Notes. The payment of
dividends to the Company by American Re-Insurance is subject to limitations
imposed by the Delaware Code and other applicable state law. The aggregate
amount available for payment of dividends by American Re-Insurance to the
Company during 1996 without prior
9
<PAGE>
approval of regulatory authorities is $110.0 million (of which $70.0 million has
already been paid). Anticipated interest expense of the Company for 1996,
including charges related to the interest payable to the holders of the Notes,
on a pro forma basis after giving effect to this Offering and the application of
the net proceeds therefrom, will be approximately $40.2 million (compared to
actual interest expense of $40.5 million for the nine months ended September 30,
1996).
FACTORS SPECIFIC TO THE REINSURANCE INDUSTRY AND THE COMPANY
The property and casualty reinsurance industry has been highly cyclical.
Demand for reinsurance is significantly influenced by underwriting results of
primary property and casualty insurance companies and prevailing general
economic and market conditions, all of which affect retention levels of primary
insurance companies and reinsurance premium rates. The cyclical trends in the
industry and the industry's profitability can also be affected significantly by
volatile and unpredictable developments, including changes in what the Company
believes to be the propensity of courts to grant large awards, natural disasters
and other catastrophic events (such as hurricanes, windstorms, earthquakes,
floods and fires), fluctuations in interest rates and other changes in the
investment environment which affect market prices of the Company's investments
and the income and returns on those investments, and inflationary pressures that
may tend to affect the size of losses experienced by ceding primary insurance
companies.
The Company and its insurance/reinsurance subsidiaries are subject to
regulation by state insurance authorities under the insurance statutes,
including insurance holding company statutes, of various states, including
Delaware, the domiciliary state of American Re-Insurance. Such statutes, among
other things, limit the amount of dividends that can be paid by the
insurance/reinsurance subsidiaries without prior regulatory approval, impose
restrictions on the amount and type of investments the insurance/ reinsurance
subsidiaries may have, prescribe solvency standards that must be met and
maintained, require the insurance/reinsurance subsidiaries to maintain reserves
for losses, loss adjustment expenses ("LAE") and unearned premiums and, in some
states, limit the right of offset. Such insurance holding company statutes
generally require prior notice or regulatory approval of changes of control of
an insurer or its holding company.
From time to time, various regulatory and legislative changes have been
proposed in the insurance and reinsurance industry, which, if implemented, may
have an effect on reinsurers, including the Company. These proposals include
limitations on the right of offset by reinsurers and possible introduction of
federal regulation of reinsurers. The Company is unable to predict whether any
such proposal will be adopted, the form in which any such proposal would be
adopted, or the effect, if any, the adoption of any such proposal would have on
the Company or its insurance/reinsurance subsidiaries.
The Company and its insurance/reinsurance subsidiaries are required to
maintain reserves to cover their estimated ultimate liability for losses and LAE
with respect to reported and unreported claims incurred as of the end of each
accounting period (net of estimated related salvage and subrogation claims and
reinsurance recoverables). These loss and LAE reserves are estimates involving
claims adjustors' evaluations of reported claims and actuarial and statistical
projections at a given time of what the insurance/reinsurance subsidiaries
expect the ultimate settlement and administration of claims to cost based on
facts and circumstances then known, predictions of future events, estimates of
future trends in claims severity and other variable factors such as inflation
and new concepts of liability. The inherent uncertainties of estimating loss
reserves are exacerbated for reinsurers by the significant periods of time that
often elapse between the occurrence of an insured loss, the reporting of the
loss to the primary insurer and, ultimately, to the reinsurer, and the primary
insurer's payment of that loss and subsequent indemnification by the reinsurer.
As a consequence, actual losses and LAE paid may deviate, perhaps substantially,
from estimates reflected in the reserves of the Company and its
insurance/reinsurance subsidiaries, as reported in the Company's financial
statements. To the extent reserves prove to be inadequate after taking into
account available retrocessional coverage including
10
<PAGE>
available stop loss protection, the Company would likely have to augment such
reserves and incur a charge to earnings.
Since the early 1980s, the Company's underwriting results have been
adversely affected by claims developing from asbestos-related and environmental
pollution coverage exposures. Significant uncertainties exist with respect to
estimating the ultimate future amounts that may be needed for these types of
claims, especially in view of changes in the legal and tort environment that
affect the development of loss reserves. For asbestos-related claims, such
uncertainties include estimations of the number and value of claims that may be
reported and the maximum value of asbestos-related exposures written by its
clients and thus the Company during expired coverage periods. For environmental
pollution claims, such uncertainties include inconsistent coverage issue
decisions reached in court cases in various jurisdictions, which include the
existence of any insurance coverage at all, what underlying policies provide the
coverage and whether the Company reinsures those policies, whether the releases
of contaminants is one "occurrence" or more for determination of applicable
coverage/policy limits, how pollution exclusions should be applied, whether
clean-up costs constitute covered damage, and whether an insurer has a duty to
defend. In addition, the lack of resolution to the Superfund legislation in
Congress adds further uncertainty to environmental pollution claims costs.
In connection with asbestos, environmental-related and other latent
liabilities coverage exposures ("Latent Liability Exposures"), the Company
strengthened its gross incurred but not reported ("IBNR") loss reserves in the
fourth quarter of 1995 by $587.0 million. See "Results of Operations--Year Ended
December 31, 1995 Compared with Year Ended December 31, 1994." Nevertheless, the
uncertainties inherent in valuing asbestos-related and environmental pollution
claims are not likely to be resolved in the near future. There can be no
assurance that adverse developments from prior years will not continue in the
future, particularly with respect to asbestos and environmental pollution
exposures, or that such adverse developments will not have a material adverse
effect on net income.
The property and casualty reinsurance business is highly competitive.
Competition with respect to the types of reinsurance in which the Company is
engaged is based on many factors, including perceived overall financial strength
of the reinsurer, ratings of the reinsurer by A.M. Best Company ("A.M. Best"),
underwriting expertise, reputation and experience in the lines written, services
offered and speed of claims payment. The Company competes for its business in
the United States and international reinsurance markets with independent
reinsurers, reinsurer subsidiaries or affiliates of insurers, the reinsurance
departments of primary insurers and underwriting syndicates from the United
States and abroad, some of which have greater financial resources than the
Company. The Company also competes with providers of alternative forms of risk
transfer, such as investment banks which offer capital market mechanisms for
primary insurers to transfer insurance risks directly to investors.
On January 29, 1996, A.M. Best affirmed its "A+ (Superior)" rating of
American Re-Insurance, the second highest of A.M. Best's 15 qualitative ratings.
American Re-Insurance has been rated "A+ (Superior)" since March 3, 1993. "A +
(Superior)" is assigned by A.M. Best to those companies which in its opinion
have demonstrated superior overall performance when compared to the standards
established by A.M. Best and have demonstrated a very strong ability to meet
their policyholder and other contractual obligations over a long period of time.
According to A.M. Best, the objectives of its rating system are to evaluate the
factors affecting overall performance of an insurance or reinsurance company and
to provide A.M. Best's opinion of the company's relative financial strength and
ability to meet its obligation to policyholders currently and in the future.
On December 10, 1996, Standard & Poors Corporation ("S&P") raised American
Re-Insurance's claims paying ability rating to "AAA." An "AAA" rating represents
the highest of S&P's ratings. A rating of "AAA" is assigned by S&P to those
companies which, in its opinion, have superior financial security on an absolute
and relative basis and their capacity to meet policyholder obligations is
overwhelming under a variety of economic and underwriting conditions.
11
<PAGE>
There can be no assurance that American Re-Insurance will continue to be
rated "A+ (Superior)" by A.M. Best or "AAA" by S&P.
On December 13, 1996, Moody's Investors Service ("Moody's") raised American
Re-Insurance's financial strength rating to "Aaa." An "Aaa" rating represents
the highest of Moody's 19 qualitative ratings. A rating of "Aaa" is assigned by
Moody's to those companies which in Moody's opinion offer exceptional financial
security.
Ratings have become increasingly important in establishing the competitive
position of a reinsurer. Management believes that a reduction to below an "A"
level in any of American Re-Insurance's ratings could have a material adverse
effect on its financial condition, results of operations and cash flows. A.M.
Best, S&P and Moody's ratings are not in any way a measure of protection offered
to investors in the Notes and should not be relied upon with respect to making
an investment in the Notes. Each of these rating agencies continually reviews
its ratings and there can be no assurance that American Re-Insurance's ratings
will be maintained at current levels in the future.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements concerning the
Company's operations, economic performance and financial condition, including,
in particular the likelihood of the Company's success in developing and
expanding its business. These statements are based upon a number of assumptions
and estimates which are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company, and reflect
future business decisions which are subject to change. Some of these assumptions
inevitably will not materialize, and unanticipated events will occur which will
affect the Company's results.
12
<PAGE>
THE COMPANY
The Company is the holding company for American Re-Insurance, a reinsurance
company that underwrites property and casualty reinsurance directly in the
United States and international markets. American Re-Insurance was founded in
1917 as the first U.S.- owned reinsurance company. Based on statutory net
premiums written of $1,611.5 million in 1995, American Re-Insurance, ranked as
the third largest property and casualty reinsurer in the U.S. The Company had
total assets of $8,395.6 million and stockholders' equity of $908.8 million at
September 30, 1996.
The Company is a wholly-owned subsidiary of Munchener
Ruckversicherungs-Gesellschaft Aktiengesellschaft in Munchen, a company
organized under the laws of Germany ("Munich Re"). Munich Re is the world's
largest reinsurance company based on 1995 net premiums written, according to
BUSINESS INSURANCE.
American Re-Insurance provides reinsurance directly to primary insurance
companies without the assistance of reinsurance brokers, positioning it as one
of only five, major direct underwriters of property and casualty reinsurance in
the U.S. The other major direct reinsurers are Employers Reinsurance
Corporation, General Reinsurance Corporation, Swiss Reinsurance America
Corporation, and Munich Re, which operates in the United States through its 50%
owned affiliate Munich American Reinsurance Company ("Munich American
Reinsurance"), and through its U.S. branch.
The Company provides both treaty and facultative reinsurance and writes such
reinsurance on both a pro rata and excess of loss basis. Under facultative
reinsurance, the primary insurer cedes and the reinsurer assumes part or all of
the risks insured by the primary insurer under a single primary insurance
policy. Treaty reinsurance is a contractual arrangement, usually renewable
annually, between a primary insurer and a reinsurer under which the primary
insurer must cede and the reinsurer must assume a specified portion of a type or
category of risks. In the case of pro rata reinsurance, the reinsurer, in return
for a predetermined portion or share of the insurance premium charged by the
primary insurer, indemnifies the primary insurer against a predetermined portion
of the losses and LAE of the primary insurer under the covered primary policy or
policies. In the case of excess of loss reinsurance, the reinsurer indemnifies
the primary insurer against all or a specific portion of losses on underlying
insurance policies in excess of a specified dollar amount, known as the
"retention" or "attachment point," most often subject to a negotiated limit.
Premiums payable to the reinsurer by the primary insurer for excess of loss
coverage are not directly proportional to the premiums the primary insurer
receives because the reinsurer does not assume a proportionate risk.
13
<PAGE>
The following table sets forth the mix of the Company's business based on
statutory gross premiums written for years ended December 31, 1992, 1993, 1994
and 1995 and the nine months ended September 30, 1996:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NINE
MONTHS
ENDED
SEPTEMBER
30,
1992 1993 1994(1) 1995(1) 1996(1)
--------------------- --------------------- --------------------- --------------------- ----------
<CAPTION>
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Treaty Property
Pro Rata............... $ 303.1 23.1% $ 320.0 19.5% $ 353.3 18.4% $ 419.4 20.9% $ 376.0
Excess of Loss......... 107.4 8.2 218.9 13.4 212.0 11.0 245.2 12.2 187.9
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
Total................ 410.5 31.3 538.9 32.9 565.3 29.4 664.6 33.1 563.9
Treaty Casualty
Pro Rata............... 235.5 17.9 345.1 21.1 410.8 21.4 374.5 18.6 411.1
Excess of Loss......... 245.8 18.7 245.3 15.0 360.9 18.8 320.2 16.0 250.8
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
Total................ 481.3 36.6 590.4 36.1 771.7 40.2 694.7 34.6 661.9
Facultative Property
Pro Rata............... 39.4 3.0 51.1 3.1 56.0 2.9 59.1 3.0 60.5
Excess of Loss......... 42.4 3.2 62.2 3.8 63.2 3.3 88.8 4.4 77.6
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
Total................ 81.8 6.2 113.3 6.9 119.2 6.2 147.9 7.4 138.1
Facultative Casualty
Pro Rata............... 0.6 0.1 1.7 0.0 0.6 0.0 0.2 0.0 3.8
Excess of Loss......... 339.1 25.8 393.3 24.1 466.3 24.2 499.2 24.9 422.5
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
Total................ 339.7 25.9 395.0 24.1 466.9 24.2 499.4 24.9 426.3
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
Total................ $ 1,313.3 100.0% $ 1,637.6 100.0% $ 1,923.1 100.0% $ 2,006.6 100.0% $ 1,790.2
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
<CAPTION>
<S> <C>
<S> <C>
Treaty Property
Pro Rata............... 21.0%
Excess of Loss......... 10.5
---------
Total................ 31.5
Treaty Casualty
Pro Rata............... 23.0
Excess of Loss......... 14.0
---------
Total................ 37.0
Facultative Property
Pro Rata............... 3.4
Excess of Loss......... 4.3
---------
Total................ 7.7
Facultative Casualty
Pro Rata............... 0.2
Excess of Loss......... 23.6
---------
Total................ 23.8
---------
Total................ 100.0%
---------
---------
</TABLE>
- ------------------------
(1) The totals for the years ended December 31, 1994 and 1995 and for the nine
months ended September 30, 1996 include premiums from primary business
written by American Alternative Insurance Corporation, which was acquired by
the Company in 1994. The premiums have been allocated to the Facultative
Casualty Excess of Loss amount.
The Company focuses its treaty marketing efforts on small- to medium-sized
regional property and casualty insurers with annual gross premium writings of
less than $500 million. These regional insurers generally require higher levels
of reinsurance than larger, better capitalized primary insurers and tend to rely
more heavily on the Company for their reinsurance needs. Such regional insurers
also have greater need for the Company's high level of insurance skills and
services. The Company markets its facultative business to large primary
insurers, which comprise the largest segment of the commercial insurance market,
and smaller regional primary insurers whose commercial insurance risks are more
limited in volume and scope. The Company also markets to large commercial
insurance buyers, such as major corporations and governmental entities, seeking
alternatives to the primary insurance companies that traditionally service these
insurance buyers. These buyers, and the captive insurance companies, risk
retention groups, and other self insurance mechanisms they use, are referred to
as the "alternative market". In 1995 and for the first nine months of 1996,
approximately 18.0% and 14.9%, respectively, of the Company's total net premiums
written represented alternative market business.
The Company's business objective is to maximize profitability throughout the
property and casualty underwriting cycle. The Company seeks to achieve this
objective through a strategy of (i) marketing based upon client needs, referred
to by the Company as the "whole account approach," (ii) capitalizing on its
financial resources and position as a direct writer by emphasizing long-term
client relationships, (iii) adjusting its mix of business to react to changing
market conditions, (iv) maintaining a conservative investment portfolio and (v)
utilizing prudent actuarial practices in pricing its business and establishing
its loss reserves.
14
<PAGE>
The Company has developed the whole account approach to develop and deliver
products and services closely tailored to its clients' needs, and to integrate
the marketing of its products and services with the underwriting of reinsurance
risks. Each of the Company's clients is assigned a team of specialists including
treaty, facultative and other services specialists, headed by a client
relationship manager. In addition to underwriting insurance risks, the Company
provides its clients with services including consulting in the areas of
investment management, risk management, actuarial analysis, financial analysis,
claims management, data processing, mergers and acquisitions due diligence
review, reinsurance and insurance brokerage, captive and risk retention group
management services and underwriting management services.
The Company emphasizes long-term relationships with its clients, a strategy
that management believes provides stability to the Company's sources of revenue
during underwriting cycles. The Company believes that its close relationships
with clients arising from the whole account approach, its direct underwriting,
and the extensive services that it offers have led to long-term, stable
relationships with clients based more on quality and variety of service than on
price.
The Company adjusts its mix of business as market conditions change and
opportunities arise. In the protracted soft market that currently exists, the
Company writes more excess of loss business and opportunistic pro-rata treaties
in order to better control the relationship between premiums received and the
risk exposure underwritten. The Company also adjusts its premiums written from
period to period between the traditional and alternative markets, and domestic
and international markets, based on opportunities presented.
The Company follows a conservative investment strategy that emphasizes
maintaining a high-quality fixed income portfolio that generates high current
income. The Company's current investment strategy does not contemplate material
additional investment in non-investment grade securities, commercial real estate
or commercial mortgages. The Company's bond and short-term investment portfolio,
which constitutes 91.1% of the total financial statement value of cash and
investments, had an average S&P quality rating of "AA+" at September 30, 1996,
which remains unchanged from December 31, 1995.
The Company employs a staff of approximately 40 actuaries who are integrated
into all of its major operating processes that include: account selection; risk
evaluation; rating and pricing; return on equity modeling; consulting assistance
to clients; and establishment of the Company's loss reserves. The Company
believes this integration allows for a comprehensive, technical approach to
pricing its business. Different actuarial units support the pricing for each of
the Company's operating divisions. The Company also maintains a Reserve Analysis
Unit, which is responsible for continuously monitoring the Company's loss
reserve position. The Reserve Analysis Unit staff works together with the rating
and pricing actuaries in evaluating the Company's loss reserve position relative
to its pricing levels and mix of business (e.g., property versus casualty,
excess of loss versus pro rata, low versus moderate versus high hazard and
attachment point).
The Company seeks to manage and diversify its risk through careful
underwriting, active claims management, retrocessional arrangements and the
selective commutation of certain reinsurance contracts. The Company's normal
business practice is to retrocede a portion of most risks assumed and to
purchase additional reinsurance for catastrophic events.
In connection with the recent acquisition of the Company by Munich Re,
Munich Re and the Company are contemplating various alternatives for integrating
all or a portion of the operations of American Re-Insurance during 1997 with all
or a portion of the operations of Munich American Reinsurance (50% of which is
owned by Munich Re) and all or a portion of the operations of the United States
branch of Munich Re. There can be no assurance that any such integration will
occur on the timetable currently contemplated or at all, or as to the form that
any such integration could take. Any plan for integration would be subject to,
among other things, an analysis by Munich Re and the Company of the
15
<PAGE>
accounting, operational and legal implications of such integration, the
negotiation and execution of definitive agreements as to value and other
matters, as well as a variety of other factors that are beyond the Company's
control, including, without limitation, the consent of certain of the other
shareholders of Munich American Reinsurance and application for and receipt of
insurance and other regulatory approvals. There can be no assurance as to the
impact of any such integration on the business conditions (financial or
otherwise) or prospects of the Company.
Munich American Reinsurance had statutory total admitted assets and
policyholders' surplus of $1,422.3 million and $323.1 million, respectively, as
of December 31, 1995 and $1,526.4 million and $348.3 million, respectively, as
of September 30, 1996. Munich American Reinsurance had $413.5 million and $330.5
million of net written premiums for the year ended December 31, 1995 and the
nine months ended September 30, 1996, respectively. The United States branch of
Munich Re had total statutory admitted assets and statutory policyholders'
surplus of $1,396.2 million and $532.8 million, respectively, as of December 31,
1995 and $1,459.7 million and $595.8 million, respectively, as of September 30,
1996. The United States branch of Munich Re had $299.8 million and $198.1
million of net written premiums for the year ended December 31, 1995 and the
nine months ended September 30, 1996, respectively.
The Company's principal executive offices are located at 555 College Road
East, Princeton, New Jersey 08543, and its telephone number is (609) 243-4200.
16
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its subsidiaries at September 30, 1996 and as adjusted to give
effect to the sale of the Old Notes and the application of the net proceeds
therefrom to defease the Company's 10 7/8% Senior Subordinated Debentures due
2004 (the "Subordinated Debentures").
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
(IN MILLIONS)
------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
---------- ------------
Senior bank debt....................................................................... $ 75.0 $ 75.0
The Notes.............................................................................. -- $ 500.0
Subordinated Debentures................................................................ 450.0 --
---------- ------------
Total Debt......................................................................... 525.0 575.0
Company-obligated mandatorily redeemable preferred securities of subsidiary trust
holding as all of its assets Junior Subordinated Debentures.......................... 237.5 237.5
Stockholders' equity
Common stock, par value $.01 per share; authorized: 125,000,000 shares; issued and
outstanding: 47,293,014 shares at September 30, 1996................................. 0.5 0.5
Additional paid-in capital............................................................. 715.6 715.6
Retained earnings...................................................................... 218.0 184.0(1)
Net unrealized appreciation of investments............................................. 12.5 12.5
Net unrealized loss on foreign exchange................................................ (37.8) (37.8)
---------- ------------
Total stockholders' equity......................................................... 908.8 874.8
---------- ------------
Total capitalization............................................................... $ 1,671.3 $ 1,687.3
---------- ------------
---------- ------------
</TABLE>
- ------------------------
(1) Reflects a one-time extraordinary loss of $35.7 (on an after-tax basis)
million in connection with the defeasance by the Company in respect of the
early extinguishment of the Subordinated Debentures.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED SEPTEMBER
DECEMBER 31, 30,
-------------------- ------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
---- ---- -------- ---- ----
Ratio of earnings to fixed charges......................................................... 3.1 2.9 (1.3)(2) 3.8 4.4
Pro forma ratio of earnings to fixed charges(1)............................................ -- -- (1.6)(2) 4.8 5.4
</TABLE>
- ------------------------
(1) Pro forma for the issuance of the Old Notes and the application of the net
proceeds therefrom to defease the Subordinated Debentures.
(2) For the year ended December 31, 1995, earnings were insufficient to cover
fixed charges by $94.9 million and pro forma earnings would have been
insufficient to cover pro forma fixed charges by $94.9 million.
Earnings consist of income before income taxes plus fixed charges, net of
capitalized interest. Fixed charges consist of interest expense before reduction
for capitalized interest and one-third of rental expense, which is considered to
be representative of an interest factor.
17
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
OF THE COMPANY
Set forth below are five years and the most recent interim period of
selected financial information which should be read in conjunction with the
consolidated financial statements and notes of the Company incorporated by
reference from the 1995 10-K and September 10-Q. Financial information is
presented for American Re-Insurance for the year ended December 31, 1991, and
the nine month period ended September 30, 1992, and for the Company for the
three months ended December 31, 1992, and each of the years ended December 31,
1993, 1994 and 1995. The information (other than statutory data) for the year
ended December 31, 1991, and the nine months ended September 30, 1992, was
derived from the audited consolidated financial statements and related notes of
American Re-Insurance. The information (other than statutory data) as of and for
the three months ended December 31, 1992, and each of the years ended December
31, 1993, 1994 and 1995 was derived from the audited consolidated financial
statements and related notes of the Company. The financial data for the nine
months ended September 30, 1996 and 1995, respectively, have been derived from
the Company's unaudited consolidated financial statements as of and for the nine
month period then ended, which, in the opinion of the management of the Company,
includes all adjustments (consisting of normal recurring accruals) necessary for
a fair presentation of results of operations and financial position for the
periods and as of the dates presented. The results of operations for any interim
period are not necessarily indicative of results of operations for the full
year. The statutory data have been derived from statutory financial statements.
Such statutory financial statements are prepared in accordance with statutory
accounting principles, which differ from generally accepted accounting
principles ("GAAP").
<TABLE>
<CAPTION>
THE THE COMPANY
AMERICAN RE-INSURANCE COMPANY ------------------------------------------
(PREDECESSOR COMPANY) -------------- COMBINED(1) NINE
------------------------------ -------------- MONTHS
NINE MONTHS THREE MONTHS ENDED
YEAR ENDED ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, 30,
-------------- -------------- -------------- -------------- ------------------------------- ---------
1991 1992 1992 1992 1993 1994 1995 1995
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
OPERATING DATA:
Net premiums
written............. $ 901.7 $ 741.7 $ 278.6 $ 1,020.4 $ 1,363.4 $ 1,553.3 $ 1,629.5 $ 1,238.2
Net premiums earned... 930.1 692.7 270.7 963.4 1,249.9 1,461.4 1,530.9 1,151.0
Losses and LAE(2)..... 677.6 472.0 201.3 673.3 796.9 1,011.0 1,340.2 771.2
Underwriting
expenses............ 256.2 245.5 76.4 322.0 403.5 439.3 452.4 337.5
Underwriting gain
(loss).............. (3.7) (24.8) (7.1) (31.9) 49.5 11.1 (261.7) 42.3
Net investment
income.............. 220.7 165.3 42.0 207.3 165.1 188.7 222.6 166.0
Net realized capital
gains (losses)...... 10.4 4.2 (2.1) 2.1 5.1 (0.2) 4.7 4.4
Interest expense...... -- -- 24.9 -- 66.1 60.0 60.7 47.7
Income (loss) before
income taxes........ 202.8 128.9 (10.5) -- 144.0 120.7 (159.5) 149.7
Income taxes
(benefits).......... 44.7 28.2 (7.0) -- 36.0 23.2 (76.6) 37.4
Income (loss) before
distributions on
preferred securities
of subsidiary trust,
extraordinary loss,
and cumulative
effect of accounting
change.............. 158.1 100.7 (3.5) -- 108.0 97.5 (82.9) 112.3
<CAPTION>
1996
---------
<S> <C>
OPERATING DATA:
Net premiums
written............. $ 1,432.8
Net premiums earned... 1,282.3
Losses and LAE(2)..... 820.8
Underwriting
expenses............ 374.2
Underwriting gain
(loss).............. 87.3
Net investment
income.............. 186.0
Net realized capital
gains (losses)...... 2.2
Interest expense...... 40.5
Income (loss) before
income taxes........ 215.0
Income taxes
(benefits).......... 60.3
Income (loss) before
distributions on
preferred securities
of subsidiary trust,
extraordinary loss,
and cumulative
effect of accounting
change.............. 154.7
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
THE THE COMPANY
AMERICAN RE-INSURANCE COMPANY ------------------------------------------
(PREDECESSOR COMPANY) -------------- COMBINED(1) NINE
------------------------------ -------------- MONTHS
NINE MONTHS THREE MONTHS ENDED
YEAR ENDED ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, 30,
-------------- -------------- -------------- -------------- ------------------------------- ---------
1991 1992 1992 1992 1993 1994 1995 1995
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Distributions on
preferred securities
of subsidiary
trust............... -- -- -- -- -- -- (4.4) (1.1)
Income (loss) before
extraordinary loss
and cumulative
effect of accounting
change.............. 158.1 100.7 (3.5) -- 108.0 97.5 (87.3) 111.2
Extraordinary loss,
net of applicable
income tax effect... -- -- -- -- (26.6) -- (0.3) (0.3)
Cumulative effect of
accounting change,
net of applicable
income tax effect... -- -- -- -- 17.8 -- -- --
Net income (loss)
before preferred
dividend............ 158.1 100.7 (3.5) -- 99.3 97.5 (87.6) 110.9
Paid-in-kind preferred
dividends........... -- -- 2.5 -- 0.9 -- -- --
Net income (loss)
available to common
shareholders........ 158.1 100.7 (6.0) -- 98.4 97.5 (87.6) 110.9
EARNINGS (LOSS) PER
SHARE:
Income (loss) before
extraordinary loss
and cumulative
effect of accounting
change.............. -- -- $ (0.10) -- $ 2.24 $ 2.01 $ (1.85) $ 2.29
Extraordinary loss,
net of tax.......... -- -- -- -- (0.55) -- (0.01) (0.01)
Cumulative effect of
accounting change,
net of tax.......... -- -- -- -- 0.37 -- -- --
Paid-in-kind preferred
dividend............ -- -- (0.08) -- (0.02) -- -- --
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
Net income (loss) per
common share........ -- -- $ (0.18) -- $ 2.04 $ 2.01 $ (1.86) $ 2.28
DIVIDENDS DECLARED PER
COMMON SHARE:
Cash dividend per
common share........ -- -- -- -- -- -- $ 0.32 $ 0.24
OTHER GAAP OPERATING
DATA (3):
Loss and LAE ratio.... 72.9% 68.1% 74.4% 69.9% 63.8% 69.2% 87.5% 67.0%
Underwriting expense
ratio............... 27.5 35.5 28.2 33.4 32.3 30.0 29.6 29.3
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
Combined ratio........ 100.4% 103.6% 102.6% 103.3% 96.1% 99.2% 117.1% 96.3%
<CAPTION>
1996
---------
<S> <C>
Distributions on
preferred securities
of subsidiary
trust............... (9.8)
Income (loss) before
extraordinary loss
and cumulative
effect of accounting
change.............. 144.9
Extraordinary loss,
net of applicable
income tax effect... --
Cumulative effect of
accounting change,
net of applicable
income tax effect... --
Net income (loss)
before preferred
dividend............ 144.9
Paid-in-kind preferred
dividends........... --
Net income (loss)
available to common
shareholders........ 144.9
EARNINGS (LOSS) PER
SHARE:
Income (loss) before
extraordinary loss
and cumulative
effect of accounting
change.............. $ 2.96
Extraordinary loss,
net of tax.......... --
Cumulative effect of
accounting change,
net of tax.......... --
Paid-in-kind preferred
dividend............ --
---------
Net income (loss) per
common share........ $ 2.96
DIVIDENDS DECLARED PER
COMMON SHARE:
Cash dividend per
common share........ $ 0.30
OTHER GAAP OPERATING
DATA (3):
Loss and LAE ratio.... 64.0%
Underwriting expense
ratio............... 29.2
---------
Combined ratio........ 93.2%
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
THE THE COMPANY
AMERICAN RE-INSURANCE COMPANY ------------------------------------------
(PREDECESSOR COMPANY) -------------- COMBINED(1) NINE
------------------------------ -------------- MONTHS
NINE MONTHS THREE MONTHS ENDED
YEAR ENDED ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, 30,
-------------- -------------- -------------- -------------- ------------------------------- ---------
1991 1992 1992 1992 1993 1994 1995 1995
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATUTORY DATA (4):
Ratio of net premiums
written to
surplus............. 1.22x -- -- 1.15x 1.26x 1.39x 1.45x 1.32x
Policyholder's
surplus............. $ 735.7 -- -- $ 875.8 $ 1,079.3 $ 1,104.1 $ 1,109.6 $ 1,209.8
Loss and LAE ratio.... 73.0% -- -- 68.5% 64.8% 71.2% 88.9% 67.9%
Underwriting expense
ratio............... 29.7 -- -- 34.3 34.7 32.6 32.1 31.7
-------------- -------------- -------------- -------------- --------- --------- --------- ---------
Combined ratio........ 102.7% -- -- 102.8% 99.5% 103.8% 121.0% 99.6%
BALANCE SHEET DATA (AT
END OF PERIOD):
Total investments and
cash................ $ 2,752.3 -- $ 2,833.8 -- $ 3,153.3 $ 3.308.9 $ 3,957.5 $ 3,783.4
Total assets.......... 3,812.5(5) -- 5,886.9 -- 6,231.4 6,677.9 7,814.4 7,286.8
Loss and LAE
reserves............ 2,063.5(5) -- 3,523.9 -- 3,685.7 3,971.9 4,790.0 4,213.4
Senior bank debt...... -- -- 575.0 -- 275.0 200.0 75.0 --
Senior subordinated
debt................ -- -- 450.0 -- 450.0 450.0 450.0 450.0
Company-obligated
mandatorily
redeemable preferred
securities of
subsidiary trust
holding as all its
assets Junior
Subordinated
Debentures.......... -- -- -- -- -- -- 237.5 237.5
Stockholders' equity.. 966.0 -- 386.3 -- 797.2 789.2 847.1 999.9
<CAPTION>
1996
---------
<S> <C>
STATUTORY DATA (4):
Ratio of net premiums
written to
surplus............. 1.54x
Policyholder's
surplus............. $ 1,182.7
Loss and LAE ratio.... 64.4%
Underwriting expense
ratio............... 30.3
---------
Combined ratio........ 94.7%
BALANCE SHEET DATA (AT
END OF PERIOD):
Total investments and
cash................ $ 4,075.4
Total assets.......... 8,395.6
Loss and LAE
reserves............ 4,938.1
Senior bank debt...... 75.0
Senior subordinated
debt................ 450.0
Company-obligated
mandatorily
redeemable preferred
securities of
subsidiary trust
holding as all its
assets Junior
Subordinated
Debentures.......... 237.5
Stockholders' equity.. 908.8
</TABLE>
- ------------------------
(1) Represents the sum of American Re-Insurance's results for the nine months
ended September 30, 1992 and American Re-Insurance's results for the three
months ended December 31, 1992. The combined sum has been presented for
comparison of significant operating data.
(2) "LAE" means loss adjustment expenses.
(3) GAAP loss and LAE ratio represents the sum of losses and LAE as a percentage
of net premiums earned. GAAP underwriting expense ratio represents
underwriting expenses as a percentage of net premiums earned. GAAP combined
ratio represents the sum of the GAAP loss and LAE ratio and GAAP
underwriting expense ratio.
(4) Represents statutory data for the applicable period. Ratio of net premiums
written to surplus represents statutory net premiums written for the period
over statutory policyholders' surplus at the end of such period. Statutory
loss and LAE ratio represents the sum of statutory losses and LAE as a
percentage of statutory net premiums earned. Statutory underwriting expense
ratio represents statutory underwriting expenses as a percentage of
statutory net premiums written. Statutory combined ratio represents the sum
of the statutory loss and LAE ratio and the statutory underwriting expense
ratio.
(5) Stated in accordance with the gross financial reporting requirements as
prescribed by Financial Accounting Standard No. 113, "Accounting and
Reporting for Reinsurance of Short-Duration and Long Duration Contracts."
20
<PAGE>
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995
The Company's net premiums written increased 15.7% to $1,432.8 million for
the nine months ended September 30, 1996, from $1,238.2 million for the same
period in 1995. The increase in net premiums written was primarily attributable
to increased writings in both treaty and facultative business. Total treaty net
premiums written increased 14.8% to $1,020.5 million for the nine months ended
September 30, 1996, from $888.6 million for the same period in 1995. In this
connection, the Company's domestic operations treaty net premiums written
increased 13.7% to $618.5 million for the nine months ended September 30, 1996,
from $544.1 million for the same period in 1995. Total facultative net premiums
written increased 17.9% to $412.3 million for the nine months ended September
30, 1996, from $349.6 million for the same period in 1995. Accounting for this
increase was the Company's domestic operations large finite risk program of
$79.6 million written in the third quarter of 1996.
The Company's net premiums earned increased 11.4% to $1,282.3 million for
the nine months ended September 30, 1996, from $1,151.0 million for the same
period in 1995. The increase in net premiums earned was attributable to a 16.0%
increase in total treaty net premiums earned to $937.5 million for the 1996
period from $808.5 million for the 1995 period, while facultative net premiums
earned increased 0.7% to $344.8 million for the 1996 period, from $342.5 million
for the 1995 period. The increase in net premiums earned was primarily
attributable to the increase in net premiums written for the nine months ended
September 30, 1996, as well as the timing of premiums earned on business in
force.
Net losses and LAE incurred increased 6.4% to $820.8 million for the nine
months ended September 30, 1996, from $771.2 million for the same period in
1995. This increase was primarily attributable to the increase in the proportion
of net earned premium exposures that relate to treaties, which contains a higher
ultimate accident year loss ratio than facultative business, partially offset by
a decrease in losses due to adverse development from claims covering asbestos,
environmental-related and other Latent Liability Exposures. Due to the provision
made for loss reserve strengthening for Latent Liability Exposures in the fourth
quarter of 1995, the Company incurred no losses for Latent Liability Exposures
in the nine-month period ended September 30, 1996, compared to $54.7 million for
the same period in 1995.
Underwriting expense, comprised of commission expense plus operating
expense, increased 10.9% to $374.3 million for the nine months ended September
30, 1996, from $337.5 million for the same period in 1995. This increase was
primarily due to an increase in commission expense of 14.1% to $274.6 million
for the nine months ended September 30, 1996, from $240.7 million for the same
period in 1995. This result was partially due to an increase in writings of pro
rata treaty premiums. Operating expenses increased 2.9% to $99.6 million for the
nine months ended September 30, 1996, from $96.8 million for the same period in
1995, due to an increase in overhead expenses.
The Company experienced an underwriting gain (net premiums earned minus
losses and LAE incurred and underwriting expenses) of $87.3 million for the nine
months ended September 30, 1996, compared to $42.3 million for the same period
in 1995. On a GAAP basis, the Company's loss ratio decreased to 64.0% for the
nine months ended September 30, 1996, from 67.0% for the same period in 1995
(which included 4.8 points for adverse development for Latent Liability
Exposures), while the underwriting expense ratio decreased to 29.2% for the nine
months ended September 30, 1996, from 29.3% for the same period in 1995. The
reduction in adverse loss development for Latent Liability Exposures in the 1996
period was partially offset by the increase in the proportion of net premiums
earned that relates to treaties, which contains a higher accident year loss
ratio than facultative business. As a result of the decrease in the loss ratio,
the GAAP combined ratio for the nine months ended September 30, 1996, decreased
to 93.2%, from 96.3% for the same period in 1995.
21
<PAGE>
Pre-tax net investment income increased 12.0% to $186.0 million for the nine
months ended September 30, 1996, from $166.0 million for the same period in
1995. This increase was primarily attributable to an increase in the invested
asset base, in addition to a higher overall effective interest rate in the
investment portfolio. The Company's after-tax net investment income increased by
10.5% to $137.6 million for the nine months ended September 30, 1996, from
$124.5 million for the same period in 1995. The after-tax net investment income
increase was less than the pre-tax net investment increase due to the Company's
decision to continue to increase the percentage of taxable fixed maturity
investments in its portfolio, based on the relative attractiveness of investment
yields on highly rated taxable instruments, in addition to tax-planning
considerations.
The Company's interest expense decreased by 15.0% to $40.5 million for the
nine months ended September 30, 1996, from $47.7 million for the same period in
1995. This decrease was primarily attributable to the lower level of senior bank
debt outstanding during the nine months ended September 30, 1996, compared to
the 1995 period, under the Company's revolving credit facility.
The Company realized net capital gains of $2.2 million for the nine months
ended September 30, 1996, compared to net capital gains of $4.4 million for the
same period in 1995. This change was primarily due to net capital gains of $2.1
million realized on bond sales for the nine months ended September 30, 1996,
compared to net capital gains of $3.4 million realized on bond sales for the
same period in 1995.
Other income increased by 34.0% to $35.1 million for the nine months ended
September 30, 1996, from $26.2 million for the same period in 1995. The increase
in the 1996 period was primarily attributable to an increase of $12.3 million in
fee subsidiary revenue. Other expenses increased by 32.4% to $55.0 million for
the nine months ended September 30, 1996 from $41.5 million for the same period
in 1995. The increase in the 1996 period was attributable to an increase in fee
subsidiary expenses of $15.4 million, partially offset by a decrease of $1.5
million in the provision for the allowance for doubtful accounts.
Income before income taxes increased by 43.6% to $215.0 million for the nine
months ended September 30, 1996, from $149.7 million for the same period in
1995. This increase was primarily attributable to increased underwriting gain
and investment income. Federal and foreign income taxes increased by 61.3% to
$60.3 million for the nine months ended September 30, 1996, from $37.4 million
for the same period in 1995. This increase was due to the increase in income
before income taxes, in addition to a decrease in tax-exempt investment income
earned by the Company.
The Company recognized an after-tax charge of $9.8 million for the nine
months ended September 30, 1996, compared to $1.1 million for the same period in
1995, representing the Company's minority interest in the earnings of American
Re Capital. The charge is due to the obligations incurred by American Re Capital
("American Re Capital"), a single-purpose, wholly-owned subsidiary trust in
which the Company has a minority interest, on its 8 1/2% Cumulative Quarterly
Income Preferred Securities ("QUIPS"), which were issued August 30, 1995.
In the third quarter of 1995, the Company recognized an extraordinary
non-cash after-tax loss of $0.3 million representing the write-off of
capitalized financing fees for the Company's prepaid revolving bank credit
agreement. There was no comparable charge for the Company in 1996.
Net income to common stockholders increased by 30.7% to $144.9 million for
the nine months ended September 30, 1996, from $110.9 million for the same
period in 1995. Primary earnings per share to common stockholders increased by
29.8% to $2.96 per share for the nine months ended September 30, 1996, from
$2.28 per share for the same period in 1995. There were 49.0 million weighted
average shares and common stock equivalents outstanding during the nine months
ended September 30, 1996, compared to 48.6 million outstanding during the same
period in 1995.
22
<PAGE>
YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994
The Company's net premiums written increased 4.9% to $1,629.5 million for
the year ended December 31, 1995, from $1,553.3 million in 1994. Total treaty
net premiums written increased 2.3% to $1,128.2 million for 1995, from $1,103.1
million for 1994, with increases in domestic operations' and international
operations' treaty net premiums written, partially offset by a decline in Am-Re
Managers, Inc. treaty net premiums written. Facultative net premiums written
increased 11.4% to $501.3 million for 1995, from $450.2 million for 1994,
primarily due to expansion of existing accounts. International net premiums
written, which are included in the treaty and facultative amounts stated above,
were $380.5 million or 23.4% of total net premiums written for 1995, compared to
$309.3 million, or 19.9% of total net premiums written for 1994. The Company
believes that the increase in international premium writings can be attributed
to its continued success in implementing its direct whole account marketing
approach, as well as increasing opportunities presented in the European market.
The Company's net premiums earned increased 4.8% to $1,530.9 million for the
year ended December 31, 1995, from $1,461.4 million in 1994. This increase in
earned premiums was primarily attributable to the increase in premiums written
for 1995, as well as the timing of premiums earned on business in force.
Net losses and LAE incurred increased 32.6% to $1,340.2 million for the year
ended December 31, 1995, from $1,011.0 million in 1994. This increase was
primarily attributable to a $347.4 million charge for loss reserve
strengthening, primarily due to increases in net Latent Liability Exposures in
1995. The year ended December 31, 1995 included $10.0 million of catastrophe
losses for various Caribbean storms, compared to $66.1 million in catastrophe
losses incurred in 1994 from the Northridge Earthquake.
During the fourth quarter of 1995, the Company undertook and concluded a
major initiative to reevaluate its reserves for Latent Liability Exposures.
Factors considered in this process included: (i) the firming of case law in many
jurisdictions with respect to coverage decisions on Latent Liability Exposures,
which has affected settlement activity of the Company's clients, (ii) greater
quantification of potential liabilities at the commercial risk level, which in
turn allows for more accurate potential liability information for insurers and
ultimately reinsurers, (iii) development of an enhanced claims information
system at the Company, which allowed construction of a data base from which
estimates with respect to Latent Liability Exposures and the related reinsurance
and retrocessional coverage accruing to the benefit of the Company could be
reasonably estimated, (iv) efforts taken by the insurance industry and insured
parties to quantify exposure to environmental liability in light of Superfund
reform initiatives in the United States Congress, and (v) the extensive due
diligence consulting activities of AM-RE Consultants, Inc., which have allowed
AM-RE Consultants, Inc. to gain knowledge of and evaluate actuarial modeling and
reserving, and claims handling methodologies for Latent Liability Exposures.
As a result of this reevaluation, the Company announced on January 29, 1996,
that in the fourth quarter of 1995 it increased its IBNR loss reserves for
Latent Liability Exposures, which relate primarily to accident years prior to
1986, by $587.0 million. Cessions to specific retrocessional arrangements, net
of a reserve for uncollectible reinsurance for this reserve charge, were $119.0
million. As a result, the net increase to loss reserves for Latent Liability
Exposures recognized by the Company at December 31, 1995, was $468.0 million.
After cession, the net charge for loss reserve strengthening was $347.4 million,
($231.0 million, net of tax).
Underwriting expense, comprised of commission expense plus operating
expense, increased 3.0% to $452.4 million for the year ended December 31, 1995,
from $439.3 million in 1994. Commission expense increased slightly to $322.4
million for the year ended December 31, 1995, from $321.5 million in 1994.
Operating expenses increased 10.4% to $130.0 million in 1995 from $117.8 million
in 1994, primarily due to increased overhead expense, in addition to $4.0
million of expense associated with an
23
<PAGE>
ongoing information systems and processes reengineering effort the Company
commenced in mid-1995.
The Company experienced an underwriting loss (net premiums earned minus
losses and LAE incurred and underwriting expenses) of $261.7 million for the
year ended December 31, 1995, compared to an underwriting gain of $11.1 million
in 1994. The change in the underwriting result was attributable to the charge
for loss reserve strengthening recognized in 1995. On a GAAP basis, the
Company's loss ratio increased to 87.5% in 1995 (inclusive of 20.4 points due to
the charge for loss reserve strengthening and 0.6 points due to catastrophe
losses), from 69.2% in 1994 (inclusive of 4.5 points from catastrophe losses),
while the underwriting expense ratio decreased to 29.6% in 1995 from 30.0% in
1994. Primarily as a result of the loss reserve strengthening, the Company's
1995 GAAP combined ratio increased to 117.1% from 99.2% for 1994.
Pre-tax net investment income increased 18.0% to $222.6 million for the year
ended December 31, 1995, from $188.7 million in 1994. This increase was
primarily attributable to the increase in invested assets, as well as a higher
overall effective interest rate in the investment portfolio. The Company's
after-tax net investment income increased by 14.2% to $166.8 million in 1995
from $146.0 million in 1994. The after-tax net investment income increase was
less than the pre-tax net investment income increase due to the Company's
decision to continue to increase the percentage of taxable fixed maturity
investments in its portfolio, based on the relative attractiveness of investment
yields on highly rated taxable instruments.
The Company's interest expense decreased by 1.2% to $60.7 million for the
year ended December 31, 1995, from $60.0 million in 1994. This increase was due
to interest rate swap expense of $2.4 million for the year ended December 31,
1995, compared to interest rate swap recoveries of $3.1 million in 1994. The
change in the impact of the interest rate swap was partially offset by a 39.4%
decrease, or $5.0 million, in bank credit-related interest expense, due to the
lower level of senior bank debt outstanding in 1995, and the subsequent
retirement of the Company's revolving bank credit facility with proceeds
received from the sale of the QUIPS in 1995.
The Company realized net capital losses of $4.7 million for the year ended
December 31, 1995, compared to net capital losses of $0.2 million in 1994. This
change was primarily due to net capital gains of $4.3 million realized on bond
sales in 1995, compared to net capital losses of $0.3 million realized on bond
sales in 1994.
Other income increased by 36.7% to $39.1 million for the year ended December
31, 1995, from $28.6 million in 1994. This increase was primarily attributable
to an increase in fee subsidiary revenue. Other expenses increased to $103.4
million in 1995 from $47.5 million in 1994. The increase in the 1995 period was
primarily due to a $9.6 million increase in subsidiary expenses, and a $34.5
million increase in the provision for the allowance of uncollectible reinsurance
related to the charge for loss reserve strengthening in 1995.
The Company incurred a loss before income taxes, distributions on preferred
securities of subsidiary trust, and extraordinary loss of $159.5 million for the
year ended December 31, 1995, compared to income of $120.7 million in 1994.
Federal and foreign income tax benefits were $76.6 million for the year ended
December 31, 1995, compared to tax expense of $23.2 million in 1994.
The Company incurred an after-tax expense of $4.4 million for the year ended
December 31, 1995, representing the Company's minority interest in the earnings
of American Re Capital. The charge was due to the distributions paid on the
QUIPS. There was no comparable charge for the Company in the 1994 period.
In 1995, the Company recognized an extraordinary, non-cash after-tax loss of
$0.3 million, representing the write-off of capitalized financing fees from the
revolving bank credit agreement after the obligation was paid in full. There was
no comparable charge for the Company in 1994.
24
<PAGE>
The Company experienced a net loss to common stockholders of $87.6 million
for the year ended December 31, 1995, compared to net income of $97.5 million in
1994. The net loss per share to common stockholders was $1.86 for the year ended
December 31, 1995, compared to primary net income per share of $2.01 in 1994.
There were 47.1 million weighted average shares outstanding during the year
ended December 31, 1995, compared to 48.5 million share and share equivalents
outstanding during the same period in 1994. Share equivalents were not included
in the earnings per share calculations for the year ended December 31, 1995, as
the effect would have been antidilutive.
RECENT DEVELOPMENTS
In connection with the acquisition by Munich Re of the Company, the Company
will record a one-time charge to operating earnings of approximately of $36.1
million ($35.1 million on an after-tax basis), consisting primarily of financial
advisory fees in the fourth quarter of 1996. In connection with the defeasance
by the Company of the Subordinated Debentures, the Company will record a
one-time extraordinary loss of approximately $34.0 million (on an after-tax
basis) in respect of the early extinguishment of the Subordinated Debentures in
the fourth quarter of 1996.
25
<PAGE>
THE EXCHANGE OFFER
GENERAL
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal (which
together constitute the Exchange Offer), to exchange up to $500 million
aggregate principal amount of Exchange Notes for a like aggregate principal
amount of Old Notes properly tendered on or prior to the Expiration Date and not
withdrawn as permitted pursuant to the procedures described below. The Exchange
Offer is being made with respect to all of the Old Notes.
As of the date of this Prospectus, $500,000,000 aggregate principal amount
of the Old Notes is outstanding. This Prospectus, together with the Letter of
Transmittal, is first being sent on or about , 1997, to all holders
of Old Notes known to the Company. The Company's obligation to accept Old Notes
for exchange pursuant to the Exchange Offer is subject to certain conditions set
forth under "Certain Conditions to the Exchange Offer" below. The Company
currently expects that each of the conditions will be satisfied and that no
waivers will be necessary.
PURPOSE OF THE EXCHANGE OFFER
The Old Notes were issued on December 24, 1996 in a transaction exempt from
the registration requirements of the Securities Act. Accordingly, the Old Notes
may not be reoffered, resold, or otherwise transferred unless so registered or
unless an applicable exemption from the registration and prospectus delivery
requirements of the Securities Act is available.
In connection with the issuance and sale of the Old Notes, the Company
entered into the Registration Rights Agreement, which requires the Company to
file with the Commission a registration statement relating to the Exchange Offer
not later than 45 days after the closing of the sale of the Old Notes (the
"Closing Date") and to use its best efforts to cause the registration relating
to the Exchange Offer to become effective under the Securities Act not later
than 180 days after the Closing Date, and the Exchange Offer to be consummated
within 10 business days of the effectiveness of the Registration Statement (or
if obligated to file the Shelf Registration Statement, the Company will use its
best efforts to file the Shelf Registration Statement with the Commission on or
prior to the earliest to occur of 90 days after the date on which the Company is
notified by the Commission or otherwise determines that it is not required to
file the Exchange Offer Registration Statement or permitted to consummate the
Exchange Offer or prior to 45 days after the Closing Date). A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement.
The Exchange Offer is being made by the Company to satisfy its obligations
with respect to the Registration Rights Agreement. The term "Holder," with
respect to the Exchange Offer, means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Notes are held of record by The Depository Trust Company. Other than
pursuant to the Registration Rights Agreement, the Company is not required to
file any registration statement to register any outstanding Old Notes. Holders
of Old Notes who do not tender their Old Notes or whose Old Notes are tendered
but not accepted would have to rely on exemptions to registration requirements
under the securities laws, including the Securities Act, if they wish to sell
their Old Notes.
The Company is making the Exchange Offer in reliance on the position of the
Staff of the Commission as set forth in certain interpretive letters addressed
to third parties in other transactions. However, the Company has not sought its
own interpretive letter and there can be no assurance that the Staff would make
a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
Staff, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for
26
<PAGE>
resale, resold and otherwise transferred by a Holder (other than any Holder who
is a broker-dealer or an "affiliate" of the Company within the meaning of Rule
405 of the Securities Act) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such Holder's business and
that such Holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Notes. See "--Resale of Exchange Notes." Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Old Notes, where such Old Notes are acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
TERMS OF THE EXCHANGE
The Company hereby offers to exchange, subject to the conditions set forth
herein and in the Letter of Transmittal accompanying this Prospectus, $1,000 in
principal amount of Exchange Notes for each $1,000 in principal amount of the
Old Notes. The terms of the Exchange Notes are identical in all material
respects to the terms of the Old Notes for which they may be exchanged pursuant
to this Exchange Offer, except that the Exchange Notes will generally be freely
transferable by holders thereof and will not be subject to any covenant
regarding registration. The Exchange Notes will evidence the same indebtedness
as the Old Notes and will be entitled to the benefits of the Indenture. See
"Description of Exchange Notes."
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange.
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the
Exchange Notes issued pursuant to the Exchange Offer in exchange for the Old
Notes may be offered for sale, resold or otherwise transferred by a holder
without compliance with the registration and prospectus delivery provisions of
the Securities Act. Instead, based on an interpretation by the Staff of the
Commission set forth in a series of no-action letters issued to third parties,
the Company believes that Exchange Notes issued pursuant to the Exchange Offer
in exchange for Old Notes may be offered for sale, resold and otherwise
transferred by any holder of such Exchange Notes (other than any such holder
that is a broker-dealer or is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's business and
such holder has no arrangement or understanding with any person to participate
in the distribution of such Exchange Notes and neither such holder nor any other
such person is engaging in or intends to engage in a distribution of such
Exchange Notes. Since the Commission has not considered the Exchange Offer in
the context of a no-action letter, there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offer. Any holder who is an affiliate of the Company or who tenders in the
Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes cannot rely on such interpretation by the staff of the Commission
and must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each holder, other
than a broker-dealer, must acknowledge that it is not engaged in, and does not
intend to engage in, a distribution of Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution."
Interest on the Old Notes has accrued from the original date of issuance
thereof, December 24, 1996 and will cease to accrue on the date the Exchange
Notes are exchanged for the Old Notes. Interest on the Exchange Notes will
accrue from the date the Exchange Notes are exchanged for Old Notes and
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<PAGE>
is payable in cash semi-annually in arrears on June 15 and December 15 of each
year, commencing June 15, 1997.
Tendering holders of the Old Notes shall not be required to pay brokerage
commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of the Old Notes
pursuant to the Exchange Offer.
EXPIRATION DATE; EXTENSION; TERMINATION; AMENDMENT
The Exchange Offer will expire at 5:00 p.m., New York City time, on
, 1997, unless the Company in its sole discretion, has extended the
period of time for which the Exchange Offer is open (such date, as it may be
extended, is referred to herein as the "Expiration Date"). The Expiration Date
will be at least 20 business days after the commencement of the Exchange Offer
in accordance with Rule 14e-1(a) under the Exchange Act. The Company expressly
reserves the right, at any time or from time to time, to extend the period of
time during which the Exchange Offer is open, and thereby delay acceptance for
exchange of any Old Notes, by giving oral or written notice to the Exchange
Agent and by giving written notice of such extension to the holders thereof or
by timely public announcement no later than 9:00 a.m. New York City time, on the
next business day after the previously scheduled Expiration Date. During any
such extension, all Old Notes previously tendered will remain subject to the
Exchange Offer unless properly withdrawn.
The Company expressly reserves the right to (i) terminate or amend the
Exchange Offer and not to accept for exchange any Old Notes not theretofore
accepted for exchange upon the occurrence of any of the events specified below
under "Certain Conditions to the Exchange Offer" which have not been waived by
the Company and (ii) amend the terms of the Exchange Offer in any manner which,
in its good faith judgment, is advantageous to the Holders of the Old Notes,
whether before or after any tender of the Notes. If any such termination or
amendment occurs, the Company will notify the Exchange Agent and will either
issue a press release or give oral or written notice to the holders of the Old
Notes as promptly as practicable.
For purposes of the Exchange Offer, a "business day" means any day other
than Saturday, Sunday or a date on which banking institutions are required or
authorized by New York State law to be closed, and consists of the time period
from 12:01 a.m. through 12:00 midnight, New York City time. Unless the Company
terminates the Exchange Offer prior to 5:00 p.m., New York City time, on the
Expiration Date, the Company will exchange the Exchange Notes for the Old Notes
on the Exchange Date.
PROCEDURES FOR TENDERING OLD NOTES
The tender to the Company of Old Notes by a holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal.
A holder of Old Notes may tender the same by (i) properly completing and
signing the Letter of Transmittal or a facsimile thereof (all references in this
Prospectus to the Letter of Transmittal shall be deemed to include a facsimile
thereof) and delivering the same, together with the certificate or certificates
representing the Old Notes being tendered and any required signature guarantees
and any other document required by the Letter of Transmittal, to the Exchange
Agent at its address set forth below on or prior to the Expiration Date (or
complying with the procedure for book-entry transfer described below) or (ii)
complying with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT
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TIME SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY. NO OLD NOTES OR LETTERS OF
TRANSMITTAL SHOULD BE SENT TO THE COMPANY.
If tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal and the Exchange Notes to be issued in exchange therefor are to
be issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall include
any participant in The Depository Trust Company (also referred to as a
"book-entry transfer facility") whose name appears on a security listing as the
owner of Old Notes), the signature of such signer need not be guaranteed. In any
other case, the tendered Old Notes must be endorsed or accompanied by written
instruments of transfer in form satisfactory to the Company and duly executed by
the registered holder, and the signature on the endorsement or instrument of
transfer must be guaranteed by a commercial bank or trust company located or
having an office, branch, agency or correspondent in the United States, or by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. (any of the foregoing hereinafter
referred to as an ("Eligible Institution"). If the Exchange Notes and/or Old
Notes not exchanged are to be delivered to an address other than that of the the
registered holder appearing on the note register of the Old Notes, the signature
in the Letter of Transmittal must be guaranteed by an Eligible Institution.
The Exchange Agent will make a request within two business days after the
date of receipt of this Prospectus to establish accounts with respect to the Old
Notes at the book-entry transfer facility for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the book-entry transfer facility's system
may make book-entry delivery of Old Notes by causing such book-entry transfer
facility to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with the book-entry transfer facility's
procedures for such transfer. Although delivery of Old Notes may be effected
through book-entry transfer into the Exchange Agent's account at the book-entry
transfer facility, an appropriate Letter of Transmittal with any required
signature guarantee an all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures.
If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or Old Notes to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if the Exchange Agent has received at
its address set forth below on or prior to the Expiration Date, a letter,
telegram or facsimile transmission (receipt confirmed by telephone and an
original delivered by guaranteed overnight courier) from an Eligible Institution
setting forth the name and address of the tendering holder, the names in which
the Old Notes are registered and, if possible, the certificate numbers of the
Old Notes to be tendered, and stating that the tender is being made thereby and
guaranteeing that within three business days after the Expiration Date, the Old
Notes in proper form for transfer (or a confirmation of book-entry transfer of
such Old Notes into the Exchange Agent's account at the book-entry transfer
facility), will be delivered by such Eligible Institution together with a
properly completed and duly executed Letter of Transmittal (and any other
required documents). Unless Old Notes being tendered by the above-described
method are deposited with the Exchange Agent within the time period set forth
above (accompanied or preceded by a properly completed Letter of Transmittal and
any other required documents), the Company may, at its option, reject the
tender. Copies of the notice of guaranteed delivery ("Notice of Guaranteed
Delivery") which may be used by Eligible Institutions for the purposes described
in this paragraph are available from the Exchange Agent.
A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at the book-entry transfer facility)
is received by the Exchange Agent, or (ii) a Notice of Guaranteed Delivery or
letter,
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<PAGE>
telegram or facsimile transmission to similar effect (as provided above) from an
Eligible Institution is received by the Exchange Agent. Issuances of Exchange
Notes in exchange for Old Notes tendered pursuant to a Notice of Guaranteed
Delivery or letter, telegram or facsimile transmission to similar effect (as
provided above) by an Eligible Institution will be made only against deposit of
the Letter of Transmittal (and any other required documents) and the tendered
Old Notes.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Notes which acceptance might, in the judgment of the Company or
its counsel, be unlawful. The Company also reserves the absolute right to waive
any defects or irregularities or conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date (including the
right to waive the ineligibility of any holder who seeks to tender Old Notes in
the Exchange Offer). The interpretation of the terms and conditions of the
Exchange Offer (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with a tender of Old Notes
for exchange must be cured within such reasonable period of time as the Company
shall determine. Neither the Company, the Exchange Agent nor any other person
shall be under any duty to give notification of any defect or irregularity with
respect to any tender of Old Notes for exchange, nor shall any of them incur any
liability for failure to give such notification.
If the Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Old Notes, such Old Notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered holder or holders appear on the Old Notes.
If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
By tendering, each holder will represent to the Company that, among other
things, the Exchange Notes acquired pursuant to the Exchange Offer are being
acquired in the ordinary course of business of the person receiving such
Exchange Notes, whether or not such person is the holder, that neither the
holder nor any such other person has an arrangement or understanding with any
person to participate in the distribution of such Exchange Notes and that
neither the holder nor any such other person is an "affiliate," as defined under
Rule 405 of the Securities Act, of the Company, or if it is an affiliate it will
comply with the registration and prospectus requirements of the Securities Act
to the extent applicable.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
The party tendering Old Notes for exchange (the "Transferor") exchanges,
assigns and transfers the Old Notes to the Company and irrevocably constitutes
and appoints the Exchange Agent as the Transferor's agent and attorney-in-fact
to cause the Old Notes to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer the Old Notes and to acquire Exchange Notes
issuable upon the
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<PAGE>
exchange of such tendered Old Notes, and that, when the same are accepted for
exchange, the Company will acquire good and unencumbered title to the tendered
Old Notes, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim. The Transferor also warrants that it will,
upon request, execute and deliver any additional documents deemed by the
Exchange Agent or the Company to be necessary or desirable to complete the
exchange, assignment and transfer of tendered Old Notes or transfer ownership of
such Old Notes on the account books maintained by a book-entry transfer
facility. The Transferor further agrees that acceptance of any tendered Old
Notes by the Company and the issuance of Exchange Notes in exchange therefor
shall constitute performance in full by the Company of certain of its
obligations under the Registration Rights Agreement. All authority conferred by
the Transferor will survive the death or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
The Transferor certifies that it is not an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act and that it is acquiring the
Exchange Notes offered hereby in the ordinary course of such Transferor's
business and that such Transferor has no arrangement with any person to
participate in the distribution of such Exchange Notes. Each holder, other than
a broker-dealer, must acknowledge that it is not engaged in, and does not intend
to engage in, a distribution of Exchange Notes. Each Transferor which is a
broker-dealer receiving Exchange Notes for its own account must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company will, for a period no greater than 180 days after
consummation of the Exchange Offer, make available this Prospectus available to
any broker-dealer for use in connection with any such resale.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.
For a withdrawal to be effective, a written notice of withdrawal sent by
telegram, facsimile transmission (receipt confirmed by telephone) or letter must
be received by the Exchange Agent at the address set forth herein prior to the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having tendered the Old Notes to be withdrawn (the "Depositor"), (ii)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes), (iii) specify the principal
amount of Old Notes to be withdrawn, (iv) include a statement that such holder
is withdrawing his election to have such Old Notes exchanged, (v) be signed by
the holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered or as otherwise described
above (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee under the Indenture
register the transfer of such Old Notes into the name of the person withdrawing
the tender and (vi) specify the name in which any such Old Notes are to be
registered, if different from that of the Depositor. The Exchange Agent will
return the properly withdrawn Old Notes promptly following receipt of notice of
withdrawal. If Old Notes have been tendered pursuant to the procedure for
book-entry transfer, any notice of withdrawal must specify the name and number
of the account at the book-entry transfer facility to be credited with the
withdrawn Old Notes or otherwise comply with the book-entry transfer facility
procedure. All questions as to the validity of notices of withdrawals, including
time of receipt, will be determined by the Company and such determination will
be final and binding on all parties.
Any Old Notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are
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<PAGE>
not exchanged for any reason will be returned to the holder thereof without cost
to such holder (or, in the case of Old Notes tendered by book-entry transfer
into the Exchange Agent's account at the book-entry transfer facility pursuant
to the book-entry transfer procedures described above, such Old Notes will be
credited to an account with such book-entry transfer facility specified by the
holder) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described under "--Procedures for
Tendering Old Notes" above at any time on or prior to the Expiration Date.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
One business day following the Expiration Date, assuming satisfaction or
waiver of all of the conditions to the Exchange Offer, the Company will accept
all Old Notes properly tendered and will issue the Exchange Notes. See
"--Certain Conditions to the Exchange Offer" below. For purposes of the Exchange
Offer, the Company shall be deemed to have accepted properly tendered Old Notes
for exchange when, as and if the Company has given oral or written notice
thereof to the Exchange Agent.
For each Old Note accepted for exchange, the holder of such Old Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Old Note.
In all cases, issuance of Exchange Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely book-entry
confirmation of such Old Notes into the Exchange Agent's account at the
book-entry transfer facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Old Notes are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer or if Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at the
book-entry transfer facility pursuant to the book-entry transfer procedures
described above, such non-exchanged Old Notes will be credited to an account
maintained with such book-entry transfer facility) as promptly as practicable
after the expiration of the Exchange Offer.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, or any extension
of the Exchange Offer, the Company shall not be required to accept for exchange,
or to issue Exchange Notes in exchange for, any Old Notes and may terminate or
amend the Exchange Offer (by oral or written notice to the Exchange Agent or by
a timely press release) if at any time before the acceptance of such Old Notes
for exchange or the exchange of the Exchange Notes for such Old Notes, any of
the following conditions exist:
(a) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency or regulatory authority or any
injunction, order or decree is issued with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or have a
material adverse effect on the contemplated benefits of the Exchange
Offer to the Company; or
(b) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company that is or may be adverse to the Company, or the
Company shall have become aware of facts that have or may have adverse
significance with respect to the value of the Old Notes or the Exchange
Notes or that may materially impair the contemplated benefits of the
Exchange Offer to the Company;
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<PAGE>
(c) any law, rule or regulation or applicable interpretations of the staff
of the Commission is issued or promulgated which, in the good faith
determination of the Company, do not permit the Company to effect the
Exchange Offer; or
(d) any governmental approval has not been obtained, which approval the
Company, in its sole discretion, deems necessary for the consummation of
the Exchange Offer; or
(e) there shall have been proposed, adopted or enacted any law, statute,
rule or regulation (or an amendment to any existing law, statute, rule or
regulation) which, in the sole judgment of the Company, might materially
impair the ability of the Company to proceed with the Exchange Offer or
have a material adverse effect on the contemplated benefits of the
Exchange Offer to the Company; or
(f) there shall occur a change in the current interpretation by the staff
of the Commission which permits the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes to be offered for resale, resold
and otherwise transferred by holders thereof (other than any such holder
that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such
Exchange Notes are acquired in the ordinary course of such holders'
business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Notes; or
(g) there shall have occurred (i) any general suspension of, shortening of
hours for, or limitation on prices for, trading in securities on any
national securities exchange or in the over-the-counter market (whether
or not mandatory), (ii) any limitation by any governmental agency or
authority which may adversely affect the ability of the Company to
complete the transactions contemplated by the Exchange Offer, (iii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by Federal or state authorities in the United States
(whether or not mandatory), (iv) a commencement of a war, armed
hostilities or other international or national crisis directly or
indirectly involving the United States, (v) any limitation (whether or
not mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extension of credit by banks or
other leading institutions in the United States, or (vi) in the case of
any of the foregoing existing at the time of the commencement of the
Exchange Offer, a material acceleration or worsening thereof.
The Company expressly reserves the right to terminate the Exchange Offer and
not accept for exchange any Old Notes upon the occurrence of any of the
foregoing conditions (which represent all of the material conditions to the
acceptance by the Company of properly tendered Old Notes). In addition, the
Company may amend the Exchange Offer at any time prior to the Expiration Date if
any of the conditions set forth above occurs. Moreover, regardless of whether
any of such conditions has occurred, the Company may amend the Exchange Offer in
any manner which, in its good faith judgment, is advantageous to holders of the
Old Notes.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. If the Company waives or amends the foregoing
conditions, it will, if required by law, extend the Exchange Offer for a minimum
of five business days from the date that the Company first gives notice, by
public announcement or otherwise, of such waiver or amendment, if the Exchange
Offer would otherwise expire within such five business day period. Any
determination by the Company concerning the events described above will be final
and binding upon all parties.
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In addition, the Company will not accept for exchange any Old Notes
tendered, and no Exchange Notes will be issued in exchange for any such Old
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended. In any such event the Company is required to use every
reasonable effort to obtain the withdrawal of any stop order at the earliest
possible time.
The Exchange Offer is not conditioned upon any minimum principal amount of
Old Notes being tendered for exchange.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as the Exchange Agent
for the Exchange Offer. All executed Letters of Transmittal should be directed
to the Exchange Agent at one of the addresses set forth below:
<TABLE>
<CAPTION>
<S> <C>
BY MAIL:
BY HAND/OVERNIGHT COURIER: (INSURED OR REGISTERED RECOMMENDED)
State Street Bank and Trust Company State Street Bank and Trust Company
Two International Place Two International Place
Fourth Floor Fourth Floor
Boston, Massachusetts Boston, Massachusetts
Attention: Corporate Trust Operations Attention: Corporate Trust Operations
Nancy Bowker Nancy Bowker
</TABLE>
BY FACSIMILE:
(617) 664-5371
(For Eligible Institutions Only)
Questions and requests for assistance, requests for additional copies of this
Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent at the address and
telephone number set forth in the Letter of Transmittal.
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ON THE LETTER OF TRANSMITTAL,
OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN THE ONES SET FORTH
ON THE LETTER OF TRANSMITTAL, WILL NOT CONSTITUTE A VALID DELIVERY.
SOLICITATION OF TENDERS; FEES AND EXPENSES
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith. The
Company will also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this and other related documents to the beneficial owners of the Old
Notes and in handling or forwarding tenders for their customers.
The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Company and are estimated in the aggregate to be
approximately $ , which includes fees and expenses of the Exchange Agent,
Trustee, registration fees, accounting, legal, printing and related fees and
expenses.
No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those contained
in this Prospectus. If given or made, such information or representations should
not be relied upon as having been authorized by the Company.
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Neither the delivery of this Prospectus nor any exchange made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the respective dates as of which information is
given herein. The Exchange Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Old Notes in any jurisdiction in which
the making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, the Company may, at its
discretion, take such action as it may deem necessary to make the Exchange Offer
in any such jurisdiction and extend the Exchange Offer to holders of Old Notes
in such jurisdiction. In any jurisdiction in which the securities laws or blue
sky laws of which require the Exchange Offer to be made by a licensed broker or
dealer, the Exchange Offer is being made on behalf of the Company by one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
TRANSFER TAXES
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Old Notes tendered, or if
tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the carrying value of the Old Notes
as reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Company upon the exchange of Exchange Notes for Old Notes. Expenses incurred in
connection with the issuance of the Exchange Notes will be amortized over the
term of the Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon. Old Notes not
exchanged pursuant to the Exchange Offer will continue to remain outstanding in
accordance with their terms. In general, the Old Notes may not be offered or
sold unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register the Old Notes under the Securities Act.
Participation in the Exchange Offer is voluntary, and holders of Old Notes
should carefully consider whether to participate. Holders of the Old Notes are
urged to consult their financial and tax advisors in making their own decision
on what action to take.
As a result of the making of, and upon acceptance for exchange of all
validly tendered Old Notes pursuant to the terms of, this Exchange Offer, the
Company will have fulfilled a covenant contained in the Registration Rights
Agreement. Holders of Old Notes who do not tender their Old Notes in the
Exchange Offer will continue to hold such Old Notes and will be entitled to all
the rights and limitations applicable thereto under the Indenture, except for
any such rights under the Registration Rights Agreement that by their terms
terminate or cease to have further effectiveness as a result of the making of
this Exchange
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<PAGE>
Offer. All untendered Old Notes will continue to be subject to the restrictions
on transfer set forth in the Indenture. To the extent that Old Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
Old Notes could be adversely affected.
The Company may in the future seek to acquire, subject to the terms of the
Indenture, untendered Old Notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. The Company has
no present plan to acquire any Old Notes which are not tendered in the Exchange
Offer.
RESALE OF EXCHANGE NOTES
The Company is making the Exchange Offer in reliance on the position of the
Staff of the Commission as set forth in certain interpretive letters addressed
to third parties in other transactions. However, the Company has not sought its
own interpretive letter and there can be no assurance that the Staff would make
a similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
Staff, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by a Holder (other than any Holder who is a broker-dealer
or an "affiliate" of the Company within the meaning of Rule 405 of the
Securities Act) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Notes
are acquired in the ordinary course of such Holder's business and that such
Holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such Exchange Notes. However, any holder who is an "affiliate" of the
Company or who has an arrangement or understanding with respect to the
distribution of the Exchange Notes to be acquired pursuant to the Exchange
Offer, or any broker-dealer who purchased Old Notes from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities Act
(i) could not rely on the applicable interpretations of the Staff and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act. A broker-dealer who holds Old Notes that were acquired for its
own account as a result of market-making or other trading activities may be
deemed to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of Exchange Notes. Each such broker-dealer that
receives Exchange Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge in the Letter of
Transmittal that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
In addition, to comply with the securities laws of certain jurisdictions, if
applicable, the Exchange Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification is available and is complied with. The Company has
agreed, pursuant to the Registration Rights Agreement and subject to certain
specified limitations therein, to register or qualify the Exchange Notes for
offer or sale under the securities or blue sky laws of such jurisdictions as any
holder of the Exchange Notes reasonably requests in writing; PROVIDED, HOWEVER,
that the Company shall not be required to register or qualify to transact
business where it is not now so qualified or to take action that would subject
it to the service of process in suits or to taxation, other than as to matters
and transactions relating to the Prospectus, in any jurisdiction where it is not
now so subject. Such registration or qualification may require the imposition of
restrictions or conditions (including suitability requirements for offerees or
purchasers) in connection with the offer or sale of any Exchange Notes.
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DESCRIPTION OF THE EXCHANGE NOTES
The Old Notes were issued and the Exchange Notes offered hereby will be
issued under an Indenture dated as of December 24, 1996 (the "Indenture")
between the Company and State Street Bank and Trust Company. The terms of the
Exchange Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Exchange Notes are subject to all such terms, and
holders of the Exchange Notes are referred to the Indenture and the Trust
Indenture Act for a statement thereof. The following summary of certain
provisions of the Indenture describes the material terms of the Indenture but
does not purport to be complete and is qualified in its entirety by reference to
the Indenture, including the definitions therein of certain terms used below.
The definitions of certain terms used in the following summary are set forth
below under "Certain Definitions." The Indenture is an exhibit to the
Registration Statement of which this Prospectus is a part.
On December 24, 1996, the Company issued $500,000,000 aggregate principal
amount of Old Notes under the Indenture. The terms of the Exchange Notes are
identical in all material respects to the Old Notes, except for certain transfer
restrictions and registration and other rights relating to the exchange of the
Old Notes for Exchange Notes. The Trustee will authenticate and deliver Exchange
Notes for original issue only in exchange for a like principal amount of Old
Notes. Any Old Notes that remain outstanding after the consummation of the
Exchange Offer, together with the Exchange Notes, will be treated as a single
class of securities under the Indenture. Accordingly, all references herein to
specified percentages in aggregate principal amount of the outstanding Exchange
Notes shall be deemed to mean, at any time after the Exchange Offer is
consummated, such percentage in aggregate principal amount of the Old Notes and
Exchange Notes then outstanding.
PRINCIPAL, MATURITY AND INTEREST
The Notes will be unsecured obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated debt of the Company and will
be limited in aggregate principal amount to $500 million and will mature on
December 15, 2026. Interest on the Notes will accrue at the rate of 7.45% per
annum. Interest on the Old Notes has accrued from the original date of issuance
thereof, December 24, 1996, and will cease to accrue on the date the Exchange
Notes are exchanged for the Old Notes. Interest on the Exchange Notes will
accrue from the date the Exchange Notes are exchanged for Old Notes and is
payable in cash semi-annually in arrears on June 15 and December 15 of each
year, commencing June 15, 1997. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. Principal, interest, premium and
Liquidated Damages, if any, on the Notes will be payable at the office or agency
of the Company maintained for such purpose within the City and State of New York
or, at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; PROVIDED that all
payments with respect to Global Notes and definitive notes the Holders of which
have given wire transfer instructions to the Company will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Unless otherwise designated by the Company, the Company's
office or agency in New York will be the office of the Trustee maintained for
such purpose. Except as described below under "--Book-Entry, Delivery and Form,"
the Notes will be issued in denominations of $1,000 and integral multiples
thereof. No service charge will be made for any transfer or exchange of such
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Company will not be required pursuant to the Indenture to repurchase the
Notes, in whole or in part, with the proceeds of any sale, transfer or other
disposition of any shares of capital stock of any Subsidiary. Furthermore, the
Indenture will not provide for any restrictions on the Company's use of any such
proceeds.
The Indenture will not contain any provisions that would restrict the
Company from incurring, assuming or becoming liable with respect to any
indebtedness or other obligations or from paying
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dividends or making other distributions on its capital stock or purchasing or
redeeming its capital stock. The Indenture will not contain any financial ratios
or specified levels of net worth or liquidity to which the Company must adhere.
In addition, the Indenture will not contain any provisions that would provide
protection to Holders of the Notes against a sudden and dramatic decline in
credit quality of the Company resulting from any takeover, recapitalization or
similar restructuring or from other highly leveraged transactions.
OPTIONAL REDEMPTION
The Notes will be redeemable in whole or in part, at the option of the
Company at any time, at a redemption price equal to the greater of (i) 100% of
the principal amount of such Notes and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted, on a
semiannual basis, at the Treasury Yield plus 15 basis points, together with
accrued interest, and Liquidated Damages, if any, to the date of redemption.
SETTLEMENT AND PAYMENT
Settlement for the Notes and payments by the Company in respect of the Notes
(including principal, interest, premium and Liquidated Damages, if any) will be
made in immediately available funds. The Notes are expected to be eligible to
trade in the DTC's Same-Day Funds Settlement System, and any permitted secondary
market trading activity in the Notes will, therefore, be required by DTC to be
settled in immediately available funds. No assurance can be given as to the
effect, if any, of such settlement arrangements on trading activity in the
Notes.
Because of time zone differences, the securities account of the Euroclear
System ("Euroclear") and Cedel, S.A. ("CEDEL") participants (each, a "Member
Organization") purchasing an interest in a Global Note from a Participant (as
defined herein) that is not a Member Organization will be credited during the
securities settlement processing day (which must be a business day for Euroclear
or CEDEL, as the case may be) immediately following the DTC settlement date.
Transactions in interests in a Global Note settled during any securities
settlement processing day will be reported to the relevant Member Organization
on the same day. DTC has advised the Company that cash received in Euroclear or
CEDEL as a result of sales of interests in a Global Note by or through a Member
Organization to a Participant that is not a Member Organization will be received
with value on the DTC settlement date, but will not be available in the relevant
Euroclear or CEDEL cash account until the business day for Euroclear and CEDEL
following settlement in DTC.
COVENANTS
LIMITATION ON LIENS
The Indenture will provide that the Company will not, and will not permit
any Principal Subsidiary to, create or suffer to exist any Lien to secure any
Indebtedness of the Company or upon any shares of equity interests or evidences
of Indebtedness issued by any Principal Subsidiary and owned by the Company or
any Principal Subsidiary (whether such shares or evidences of Indebtedness were
owned as of the date of the Indenture or thereafter issued or acquired), without
making, or causing such Principal Subsidiary to make, effective provision to
secure all of the Notes issued under the Indenture and then outstanding by such
Lien, equally and ratably with any and all other such Indebtedness thereby
secured, so long as such other Indebtedness is so secured, unless, after giving
effect thereto, the sum of the principal amount of Indebtedness secured by all
Liens incurred after the date of the Indenture does not exceed (other than the
Liens permitted by clause (i) through (xviii) in the following sentence
(collectively "Permitted Liens")) 10% of Consolidated Net Tangible Assets of the
Company. The foregoing restrictions shall not apply to Indebtedness secured by
Liens existing on the date of the Indenture or to: (i) Liens on property of a
corporation existing at the time such corporation is merged into or consolidated
with the Company or a Principal Subsidiary or at the time of a sale, lease or
other disposition of the properties of such corporation (or a division thereof)
as an entirety or substantially as
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an entirety to the Company or a Principal Subsidiary, provided that no such Lien
as a result of such merger, consolidation, sale, lease or other disposition is
extended to other property owned by the Company or such Principal Subsidiary
immediately prior thereto; (ii) Liens on property or shares of equity interests
or evidences of indebtedness of a corporation existing at the time such
corporation becomes a Principal Subsidiary; (iii) Liens securing Indebtedness of
a Principal Subsidiary to the Company or to another Principal Subsidiary; (iv)
Liens on any property created, assumed or otherwise brought into existence in
contemplation of the sale or other disposition of the underlying property,
whether directly or indirectly, by way of share disposition or otherwise,
provided that the Company must have disposed of such property within 180 days
after the creation of such Liens and that any Indebtedness secured by such Liens
shall be without recourse to the Company or any Subsidiary; (v) Liens in favor
of the United States of America or any State thereof, or any department, agency
or instrumentality or political subdivision thereof, to secure partial,
progress, advance or other payments; (vi) Liens to secure Indebtedness of joint
ventures in which the Company or a Principal Subsidiary has an interest, to the
extent such Liens are on property or assets of, or equity interests in, such
joint ventures; (vii) Liens for taxes, fees, assessments or other governmental
charges that are not delinquent or remain payable without penalty provided that
no notice of lien has been filed or recorded under the Uniform Commercial Code;
(viii) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
that are not delinquent or remain payable without penalty; (ix) Liens (other
than any Lien imposed by ERISA) consisting of pledges or deposits required in
the ordinary course of business in connection with (A) workers' compensation,
unemployment insurance and other social security legislation and (B) insurance
contracts, reinsurance contracts, retrocession agreements and other similar
agreements incurred in the ordinary course of business (including, but not
limited to, pledges or deposits made in connection with letters of credit issued
in connection therewith); (x) Liens consisting of judgment or judicial
attachment liens, provided that the enforcement of such Liens is effectively
stayed; (xi) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount, and that do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of the businesses of the Company and its Principal Subsidiaries; (xii)
deposits made by any Principal Subsidiary, or other statutory Lien against the
assets of any Principal Subsidiary, in each case made or incurred in favor of
policyholders of such Principal Subsidiary in the ordinary course of business
pursuant to insurance regulatory requirements; (xiii) Liens arising solely by
virtue of any statutory or common law provision relating to banker's liens,
rights of setoff or similar rights and remedies, in each case as to deposit
accounts or other funds maintained with a creditor depository institution;
PROVIDED that (A) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by the Company in
excess of those set forth by regulations promulgated by the Federal Reserve
Board, and (B) such deposit account is not intended by the Company or any
Principal Subsidiary to provide collateral to the depository institution; (xiv)
Liens arising from Uniform Commercial Code financing statements regarding
leases; (xv) Liens or pledges or deposits of cash or securities made by any
Principal Subsidiary as a condition to obtaining or maintaining any licenses
issued to it by any applicable governmental authority; (xvi) Liens incurred in
connection with that certain Equipment Trust 1993-1 dated as of December 30,
1993 between American Re-Insurance and Continental Bank, N.A.; (xvii) Liens
incurred in the ordinary course of business on securities to secure repurchase
and reverse repurchase obligations in respect of such securities; (xviii) Liens
arising as a result of deposits made by the Company to defease the Subordinated
Debentures; and (xix) extension, renewal, replacement or refunding of any Lien
existing on the date of the Indenture or referred to in clauses (i) to (iii) or
clause (xvi), provided that the principal amount of Indebtedness secured thereby
and not otherwise authorized by clauses (i) to (iii) or clause (xvi) shall not
exceed the principal amount of Indebtedness, plus any premium or fee payable in
connection with any such extension, renewal, replacement or refunding, so
secured at the time of such extension, renewal, replacement or refunding.
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RESTRICTIONS ON MERGER AND SALE OF ASSETS
The Indenture will provide that the Company will not consolidate with or
merge with or into any other Person or sell, lease or otherwise transfer its
property and assets as, or substantially as, an entirety to any Person, and the
Company will not permit any Person to merge with or into or consolidate with the
Company unless (i) either (A) the Company will be the resulting or surviving
entity or (B) any successor or purchaser is a corporation, partnership, limited
liability company or trust organized under the laws of the United States of
America, any State or the District of Columbia, and any such successor or
purchaser expressly assumes the Company's obligations on the Notes under a
supplemental Indenture; (ii) immediately after giving effect to the transaction
no Event of Default, and no event which after notice or lapse of time or both
would become an Event of Default, shall have occurred and be continuing; (iii)
if, as a result of any such transaction, property or assets of the Company or
any Principal Subsidiary would become subject to a Lien which would not be
permitted by the limitation on Liens contained in the Indenture, the Company or,
if applicable, the successor to the Company, as the case may be, shall take such
steps as shall be necessary effectively to secure the Notes issued under the
Indenture equally and ratably with Indebtedness secured by such Lien; and (iv)
certain other conditions are met. Upon any consolidation or merger into any
other Person or any conveyance, transfer or lease of the Company's assets
substantially as an entirety to any Person, the successor Person shall succeed
to, and be substituted for, the Company under the Indenture, and the Company,
except in the case of a lease, shall be relieved of all obligations and
covenants under the Indenture and the Notes to the extent it was the predecessor
Person.
Under the laws of the State of New York, which govern the Indenture, there
is no established meaning of the phrase "substantially as an entirety" with
regard to a company's assets or property, and the interpretation of such phrase
is very fact-intensive. As a result, it may be difficult for Holders of the
Notes to ascertain whether a viable claim exists under the Indenture with
respect to any given transaction.
EVENTS OF DEFAULT AND NOTICE THEREOF
The Indenture will provide that each of the following constitutes an "Event
of Default": (a) failure to pay principal of (or premium, if any, on) any Note
when due; (b) failure to pay any interest or Liquidated Damages on any Note when
due, and such failure shall continue for a period of 30 days; (c) failure to
perform any other covenant or agreement of the Company under the Indenture,
continued for 90 days after written notice as provided in the Indenture; (d)
failure by the Company or any Principal Subsidiary to pay Indebtedness in an
aggregate principal amount exceeding $20,000,000 at the later of final maturity
or upon expiration of any applicable period of grace with respect to such
principal amount, and such failure to pay shall not have been cured by the
Company within 30 days after such failure, or (ii) acceleration of the maturity
of any Indebtedness of the Company or any Principal Subsidiary, having an
aggregate principal amount in excess of $20,000,000, if such Indebtedness is not
discharged, or such acceleration is not annulled, within 15 days after written
notice as provided in the Indenture; and (e) certain events of bankruptcy,
insolvency or reorganization.
The Holders of a majority in aggregate principal amount of the outstanding
Notes shall have the right, subject to such provisions for indemnification of
the Trustee, to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee under the Indenture or exercising any
trust or power conferred on the Trustee with respect to the Notes.
If an Event of Default (other than an Event of Default specified in clause
(e) of the second preceding paragraph) with respect to Notes at the time
outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 25% in principal amount of the Notes may, by a notice in writing to the
Company (and to the Trustee if given by the Holders), declare the principal
amount of all of the Notes to be due and payable immediately; PROVIDED, however,
that under certain circumstances the Holders of a majority in aggregate
principal amount of Notes may rescind or annul such declaration and its
consequences. If an Event of Default specified in clause (e) of the second
preceding paragraph occurs, the
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Notes then outstanding automatically will become immediately payable without any
declaration or other act on the part of the Trustee or any Holder. For
information as to waiver of defaults, see "--Modification and Waiver" herein.
No Holder of a Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to the Notes and the Holders of at least 25% in aggregate
principal amount of the outstanding Notes shall have made written request, and
offered reasonable indemnity to the Trustee, to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and the Trustee shall have failed to institute such proceeding
within 60 days. However, such limitations do not apply to a suit instituted by a
Holder of any Note for enforcement of payment of the principal of (or premium or
Liquidated Damages, if any) or interest, if any, on such Note on or after the
respective due dates expressed in such Note.
The Company will be required to furnish to the Trustee annually a statement
by certain officers of the Company as to whether the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
the Indenture.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee, with the consent of the Holders of not less than a majority of
principal amount of the outstanding Notes affected by the modification or
amendment (including consents obtained in connection with a purchase of, or
tender or exchange offer for, outstanding Notes); provided, however, that no
such modification or amendment may, without the consent of the Holder of each
such outstanding Note affected thereby: (a) change the Stated Maturity of the
principal of (or premium, if any) or any installment of principal or interest,
if any, on any such Note; (b) reduce the principal amount of (or premium, if
any) or the interest rate, if any, on any such Note; (c) reduce the amount of,
or postpone the date fixed for, the payment of any sinking fund or analogous
obligation; (d) waive a redemption payment with respect to any Note, (e) change
the place or currency of payment of principal of (or premium or Liquidated
Damages, if any) or the interest, if any, on any such Note; (f) impair the right
to institute suit for the enforcement of any such payment on or with respect to
any such Note on or after the Stated Maturity (or, in the case of redemption, on
or after the Redemption Date); (g) reduce the percentage of the principal amount
of outstanding Notes, the consent of the Holders of which is necessary to modify
or amend the Indenture; or (h) modify the foregoing requirements or reduce the
percentage of outstanding Notes necessary to waive compliance with certain
provisions of the Indenture or for waiver of certain defaults.
The Holders of at least a majority of the aggregate principal amount of the
outstanding Notes may waive compliance by the Company with certain restrictive
provisions of the Indenture and waive any past default under the Indenture,
except a default in the payment of principal, premium, Liquidated Damages or
interest or in the performance of certain covenants.
From time to time, the Company and the Trustee, without the consent of the
Holders, may amend the Indenture for certain specified purposes, including,
without limitation, (i) curing ambiguities, defects or inconsistencies and (ii)
other changes so long as any such change does not adversely affect the rights of
any of the Holders in any material respect.
Except in certain limited circumstances, the Company will be entitled to set
any day as the record date for the purpose of determining the Holders of
outstanding Notes entitled to give or take any direction, notice, consent,
waiver or other action under the Indenture, in the manner and subject to the
limitations provided in the Indenture. In certain limited circumstances, the
Trustee will be entitled to set a record date for action by Holders. If a record
date is set for any action to be taken by Holders, such action may be taken only
by persons who are Holders of outstanding Notes on the record date. To be
effective, such action must be taken by Holders of the requisite principal
amount of such Notes within a specified period following the record date. For
any particular record date, this period will be 180 days or such
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shorter period as may be specified by the Company (or the Trustee, if it set the
record date), and may be shortened or lengthened (but not beyond 180 days) from
time to time.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have the
obligations of the Company discharged with respect to the outstanding Notes
("defeasance"). Such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
Notes, except for (i) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium and Liquidated Damages, if any,
and interest on such Notes when such payments are due, or on the redemption
date, as the case may be, (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and (iv) the defeasance provisions
of the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("covenant defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or an Event of Default with respect to the Notes. In the event covenant
defeasance occurs, certain events (not including non-payment, bankruptcy and
insolvency events) described under "Events of Default" will no longer constitute
an Event of Default with respect to the Notes.
In order to exercise either defeasance or covenant defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Notes, cash in U.S. dollars, U.S. Government Obligations, or
a combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the Stated Maturity or on the applicable optional
redemption date, as the case may be, of such principal or installment of
principal or interest and any mandatory redemption or analogous payments
applicable to the outstanding Notes, (ii) in the case of defeasance, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
stating that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the date of the Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred;
(iii) in the case of covenant defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States to the effect that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as clause (e) under the first
paragraph under "Events of Default" are concerned, at any time in the period
ending on the 91st day after the date of deposit; (v) such defeasance or
covenant defeasance shall not result in a breach of violation of, or constitute
a default under the Indenture or any other material agreement or instrument to
which the Company or any Principal Subsidiary is a party or by which the Company
or any Principal Subsidiary is bound; (vi) the Company shall have delivered to
the Trustee an opinion of counsel to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (vii) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over the other
creditors of the Company or with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others; and (viii) the Company shall have
delivered to the
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Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to either the defeasance or the
covenant defeasance, as the case may be, have been compiled with.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth below, Exchange Notes will be issued in registered,
global form in minimum denominations of $1,000 and integral multiples of $1,000
in excess thereof.
The certificates representing the Exchange Notes will be represented by a
single, permanent Global Exchange Note, in definitive, fully registered form
without interest coupons. The Global Note will be deposited upon issuance with
the Trustee as custodian for DTC, and registered in the name of DTC or its
nominee for credit to an account of a direct or indirect participant in DTC as
described below.
Except as set forth below, the Global Note may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Note may not be exchanged for Notes
in certificated form except in the limited circumstances described below. See
"--Exchange of Book-Entry Notes for Certificated Notes."
DEPOSITORY PROCEDURES
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic book-
entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interests and transfer of ownership interests of
each actual purchaser of each security held by or on behalf of DTC are recorded
on the records of the Participants and Indirect Participants.
43
<PAGE>
Euroclear and CEDEL will hold interests in the Global Note on behalf of
their participants through customers' securities accounts in their respective
names on the books of their respective depositaries, which are Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear, and
Citibank, N.A., as operator of CEDEL. The depositaries, in turn, will hold such
interests in the Global Note in customers' securities accounts in the
depositaries' names on the books of DTC. All interests in the Global Note,
including those held through Euroclear or CEDEL, may be subject to the
procedures and requirements of DTC. Those interests held through Euroclear or
CEDEL may also be subject to the procedures and requirements of such systems.
The laws of some states require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the Global Note to such persons will be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants and certain banks, the ability of a
person having beneficial interests in the Global Note to pledge such interests
to persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests. For certain other restrictions
on the transferability of the Notes, see "--Exchange of Book-Entry Notes for
Certificated Notes," "--Exchange of Certificated Notes for Book-Entry Notes."
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of and premium, if any, and interest on
the Global Note registered in the name of DTC or its nominee will be payable by
the Trustee to DTC in its capacity as the registered Holder under the Indenture.
Under the terms of the Indenture, the Company and the Trustee will treat the
persons in whose names the Notes, including the Global Note, are registered as
the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Company, the Trustee
nor any agent of the Company or the Trustee has or will have any responsibility
or liability for (i) any aspect of DTC's records or any Participant's or
Indirect Participant's records relating to or payments made on account of
beneficial ownership interests in the Global Note, or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Note or (ii) any other matter relating to the actions and practices of
DTC or any of its Participants or Indirect Participants. DTC has advised the
Company that its current practice, upon receipt of any payment in respect of
securities such as the Notes (including principal and interest), is to credit
the accounts of the relevant Participants with the payment on the payment date,
in amounts proportionate to their respective holdings in the principal amount of
beneficial interests in the relevant security as shown on the records of DTC
unless DTC has reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Trustee or
the Company. Neither the Company nor the Trustee will be liable for any delay by
DTC or any of its Participants in identifying the beneficial owners of the
Notes, and the Company and the Trustee may conclusively rely on and will be
protected in relying on instructions from DTC or its nominee for all purposes.
Except for trades involving only Euroclear and CEDEL participants, interests
in the Global Note are expected to be eligible to trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its participants. See "--Same-Day Settlement and
Payment."
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and CEDEL will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
44
<PAGE>
Subject to compliance with the transfer restrictions applicable to the Notes
described herein, cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or CEDEL participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
CEDEL, as the case may be, by its respective depositary; however such
cross-market transactions will require delivery of instructions to Euroclear or
CEDEL, as the case may be, by the counterparty in such system in accordance with
the rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or CEDEL, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by delivering
or receiving interests in the Global Note in DTC, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Euroclear participants and CEDEL participants may not deliver
instructions directly to the depositaries for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or
CEDEL participant purchasing an interest in the Global Note from a Participant
in DTC will be credited, and any such crediting will be reported to the relevant
Euroclear or CEDEL participant, during the securities settlement processing day
(which must be a business day for Euroclear and CEDEL) immediately following the
settlement date of DTC. DTC has advised the Company that cash received in
Euroclear or CEDEL as a result of sales of interests in the Global Note by or
through a Euroclear or CEDEL participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or CEDEL cash account only as of the business day for
Euroclear or CEDEL following DTC's settlement date.
DTC has advised the Company that it will take any action permitted to be
taken by a Holder of Notes only at the direction of one or more Participants to
whose account with DTC interests in the Global Note are credited and only in
respect of such portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the Notes, DTC reserves the right
to exchange the Global Note for legended Notes in certificated form, and to
distribute such Notes to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and
their book-entry systems has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures to
facilitate transfers of interests in the Global Note among participants in DTC,
Euroclear and CEDEL, they are under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither the Company nor the Trustee will have any responsibility for the
performance by DTC, Euroclear or CEDEL or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
The Global Note is exchangeable for definitive Notes in registered
certificated form if (i) DTC (x) notifies the Company that it is unwilling or
unable to continue as depositary for the Global Note and the Company thereupon
fails to appoint a successor depositary or (y) has ceased to be a clearing
agency registered under the Exchange Act, (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of the
Notes in certificated form or (iii) there shall have occurred and be continuing
an Event of Default or any event which after notice or lapse of time or both
would be an Event of Default with respect to the Notes. In all cases,
certificated Notes delivered in exchange for the Global Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures).
45
<PAGE>
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture with respect to any other capitalized terms used herein
for which no definition is provided.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" of the Company means the aggregate amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any indebtedness for
money borrowed having a maturity of less than 12 months from the date of the
most recent consolidated balance sheet of the Company but which by its terms is
renewable or extendible beyond 12 months from such date at the option of the
borrower) and (b) all goodwill, trade names, patents, unamortized debt discount
and expense and any other like intangibles, all as set forth on the most recent
consolidated balance sheet of the Company and computed in accordance with
generally accepted accounting principles.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Holder" means a holder of any of the Notes.
"Indebtedness" of any Person means (without duplication), with respect to
any Person, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person and (iv) every obligation of the type referred to in
clauses (i) through (iii) of another Person the payment of which such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor,
guarantor or otherwise (but only, in the case of clause (iv), to the extent such
Person has guaranteed or is responsible or liable for such obligations). The
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value thereof, in the case of any Indebtedness that does not require current
payments of interest, and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Independent Investment Banker" means any of the Initial Purchasers and its
successors.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security arrangement of any kind or nature whatsoever on
or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
46
<PAGE>
"Principal Subsidiary" means American Re-Insurance, or any other Subsidiary
of the Company which shall hereafter succeed by merger or otherwise to a major
part of the business of one or more of the Principal Subsidiary. The decision as
to whether a Subsidiary shall have succeeded to a major part of the Principal
Subsidiary shall be made in good faith by the Board of Directors of the Company
or a committee thereof by the adoption of a resolution so stating, and the
Company shall within 30 days of the date of the adoption of such resolution
deliver to the Trustee a copy thereof, certified by the Corporate Secretary or
the Assistant Corporate Secretary of the Company.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Reference Treasury Dealer" means each of the Initial Purchasers and their
respective successors; PROVIDED, HOWEVER, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
"Stated Maturity," when used with respect to any Note or any installment of
principal thereof or interest thereon, means the date specified in such Note as
the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding voting stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
47
<PAGE>
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett, New York, New York, the
exchange of Old Notes for Exchange Notes will not constitute a taxable event to
Holders for United States federal income tax purposes. Consequently, no gain or
loss will be recognized by a Holder upon receipt of an Exchange Note, the
holding period of the Exchange Note will include the holding period of the Old
Note and the basis of the Exchange Note will be the same as the basis of the Old
Note immediately before the exchange.
The opinion of Simpson Thacher & Bartlett is based upon the provisions of
the Internal Revenue Code of 1986, as amended, and the regulations, rulings and
judicial decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in federal income tax consequences
different from those discussed above. PERSONS CONSIDERING THE EXCHANGE OF OLD
NOTES FOR EXCHANGE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR
SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER
TAXING JURISDICTIONS.
48
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. To the extent any such broker-dealer participates in
the Exchange Offer and so notifies the Company, or causes the Company to be so
notified in writing,the Company has agreed to make available for a period of no
greater than 180 days after the consummation of the Exchange Offer this
Prospectus as amended or supplemented, available to such broker-dealer for use
in connection with any such resale, and will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. In
addition, until , 1997 (90 days after the date of this Prospectus),
all dealers effecting transactions in the New Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes or a combination of such methods of
resale, at prevailing market prices at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Company has agreed to pay all expenses incident to the Exchange Offer
(other than commissions and concessions of any broker-dealers), subject to
certain prescribed limitations, and will indemnify the holders of the Old Notes
against certain liabilities, including certain liabilities that may arise under
the Securities Act.
By its acceptance of the Exchange Offer, any broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer hereby agrees to notify the
Company prior to using the Prospectus in connection with the sale or transfer of
Exchange Notes, and acknowledges and agrees that, upon receipt of notice from
the Company of the happening of any event which makes any statement in the
Prospectus untrue in any material respect or which requires the making of any
changes in the Prospectus in order to make the statements therein not misleading
or which may impose upon the Company disclosure obligations that may have a
material adverse effect on the Company (which notice the Company agrees to
deliver promptly to such broker-dealer), such broker-dealer will suspend use of
the Prospectus until the Company has notified such broker-dealer that delivery
of the Prospectus may resume and has furnished copies of any amendment or
supplement to the Prospectus to such broker-dealer.
49
<PAGE>
EXPERTS
The financial statements of the Company and its consolidated subsidiaries as
of December 31, 1995 and 1994 and for the years ended December 31, 1995, 1994
and 1993 and the three-month period ended December 31, 1992, and the related
financial statement schedules incorporated in this Offering Circular by
reference from the 1995 10-K have been audited by Deloitte & Touche LLP,
independent auditors, except with respect to the financial statements of the
Company and its consolidated subsidiaries for the three-month period ended
December 31, 1992 and the related financial statement schedules, as stated in
their reports which are based on the reports of other auditors. The reports of
Deloitte & Touche LLP include an explanatory paragraph as to a change in the
method of accounting in 1994, for debt and equity securities to conform with a
new accounting pronouncement: Statement of Financial Accounting Standards No.
115. The explanatory paragraph also states that in 1993, the Company changed its
method of accounting for certain reinsurance contracts to conform with two new
accounting pronouncements: Emerging Issues Task Force Issue No. 93-6 and
Statement of Financial Accounting Standards No. 113.
Such financial statements of American Re and its consolidated subsidiaries
are incorporated herein in reliance upon the report of Deloitte & Touche LLP
given upon their authority as experts in accounting and auditing.
LEGAL MATTERS
Certain matters relating to the legality of the Notes will be passed upon on
behalf of the Company by Robert K. Burgess, Senior Vice President, General
Counsel and Secretary for the Company.
50
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES IN ANY JURISDICTION WHERE OR TO ANY PERSON
TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THE PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information........................... 3
Risk Factors.................................... 9
The Company..................................... 13
Capitalization.................................. 17
Ratio of Earnings to Fixed Charges.............. 17
Pro Forma Condensed Consolidated Financial
Statement.....................................
Selected Consolidated Financial Data of the
Company....................................... 18
Results of Operations........................... 21
The Exchange Offer.............................. 26
Description of the Exchange Notes............... 37
United States Federal Income Tax Consequences... 48
Plan of Distribution............................ 49
Experts......................................... 50
Legal Matters................................... 50
</TABLE>
------------------------
$500,000,000
[LOGO]
AMERICAN RE
CORPORATION
-------------
PROSPECTUS
------------------------
OFFER TO EXCHANGE $500,000,000 OF ITS
7.45% SENIOR NOTES DUE 2026,
SERIES B, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT, FOR $500,000,000
OF ITS OUTSTANDING 7.45% SENIOR
NOTES DUE 2026, SERIES A.
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
American Re Corporation ("American Re") is a Delaware corporation. Section
145 of the General Corporation Law of the State of Delaware ("GCL") provides
that a Delaware corporation has the power to indemnify its officers and
directors in certain circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding provided that such director or officer acted in good faith in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action proceeding, provided that
such director or officer had no cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred in connection with the
defense or settlement of such action or suit provided that such director or
officer acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such director
or officer shall have been adjudged to be liable for negligence or misconduct in
the performance of his duty to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action was brought shall
determine that despite the adjudication of liability such director or officer is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorney's
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liability under Section 145.
Under the Company's Restated Certificate of Incorporation (the "Charter") no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law, or (iv) for any transaction from
which the director derived an improper personal benefit. The Charter and the
Bylaws of the Company also provide for indemnification of the officers and
directors of the Company to the full extent permitted by applicable law.
American Re has placed in effect insurance coverage which purports (a) to
insure it against certain costs of indemnification which may be incurred by it
pursuant to the aforementioned Bylaw provisions or
II-1
<PAGE>
otherwise, and (b) to insure the officers and directors of the registrant and of
its subsidiaries against certain liabilities incurred by them in the discharge
of their functions as officers and directors except for liabilities arising from
their own malfeasance.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Set forth below is a list of the exhibits included as part of this
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------ --------------------------------------------------------------------------
<C> <S>
3.1 Restated Certificate of Incorporation of the Company is incorporated by
reference from the Company's Form S-1, Registration Statement No.
33-49110, Exhibit 3.1, as filed with the Securities and Exchange
Commission on July 1, 1992.
*3.2 By-laws of the Company, adopted on November 25, 1996.
3.3 Certificate of Amendment to the Restated Certificate of Incorporation of
the Company is incorporated by reference from Amendment No. 2 to the
Company's Form S-1, Registration Statement No. 33-54938, Exhibit 3.3, as
filed with the Securities and Exchange Commission on January 25, 1993.
*4.1 Indenture, dated as of December 24, 1996, among the Company and State
Street Bank and Trust Company, as Trustee, relating to the 7.45% Senior
Notes, due 2026.
*4.2 Form of 7.45% Senior Notes, Series B, due 2026.
*4.3 Form of 7.45% Senior Notes, Series A, due 2026.
*4.4 Registration Rights Agreement, dated as of December 24, 1996, among the
Company, Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette, Merrill
Lynch & Co., J.P. Morgan & Co., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc, Smith Barney Inc. and UBS Securities.
5 Opinion of Robert K. Burgess, Senior Vice President, General Counsel and
Secretary, dated February , 1997.
*8 Tax Opinion of Simpson Thacher & Bartlett, dated as of January , 1997.
*12 Computation of Ratio of Earnings to Fixed Charges.
*21 List of subsidiaries.
23.1 Consent of Robert K. Burgess, Senior Vice President, General Counsel and
Secretary.
*23.2 Consent of Simpson Thacher & Bartlett (included as part of its opinion
filed as Exhibit 8 hereto).
*23.3 Consent of Deloitte & Touche LLP dated January 24, 1997 as to the
financial statements of the Company and its consolidated subsidiaries
dated January 29, 1996.
*24 Powers of Attorney.
*25 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of State Street Bank and Trust Company, as
Trustee.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------ --------------------------------------------------------------------------
<C> <S>
28 Information from reports furnished to state regulatory authorities is
incorporated by reference from the Company's Form 10-K, Exhibit 28, as
filed with the Securities and Exchange Commission on March 29, 1996.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
*99.3 Form of Guidelines For Certification of Taxpayer Identification Number on
Substitute Form W-9
</TABLE>
- ------------------------
* Filed herewith
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual reports pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities and Exchange
Act of 1934) that are incorporated by reference in the 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions 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.
The registrant hereby undertakes:
(1) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) that every prospectus: (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part
of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment 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.
II-3
<PAGE>
(3) To be filed, 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;
(ii) To reflect in the prospectus any fact or event arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(4) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(5) 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.
(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subseqeuent to the
effective date of the registration statement through the date of responding
to the request.
(7) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Princeton, on the 29th
day of January, 1997.
AMERICAN RE CORPORATION
BY: /S/ ROBERT K. BURGESS
-----------------------------------------
SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 29th day of January by the
following persons in the capacities indicated:
/s/ JAMES R. FISHER Senior Vice President
- ------------------------------ and Chief Financial and January 29, 1997
James R. Fisher Accounting Officer
/s/ CLAUS HELBIG*
- ------------------------------ Director January 29, 1997
Claus Helbig
/s/ PAUL H. INDERBITZIN* Director, Chairman, Chief
- ------------------------------ Executive Officer and January 29, 1997
Paul H. Inderbitzin President
/s/ EDWARD B. JOBE*
- ------------------------------ Director January 29, 1997
Edward B. Jobe
/s/ HANS RATHNOW*
- ------------------------------ Director January 29, 1997
Hans Rathnow
/s/ HANS-JURGEN SCHINZLER*
- ------------------------------ Director January 29, 1997
Hans-Jurgen Schinzler
*By: /s/ ROBERT K. BURGESS
------------------------------------------
Senior Vice President, General Counsel and
Secretary
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
PAGE
NUMBER IN
SEQUENTIAL
NUMBERING
EXHIBIT NO. DESCRIPTION SYSTEM
- ------------- ----------------------------------------------------------------------------------- ---------------
<C> <S> <C>
3.1 Restated Certificate of Incorporation of the Company is incorporated by reference
from the Company's Form S-1, Registration Statement No. 33-49110, Exhibit 3.1, as
filed with the Securities and Exchange Commission on July 1, 1992................
*3.2 By-laws of the Company, adopted on November 25, 1996...............................
3.3 Certificate of Amendment to the Restated Certificate of Incorporation of the
Company is incorporated by reference from Amendment No. 2 to the Company's Form
S-1, Registration Statement No. 33-54938, Exhibit 3.3, as filed with the
Securities and Exchange Commission on January 25, 1993...........................
*4.1 Indenture, dated as of December 24, 1996, among the Company and State Street Bank
and Trust Company, as Trustee, relating to the 7.45% Senior Notes, due 2026......
*4.2 Form of 7.45% Senior Notes, Series B, due 2026.....................................
*4.3 Form of 7.45% Senior Notes, Series A, due 2026.....................................
*4.4 Registration Rights Agreement, dated as of December 24, 1996, among the Company,
Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette, Merrill Lynch & Co., J.P.
Morgan & Co., Morgan Stanley & Co. Incorporated, Salomon Brothers Inc, Smith
Barney Inc. and UBS Securities...................................................
5 Opinion of Robert K. Burgess, Senior Vice President, General Counsel and Secretary,
dated February , 1997..........................................................
*8 Tax Opinion of Simpson Thacher & Bartlett, dated as of January , 1997........
*12 Computation of Ratio of Earnings to Fixed Charges..................................
*21 List of subsidiaries...............................................................
23.1 Consent of Robert K. Burgess, Senior Vice President, General Counsel and
Secretary........................................................................
*23.2 Consent of Simpson Thacher & Bartlett (included as part of its opinion filed as
Exhibit 8 hereto)................................................................
*23.3 Consent of Deloitte & Touche LLP dated January 24, 1997 as to the financial
statements of the Company and its consolidated subsidiaries dated January 29,
1996.............................................................................
*24 Powers of Attorney.................................................................
*25 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of State Street Bank and Trust Company, as Trustee.......................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
NUMBER IN
SEQUENTIAL
NUMBERING
EXHIBIT NO. DESCRIPTION SYSTEM
- ------------- ----------------------------------------------------------------------------------- ---------------
<C> <S> <C>
28 Information from reports furnished to state regulatory authorities is incorporated
by reference from the Company's Form 10-K, Exhibit 28, as filed with the
Securities and Exchange Commission on March 29, 1996.............................
*99.1 Form of Letter of Transmittal......................................................
*99.2 Form of Notice of Guaranteed Delivery..............................................
*99.3 Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9..............................................................
</TABLE>
- ------------------------
* Filed herewith
<PAGE>
Exhibit 3.2
=========================================
BY-LAWS
OF
AMERICAN RE CORPORATION
=========================================
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
OFFICES
1.01. Registered Office..................................................... 1
1.02. Other Offices......................................................... 1
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.01. Annual Meetings....................................................... 1
2.02. Special Meetings...................................................... 1
2.03. Notice of Meetings.................................................... 2
2.04. Waiver of Notice...................................................... 2
2.05. Adjournments.......................................................... 2
2.06. Quorum................................................................ 2
2.07. Voting................................................................ 3
2.08. Proxies............................................................... 3
2.09. Stockholders' Consent in Lieu of Meeting.............................. 3
ARTICLE III
BOARD OF DIRECTORS
3.01. General Powers........................................................ 3
3.02. Number and Term of Office............................................. 3
3.03. Resignation........................................................... 4
3.04. Removal............................................................... 4
3.05. Vacancies............................................................. 4
3.06. Meetings.............................................................. 4
3.07. Committees of the Board............................................... 6
3.08. Committee Rules....................................................... 6
3.09. Directors' Consent in Lieu of Meeting................................. 6
3.10. Action by Means of Telephone or Similar Communications Equipment...... 6
(i)
<PAGE>
Section Page
3.11. Compensation.......................................................... 6
ARTICLE IV
OFFICERS
4.01. Officers.............................................................. 7
4.02. Authority and Duties.................................................. 7
4.03. Term of Office, Resignation and Removal............................... 7
4.04. Vacancies............................................................. 7
4.05. The Chairman.......................................................... 7
4.06. The President......................................................... 8
4.07. Vice Presidents....................................................... 8
4.08. The Secretary......................................................... 8
4.09. Assistant Secretaries................................................. 8
4.10. The Treasurer......................................................... 8
4.11. Assistant Treasurers.................................................. 9
ARTICLE V
CHECKS, DRAFTS, NOTES, AND PROXIES
5.01. Checks, Drafts and Notes.............................................. 9
5.02. Execution of Proxies.................................................. 9
ARTICLE VI
SHARES AND TRANSFERS OF SHARES
6.01. Certificates Evidencing Shares........................................ 10
6.02. Stock Ledger.......................................................... 10
6.03. Transfers of Shares................................................... 10
6.04. Addresses of Stockholders............................................. 10
6.05. Lost, Destroyed and Mutilated Certificates............................ 10
6.06. Regulations........................................................... 11
6.07. Fixing Date for Determination of Stockholders of Record............... 11
(ii)
<PAGE>
Section Page
ARTICLE VII
SEAL
7.01. Seal.................................................................. 11
ARTICLE VIII
FISCAL YEAR
8.01. Fiscal Year........................................................... 11
ARTICLE IX
INDEMNIFICATION AND INSURANCE
9.01. Indemnification........................................................ 12
9.02. Insurance for Indemnification......................................... 14
ARTICLE X
AMENDMENTS
10.01. Amendments........................................................... 14
(iii)
<PAGE>
BY-LAWS
OF
AMERICAN RE CORPORATION
ARTICLE I
OFFICES
SECTION 1.01. Registered Office. The registered office of American Re
Corporation (the "Corporation") in the State of Delaware shall be at the
principal office of The Prentice-Hall Corporation System, Inc. in the City of
Wilmington, County of New Castle, and the registered agent in charge thereof
shall be The Prentice Hall Corporation.
SECTION 1.02. Other Offices. The Corporation may also have an office or
offices at any other place or places within or without the State of Delaware as
the Board of Directors of the Corporation (the "Board") may from time to time
determine or the business of the Corporation may from time to time require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. Annual Meetings. The annual meeting of stockholders of the
Corporation for the election of directors of the Corporation ("Directors"), and
for the transaction of such other business as may properly come before such
meeting, shall be held at such place, date and time as shall be fixed by the
Board and designated in the notice or waiver of notice of such annual meeting;
provided, however, that no annual meeting of stockholders need be held if all
actions, including the election of Directors, required by the General
Corporation Law of the State of Delaware (the "General Corporation Law") to be
taken at such annual meeting are taken by written consent in lieu of meeting
pursuant to Section 2.09 hereof.
SECTION 2.02. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called by the Board or the Chairman of the Board, the
President or the Secretary of the Corporation or by the recordholders of at
least a majority of the shares of common stock of the Corporation issued and
outstanding ("Shares") and entitled to vote thereat, to be held at such place,
date and time as shall be designated in the notice or waiver of notice thereof.
<PAGE>
2
SECTION 2.03. Notice of Meetings. (a) Except as otherwise provided by law,
written notice of each annual or special meeting of stockholders stating the
place, date and time of such meeting and, in the case of a special meeting, the
purpose or purposes for which such meeting is to be held, shall be given
personally or by first-class mail (airmail in the case of international
communications) to each recordholder of Shares (a "Stockholder") entitled to
vote thereat, not less than 10 nor more than 60 days before the date of such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the Stockholder at such
Stockholder's address as it appears on the records of the Corporation. If, prior
to the time of mailing, the Secretary of the Corporation (the "Secretary") shall
have received from any Stockholder a written request that notices intended for
such Stockholder are to be mailed to some address other than the address that
appears on the records of the Corporation, notices intended for such Stockholder
shall be mailed to the address designated in such request.
(b) Notice of a special meeting of Stockholders may be given by the person
or persons calling the meeting, or, upon the written request of such person or
persons, such notice shall be given by the Secretary on behalf of such person or
persons. If the person or persons calling a special meeting of Stockholders give
notice thereof, such person or persons shall deliver a copy of such notice to
the Secretary. Each request to the Secretary for the giving of notice of a
special meeting of Stockholders shall state the purpose or purposes of such
meeting.
SECTION 2.04. Waiver of Notice. Notice of any annual or special meeting of
Stockholders need not be given to any Stockholder who files a written waiver of
notice with the Secretary, signed by the person entitled to notice, whether
before or after such meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of Stockholders need be specified in any written waiver
of notice thereof. Attendance of a Stockholder at a meeting, in person or by
proxy, shall constitute a waiver of notice of such meeting, except when such
Stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the grounds that
the notice of such meeting was inadequate or improperly given.
SECTION 2.05. Adjournments. Whenever a meeting of Stockholders, annual or
special, is adjourned to another date, time or place, notice need not be given
of the adjourned meeting if the date, time and place thereof are announced at
the meeting at which the adjournment is taken. If the adjournment is for more
than 30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
Stockholder entitled to vote thereat. At the adjourned meeting, any business may
be transacted which might have been transacted at the original meeting.
SECTION 2.06. Quorum. Except as otherwise provided by law or the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), the
<PAGE>
3
recordholders of a majority of the Shares entitled to vote thereat, present in
person or by proxy, shall constitute a quorum for the transaction of business at
all meetings of Stockholders, whether annual or special. If, however, such
quorum shall not be present in person or by proxy at any meeting of
Stockholders, the Stockholders entitled to vote thereat may adjourn the meeting
from time to time in accordance with Section 2.05 hereof until a quorum shall be
present in person or by proxy.
SECTION 2.07. Voting. Each Stockholder shall be entitled to one vote for
each Share held of record by such Stockholder. Except as otherwise provided by
law or the Certificate of Incorporation, when a quorum is present at any meeting
of Stockholders, the vote of the recordholders of a majority of the Shares
constituting such quorum shall decide any question brought before such meeting.
SECTION 2.08. Proxies. Each Stockholder entitled to vote at a meeting of
Stockholders or to express, in writing, consent to or dissent from any action of
Stockholders without a meeting may authorize another person or persons to act
for such Stockholder by proxy. Such proxy shall be filed with the Secretary
before such meeting of Stockholders or such action of Stockholders without a
meeting, at such time as the Board may require. No proxy shall be voted or acted
upon more than three years from its date, unless the proxy provides for a longer
period.
SECTION 2.09. Stockholders' Consent in Lieu of Meeting. Any action
required by the General Corporation Law to be taken at any annual or special
meeting of Stockholders, and any action which may be taken at any annual or
special meeting of Stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the recordholders of Shares having not less than the
minimum number of votes necessary to authorize or take such action at a meeting
at which the recordholders of all Shares entitled to vote thereon were present
and voted.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. General Powers. The business and affairs of the Corporation
shall be managed by the Board, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law, the
Certificate of Incorporation or these By-laws directed or required to be
exercised or done by Stockholders.
SECTION 3.02. Number and Term of Office. The number of Directors shall be
four or such other number as shall be fixed from time to time by the Board.
Directors need
<PAGE>
4
not be Stockholders. Directors shall be elected at the annual meeting of
Stockholders or, if, in accordance with Section 2.01 hereof, no such annual
meeting is held, by written consent in lieu of meeting pursuant to Section 2.09
hereof, and each Director shall hold office until his successor is elected and
qualified, or until his earlier death or resignation or removal in the manner
hereinafter provided.
SECTION 3.03. Resignation. Any Director may resign at any time by giving
written notice to the Board, the Chairman of the Board of the Corporation (the
"Chairman") or the Secretary. Such resignation shall take effect at the time
specified in such notice or, if the time be not specified, upon receipt thereof
by the Board, the Chairman or the Secretary, as the case may be. Unless
otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective.
SECTION 3.04. Removal. Any or all of the Directors may be removed, with or
without cause, at any time by vote of the recordholders of a majority of the
Shares then entitled to vote at an election of Directors, or by written consent
of the recordholders of Shares pursuant to Section 2.09 hereof.
SECTION 3.05. Vacancies. Vacancies occurring on the Board as a result of
the removal of Directors without cause may be filled only by vote of the
recordholders of a majority of the Shares then entitled to vote at an election
of Directors, or by written consent of such recordholders pursuant to Section
2.09 hereof. Vacancies occurring on the Board for any other reason, including,
without limitation, vacancies occurring as a result of the creation of new
directorships that increase the number of Directors, may be filled by such vote
or written consent or by vote of the Board or by written consent of the
Directors pursuant to Section 3.08 hereof. If the number of Directors then in
office is less than a quorum, such other vacancies may be filled by vote of a
majority of the Directors then in office or by written consent of all such
Directors pursuant to Section 3.08 hereof. Unless earlier removed pursuant to
Section 3.04 hereof, each Director chosen in accordance with this Section 3.05
shall hold office until the next annual election of Directors by the
Stockholders and until his successor shall be elected and qualified.
SECTION 3.06. Meetings. (a) Annual Meetings. As soon as practicable after
each annual election of Directors by the Stockholders, the Board shall meet for
the purpose of organization and the transaction of other business, unless it
shall have transacted all such business by written consent pursuant to Section
3.08 hereof.
(b) Other Meetings. Other meetings of the Board shall be held at such
times as the Chairman, the President of the Corporation (the "President"), the
Secretary or a majority of the Board shall from time to time determine.
<PAGE>
5
(c) Notice of Meetings. The Secretary shall give written notice to each
Director of each meeting of the Board, which notice shall state the place, date,
time and purpose of such meeting. Notice of each such meeting shall be given to
each Director, if by mail, addressed to him at his residence or usual place of
business, at least two days before the day on which such meeting is to be held,
or shall be sent to him at such place by telecopy, telegraph, cable, or other
form of recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held. A written
waiver of notice, signed by the Director entitled to notice, whether before or
after the time of the meeting referred to in such waiver, shall be deemed
equivalent to notice. Neither the business to be transacted at, nor the purpose
of any meeting of the Board need be specified in any written waiver of notice
thereof. Attendance of a Director at a meeting of the Board shall constitute a
waiver of notice of such meeting, except as provided by law.
(d) Place of Meetings. The Board may hold its meetings at such place or
places within or without the State of Delaware as the Board or the Chairman may
from time to time determine, or as shall be designated in the respective notices
or waivers of notice of such meetings.
(e) Quorum and Manner of Acting. One-third of the total number of
Directors then in office (but in no event less than two if the total number of
directorships, including vacancies, is greater than one and in no event a number
less than one-third of the total number of directorships, including vacancies)
shall be present in person at any meeting of the Board in order to constitute a
quorum for the transaction of business at such meeting, and the vote of a
majority of those Directors present at any such meeting at which a quorum is
present shall be necessary for the passage of any resolution or act of the
Board, except as otherwise expressly required by law, the Certificate of
Incorporation or these By-laws. In the absence of a quorum for any such meeting,
a majority of the Directors present thereat may adjourn such meeting from time
to time until a quorum shall be present.
(f) Organization. At each meeting of the Board, one of the following shall
act as chairman of the meeting and preside, in the following order of
precedence:
(i) the Chairman;
(ii) the President;
(iii) any Director chosen by a majority of the Directors present.
The Secretary or, in the case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present) whom the chairman of
the meeting shall appoint shall act as secretary of such meeting and keep the
minutes thereof.
<PAGE>
6
SECTION 3.07. Committees of the Board. The Board may designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of the
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in place
of any such absent or disqualified member. Any such committee, to the extent
permitted by law and to the extent provided in the resolution of the Board,
shall have an may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it.
SECTION 3.08. Committee Rules. Unless the Board otherwise provides, each
committee designated by the Board may make alter and repeal rules for the
conduct of its business. In the absence of such rules each committee shall
conduct its business in the same manner as the Board conducts its business
pursuant to Article III of these by-laws.
SECTION 3.09. Directors' Consent in Lieu of Meeting. Any action required
or permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by all
the members of the Board or such committee and such consent is filed with the
minutes of the proceedings of the Board or such committee.
SECTION 3.10. Action by Means of Telephone or Similar Communications
Equipment. Any one or more members of the Board, or of any committee thereof,
may participate in a meeting of the Board or such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
SECTION 3.11. Compensation. Unless otherwise restricted by the Certificate
of Incorporation, the Board may determine the compensation of Directors. In
addition, as determined by the Board, Directors may be reimbursed by the
Corporation for their expenses, if any, in the performance of their duties as
Directors. No such compensation or reimbursement shall preclude any Director
from serving the Corporation in any other capacity and receiving compensation
therefor.
<PAGE>
7
ARTICLE IV
OFFICERS
SECTION 4.01. Officers. The officers of the Corporation shall be the
Chairman, the President, the Secretary and a Treasurer and may include one or
more Vice Presidents and one or more Assistant Secretaries and one or more
Assistant Treasurers. Any two or more offices may be held by the same person.
SECTION 4.02. Authority and Duties. All officers shall have such authority
and perform such duties in the management of the Corporation as may be provided
in these By-laws or, to the extent not so provided, by resolution of the Board.
SECTION 4.03. Term of Office, Resignation and Removal. (a) Each officer
shall be appointed by the Board and shall hold office for such term as may be
determined by the Board. Each officer shall hold office until his successor has
been appointed and qualified or his earlier death or resignation or removal in
the manner hereinafter provided. The Board may require any officer to give
security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written notice to the
Board, the Chairman, the President or the Secretary. Such resignation shall take
effect at the time specified in such notice or, if the time be not specified,
upon receipt thereof by the Board, the Chairman, the President or the Secretary,
as the case may be. Unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective.
(c) All officers and agents appointed by the Board shall be subject to
removal, with or without cause, at any time by the Board or by the action of the
recordholders of a majority of the Shares entitled to vote thereon.
SECTION 4.04. Vacancies. Any vacancy occurring in any office of the
Corporation, for any reason, shall be filled by action of the Board. Unless
earlier removed pursuant to Section 4.03 hereof, any officer appointed by the
Board to fill any such vacancy shall serve only until such time as the unexpired
term of his predecessor expires unless reappointed by the Board.
SECTION 4.05. The Chairman. The Chairman shall have the power to call
special meetings of Stockholders, to call special meetings of the Board and, if
present, to preside at all meetings of Stockholders and all meetings of the
Board. The Chairman shall perform all duties incident to the office of Chairman
of the Board and all such other duties as may from time to time be assigned to
him by the Board or these By-laws.
<PAGE>
8
SECTION 4.06. The President. The President shall be the chief executive
officer of the Corporation and shall have general and active management and
control of the business and affairs of the Corporation, subject to the control
of the Board, and shall see that all orders and resolutions of the Board are
carried into effect. The President shall perform all duties incident to the
office of President and all such other duties as may from time to time be
assigned to him by the Board or these By-laws.
SECTION 4.07. Vice Presidents. Vice Presidents, if any, in order of their
seniority or in any other order determined by the Board, shall generally assist
the President and perform such other duties as the Board or the President shall
prescribe, and in the absence or disability of the President, shall perform the
duties and exercise the powers of the President.
SECTION 4.08. The Secretary. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of Stockholders
and shall record all votes and the minutes of all proceedings in a book to be
kept for that purpose, and shall perform the same duties for any committee of
the Board when so requested by such committee. He shall give or cause to be
given notice of all meetings of Stockholders and of the Board, shall perform
such other duties as may be prescribed by the Board, the Chairman or the
President and shall act under the supervision of the Chairman. He shall keep in
safe custody the seal of the Corporation and affix the same to any instrument
that requires that the seal be affixed to it and which shall have been duly
authorized for signature in the name of the Corporation and, when so affixed,
the seal shall be attested by his signature or by the signature of the Treasurer
of the Corporation (the "Treasurer") or an Assistant Secretary or Assistant
Treasurer of the Corporation. He shall keep in safe custody the certificate
books and stockholder records and such other books and records of the
Corporation as the Board, the Chairman or the President may direct and shall
perform all other duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Board, the Chairman or
the President.
SECTION 4.09. Assistant Secretaries. Assistant Secretaries of the
Corporation ("Assistant Secretaries"), if any, in order of their seniority or in
any other order determined by the Board, shall generally assist the Secretary
and perform such other duties as the Board or the Secretary shall prescribe,
and, in the absence or disability of the Secretary, shall perform the duties and
exercise the powers of the Secretary.
SECTION 4.10. The Treasurer. The Treasurer shall have the care and custody
of all the funds of the Corporation and shall deposit such funds in such banks
or other depositories as the Board, or any officer or officers, or any officer
and agent jointly, duly authorized by the Board, shall, from time to time,
direct or approve. He shall disburse the funds of the Corporation under the
direction of the Board and the President. He shall keep a full and accurate
account of all moneys received and paid on account of the Corporation and
<PAGE>
9
shall render a statement of his accounts whenever the Board, the Chairman or the
President shall so request. He shall perform all other necessary actions and
duties in connection with the administration of the financial affairs of the
Corporation and shall generally perform all the duties usually appertaining to
the office of treasurer of a corporation. When required by the Board, he shall
give bonds for the faithful discharge of his duties in such sums and with such
sureties as the Board shall approve.
SECTION 4.11. Assistant Treasurers. Assistant Treasurers of the
Corporation ("Assistant Treasurers"), if any, in order of their seniority or in
any other order determined by the Board, shall generally assist the Treasurer
and perform such other duties as the Board or the Treasurer shall prescribe,
and, in the absence or disability of the Treasurer, shall perform the duties and
exercise the powers of the Treasurer.
ARTICLE V
CHECKS, DRAFTS, NOTES, AND PROXIES
SECTION 5.01. Checks, Drafts and Notes. All checks, drafts and other
orders for the payment of money, notes and other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall be
determined, from time to time, by resolution of the Board.
SECTION 5.02. Execution of Proxies. The Chairman or the President, or, in
the absence or disability of both of them, any Vice President, may authorize,
from time to time, the execution and issuance of proxies to vote shares of stock
or other securities of other corporations held of record by the Corporation and
the execution of consents to action taken or to be taken by any such
corporation. All such proxies and consents, unless otherwise authorized by the
Board, shall be signed in the name of the Corporation by the Chairman, the
President or any Vice President.
<PAGE>
10
ARTICLE VI
SHARES AND TRANSFERS OF SHARES
SECTION 6.01. Certificates Evidencing Shares. Shares shall be evidenced by
certificates in such form or forms as shall be approved by the Board.
Certificates shall be issued in consecutive order and shall be numbered in the
order of their issue, and shall be signed by the Chairman, the President or any
Vice President and by the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer. If such a certificate is manually signed by one such
officer, any other signature on the certificate may be a facsimile. In the event
any such officer who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to hold such office or to be employed by
the Corporation before such certificate is issued, such certificate may be
issued by the Corporation with the same effect as if such officer had held such
office on the date of issue.
SECTION 6.02. Stock Ledger. A stock ledger in one or more counterparts
shall be kept by the Secretary, in which shall be recorded the name and address
of each person, firm or corporation owning the Shares evidenced by each
certificate evidencing Shares issued by the Corporation, the number of Shares
evidenced by each such certificate, the date of issuance thereof and, in the
case of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name Shares stand on the stock ledger of
the Corporation shall be deemed the owner and recordholder thereof for all
purposes.
SECTION 6.03. Transfers of Shares. Registration of transfers of Shares
shall be made only in the stock ledger of the Corporation upon request of the
registered holder of such shares, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary, and upon the
surrender of the certificate or certificates evidencing such Shares properly
endorsed or accompanied by a stock power duly executed, together with such proof
of the authenticity of signatures as the Corporation may reasonably require.
SECTION 6.04. Addresses of Stockholders. Each Stockholder shall designate
to the Secretary an address at which notices of meetings and all other corporate
notices may be served or mailed to such Stockholder, and, if any Stockholder
shall fail to so designate such an address, corporate notices may be served upon
such Stockholder by mail directed to the mailing address, if any, as the same
appears in the stock ledger of the Corporation or at the last known mailing
address of such Stockholder.
SECTION 6.05. Lost, Destroyed and Mutilated Certificates. Each
recordholder of Shares shall promptly notify the Corporation of any loss,
destruction or mutilation of any certificate or certificates evidencing any
Share or Shares of which he is the recordholder. The Board may, in its
discretion, cause the Corporation to issue a new
<PAGE>
11
certificate in place of any certificate theretofore issued by it and alleged to
have been mutilated, lost, stolen or destroyed, upon the surrender of the
mutilated certificate or, in the case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction, and the
Board may, in its discretion, require the recordholder of the Shares evidenced
by the lost, stolen or destroyed certificate or his legal representative to give
the Corporation a bond sufficient to indemnify the Corporation against any claim
made against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
SECTION 6.06. Regulations. The Board may make such other rules and
regulations as it may deem expedient, not inconsistent with these By-laws,
concerning the issue, transfer and registration of certificates evidencing
Shares.
SECTION 6.07. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the Stockholders entitled to notice of
or to vote at any meeting of Stockholders or any adjournment thereof, or to
express consent to, or to dissent from, corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other such action. A determination of the Stockholders
entitled to notice of or to vote at a meeting of Stockholders shall apply to any
adjournment of such meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
ARTICLE VII
SEAL
SECTION 7.01. Seal. The Board may approve and adopt a corporate seal,
which shall be in the form of a circle and shall bear the full name of the
Corporation, the year of its incorporation and the words "Corporate Seal
Delaware".
ARTICLE VIII
FISCAL YEAR
SECTION 8.01. Fiscal Year. The fiscal year of the Corporation shall end on
the thirty-first day of December of each year unless changed by resolution of
the Board.
<PAGE>
12
ARTICLE IX
INDEMNIFICATION AND INSURANCE
SECTION 9.01. Indemnification. (a) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 9.01(a) and (b) of these
By-laws, or in defense of any claim,
<PAGE>
13
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under Section 9.01(a) and (b) of these By-laws
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 9.01(a) and (b) of these
By-laws. Such determination shall be made (i) by the Board by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the stockholders of the Corporation.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation pursuant to this Article IX. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, other Sections of this Article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, by-law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.
(g) For purposes of this Article IX, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Article IX with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(h) For purposes of this Article IX, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on
<PAGE>
14
a person with respect to an employee benefit plan; and references to "serving at
the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves service by, such director, officer, employee or agent with respect to
any employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article IX.
(i) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article IX shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 9.02. Insurance for Indemnification. The Corporation may purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of Section
145 of the General Corporation Law.
ARTICLE X
AMENDMENTS
SECTION 10.01. Amendments. Any By-law (including these By-laws) may be
adopted, amended or repealed by the vote of the recordholders of a majority of
the Shares then entitled to vote at an election of Directors or by written
consent of Stockholders pursuant to Section 2.09 hereof, or by vote of the Board
or by a written consent of Directors pursuant to Section 3.08 hereof.
<PAGE>
Exhibit 4.1
================================================================================
AMERICAN RE CORPORATION
7.45% NOTES DUE 2026
-------------------
INDENTURE
DATED AS OF DECEMBER 24, 1996
-------------------
-------------------
STATE STREET BANK AND TRUST COMPANY
TRUSTEE
-------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE 1
Section 1.01. Definitions....................................................1
Section 1.02. Other Definitions..............................................8
Section 1.03. Incorporation By Reference of Trust Indenture Act..............8
Section 1.04. Rules of Construction..........................................8
Section 1.05. Compliance Certificates and Opinions...........................9
Section 1.06. Form of Documents Delivered To Trustee.........................9
Section 1.07. Acts of Holders...............................................10
ARTICLE 2 THE NOTES 11
Section 2.01. Form and Dating...............................................11
Section 2.02. Execution, Authentication, Delivery and Dating................12
Section 2.03. Registrar and Paying Agent....................................13
Section 2.04. Paying Agent To Hold Money In Trust...........................13
Section 2.05. Holder Lists..................................................13
Section 2.06. Transfer and Exchange.........................................14
Section 2.07. Replacement Notes.............................................20
Section 2.08. Outstanding Notes.............................................20
Section 2.09. Treasury Notes................................................21
Section 2.10. Temporary Notes...............................................21
Section 2.11. Cancellation..................................................21
Section 2.12. Payment of Interest; Interest Rights Preserved................21
ARTICLE 3 REDEMPTION AND PREPAYMENT 22
Section 3.01. Applicability of Article......................................22
Section 3.02. Election to Redeem; Notice to Trustee.........................22
Section 3.03. Section by Trustee of Notes to Be Redeemed....................22
Section 3.04. Notice of Redemption..........................................23
Section 3.05. Deposit of Redemption Price...................................23
Section 3.06. Notes Payable on Redemption Date..............................24
Section 3.07. Notes Redeemed in Part........................................24
Section 3.08. Redemption....................................................24
Section 3.09. Mandatory Redemption..........................................24
ARTICLE 4 COVENANTS 25
Section 4.01. Payment of Principal, Premium and Interest....................25
Section 4.02. Maintenance of Office or Agency...............................25
Section 4.03. Money for Security Payments to Be Held In Trust...............25
i
<PAGE>
Section 4.04. Reports.......................................................27
Section 4.05. Statement as to Compliance; Notice of Default; Provision
of Financial Statements......................................27
Section 4.06. Payment of Taxes and Other Claims.............................27
Section 4.07. Limitation on Liens...........................................28
Section 4.08. Corporate Existence. .........................................28
ARTICLE 5 SUCCESSORS 28
Section 5.01. Restrictions on Merger........................................28
Section 5.02. Successor Corporation Substituted.............................29
ARTICLE 6 DEFAULTS AND REMEDIES 29
Section 6.01. Events of Default and Notice Thereof..........................29
Section 6.02. Acceleration of Maturity; Rescission..........................30
Section 6.03. Other Remedies................................................30
Section 6.04. Waiver of Past Defaults.......................................31
Section 6.05. Control by Majority...........................................31
Section 6.06. Limitation on Suits...........................................31
Section 6.07. Rights of Holders of Notes to Receive Payment.................31
Section 6.08. Collection Suit by Trustee....................................31
Section 6.09. Trustee May File Proofs of Claim..............................32
Section 6.10. Priorities....................................................32
Section 6.11. Undertaking for Costs.........................................32
Section 6.12. Waiver of Stay, Extension of Usury Laws.......................33
ARTICLE 7 TRUSTEE 33
Section 7.01. Duties of Trustee.............................................33
Section 7.02. Rights of Trustee.............................................34
Section 7.03. Individual Rights of Trustee..................................34
Section 7.04. Trustee's Disclaimer..........................................35
Section 7.05. Notice of Defaults............................................35
Section 7.06. Reports by Trustee to Holders of the Notes....................35
Section 7.07. Compensation and Indemnity....................................35
Section 7.08. Replacement of Trustee........................................36
Section 7.09. Successor Trustee by Merger, etc..............................37
Section 7.10. Eligibility; Disqualification.................................37
Section 7.11. Preferential Collection of Claims Against the Company.........37
ARTICLE 8 DEFEASANCE AND COVENANT DEFEASANCE 37
Section 8.01. Option to Effect Defeasance or Covenant Defeasance............37
Section 8.02. Defeasance and Discharge......................................37
Section 8.03. Covenant Defeasance...........................................38
Section 8.04. Conditions to Defeasance or Covenant Defeasance...............38
ii
<PAGE>
Section 8.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions...............40
Section 8.06. Reinstatement................................................40
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER 40
Section 9.01. Without Consent of Holders of Notes..........................40
Section 9.02. With Consent of Holders of Notes.............................41
Section 9.03. Compliance with TIA..........................................42
Section 9.04. Revocation and Effect of Consents............................42
Section 9.05. Notation on or Exchange of Notes.............................43
ARTICLE 10 SATISFACTION AND DISCHARGE 43
Section 10.01 satisfaction and discharge of indenture......................43
section 10.02 application of Trust money...................................44
ARTICLE 11 MISCELLANEOUS 44
Section 11.01. Conflict of Any Provision of Indenture with TIA..............44
Section 11.02. Notices......................................................44
Section 11.03. Communication by Holders of Notes with Other Holders of
Notes.......................................................46
Section 11.04. Certificate and Opinion as to Conditions Precedent...........46
Section 11.05. Legal Holidays...............................................46
Section 11.06. Reserved.....................................................46
Section 11.07. No Recourse Against Others...................................46
Section 11.08. Governing Law................................................46
Section 11.09. No Adverse Interpretation of Other Agreements................47
Section 11.10. Successors and Assigns.......................................47
Section 11.11. Severability.................................................47
Section 11.12. Counterpart Originals........................................47
Section 11.13. Table of Contents, Headings, etc. ...........................47
iii
<PAGE>
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit B-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
Exhibit B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
Exhibit B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER OF
DEFINITIVE NOTES
Exhibit B-4 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
RULE 144A GLOBAL NOTE OR REGULATION S GLOBAL NOTE TO DEFINITIVE
NOTE
Exhibit B-5 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
DEFINITIVE NOTE TO RULE 144A GLOBAL NOTE OR REGULATION S GLOBAL
NOTE
iv
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture Indenture Section
Act Section
310(a)(1)...................................................7.10
(a)(2)...................................................7.10
(a)(3)...................................................N.A.
(a)(4)...................................................N.A.
(a)(5)...................................................7.10
(b)......................................................7.10
(c)......................................................N.A.
311(a)......................................................7.11
(b)......................................................7.11
(c)......................................................N.A.
312(a)......................................................10.03
(b)......................................................10.03
(c)......................................................10.03
313(a)......................................................7.06
(b)(1)...................................................N.A.
(b)(2)...................................................7.06; 7.07
(c)......................................................7.06; 10.02
(d)......................................................7.06
314(a)......................................................4.04; 10.02
(b)......................................................N.A.
(c)(1)...................................................10.04
(c)(2)...................................................10.04
(c)(3)...................................................N.A.
(d)......................................................N.A.
(f)......................................................N.A.
315(a)......................................................7.01
(b)......................................................7.05; 10.02
(c)......................................................7.01
(d)......................................................7.01
(e)......................................................6.11
316(a)(last sentence).......................................2.09
(a)(1)(A)................................................6.05
(a)(1)(B)................................................6.04
(a)(2)...................................................N.A.
(b)......................................................6.07
317(a)(1) ..................................................6.08
(a)(2)...................................................6.09
(b)......................................................2.04
318(a)......................................................10.01
(b)......................................................N.A.
(c)......................................................10.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
v
<PAGE>
INDENTURE dated as of December __, 1996 between American Re Corporation, a
Delaware corporation(the "Company"), and State Street Bank and Trust Company, a
Massachusetts trust company (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 7.45% Notes due 2026
(the "Notes")
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members " means members of, or participants in, the Depository.
"Applicable Procedures" means applicable procedures of the Depository,
Euroclear or Cedel Bank, as the case may be.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of such board.
"Board Resolution " means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York or the
State of Delaware are authorized or obligated by law, regulation or executive
order to close.
"Capital Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
capital stock whether now outstanding or issued after the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Company" means American Re Corporation, a Delaware corporation, and any
successor thereto.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company (i) by its Chairman, a Vice Chairman, its
President or a Vice President and (ii) by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary and delivered to the Trustee;
1
<PAGE>
provided, however, that such written request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being signed
by one of such officers or directors listed in such clause (i) and one of the
officers listed in clause (ii) above.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.
"Comparable Treasury Price " shall be determined by an Independent
Investment Banker and means, with respect to any redemption date, (i) the
average of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) on the third Business Day
preceding such redemption date, as set forth in the daily statistical release
(or any successor release) published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
(ii) if such release (or any successor release) is not published or does not
contain such prices on such Business Day, (A) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Consolidated Net Tangible Assets" of the Company means the aggregate
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) all current liabilities (excluding any
indebtedness for money borrowed having a maturity of less than 12 months from
the date of the most recent consolidated balance sheet of the Company but which
by its terms is renewable or extendible beyond 12 months from such date at the
option of the borrower) and (b) all goodwill, trade names, patents, unamortized
debt discount and expense and any other like intangibles, all as set forth on
the most recent consolidated balance sheet of the Company and computed in
accordance with generally accepted accounting principles.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A, that do not include the information called for by footnotes
1 and 2 thereof.
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement to exchange Series B Notes for Series A
Notes.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public
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Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession.
"Global Note" means, individually and collectively, the Regulation S
Global Note and the Rule 144A Global Note.
"Holder" means a holder of any of the Notes or a Person in whose name a
Definitive Note is registered on the books of the Registrar, or in whose name a
beneficial interest in a Global Note is recorded by the Trustee or the Note
Custodian.
"Indebtedness" of any Person means (without duplication), with respect to
any Person, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person and (iv) every obligation of the type referred to in
clauses (i) through (iii) of another Person the payment of which such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor,
guarantor or otherwise (but only, in the case of clause (iv), to the extent such
Person has guaranteed or is responsible or liable for such obligations). The
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value thereof, in the case of any Indebtedness that does not require current
payments of interest, and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Independent Investment Banker" means any of the Initial Purchasers and
its successors, selected by the Company.
"Initial Purchasers" mean Goldman, Sachs & Co., Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC.
"Interest Payment Date" means each June 15 and December 15.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security arrangement of any kind or nature whatsoever on
or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Maturity" when used in respect to any Note means the date on which the
principal of (and premium, if any) and interest on such Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or Redemption
Date and whether by declaration of acceleration, call for redemption or
otherwise.
"Notes" mean the Series A Notes and the Series B Notes.
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"Note Custodian" means custodian for the Depository of the Notes in global
form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Officers" Certificate" means a certificate signed by (i) the Chairman, a
Vice Chairman, the President, a Vice President or the Treasurer of the Company
and (ii) the Secretary or an Assistant Secretary of the Company and delivered to
the Trustee; provided, however, that such certificate may be signed by two of
the officers or directors listed in clause (i) above in lieu of being signed by
one of such officers or directors listed in such clause (i) and one of the
officers listed in clause (ii) above.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in TIA Section 314(e) to the
extent applicable.
"Outstanding" when used with respect to the Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except: (a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; (b) Notes, or portions thereof, for whose payment,
redemption or purchase money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in Trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Notes; provided that, if such
Notes are to redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Notes, except to the extent provided in Sections 8.02 and 8.03, with respect
to which the Company has effected defeasance or covenant defeasance as provided
in Article Eight; and (d) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture, other than any
such Notes in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Notes are held by a bona fide purchaser in
whose hands the Notes are valid obligations of the Company; provided, however,
that, in determining whether the Holders of the requisite principal amount of
Outstanding Notes have given any request, demand, authorization, notice,
direction, consent or waiver hereunder, Notes owned by the Company, or any other
obligor upon the Notes or any Affiliate of the Company, or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, notice, direction, consent or waiver, only Notes
which the Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Affiliate of the Company or such obligor.
"Permitted Liens" means (i) Liens on property of a corporation existing at
the time such corporation is merged into or consolidated with the Company or a
Principal Subsidiary or at the time of a sale, lease or other disposition of the
properties of such corporation (or a division thereof) as an entirety or
substantially as an entirety to the Company or a Principal Subsidiary, provided
that no such Lien as a result of such merger, consolidation, sale, lease or
other disposition is extended to property owned by the Company or such Principal
Subsidiary immediately prior thereto; (ii) Liens on property or shares of equity
interests or evidences of indebtedness of a corporation existing at the time
such corporation
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becomes a Principal Subsidiary; (iii) Liens securing Indebtedness of a Principal
Subsidiary to the Company or to another Principal Subsidiary; (iv) Liens on any
property created, assumed or otherwise brought into existence in contemplation
of the sale or other disposition of the underlying property, whether directly or
indirectly, by way of share disposition or otherwise, provided that the Company
must have disposed of such property within 180 days after the creation of such
Liens and that any Indebtedness secured by such Liens shall be without recourse
to the Company or any Subsidiary; (v) Liens in favor of the United States of
America or any State thereof, or any department, agency or instrumentality or
political subdivision thereof, to secure partial, progress, advance or other
payments; (vi) Liens to secure Indebtedness of joint ventures in which the
Company or a Principal Subsidiary has an interest, to the extent such Liens are
on property or assets of, or equity interests in, such joint ventures; (vii)
Liens for taxes, fees, assessments or other governmental charges that are not
delinquent or remain payable without penalty provided that no notice of lien has
been filed or recorded under the Uniform Commercial Code; (viii) carriers',
warehousemen's, mechanics', landlords', materialmen's, repairmen's or other
similar Liens arising in the ordinary course of business that are not delinquent
or remain payable without penalty; (ix) Liens (other than any Lien imposed by
ERISA) consisting of pledges or deposits required in the ordinary course of
business in connection with (A) workers' compensation, unemployment insurance
and other social security legislation and (B) insurance contracts, reinsurance
contracts, retrocession agreements and other similar agreements incurred in the
ordinary course of business (including, but not limited to, pledges or deposits
made in connection with letters of credit issued in connection therewith); (x)
Liens consisting of judgment or judicial attachment liens, provided that the
enforcement of such Liens is effectively stayed; (xi) easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business that, in the aggregate, are not substantial in amount, and that do not
in any case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of the Company and its
Principal Subsidiaries; (xii) deposits made by any Principal Subsidiary, or
other statutory Lien against the assets of any Principal Subsidiary, in each
case made or incurred in favor of policyholders of such Principal Subsidiary in
the ordinary business pursuant to insurance regulatory requirements; (xiii)
Liens arising solely by virtue of any statutory or common law provision relating
to banker's liens, rights of setoff or similar rights and remedies, in each case
as to deposit accounts or other funds maintained with a creditor depository
institution, provided that (A) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (B) such deposit account is not intended by the Company or
any Principal Subsidiary to provide collateral to the depository institution;
(xiv) Liens arising from Uniform Commercial Code financing statements regarding
leases; (xv) Liens or pledges or deposits of cash or securities made by any
Principal Subsidiary as a condition to obtaining or maintaining any licenses
issued to it by any applicable government authority; (xvi) Liens incurred in
connection with that certain Equipment Trust 1993-1 dated as of December 30,
1993 between American Re-Insurance and Continental Bank, N.A.; (xvii) Liens
incurred in the ordinary course of business on securities to secure repurchase
and reverse repurchase obligations in respect of such securities; (xviii) Liens
arising as a result of deposits made by the Company to defease the Company's 10
7/8 % Senior Subordinated Notes due 2004; and (xix) extension, renewal,
replacement or rebinding of any Lien existing on the date hereof or referred to
in clauses (i) to (iii) or clause (xvi), provided that the principal amount of
Indebtedness secured thereby and not otherwise authorized by clauses (i) to
(iii) or clause (xvi) shall not exceed the principal amount of Indebtedness,
plus any premium or fee payable in connection with any such extension, renewal,
replacement or refunding, so secured at the time of such extension, renewal,
replacement or refunding.
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"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal Subsidiary" means American Re-Insurance, or any other
Subsidiary of the Company which shall hereafter succeed by merger or otherwise
to a major part of the business of the Principal Subsidiary. The decision as to
whether a Subsidiary shall have succeeded to a major part of the Principal
Subsidiary shall be made in good faith by the Board of Directors of the Company
or a committee thereof by the adoption of a resolution so stating, and the
Company shall within 30 days of the date of the adoption of such resolution
deliver to the Trustee a copy thereof, certified by the Corporate Secretary or
the Assistant Corporate Secretary of the Company.
"Redemption Date ", when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
an Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issues (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of the Initial Purchasers and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer and notify the Trustee of the substitution.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 1996, by and among the Company and the other parties named
on the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.
"Regular Record Date " for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A, and that is
deposited with and registered in the name of the Depository or its nominee,
representing a series of Notes sold in reliance on Regulation S.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Rule 144A " means Rule 144A promulgated under the Securities Act.
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"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A, and that is
deposited with and registered in the name of the Depository, representing a
series of Notes sold in reliance on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Notes" means the 7.45% Senior Notes due 2026 issued pursuant to
this Indenture.
`Series B Notes" means the 7.45% Senior Notes due 2026 to be issued
pursuant to this Indenture in connection with the Exchange Offer.
"Special Record Date" means a date fixed by the Trustee for the payment of
any Defaulted Interest pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Note or any installment
of principal thereof or interest thereon, means the date specified in such Note
as the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"Subsidiary" means any Person a majority of the equity ownership or the
voting stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Treasury Yield" shall be determined by an Independent Investment Banker
and means, with respect to any redemption date, the rate per annum equal to the
semiannual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption
date.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"U.S. Government Obligations" means Notes that are (x) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (y) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended), as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S.
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Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Act"................................................ 1.07
"Accredited Investors"............................... 2.01
"Cedel Bank"......................................... 2.01
"Covenant Defeasance"................................ 8.03
"DTC"................................................ 2.03
"Euroclear".......................................... 2.01
"Event of Default"................................... 6.01
"Defeasance"......................................... 8.02
"Paying Agent"....................................... 2.03
"QIB"................................................ 2.01
"Registrar".......................................... 2.03
"Rule 144 A Global Notes"............................ 2.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligors upon
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules adopted
by the SEC from time to time.
SECTION 1.05. COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion (other than the certificates required by
Section 4.05(a)) with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.06. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion
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of, or representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.07. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to TIA Section 315) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by a Register kept by the
Registrar.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
any such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than the
date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Notes then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the Notes
then Outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other Act
by the Holders on such recorded date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Note shall bind every future Holder of the
same Note or the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything
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done, suffered or omitted to be done by the Trustee, any Paying Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof (subject to a
minimum initial purchase requirement of $100,000 for Notes sold other than in
reliance on Rule 144A or Regulation S).
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
(a) Global Notes. Notes offered and sold to qualified institutional buyers
as defined in Rule 144A ("QIBs") in reliance on Rule 144A shall be issued
initially in the form of one or more global notes in definitive, fully
registered form without coupons, (the "Rule 144A Global Note"), which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Depository or a Note Custodian, and registered in the name of the Depository or
a nominee of the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the Rule
144A Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depository or its nominee as
hereinafter provided.
Notes offered and sold in reliance on Regulation S shall be issued in the
form of one or more global notes in definitive, fully registered form without
coupons, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for the Depository, and
registered in the name of the Depository or the nominee of the Depository for
the accounts of designated agents holding on behalf of the Euroclear System
("Euroclear") or Cedel Bank, S.A. ("Cedel Bank"), duly executed by the Company
and authenticated by the Trustee as hereinafter provided. Prior to the 41st day
after the later of the commencement of the offering of the Notes and the date of
issuance of the Notes, beneficial interests in the Regulation S Global Notes may
be held only through Euroclear or Cedel Bank, unless delivery is made through a
144A Global Note. The "40-day restricted period" (as defined in Regulation S)
shall be terminated upon the receipt by the Trustee of (i) a written certificate
from the Depository, together with copies of certificates from Euroclear and
Cedel Bank certifying that they have received certification of non-United States
beneficial ownership of 100 % of the aggregate principal amount of the
Regulation S Global Notes (except to the extent of any beneficial owners thereof
who acquired an interest therein pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in one or more Rule 144A Global Notes, all as contemplated by Section
2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company. The
aggregate principal amount of the Regulation S Global Notes may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depository or its nominee, as the case may be, in connection with
transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time
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endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel Bank shall be
applicable to interests in the Regulation S Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to the
Rule 144A Global Notes and the Regulation S Global Notes deposited with or on
behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(b), authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depository or the nominee of the Depository and
(ii) shall be delivered by the Trustee to the Depository or pursuant to the
Depository's instructions or held by the Note Custodian.
Agent Members shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depository or by the Note
Custodian or under such Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
such Depository governing the exercise of the rights of an owner of a beneficial
interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form to a limited
number of institutional investors that qualify as accredited investors as
defined in Rule 510(a)(1), (2), (3) and (7) under the Securities Act, shall be
substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnote 1 thereto).
SECTION 2.02. EXECUTION, AUTHENTICATION, DELIVERY AND DATING
An Officer of the Company shall sign the Notes for the Company by manual
or facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer of the Company, authenticate Series A Notes for original issue up to the
aggregate principal amount of $500,000,000. The Trustee shall, upon a written
order of the Company signed by an Officer of the Company authenticate
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Series B Notes for original issue up to the aggregate principal amount of Series
A Notes exchanged in the Exchange Offer or otherwise exchanged for Series A
Notes pursuant to the terms of the Registration Rights Agreement. The aggregate
principal amount of Notes outstanding at any time may not exceed $500,000,000
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this lndenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days
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before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.06. Transfers of beneficial interests in the Global Notes
to Persons required to take delivery thereof in the form of an interest in
another Global Note shall be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at any
time, an owner of a beneficial interest in a Rule 144A Global Note deposited
with the Depository (or the Note Custodian) wishes to transfer its interest in
such Rule 144A Global Note to a Person who is required or permitted to take
delivery thereof in the form of an interest in a Regulation S Global Note, such
owner shall, subject to the Applicable Procedures, exchange or cause the
exchange of such interest for an equivalent beneficial interest in a Regulation
S Global Note as provided in this Section 2.06(a)(i). Upon receipt by the
Trustee of (1) instructions given in accordance with the Applicable Procedures
from an Agent Member directing the Trustee to credit or cause to be credited a
beneficial interest in the Regulation S Global Note in an amount equal to the
beneficial interest in the applicable Rule 144A Global Note to be exchanged, (2)
a written order given in accordance with the Applicable Procedures containing
information regarding the participant account of the Depository and the
Euroclear or Cedel Bank account to be credited with such increase, and (3) a
certificate in the form of Exhibit B-1 hereto given by the owner of such
beneficial interest stating that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S, then
the Trustee, as Registrar, shall instruct the Depository to reduce or cause to
be reduced the aggregate principal amount at maturity of the applicable Rule
144A Global Note and to increase or cause to be increased the aggregate
principal amount at maturity of the applicable Regulation S Global Note by the
principal amount at maturity of the beneficial interest in the Rule 144A Global
Note to be exchanged, to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the Regulation S
Global Note equal to the reduction in the aggregate principal amount at maturity
of the applicable Rule 144A Global Note, and to debit, or cause to be debited,
from the account of the Person making such exchange or transfer the beneficial
interest in the Rule 144A Global Note that is being exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If, at any
time, an owner of a beneficial interest in a Regulation S Global Note deposited
with the Depository or with the Note Custodian wishes to transfer its interest
in such Regulation S Global Note to a Person who is required or permitted to
take delivery thereof in the form of an interest in a Rule 144A Global Note,
such owner shall, subject to the Applicable Procedures, exchange or cause the
exchange of such interest for an equivalent beneficial interest in a Rule 144A
Global Note as provided in this Section 2.06(a)(ii). Upon receipt by the Trustee
of (1) instructions from Euroclear or Cedel Bank, if applicable, and the
Depository, directing the Trustee to credit or cause to be credited a beneficial
interest in the Rule 144A Global Note equal to the beneficial interest in the
Regulation S Global Note to be exchanged, such instructions to contain
information regarding the participant account with the Depository to be credited
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with such increase, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of the
Depository and (3) a certificate in the form of Exhibit B-2 attached hereto
given by the owner of such beneficial interest stating (A) if the transfer is
pursuant to Rule 144A, that the Person transferring such interest in a
Regulation S Global Note reasonably believes that the Person acquiring such
interest in a Rule 144A Global Note is a QIB and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and any
applicable blue sky or securities laws of any state of the United States, (B)
that the transfer complies with the requirements of Rule 144A under the
Securities Act and any applicable blue sky or securities laws of any state of
the United States or (C) if the transfer is pursuant to any other exemption from
the registration requirements of the Securities Act, that the transfer of such
interest has been made in compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance with the requirements of
the exemption claimed, such statement to be supported by an Opinion of Counsel
from the transferee or the transferor in form reasonably acceptable to the
Company and to the Trustee, then the Trustee, as Registrar, shall instruct the
Depository to reduce or cause to be reduced the aggregate principal amount at
maturity of such Regulation S Global Note and to increase or cause to be
increased the aggregate principal amount at maturity of the applicable Rule 144A
Global Note by the principal amount at maturity of the beneficial interest in
the Regulation S Global Note to be exchanged, and the Trustee, as Registrar,
shall instruct the Depository, concurrently with such reduction, to credit or
cause to be credited to the account of the Person specified in such instructions
a beneficial interest in the applicable Rule 144A Global Note equal to the
reduction in the aggregate principal amount at maturity of such Regulation S
Global Note and to debit or cause to be debited from the account of the Person
making such transfer the beneficial interest in the Regulation S Global Note
that is being transferred.
(b) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer Restricted
Security, such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification to that effect from such Holder (in substantially the
form of Exhibit B-3 hereto); or
(B) if such Transfer Restricted Security is being transferred to
a QIB in accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
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Securities Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Security is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto) and an Opinion of Counsel from
such Holder or the transferee reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with the Securities
Act.
(c) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.
(i) Any Person having a beneficial interest in a Global Note may upon
request, subject to the Applicable Procedures, exchange such beneficial interest
for a Definitive Note. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depository (or Euroclear
or Cedel Bank, as applicable), from the Depository or its nominee on behalf of
any Person having a beneficial interest in a Global Note, and, in the case of a
Transfer Restricted Security, the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification to that effect from such Person (in substantially the form of
Exhibit B-4 hereto); or
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the Securities Act, a
certification to that effect from the transferor (in substantially the form of
Exhibit B-4 hereto); or
(C) if the Person transferring the beneficial interest in the
Global Note is not the Initial Purchaser of such Global Note to be so
transferred and the transfer is other than (i) to the Company, (ii) to a Person
who the transferor reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A under the Securities Act, (iii) in an offshore
transaction in accordance with Rule 903 or 904 (as applicable) under the
Securities Act, or (iv) pursuant to an exemption from registration provided by
Rule 144 (if available) under the Securities Act, any additional documentation
or other evidence (including but not limited to a customary letter of
representations from the transferee and an opinion of counsel) as the Company
may, in its absolute discretion, require that the transfer is being made in
compliance with an applicable exemption from registration,
if such beneficial interest is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect from the transferor (in substantially the form of
Exhibit B-4 hereto) and an Opinion of Counsel from the transferee or transferor
reasonably acceptable to the Company and to the Registrar to the effect that
such transfer is in compliance with the Securities Act, the Company shall
execute and, the Trustee shall authenticate and deliver to the transferee a
Definitive Note in the appropriate principal amount.
Definitive Notes issued in exchange for a beneficial interest in a Global Note
pursuant to this Section 2.06(d) shall be registered in such names and in such
authorized denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Definitive Notes to the Persons in whose names such
Notes are so registered.
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(d) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provision of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.
(e) Transfer and Exchange of a Definitive Note for a Beneficial Interest
in a Global Note. A Definitive Note may not be exchanged for a beneficial
interest in a Global Note except, subject to the Applicable Procedures, upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, and, in the case of a Transfer
Restricted Security, the following additional information and documents (all of
which may be submitted by facsimile):
(i) if such beneficial interest is being transferred to the Person
designated by the Depository as being the beneficial owner, a certification to
that effect from such Person (in substantially the form of Exhibit B-5 hereto);
(ii) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the Securities Act, a
certification to that effect from the transferor (in substantially the form of
Exhibit B-5 hereto); or
(iii) if such beneficial interest is being transferred in reliance on
any other exemption from the registration requirements of the Securities Act, a
certification to that effect from the transferor (in substantially the form of
Exhibit B-5 hereto) and an Opinion of Counsel from the transferee or the
transferor reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act, the Trustee
shall cancel such Definitive Note in accordance with Section 2.1 1 hereof and
cause, or direct the Note Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Note
Custodian, the aggregate principal amount of Notes represented by the applicable
Global Note (e.g., the Rule 144A Global Note or the Regulation S Global Note, as
the case may be) to be increased accordingly. If none of the applicable Global
Notes are then outstanding, the Company shall execute and the Trustee shall
authenticate a new applicable Global Note in the appropriate principal amount.
(f) Authentication of Definitive Notes in Absence of Depository. If at any
time:
(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global Notes
and a successor Depository for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or
(ii) the Company at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under this
Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
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(i) Except as permitted by the following paragraphs (ii) and (iii),
each Note certificate evidencing Global Notes and Definitive Notes (and all
Notes issued in exchange therefor or substitution thereof) shall bear legends in
substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE
PURCHASER (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO THE
COMPANY OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) BY SUBSEQUENT INVESTORS AS SET FORTH IN (A) ABOVE AND, IN
ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Note that does not bear the legend
set forth in (i) above and rescind any restriction on the transfer of such
Transfer Restricted Security upon receipt of a certification from the
transferring holder substantially in the form of Exhibit B-3 hereto; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be required to
bear the legend set forth in (i) above, but shall continue to be subject to the
provisions of Section 2.06(a) and (b) hereof; provided, however, that with
respect to any request for an exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that does not bear the legend
set forth in (i) above, which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certification to be substantially in the
form of Exhibit B-3 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note) in
reliance on any exemption from the registration requirements of the Securities
Act (other than exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee provides an Opinion of
Counsel to the Company
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and the Registrar in form and substance reasonably acceptable to the Company and
the Registrar (which Opinion of Counsel shall also state that the transfer
restrictions contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Note that does not bear the legend
set forth in (i) above and rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be required to
bear the legend set forth in (i) above, but shall continue to be subject to the
provisions of Section 2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an authentication. order in accordance with Section
2.02 hereof, the Trustee shall authenticate Series B Notes in exchange for
Series A Notes accepted for exchange in the Exchange Offer, which Series B Notes
shall not bear the legend set forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of such Series B Notes, in each case
unless the Holder of such Series A Notes is either (A) a broker-dealer, (B) a
Person participating in the distribution of the Series A Notes or (C) a Person
who is an affiliate (as defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Notes and Global
Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.08 and 9.05 hereto).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Definitive Notes or Global
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required:
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(A) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before the day of
any selection of Notes for redemption under Section 3.03 hereof and ending at
the close of business on the day of selection; or
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes, and
neither the Trustee, any Agent nor the Company shall be affected by notice to
the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee shall authenticate a
replacement if the Trustee's requirements are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder that is sufficient
in the judgment of the Trustee and the Company to protect the Company, the
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Note is replaced. The Company may charge for any expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
and those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because an Issuer
or an Affiliate of an Issuer holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held
by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than an Issuer, a Subsidiary or an Affiliate of
any thereof) holds, on a redemption date or maturity date, money sufficient to
pay Notes payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue interest.
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SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by an
Issuer or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by an Officer of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes (subject to the record retention requirement of the Exchange Act
in accordance with its standard disposition policies in effect from time to
time). The Trustee shall deal with such canceled Notes in accordance with its
customary procedures. The Company may not issue new Notes to replace Notes that
it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date and interest on such defaulted
interest at the applicable interest rate borne by the Notes, to the extend
lawful (such defaulted interest (and interest thereon) herein collectively
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder; and
such Defaulted Interest may be paid by the Company, At its election in each
case, as provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall give the Trustee at least 15
days' written notice (unless a shorter period is acceptable to the Trustee) of
the amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the
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aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held by the
Trustee in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Subsection provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall not
be more than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date. In the name and at the expense of the Company, the Trustee
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Registrar, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Default Interest shall be paid to the Persons in whose names the Notes are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Subsection, such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company shall be made in
accordance with Section 3.08 and this Article.
SECTION 3.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section 3.08
Shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by it (unless a shorter notice period shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed.
SECTION 3.03. SECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the particular Notes or
portions thereof to be redeemed shall be selected not more than 60 days and not
less than 30 days prior to the Redemption Date by the Trustee, from the
Outstanding Notes not previously called for redemption, either pro rata, by lot
or by any other method the Trustee shall deem fair and reasonable, and the
amounts to be redeemed may be equal to $ 1,000 or any integral multiple thereof.
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The Trustee shall promptly notify the Company and the Registrar in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principle
amount of such Note which has been or is to be redeemed.
SECTION 3.04. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Notes to be redeemed, at his address appearing in the Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a Note to be redeemed in part, the principal
amount) of the particular Notes to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on or after said date;
(e) the places or places where such Notes are to be surrendered for
payment of the Redemption Price;
(f) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(g) the CUSIP number, if any, relating to such Notes, and
(h) in the case of a Note to be redeemed in part, the principal amount of
such Note to be redeemed and that after the Redemption Date upon surrender of
such Note, new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued.
Notice of Redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at its request, by the Trustee in the
name and at the expense of the Company.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its owning
Paying Agent, segregate and hold in trust as provided in Section 3.01) an amount
of money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Notes or portions thereof which are to be redeemed
on that date.
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SECTION 3.06. NOTES PAYABLE ON REDEMPTION DATE.
Notice of Redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall by payable to the Holders of such Notes,
registered as such on the relevant Regular Record Dates according to the terms
and the provisions of Section 2.12.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the Redemption Date at the rate borne by
such Note.
SECTION 3.07. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered at the
office or agency of the Company maintained for such purpose pursuant to Section
4.02 (with, if the Company, the Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company, the Registrar or the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Note, without
service charge to such Holder, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
SECTION 3.08. REDEMPTION.
(a) At the option of the Company, the Notes will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price equal
to the greater of (i) 100% of the principal amount of such Notes and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon discounted, on a semiannual basis, at the Treasury Yield plus
15 basis points, together with accrued interest, and Liquidated Damages, if any,
to the day of redemption, all as determined by an Independent Investment Banker,
as set forth in a certificate attached to the notice delivered by the Company to
the Trustee pursuant to Section 3.02.
(b) Any redemption pursuant to this Section 3.08 shall be made pursuant to
the provisions of Section 3.01 through 3.07 hereof.
SECTION 3.09. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain, in The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. Until otherwise designated by the Company, such office or agency in The
City of New York shall be State Street Bank and Trust Company, N.A., an
affiliate of the Trustee. The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
recession shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or recession
and any change in the location of any such office or agency.
SECTION 4.03. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (premium and Liquidated Damages, if
any) or interest on any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(premium and Liquidated Damages, if any) or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided,
and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes,
it will, on or before each due date of the principal of (premium and Liquidated
Damages, if any) or interest on any Notes, deposit with a Paying Agent a sum in
same day funds (or New York Clearing House funds if such deposit is made prior
to the date on which such deposit is required to be made) sufficient to pay the
principal (premium and Liquidated Damages, if any) or interest so becoming due
(or at the option of the Company, payment of interest and Liquidated Damages, if
any, may be mailed by check to the Holders
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of the Notes at their respective addresses set forth in the register of Holders
of Notes; provided that all payments with respect to Global Notes and Definitive
Notes, the holders of which have given wire transfer instructions to the Company
shall receive such payments of interest and Liquidated Damages by wire transfer
in same day funds) such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of
(premium and Liquidated Damages, if any) or interest on Notes in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(premium and Liquidated Damages, if any) or interest;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and
obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (premium and
Liquidated Damages, if any) or interest on any Note and remaining unclaimed for
two years after such principal (premium and Liquidated Damages, if any) or
interest has become due and payable shall be paid to the Company on Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication any
unclaimed balance of such money then remaining will be repaid to the Company.
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SECTION 4.04. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders and
to the Trustee (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information with the SEC for public
availability (unless the SEC will not accept such a filing) and shall promptly
make such information available to all securities analysts and prospective
investors who request it in writing. The Company shall at all times comply with
TIA ss. 314(a).
(b) For so long as any Transfer Restricted Securities remain outstanding,
the Company shall furnish to all Holders and prospective purchasers of the Notes
designated by the Holders of Transfer Restricted Securities, promptly upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
SECTION 4.05. STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT; PROVISION OF
FINANCIAL STATEMENTS.
(a) The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year ending after the date hereof, a brief certificate of its
principal executive officer, principal financial officer or principal accounting
officer stating whether, to such officer's knowledge, the Company is in
compliance with all covenants and conditions to be complied with by it under
this Indenture. For purposes of this Section 4.05, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) If a Default has occurred and is continuing, or if the Trustee, any
Holder or the trustee for or the holder of any other evidence of Indebtedness of
the Company (other than Indebtedness in the aggregate principal amount of less
than $25,000,000) gives any notice or takes any other action with respect to a
claimed default, the Company shall deliver to the Trustee an Officers'
Certificate specifying such Default, notice or other action within 5 Business
Days of its occurrence.
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any of its
Subsidiaries that could produce a material adverse effect on the consolidated
financial condition of the Company; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with GAAP.
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SECTION 4.07. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Principal Subsidiary to,
create or suffer to exist any Lien to secure any Indebtedness of the Company or
upon any shares of equity interests or evidences of Indebtedness issued by any
Principal Subsidiary and owned by the Company or any Principal Subsidiary
(whether such shares or evidences of Indebtedness were owned as of the date
hereof or thereafter issued or acquired), without making, or causing such
Principal Subsidiary to make, effective provision to secure all of the Notes
issued hereunder and then outstanding by such Lien, equally and ratably with any
and all other such Indebtedness thereby secured, so long as such other
Indebtedness is so secured, unless, after giving effect thereto, the sum of the
principal amount of Indebtedness secured by all Liens incurred after the date
hereof does not exceed (other than Permitted Liens) 10% of Consolidated Net
Tangible Assets of the Company. The foregoing restrictions shall not apply to
Indebtedness secured by Liens existing on the date hereof or to Permitted Liens.
SECTION 4.08. CORPORATE EXISTENCE.
Subject to Article Five, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Subsidiary of the Company and the corporate rights
(charter and statutory), corporate licenses and corporate franchises of the
Company and its Subsidiaries, except where a failure to do so, singly or in the
aggregate, is not likely to have a materially adverse effect upon the business,
assets, financial conditions or results of operations of the Company and the
Subsidiaries taken as a whole determined on a consolidated basis in accordance
with generally accepted accounting principles; provided that the Company shall
not be required to preserve any such existence (except of the Company), right,
license or franchise if the Board of Directors of the Company, or of the
Subsidiary concerned, shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company or such Subsidiary and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
ARTICLE 5
SUCCESSORS
SECTION 5.01. RESTRICTIONS ON MERGER.
The Company shall not consolidate with or merge with or into any other
Person or sell, lease or otherwise transfer its property and assets as, or
substantially as, an entirety to any Person, and the Company shall not permit
any Person to merge with or into or consolidate with the Company unless (i) (A)
the Company will be the resulting or surviving entity or (B) any successor or
purchaser is a corporation, partnership, limited liability company or trust
organized under the laws of the United States of America, any State or the
District of Columbia, and any such successor or purchaser expressly assumes the
Company's obligations on the Notes under a supplemental Indenture; (ii)
immediately after giving effect to the transaction no Event of Default, and no
event which after notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing; (iii) if, as a result of any
such transaction, property or assets of the Company or any Principal Subsidiary
would become subject to a Lien which would not be permitted by the limitation on
Liens contained herein, the Company or, if applicable, the successor to the
Company, as the case may be, shall take such steps as shall be necessary
effectively to secure the Notes issued hereunder equally and ratably with
Indebtedness secured by such Lien; and (iv) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture
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comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any sale, assignment, transfer, lease
or conveyance or other disposition of all or substantially all of the assets of
the Company in accordance with Section 5.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein. When a successor assumes all the
obligations of its predecessor under this Indenture and the Notes, the
predecessor will be released from those obligations, provided that in the case
of a transfer by lease, the predecessor corporation shall not be released from
the payment of principal and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT AND NOTICE THEREOF.
An "Event of Default" occurs if:
(a) the Company fails to pay principal of (or premium if any, on) any Note
when due;
(b) the Company fails to pay any interest or Liquidated Damages, if any,
on any Note when due, continued for 30 days;
(c) the Company fails to perform any other covenant or agreement of the
Company hereunder, continued for 90 days after written notice as provided
herein;
(d) (1) the Company or any Principal Subsidiary fails to pay Indebtedness
in an aggregate principal amount exceeding $20,000,000 at the later of (i) final
maturity or (ii) upon expiration of any applicable period of grace with respect
to such principal amount, and such failure to pay shall not have been cured by
the Company within 30 days after such failure, or (2) the acceleration of the
maturity of any Indebtedness of the Company or any Principal Subsidiary, having
an aggregate principal amount in excess of $20,000,000, if such Indebtedness is
not discharged, or such acceleration is not annulled, within 15 days after
written notice provided in accordance with Section 11.02 herein;
(e) a decree or order is entered by a court having jurisdiction in the
premises (i) for relief in respect of the Company or any Principal Subsidiary in
an involuntary case or proceeding under Bankruptcy Law or (ii) adjudging the
Company or any Principal Subsidiary a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or any Principal Subsidiary under Bankruptcy Law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Principal Subsidiary or of any
substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
(f) the Company or any Principal Subsidiary institutes a voluntary case or
proceeding under Bankruptcy Law or any other case or proceedings to be
adjudicated a bankrupt or insolvent, or the Company or any Principal Subsidiary
consents to the entry of a decree or order for relief in respect of the
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Company or any Principal Subsidiary in any involuntary case or proceeding under
Bankruptcy Law or to the institution of bankruptcy or insolvency proceedings
against the Company or any Principal Subsidiary, or the Company or any Principal
Subsidiary files a petition or answer or consent seeking reorganization or
relief under Bankruptcy Law, or consents to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of any of the
Company or any Principal Subsidiary or of any substantial part of its property,
or makes an assignment for the benefit of creditors, or admits in writing its
inability to pay its debts generally as they become due or takes corporate
action in furtherance of any such action.
SECTION 6.02. ACCELERATION OF MATURITY; RESCISSION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(e) or 6.01(f) with respect to the Company or any Principal
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25
% of the principal amount of the Notes then Outstanding, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all the Notes to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
shall become due and payable immediately. If an Event of Default specified in
Section 6.01(e) or 6.01(f) with respect to the Company or any Principal
Subsidiary occurs and is continuing, the amounts described above shall by such
fact itself become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or decree for
payment of the money due has been obtained by the Trustee, the Holders of at
least a majority in aggregate principal amount of the Notes Outstanding, by
written notice to the Company and the Trustee, may annul such declaration if (a)
the Company has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee under this Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Notes, (iii) the principal of and
premium, if any, on any Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the Notes
and (iv) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes; and (b) all Events of Default,
other than the non-payment of principal of the Notes which have become due
solely by the declaration of acceleration, have been waived as provided in
Section 6.04 or cured. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture -
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes; provided, however, that the Holders of at least a majority in
aggregate principal amount of the Notes Outstanding may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the outstanding
Notes shall have the right, subject to such provisions for indemnification of
the Trustee, to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee under the Indenture or exercising any
trust or power conferred on the Trustee with respect to the Notes. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Notes or that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of a Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to the Notes unless also the Holders of at least 25 % in
aggregate principal amount of the outstanding Notes shall have made written
request, and offered reasonable indemnity to the Trustee, to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in aggregate principal amount of the Notes Outstanding a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further
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amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article Six, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any, and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6. 10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its
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discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
SECTION 6.12. WAIVER OF STAY, EXTENSION OF USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, provided, that the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may otherwise deal with the Company with the same rights
it would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
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SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the direction of the Company under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA ss. 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it
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may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business (including the trust created
by this Indenture) to, another corporation, the successor corporation without
any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has, or is a wholly owned subsidiary of a bank holding
company that has, a combined capital and surplus of at least $100 million as set
forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 8.02 or Section 8.03 be
applied to all Outstanding Notes upon compliance with the conditions set forth
below in this Article Eight.
SECTION 8.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company shall be deemed to have been discharged from its
obligations with respect to all
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Outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Notes to receive solely from the trust fund described in Section
8.04 and as more fully set forth in such Section, payments in respect of the
principal of (and premium and Liquidated Damages, if any) and interest on such
Notes when such payments are due, or on the Redemption Date, as the case may be,
(B) the Company's obligations with respect to such Notes under Sections 2.10,
2.03, 2.07, 4.02 and 4.03, (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (D) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 with respect to the Notes.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company shall be released from its obligations under the
covenants contained in Articles Five and in Sections 4.07 with respect to the
Outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Notes shall thereafter
be deemed to be not "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for financial accounting purposes). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
default or an event of Default under Section 6.01(c) or Section 6.01(h), but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 of the option applicable to Section 8.03, Sections 6.01(c) through 6.01(d)
shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
8.02 or Section 8.03 to the Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article Eight applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (A) cash in
U.S. Dollars in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, cash in U.S. Dollars in an amount, or (C) a
combination thereof, in such
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amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge (i) the principal of (and premium and Liquidated Damages, if
any) and interest on the Outstanding Notes on the Stated Maturity or on
the applicable Redemption Date, as the case may be, of such principal or
installment of principal of (premium and Liquidated Damages, if any) or
interest and (ii) any mandatory sinking fund payments or analogous
payments applicable to the Outstanding Notes on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Notes; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes;
(2) In the case of an election under Section 8.02, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(3) In the case of an election under Section 8.03, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Holders of the Outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred;
(4) No Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
Subsection 6.01(e) or 6.01(f) is concerned, at any time in the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which the Company is bound;
(6) In the case of an election under either Section 8.02 or 8.03,
the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(7) in the case of an election under either Section 8.02 or 8.03,
the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election
under Section 8.02 or 8.03 was not made by the Company with the intent of
preferring the Holders over other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
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(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for relating to either the
defeasance under Section 8.02 or the covenant defeasance under Section
8.03 (as the case may be) have been complied with as contemplated by this
Section 8.04.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 4.03, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 8.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(l)), are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 8.02 or 8.03,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03, as the case may be; provided, however, that,. if the Company makes
any payment of principal of (or premium and Liquidated Damages, if any) or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
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(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article Five hereof;
(c) to make any change, including the addition of additional covenants and
agreements, that would provide any additional rights or benefits to the Holders
of the Notes or that does not adversely affect the legal rights hereunder of any
Holder of the Note in any material respect; or
(d) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA; or
(e) to provide for the appointment of successor trustees meeting the
requirements of Section 7.10.
Upon the request of the Company accompanied by resolutions of the Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel, the Trustee shall join with the Company in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Holding Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority of the
aggregate principal amount of the Notes Outstanding (including consents obtained
in connection with a tender offer or exchange offer for the Notes), and, subject
to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default
(other than a Default or Event of Default in the payment of the principal of,
premium or Liquidated Damages, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority of the aggregate principal amount of
the Notes Outstanding (including consents obtained in connection with a tender
offer or exchange offer for the Notes).
Upon the request of the Company accompanied by resolutions of the Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of an Officers' Certificate and an Opinion of Counsel, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
41
<PAGE>
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
(a) change the Stated Maturity of the principal of (or premium, if any) or
any installment of principal or interest, if any on any such Note;
(b) reduce the principal of amount of (or premium, if any) or the interest
rate, if any, on any such Note;
(c) reduce the amount of, or postpone the date fixed for, the payment of
any sinking fund or analogous obligation;
(d) waive a redemption payment with respect to any such Note;
(e) change the place or currency of payment of principal of (or premium or
Liquidated Damages, if any) or the interest, if any, on any such Note;
(f) impair the right to institute suit for the enforcement of any such
payment on or with respect to any such Note on or after the Stated Maturity (or,
in the case of redemption, on or after the Redemption Date);
(g) reduce the percentage of the principal amount of Notes Outstanding,
the consent of the Holders of which is necessary to modify or amend this
Indenture; or
(h) modify the foregoing requirements or reduce the percentage of Notes
Outstanding necessary to waive compliance with waivers of past Defaults or the
rights of Holders of Notes to receive payments of principal of or premium, if
any, on the Notes; or
(i) make any change in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
42
<PAGE>
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
ARTICLE 10
SATISFACTION AND DISCHARGE
SECTION 10.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of Notes
herein expressly provided for) and the Trustee, on demand of and at the expense
of the Company shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes which have been replaced or paid as provided in Section 2.07
and (ii) Notes for whose payment money has theretofore been
deposited in trust or seqregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 4.03, have been delivered to the Trustee for
cancellation; or
(2) all such Notes not theretofore delivered to the Trustee for
cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and the Company,
in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal (and
premium and Liquidated Damages, if any) and interest to the date of such deposit
(in the case of Notes which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that (i) all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material
43
<PAGE>
agreement or instrument to which the Company or any Principal Subsidiary is a
party or by which the Company or any Principal Subsidiary is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the obligation
of the Company to the Trustee under Section 7.07 and, if money shall have been
deposited with the Trustee pursuant to subclause (2) of Subsection (a) of this
Section, the obligations of the Trustee under Section 10.02 and the last
paragraph of Section 4.03 shall survive.
SECTION 10.02 APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section 4.03, all money
deposited with the Trustee pursuant to Section 10.01 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 10.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though on deposit had occurred pursuant to Section 10.01; provided
that if the Company has made any payment of principal of, premium and Liquidated
Damages, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government Obligations
held by the Trustee or Paying Agent.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. CONFLICT OF ANY PROVISION OF INDENTURE WITH TIA.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the TIA, or conflicts with any provision (an "incorporated
provision") required by or deemed to be included in this Indenture by operation
of such TIA Sections, such imposed duties or incorporated provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company:
American Re Corporation
555 College Road East
Princeton, New Jersey 08543
44
<PAGE>
Attention: Robert K. Burgess
Senior Vice President
General Counsel and Secretary
Facsimile: (609) 243-4992
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz, Esq.
Facsimile: (212) 455-2502
If to the Trustee:
State Street Bank & Trust Company
Two International Place
Fourth Floor
Boston, MA 02110
Attention: Corporate Trust Department (American
Re Corporation 7.45% Notes due 2026)
Facsimile: (617) 664-5365 or 5371
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
45
<PAGE>
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 1.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 1.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.05. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, any date established for
payment of Defaulted Interest pursuant to Section 2.12, or any Maturity with
respect to any Note shall not be a Business Day, then (notwithstanding any other
provisions of this Indenture or of the Notes) payment of interest or principle
(and premium, if any) need not be made on such date but may be made on the next
succeeding Business Day with the same force and effect as if made in the
Interest Payment Date or date established for payment of Defaulted Interest
pursuant to Section 2.12 or Maturity, and no interest shall accrue with respect
to such payment for the period from and after such Interest Payment Date or date
established for payment of Defaulted Interest pursuant to Section 2.12 or
Maturity, as the case may be, to the next succeeding Business Day.
SECTION 11.06. RESERVED
[Reserved]
SECTION 11.07. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting any of the Notes waives
and releases all such liability.
SECTION 11.08. GOVERNING LAW.
This Indenture and the Notes shall be governing by and construed in
accordance with the laws of the State of New York.
46
<PAGE>
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its respective successors and assigns, whether so expressed or not. All
covenants and agreements in this Indenture by the Trustee shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
47
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed in New York, New York as of the day and year first above written.
AMERICAN RE CORPORATION
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:___________________________________
Name:
Title:
48
<PAGE>
================================================================================
EXHIBIT A
(Face of Note)
================================================================================
7.45% Senior Notes due 2026
No. 029163AB8 $
AMERICAN RE CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of
Two Hundred Million Dollars on December 15, 2026.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: December 24, 1996
AMERICAN RE CORPORATION
By:___________________________________
Name:
Title:
(SEAL)
This is one of the 7.45% Senior Notes referred to in the within-mentioned
Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:________________________________
Authorized Signature
A-1-1
<PAGE>
(Back of Senior Note)
7.45% Senior Notes due 2026
Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Senior Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE SENIOR NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)
BY THE PURCHASER (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) (4) TO THE COMPANY OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT
INVESTORS AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SENIOR NOTES EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALES OF THE SENIOR NOTES.
A-1-2
<PAGE>
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. American Re Corporation, a Delaware corporation (the
"Company"); promises to pay interest on the principal amount of this Senior Note
at 7.45% per annum from December 24, 1996 until December 15, 2026 and shall pay
the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, semi-annually in arrears on June 15 and December
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the
Senior Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided that
if there is no existing Default in the payment of interest, and if this Senior
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be June 15, 1996. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate equal to
the per annum rate on the Senior Notes then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any, (without regard
to any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of the
Senior Notes represented by the Global Notes (including principal, premium,
interest and Liquidated Damages, if any) by wire transfer of immediately
available funds to the accounts specified by the Note Custodian or, at the
option of the Company, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders of the Senior Notes at their respective
addresses set forth in the register of Holders of Senior Notes; provided that
all payments with respect to the Global Notes and Definitive Notes (the Holders
of which have provided wire transfer instructions to the Company at least ten
business days prior to the applicable payment date), will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Senior Notes may be presented for registration of transfer
and exchange at the offices of the Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture dated
as of December 24, 1996 ("Indenture") between the Company and the Trustee. The
terms of the Senior Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Senior Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Senior Notes are senior unsecured obligations of
the Company limited to $500,000,000 in aggregate principal amount.
A-1-3
<PAGE>
5. OPTIONAL REDEMPTION.
(a) At the option of the Company, the Senior Notes will be redeemable in
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of the principal amount of such Senior
Notes and (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted, on a semiannual basis, at the
Treasury Yield plus 15 basis points, together with accrued interest, and
Liquidated Damages, if any, to the date of redemption.
(b) Any redemption pursuant to this paragraph shall be made pursuant to
the provisions of Section 3.01 through 3.08 of the Indenture.
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments with respect to the Senior Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes may be
redeemed in part but only in whole multiples of $1,000. On and after the
redemption date interest ceases to accrue on Senior Notes or portions thereof
called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof (subject to a minimum initial purchase requirement
of $100,000 for Senior Notes sold to institutional investors that qualify as
accredited investors as defined in Rule 501(a)(1), (2), (3) and (7) under the
Securities Act other than in reliance on Rule 144A or Regulation S). The
transfer of Senior Notes may be registered and Senior Notes may be exchanged as
provided in Article 2 of the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and, subject to the terms of the Indenture, any existing default
(other than a default in the payment of the principal of, premium and Liquidated
Damages, if any, or interest on, the Senior Notes) or compliance with any
provision of the Indenture or the Senior Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Senior
Notes. Without the consent of any Holder of a Senior Note, the Indenture or the
Senior Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes, to provide for the assumption of the
Company's obligations to Holders of the Senior Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not adversely affect
the legal rights under the Indenture of any such Holder,
A-1-4
<PAGE>
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to provide for the appointment
of a successor trustee in compliance with the requirements of Section 7.10 of
the Indenture.
11. DEFAULTS AND REMEDIES. An Event of Default occurs if: (i) the Company
fails to pay principal of (or premium if any, on) any Senior Note when due; (ii)
the Company fails to pay any interest or Liquidated Damages, if any, on any
Senior Note when due, continued for 30 days; (iii) the Company fails to perform
any other covenant or agreement of the Company hereunder, continued for 90 days
after written notice as provided herein; (iv) the Company or any Principal
Subsidiary fails to pay Indebtedness in an aggregate principal amount exceeding
$20,000,000 (i) at the later of final maturity or upon expiration of any
applicable period of grace with respect to such principal amount, and such
failure to pay shall not have been cured by Company within 30 days after such
failure, or (ii) acceleration of the maturity of any Indebtedness of the Company
or any Principal Subsidiary, having an aggregate principal amount in excess of
$20,000,000 if such Indebtedness is not discharged, or such acceleration is not
annulled, within 15 days after written notice provided in accordance with
Section 11.02 of the Indenture; (v) a decree or order is entered by a court
having jurisdiction in the premises (i) for relief in respect of the Company or
any Principal Subsidiary in an involuntary case or proceeding under Bankruptcy
Law or (ii) adjudging the Company or any Principal Subsidiary a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or any Principal Subsidiary under Bankruptcy Law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any Principal Subsidiary or of any
substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or (vi) the Company
or any Principal Subsidiary institutes a voluntary case or proceeding under
Bankruptcy Law or any other case or proceedings to be adjudicated a bankrupt or
insolvent, or the Company or any Principal Subsidiary consents to the entry of a
decree or order for relief in respect of the Company or any Principal Subsidiary
in any involuntary case or proceeding under Bankruptcy Law or to the institution
of bankruptcy or insolvency proceedings against the Company or any Principal
Subsidiary, or the Company or any Principal Subsidiary files a petition or
answer or consent seeking reorganization or relief under Bankruptcy Law, or
consents to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of any of the Company or any Principal Subsidiary or
of any substantial part of its property, or makes an assignment for the benefit
of creditors, or admits in writing its inability to pay its debts generally as
they become due or takes corporate action in furtherance of any such action. If
an Event of Default (other than an Event of Default specified in Section 6.01(e)
or 6.01(f) of the Indenture with respect to the Company or any Principal
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
of the principal amount of the Outstanding Senior Notes, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all the Senior Notes to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by the Holders), and upon any such declaration such
principal shall become due and payable immediately. If an Event of Default
specified in Section 6.01(e) or 6.01(f) of the Indenture with respect to the
Company or any Principal Subsidiary occurs and is continuing, the amounts
described above shall by such fact itself become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of not less than a majority in aggregate principal amount of
the Senior Notes Outstanding by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Senior Notes; provided, however, that the Holders of at least a
majority in aggregate
A-1-5
<PAGE>
principal amount of the then Senior Notes Outstanding may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration.
If a Default has occurred and is continuing, or if the Trustee, any Holder
or the trustee for or the holder of any other evidence of Indebtedness of the
Company (other than Indebtedness in the aggregate principal amount of less than
$20,000,000) gives any notice or takes any other action with respect to a
claimed default, the Company is required to deliver to the Trustee an Officers'
Certificate specifying such Default, notice or other action within 5 Business
Days of its occurrence.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, and may otherwise deal with the Company, as if it
were not the Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under these Senior Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting any of these Senior Notes waives and releases
all such liability.
14. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
16. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Senior Notes under the Indenture,
Holders of Transfer Restricted Securities shall have all the rights set forth in
the Registration Rights Agreement dated as of December 24, 1996, between the
Company and the parties named on the signature pages thereof.
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company have caused
CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Senior Notes
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
555 College Road East
Princeton, New Jersey 08543
Attention: President
Facsimile: (609) 243-4992
A-1-6
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign
and transfer this Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________to transfer this
Senior Note on the books of the Company. The Agent may substitute another to act
for him.
________________________________________________________________________________
Date: _____________________________ Your Signature:__________________________
(Sign exactly as your name appears on the Senior Note)
A-1-7
<PAGE>
SCHEDULE OF EXCHANGES OF SENIOR NOTES
The following exchanges of a part of this Global Note for other Notes have
been made:
Amount of Principal
increase Amount of
Amount of in Principal this Global
decrease in Amount Note
Principal of this Amount following Signature of
Amount of such authorized officer
Date of of this this Global decrease (or of Trustee of Note
Exchange Global Note Note increase) Custodian
- ----------- ------------ -------------- ------------ ------------------
A-1-8
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
4th Floor
Boston, Massachusetts 02110
Re: 7.45% Notes due 2026 of American Re Corporation
Reference is hereby made to the Indenture, dated as of December __, 1996
(the "Indenture"), among American Re Corporation (the "Company"), as Company and
State Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Notes which are
evidenced by one or more Rule 144A Global Notes (CUSIP No. ___________) and held
with the Depository in the name of _________________________________________
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of
an equal principal amount of Notes evidenced by one or more Regulation S Global
Notes (CUSIP No. __________), which amount, immediately after such transfer, is
to be held with the Depository through Euroclear or Cedel Bank or both (Common
Code____________________________).
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed and believes that the
transferee was outside the United States; or
(b) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
B-1-1
<PAGE>
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depository
through Euroclear or Cedel Bank or both (Common Code _____________).
Upon giving effect to this request to exchange a beneficial interest in
such Rule 144A Global Note or Accredited Institutional Investor Global Note for
a beneficial interest in a Regulation S Global Note, the resulting beneficial
interest shall be subject to the restrictions on transfer applicable to
Regulation S Global Notes pursuant to the Indenture and the Securities Act and,
if such transfer occurs prior to the end of the 40-day restricted period
associated with the initial offering of Notes, the additional restrictions
applicable to transfers of interest in the Regulation S Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC (collectively,
the "Purchasers"), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
_________________________________________
[Insert Name of Transferor]
By:______________________________________
Name:
Title:
Dated:
cc: American Re Corporation
Goldman, Sachs & Co.
B-1-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
4th Floor
Boston, Massachusetts 02110
Re: 7.45% Notes due 2026 of American Re Corporation
Reference is hereby made to the Indenture, dated as of December __, 1996
(the "Indenture"), among American Re Corporation (the "Company"), as Company and
State Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $_____________ principal amount of Notes which are
evidenced by one or more Regulation S Global Notes (CUSIP No. _____________) and
held with the Depository through Euroclear or Cedel Bank or both (Common Code
_______________________________) in the name of ________________________________
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of
an equal principal amount of Notes evidenced by one or more Rule 144A Global
Notes (CUSIP No. ____________), to be held with the Depository.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
|_| such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A;
or
|_| such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
|_| such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
B-2-1
<PAGE>
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes are
being transferred in compliance with the transfer restrictions applicable
to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in Rule 144A Global Notes
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC (collectively,
the "Purchasers"), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
_________________________________________
[Insert Name of Transferor]
By:______________________________________
Name:
Title:
Dated:
cc: American Re Corporation
Goldman, Sachs & Co.
B-2-2
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
4th Floor
Boston, Massachusetts 02110
Re: 7.45% Notes due 2026 of American Re Corporation
Reference is hereby made to the Indenture, dated as of December __,1996
(the "Indenture"), among American Re Corporation (the "Company") and State
Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Notes which are
evidenced by one or more Definitive Notes (CUSIP No.: __________) and registered
with the Registrar in the name of __________________________________________
(the "Transferor"). The Transferor has requested an exchange or transfer of such
Definitive Note(s) in the form of an equal principal amount of Notes evidenced
by one or more Definitive Notes (CUSIP No. ___________), to be delivered to the
Transferor or, in the case of a transfer of such Notes, to such Person as the
Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
|_| the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
|_| the Surrendered Notes are being transferred to the Company;
or
|_| Surrendered Notes are being transferred pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person
that the Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person
and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
B-3-1
<PAGE>
|_| the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
|_| the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes are
being transferred in compliance with the transfer restrictions applicable
to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC (collectively,
the "Purchasers"), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
________________________________________
[Insert Name of Transferor]
By:_____________________________________
Name:
Title:
Dated:
cc: American Re Corporation
Goldman, Sachs & Co.
B-3-2
<PAGE>
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM RULE 144A GLOBAL NOTE OR
REGULATION S GLOBAL NOTE TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
4th Floor
Boston, Massachusetts 02110
Re: 7.45% Notes due 2026 of American Re Corporation
Reference is hereby made to the Indenture, dated as of December __, 1996
(the "Indenture"), among American Re Corporation (the "Company"), as Company and
State Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by one or more (check one) Rule 144A Global Notes (CUSIP No.
__________) or Regulation S Global Notes (CUSIP No. __________) and held with
the Depository through Euroclear or Cedel Bank or both in the name of
__________________________________________ (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in the Notes to a Person
who will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Definitive Notes (CUSIP No. __________), to be
registered with the Registrar in the name of
- --------------------.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
|_| the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
|_| the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person
that the Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person
and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
B-4-1
<PAGE>
|_| the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
|_| the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes are
being transferred in compliance with the transfer restrictions applicable
to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC (collectively,
the "Purchasers"), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
________________________________________
[Insert Name of Transferor]
By:_____________________________________
Name:
Title:
Dated:
cc: American Re Corporation
Goldman, Sachs & Co.
B-4-2
<PAGE>
EXHIBIT B-5
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM DEFINITIVE NOTE TO RULE 144A GLOBAL NOTE OR
REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(e) of the Indenture)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place
4th Floor
Boston, Massachusetts 02110
Re: 7.45% Notes due 2026 of American Re Corporation
Reference is hereby made to the Indenture, dated as of December __, 1996
(the "Indenture"), among American Re Corporation (the "Company") and State
Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Notes which are
evidenced by one or more Definitive Notes (CUSIP No. __________) and registered
with the Registrar in the name of _________________________________________ (the
"Transferor"). The Transferor has requested a transfer of such Definitive Notes
to a Person who will take delivery thereof in the form of an equal beneficial
interest in Global Notes evidenced by one or more (check one) Rule 144A Global
Notes (CUSIP No. __________) or Regulation S Global Notes (CUSIP No.
__________), which amount, immediately after such transfer, is to be held with
the Depository through Euroclear or Cedel Bank or both (Common
Code______________________________).
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
|_| the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
|_| the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person
that the Transferor reasonably believes is purchasing the Surrendered
Notes for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person
and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
B-5-1
<PAGE>
|_| the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
|_| the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes are
being transferred in compliance with the transfer restrictions applicable
to the Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
or
|_| such transfer is being effected pursuant to and in accordance with Rule
903 or Rule 904 under the Securities Act, and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed and believes that the
transferee was outside the United States; or
(b) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depository
through Euroclear or Cedel Bank or both (Common Code _____________).
Upon giving effect to this request to exchange a Definitive Note for a
beneficial interest in such Rule 144A Global Note or Regulation S Global
Note, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to the
end of the 40-day restricted period
B-5-2
<PAGE>
associated with the initial offering of Notes, the additional restrictions
applicable to transfers of interest in the Regulation S Global Note.
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co., Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc., Smith Barney Inc. and UBS Securities LLC (collectively,
the "Purchasers"), the initial purchasers of such Notes being transferred. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
________________________________________
[Insert Name of Transferor]
By:_____________________________________
Name:
Title:
Dated:
cc: American Re Corporation
Goldman, Sachs & Co.
B-5-3
<PAGE>
________________________________________________________________________________
EXHIBIT 4.2
(Face of Note)
________________________________________________________________________________
7.45% Senior Notes due 2026, Series B
No. $
AMERICAN RE CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of
_____ Million Dollars on December 15, 2026.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: February __, 1997
AMERICAN RE CORPORATION
By:
-------------------------------------
Name:
Title:
(SEAL)
This is one of the 7.45%
Senior Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
--------------------------------------------
Authorized Signature
<PAGE>
(Back of Senior Note)
7.45% Senior Notes due 2026, Series B
Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Senior Note may be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. American Re Corporation, a Delaware corporation (the
"Company"); promises to pay any interest on the principal amount of this Senior
Note at 7.45% per annum from ______________, 1997 until December 15, 2026 and
shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, semi-annually in arrears on June 15 and December
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "INTEREST PAYMENT DATE"). Interest on the
Senior Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; PROVIDED that
if there is no existing Default in the payment of interest, and if this Senior
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest
Payment Date shall be June 15, 1997. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate equal to
the per annum rate on the Senior Notes then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any, (without regard
to any applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of the
Senior Notes represented by the Global Notes (including principal, premium,
interest and Liquidated Damages, if any) by wire transfer of immediately
available funds to the accounts specified by the Note Custodian or, at the
option of the Company, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders of the Senior Notes at their respective
addresses set forth in the register of Holders of Senior Notes; PROVIDED that
all payments with respect to the Global Notes and Definitive Notes (the Holders
of which have provided wire transfer instructions to the Company at least ten
business days prior to the applicable payment date), will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Senior Notes may be presented for registration of transfer and
exchange at the offices of the Registrar. The Company may change any Paying
2
<PAGE>
Agent or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture dated
as of December 24, 1996 ("INDENTURE") between the Company and the Trustee. The
terms of the Senior Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Senior Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Senior Notes are senior unsecured obligations of
the Company limited to $500,000,000 in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) At the option of the Company, the Senior Notes will be redeemable in
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of the principal amount of such Senior
Notes and (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted, on a semiannual basis, at the
Treasury Yield plus 15 basis points, together with accrued interest, and
Liquidated Damages, if any, to the date of redemption.
(b) Any redemption pursuant to this paragraph shall be made pursuant to the
provisions of Section 3.01 through 3.08 of the Indenture.
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments with respect to the Senior Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes may be
redeemed in part but only in whole multiples of $1,000. On and after the
redemption date interest ceases to accrue on Senior Notes or portions thereof
called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof (subject to a minimum initial purchase requirement
of $100,000 for Senior Notes sold to institutional investors that qualify as
accredited investors as defined in Rule 501(a)(1), (2), (3) and (7) under the
Securities Act other than in reliance on Rule 144A or Regulation S). The
transfer of Senior Notes may be registered and Senior Notes may be exchanged as
provided in Article 2 of the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in
3
<PAGE>
principal amount of the then outstanding Senior Notes, and, subject to the terms
of the Indenture, any existing default (other than a default in the payment of
the principal of, premium and Liquidated Damages, if any, or interest on, the
Senior Notes) or compliance with any provision of the Indenture or the Senior
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Senior Notes. Without the consent of any Holder
of a Senior Note, the Indenture or the Senior Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Company's obligations to Holders of
the Senior Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Senior
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the TIA or to provide for
the appointment of a successor trustee in compliance with the requirements of
Section 7.10 of the Indenture.
11. DEFAULTS AND REMEDIES. An Event of Default occurs if: (i) the Company
fails to pay principal of (or premium if any, on) any Senior Note when due; (ii)
the Company fails to pay any interest or Liquidated Damages, if any, on any
Senior Note when due, continued for 30 days; (iii) the Company fails to perform
any other covenant or agreement of the Company hereunder, continued for 90 days
after written notice as provided herein; (iv) the Company or any Principal
Subsidiary fails to pay Indebtedness in an aggregate principal amount exceeding
$20,000,000 (i) at the later of final maturity or upon expiration of any
applicable period of grace with respect to such principal amount, and such
failure to pay shall not have been cured by Company within 30 days after such
failure, or (ii) acceleration of the maturity of any Indebtedness of the Company
or any Principal Subsidiary, having an aggregate principal amount in excess of
$20,000,000 if such Indebtedness is not discharged, or such acceleration is not
annulled, within 15 days after written notice provided in accordance with
Section 11.02 of the Indenture; (v) a decree or order is entered by a court
having jurisdiction in the premises (i) for relief in respect of the Company or
any Principal Subsidiary in an involuntary case or proceeding under Bankruptcy
Law or (ii) adjudging the Company or any Principal Subsidiary a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or any Principal Subsidiary under Bankruptcy Law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any Principal Subsidiary or of any
substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or (vi) the Company
or any Principal Subsidiary institutes a voluntary case or proceeding under
Bankruptcy Law or any other case or proceedings to be adjudicated a bankrupt or
insolvent, or the Company or any Principal Subsidiary consents to the entry of a
decree or order for relief in respect of the Company or any Principal Subsidiary
in any involuntary case or proceeding under Bankruptcy Law or to the institution
of bankruptcy or insolvency proceedings against the Company or any Principal
Subsidiary, or the Company or any Principal Subsidiary files a petition or
answer or consent seeking reorganization or relief under Bankruptcy Law, or
consents to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of any of the Company or any Principal Subsidiary or
of any substantial part of its property, or makes an assignment for the benefit
of creditors, or admits in writing its inability to pay its debts generally as
they become due or takes corporate action in furtherance of any such action. If
an Event of Default (other than an Event of Default specified in Section 6.01(e)
or 6.01(f) of the Indenture with respect to the Company or any Principal
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25%
of the principal amount of the Outstanding Senior Notes, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all the Senior Notes to
be due and payable immediately, by
4
<PAGE>
a notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal shall become due and payable
immediately. If an Event of Default specified in Section 6.01(e) or 6.01(f) of
the Indenture with respect to the Company or any Principal Subsidiary occurs and
is continuing, the amounts described above shall by such fact itself become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder. The Holders of not less than a majority in
aggregate principal amount of the Senior Notes Outstanding by notice to the
Trustee may on behalf of the Holders of all of the Senior Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Senior Notes;
PROVIDED, HOWEVER, that the Holders of at least a majority in aggregate
principal amount of the then Senior Notes Outstanding may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration.
If a Default has occurred and is continuing, or if the Trustee, any Holder
or the trustee for or the holder of any other evidence of Indebtedness of the
Company (other than Indebtedness in the aggregate principal amount of less than
$20,000,000) gives any notice or takes any other action with respect to a
claimed default, the Company is required to deliver to the Trustee an Officers'
Certificate specifying such Default, notice or other action within 5 Business
Days of its occurrence.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company, and may otherwise deal with the Company, as if it were not the
Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under these Senior Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting any of these Senior Notes waives and releases
all such liability.
14. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Senior Notes
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
555 College Road East
Princeton, New Jersey 08543
Attention: President
Facsimile: (609) 243-4992
5
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________ to transfer this Senior Note
on the books of the Company. The Agent may substitute another to act for him.
________________________________________________________________________________
Date:________________________________________ Your
Signature:________________________________________
(Sign exactly as your name appears on the Senior Note)
6
<PAGE>
SCHEDULE OF EXCHANGES OF SENIOR NOTES
The following exchanges of a part of this Global Note for other Notes have been
made:
<TABLE>
<S> <C> <C> <C> <C>
Amount of increase Principal Amount of Signature of
Amount of decrease in Principal Amount this Global Note authorized officer
in Principal Amount of this Amount of following such a decrease of Trustee of
Date of Exchange of this Global Note this Global Note (or increase) Note Custodian
- -------------------- -------------------- -------------------- -------------------------- --------------------
7
</TABLE>
<PAGE>
________________________________________________________________________________
EXHIBIT 4.3
(Face of Note)
________________________________________________________________________________
7.45% Senior Notes due 2026, Series A
No. $
AMERICAN RE CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of
_____ Million Dollars on December 15, 2026.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: December 24, 1996
AMERICAN RE CORPORATION
By:
--------------------------------
Name:
Title:
(SEAL)
This is one of the 7.45%
Senior Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
----------------------------------
Authorized Signature
<PAGE>
(Back of Senior Note)
7.45% Senior Notes due 2026, Series A
Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Senior Note may be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE SENIOR NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) BY THE PURCHASER (1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) (4)
TO THE COMPANY OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT INVESTORS AS SET FORTH
IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SENIOR NOTES
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALES OF THE SENIOR NOTES.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. American Re Corporation, a Delaware corporation (the
Company"); promises to pay any interest on the principal amount of this Senior
Note at 7.45% per annum from December 24, 1996 until December 15, 2026 and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated
2
<PAGE>
Damages, if any, semi-annually in arrears on June 15 and December 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "INTEREST PAYMENT DATE"). Interest on the Senior Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; PROVIDED that if there is no existing
Default in the payment of interest, and if this Senior Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be
June 15, 1997. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate equal to the per annum rate on the
Senior Notes then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of the
Senior Notes represented by the Global Notes (including principal, premium,
interest and Liquidated Damages, if any) by wire transfer of immediately
available funds to the accounts specified by the Note Custodian or, at the
option of the Company, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders of the Senior Notes at their respective
addresses set forth in the register of Holders of Senior Notes; PROVIDED that
all payments with respect to the Global Notes and Definitive Notes (the Holders
of which have provided wire transfer instructions to the Company at least ten
business days prior to the applicable payment date), will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Senior Notes may be presented for registration of transfer and
exchange at the offices of the Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture dated
as of December 24, 1996 ("INDENTURE") between the Company and the Trustee. The
terms of the Senior Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Senior Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Senior Notes are senior unsecured obligations of
the Company limited to $500,000,000 in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) At the option of the Company, the Senior Notes will be redeemable in
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of the principal amount of such Senior
Notes and (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted, on a semiannual basis, at the
Treasury Yield plus 15 basis points, together with accrued interest, and
Liquidated Damages, if any, to the date of redemption.
(b) Any redemption pursuant to this paragraph shall be made pursuant to the
provisions of Section 3.01 through 3.08 of the Indenture.
3
<PAGE>
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments with respect to the Senior Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes may be
redeemed in part but only in whole multiples of $1,000. On and after the
redemption date interest ceases to accrue on Senior Notes or portions thereof
called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof (subject to a minimum initial purchase requirement
of $100,000 for Senior Notes sold to institutional investors that qualify as
accredited investors as defined in Rule 501(a)(1), (2), (3) and (7) under the
Securities Act other than in reliance on Rule 144A or Regulation S). The
transfer of Senior Notes may be registered and Senior Notes may be exchanged as
provided in Article 2 of the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Senior Note or portion of a Senior Note
selected for redemption, except for the unredeemed portion of any Senior Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Notes for a period of 15 days before a selection of Senior Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and, subject to the terms of the Indenture, any existing default
(other than a default in the payment of the principal of, premium and Liquidated
Damages, if any, or interest on, the Senior Notes) or compliance with any
provision of the Indenture or the Senior Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Senior
Notes. Without the consent of any Holder of a Senior Note, the Indenture or the
Senior Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes, to provide for the assumption of the
Company's obligations to Holders of the Senior Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not adversely affect
the legal rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA or to provide for the appointment of a successor trustee
in compliance with the requirements of Section 7.10 of the Indenture.
11. DEFAULTS AND REMEDIES. An Event of Default occurs if: (i) the Company
fails to pay principal of (or premium if any, on) any Senior Note when due; (ii)
the Company fails to pay any interest or Liquidated Damages, if any, on any
Senior Note when due, continued for 30 days; (iii) the Company fails to perform
any other covenant or agreement of the Company hereunder, continued for 90 days
after written notice as provided herein; (iv) the Company or any Principal
Subsidiary fails to pay Indebtedness in an aggregate principal amount exceeding
$20,000,000 (i) at the later of final maturity or upon expiration of any
applicable period of grace with respect to such principal amount, and such
failure to pay shall not
4
<PAGE>
have been cured by Company within 30 days after such failure, or (ii)
acceleration of the maturity of any Indebtedness of the Company or any Principal
Subsidiary, having an aggregate principal amount in excess of $20,000,000 if
such Indebtedness is not discharged, or such acceleration is not annulled,
within 15 days after written notice provided in accordance with Section 11.02 of
the Indenture; (v) a decree or order is entered by a court having jurisdiction
in the premises (i) for relief in respect of the Company or any Principal
Subsidiary in an involuntary case or proceeding under Bankruptcy Law or (ii)
adjudging the Company or any Principal Subsidiary a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Principal Subsidiary under Bankruptcy Law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Principal Subsidiary or of any
substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or (vi) the Company
or any Principal Subsidiary institutes a voluntary case or proceeding under
Bankruptcy Law or any other case or proceedings to be adjudicated a bankrupt or
insolvent, or the Company or any Principal Subsidiary consents to the entry of a
decree or order for relief in respect of the Company or any Principal Subsidiary
in any involuntary case or proceeding under Bankruptcy Law or to the institution
of bankruptcy or insolvency proceedings against the Company or any Principal
Subsidiary, or the Company or any Principal Subsidiary files a petition or
answer or consent seeking reorganization or relief under Bankruptcy Law, or
consents to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of any of the Company or any Principal Subsidiary or
of any substantial part of its property, or makes an assignment for the benefit
of creditors, or admits in writing its inability to pay its debts generally as
they become due or takes corporate action in furtherance of any such action. If
an Event of Default (other than an Event of Default specified in Section 6.01(e)
or 6.01(f) of the Indenture with respect to the Company or any Principal
Subsidiary occurs and is continuing, the Trustee or the Holders of at least 25%
of the principal amount of the Outstanding Senior Notes, by written notice to
the Company (and to the Trustee if such notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all the Senior Notes to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by the Holders), and upon any such declaration such
principal shall become due and payable immediately. If an Event of Default
specified in Section 6.01(e) or 6.01(f) of the Indenture with respect to the
Company or any Principal Subsidiary occurs and is continuing, the amounts
described above shall by such fact itself become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of not less than a majority in aggregate principal amount
of the Senior Notes Outstanding by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Senior Notes; PROVIDED, HOWEVER, that the Holders of at least a
majority in aggregate principal amount of the then Senior Notes Outstanding may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration.
If a Default has occurred and is continuing, or if the Trustee, any Holder
or the trustee for or the holder of any other evidence of Indebtedness of the
Company (other than Indebtedness in the aggregate principal amount of less than
$20,000,000) gives any notice or takes any other action with respect to a
claimed default, the Company is required to deliver to the Trustee an Officers'
Certificate specifying such Default, notice or other action within 5 Business
Days of its occurrence.
5
<PAGE>
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company, and may otherwise deal with the Company, as if it were not the
Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under these Senior Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting any of these Senior Notes waives and releases
all such liability.
14. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
16. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Senior Notes under the Indenture,
Holders of Transfer Restricted Securities shall have the rights set forth in the
Registration Rights Agreement dated as of December 24, 1996, between the Company
and the parties named on the signature pages thereof.
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Senior Notes
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
555 College Road East
Princeton, New Jersey 08543
Attention: President
Facsimile: (609) 243-4992
6
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________ to transfer this Senior Note on
the books of the Company. The Agent may substitute another to act for him.
________________________________________________________________________________
Date:___________________________________ Your
Signature:__________________________________
(Sign exactly as your name appears on the Senior Note)
7
<PAGE>
SCHEDULE OF EXCHANGES OF SENIOR NOTES
The following exchanges of a part of this Global Note for other Notes have been
made:
<TABLE>
<S> <C> <C> <C> <C>
Amount of increase Principal Amount of Signature of
Amount of decrease in Principal Amount of this Global Note authorized officer
in Principal Amount of this Amount of following such decrease of Trustee of
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
- -------------------- -------------------- -------------------- ----------------------- ------------------
</TABLE>
8
<PAGE>
Exhibit 4.4
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of December 24, 1996
by and among
American Re Corporation
and
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette
Securities Corporation
J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
Smith Barney Inc.
UBS Securities LLC
================================================================================
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and entered
into as of December 24, 1996 by and among American Re Corporation (the
"Company") and Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, Salomon Brothers Inc, Smith
Barney Inc. and UBS Securities LLC (the "Purchasers"), who have agreed to
purchase the 7.45% Senior Notes due 2026 of the Company (the "Senior Notes")
under the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated December
19, 1996 (the "Purchase Agreement"), by and among the Company and the
Purchasers. In order to induce the Purchasers to purchase the Senior Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Purchasers set forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Senior Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Senior Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The 7.45% Senior Notes due 2026 of the Company (referred
to in the Indenture as the "Series B Notes") to be issued pursuant to the
Indenture in the Exchange Offer.
Exchange Offer: The offers made by the Company to the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities held
1
<PAGE>
by such Holders for Exchange Notes in an aggregate principal amount equal to the
outstanding aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders, pursuant to the Exchange Offer
Registration Statement.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Purchasers propose to sell
the Senior Notes in the United States to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, and to certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Act ("Accredited Institutions") and
outside the United State to non- U.S. persons in reliance on Regulation S under
the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of December 24, 1996, among the Company
and State Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to
which the Senior Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Senior Notes and the Exchange Notes.
Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Purchasers: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registrar: Means the Registrar of the Notes as defined in the Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company filed
under the Exchange Act with the Commission relating to (a) an offering of
Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale
of Transfer Restricted Securities pursuant to the Shelf Registration Statement,
which is filed pursuant to the provisions of this Agreement, in each case,
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
2
<PAGE>
Senior Notes: As defined in the preamble hereto.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Senior Note, until (i) the date on
which such Senior Note has been exchanged by a person other than a broker-dealer
for an Exchange Note in the Exchange Offer, (ii) following the exchange by a
broker-dealer in the Exchange Offer of a Senior Note for an Exchange Note, the
date on which such Exchange Note is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Senior Note has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (iv) the date
on which such Senior Note is distributed to the public pursuant to Rule 144
under the Securities Act.
Underwritten Registration or Underwritten Offering: A registration under
the Act in which securities of the Company are sold to one or an underwriter for
reoffering to the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company shall (i) use its reasonable efforts to
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 45 days after the Closing Date, a Registration
Statement under the Act relating to the Exchange Notes and the Exchange Offer,
(ii) use its best efforts to cause such Registration Statement to become
effective no later than 180 days after the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) within 10
business days of the effectiveness of such Registration Statement, commence the
Exchange Offer. The Exchange Offer Registration Statement shall be on the
appropriate form permitting registration of the Exchange Notes to be offered in
exchange for the Transfer Restricted Securities.
3
<PAGE>
(b) The Company shall cause the Exchange Offer Registration Statement to
be effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Notes shall be included in the Exchange Offer
Registration Statement. The Company shall use its best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement that any
Broker-Dealer who holds Senior Notes that are Transfer Restricted Securities and
that were acquired for its own account as a result of market-making activities
or other trading activities (other than Transfer Restricted Securities acquired
directly from an Issuer), may exchange such Senior Notes pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and may be required, therefore, to deliver a
prospectus meeting the requirements of the Act in connection with any sales of
the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such resales by Broker-Dealers that the Commission
may require in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(b) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of no greater
than 180 days after the consummation of the Exchange Offer.
The Company shall promptly provide sufficient copies of the latest version
of such Prospectus to Broker-Dealers promptly upon request, at any time during
such one year period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or permitted to Consummate the Exchange
Offer, in either case, because the Exchange Offer is not permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer
4
<PAGE>
Registration Statement is not appropriate or available for such resales by such
Holder, or (iii) if any Holder of Transfer Restricted Securities is a
Broker-Dealer and owns Senior Notes that has or that have or are reasonably
determined to have the status of an unsold allotment in an initial distribution
and shall so notify the Company, then, the Company shall
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 90th day after
the date on which the Company is notified by the Commission or otherwise
determines that it is not required to file the Exchange Offer Registration
Statement or permitted to Consummate the Exchange Offer, (2) the 45th day
after the date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clauses (ii) or (iii)
above, and (3) the 45th day after the Closing Date (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration Statement
shall provide for resales of all Transfer Restricted Securities the
Holders of which shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) use its best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission on or before the 180th day
after the Shelf Filing Deadline.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 6(b) hereof to the extent necessary to ensure that it is
available for resales of Notes by the Holders of Transfer Restricted Securities
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, until the third
anniversary of the Closing Date or such shorter period that will terminate when
all the Notes covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or become eligible for resale
pursuant to Rule 144 without volume or other restrictions; provided that the
Company may allow the Shelf Registration Statement to cease to be effective and
usable for a period of up to four weeks during any 360-day period if (i) the
Board of Directors of the Company determines in good faith that such action is
in the best interests of the Company and the Company notifies the Holders within
five days after the Board of Directors makes such determination or (ii) the
prospectus contained in the Shelf Registration Statement contains an untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made not misleading; provided, further that in the event that the Company
causes the Shelf Registration Statement to cease to be effective pursuant to the
preceding proviso, the Company will cause the effectiveness of the Shelf
Registration Statement to be extended by the number of days during which such
registration statement was not effective or usable.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such reasonably requested information. Each
Holder as to which any Shelf
5
<PAGE>
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) the Registration Statement required by this Agreement is not filed
with the Commission on or prior to the date specified for such filing in this
Agreement, (ii) such Registration Statement has not been declared effective by
the Commission on or prior to the date specified for such effectiveness in this
Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has not
been Consummated within 30 business days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) subject the
provisions of the last paragraph of Section 4(a), any Registration Statement
required by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose without
being succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company hereby agrees to pay liquidated damages to
each Holder of Transfer Restricted Securities with respect to the first 90-day
period immediately following the occurrence of such Registration Default, in an
amount equal to $.05 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. Notwithstanding anything to the contrary set forth
herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (i) above, (2)
upon the effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued Liquidated Damages will be paid by the Company in cash on each
Damages Payment Date to the Holders of the Global Note or Notes and any holder
of Definitive Notes (as defined in the Indenture) who has given wire transfer
instructions to the Company at least ten business days prior to the Damages
Payment Date by wire transfer of immediately available funds and to all other
holders of Definitive Notes by mailing checks to their registered addresses.
All obligations of the Company set forth in the preceding paragraph that
are outstanding with respect to any Transfer Restricted Security at the time
such security ceases to be a Transfer Restricted Security shall survive until
such time as all such obligations with respect to such Security shall have been
satisfied in full.
6
<PAGE>
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate
in a distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction should be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K
under the Act, if the resales are of Exchange Notes obtained by such
Holder in exchange for Senior Notes acquired by such Holder directly from
an Issuer.
(ii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission stating (A) that the Company is registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) that the Company has not
entered into any arrangement or understanding with any Person to
distribute the Exchange Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Exchange Notes
received in the Exchange Offer.
(b) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company shall:
(i) subject to the provisions of Section 4(a), use its best efforts
to keep such Registration Statement continuously effective and provide all
requisite financial statements for the period specified in Section 3 or 4
of this Agreement, as applicable; upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not to
be effective and usable for resale of Transfer Restricted
7
<PAGE>
Securities during the period required by this Agreement, the Company shall
file promptly an appropriate amendment to such Registration Statement, in
the case of clause (A), correcting any such misstatement or omission, and,
in the case of either clause (A) or (B), use its best efforts to cause
such amendment to be declared effective and such Registration Statement
and the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter;
(ii) subject to the provisions of Section 4(a), prepare and file
with the Commission such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in Section 3 or 4
hereof, as applicable or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement have
been sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) of the filing of the Prospectus or any prospectus supplement
or post-effective amendment, and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any;
(v) subject to the execution of confidentiality agreements
acceptable to the Company, make available at reasonable times for
inspection by the selling Holders, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant retained by such selling Holders or any of the underwriters,
all financial and other records, pertinent corporate
8
<PAGE>
documents and properties of the Company and cause the Company's officers,
directors and employees to supply all information reasonably requested by
any such Holders, underwriter, attorney or accountant in connection with
such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(vi) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being sold
to such underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(vii) upon request, furnish to each selling Holder and furnish to
each of the underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein
and all exhibits (including exhibits incorporated therein by reference);
(viii) upon request, deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company hereby consents
to the use of the Prospectus and any amendment or supplement thereto by each
of the selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities covered
by the Prospectus or any amendment or supplement thereto;
(ix) enter into such customary agreements (including an underwriting
agreement), and make such representations and warranties, and take all such
other actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement, all to such extent as
may be reasonably requested by any Holder of Transfer Restricted Securities
or underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement; and if the
registration is an Underwritten Registration, the Company shall:
(A) furnish to the Purchasers, each selling Holder and each
underwriter, if any, in such substance and scope as they may reasonably
request and as are customarily made by issuers to underwriters in
secondary underwritten offerings, upon the date of the effectiveness of
the Shelf Registration Statement:
(1) a certificate, dated the date of the effectiveness of the
Shelf Registration Statement, signed by (y) the President or any Vice
President and (z) a principal financial or accounting officer of the
Company confirming, as of the date thereof, as to the matters set
forth in Section 7(e) of the Purchase Agreement, such matters as may
be required for counsel to deliver an opinion as is customary in such
transactions and such other matters as such parties may reasonably
request;
9
<PAGE>
(2) an opinion, dated the date of the or the date of
effectiveness of the Shelf Registration Statement, as the case may
be, of counsel for the Company, covering the matters set forth in
paragraphs (b) and (c) of Section 7 of the Purchase Agreement and
such other matters as such parties may reasonably request, and in any
event including a statement to the effect that such counsel has
participated in conferences with officers and other representatives
of the Company's representatives of the independent public
accountants for the Company and the Purchasers' representatives and
the Purchasers' counsel in connection with the preparation of such
Registration Statement and the related Prospectus and have considered
the matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements;
and that such counsel advises that, on the basis of the foregoing
(relying as to materiality to a certain extent upon facts provided to
such counsel by officers and other representatives of the Company and
without independent check or verification), no facts came to such
counsel's attention that caused such counsel to believe that the
applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became effective,
and, in the case of the Exchange Offer Registration Statement, as of
the date of Consummation, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or that the Prospectus contained in such Registration Statement as of
its date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of Consummation,
contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this Agreement
or the related Prospectus; and
(3) customary comfort letters, dated as of the date of
effectiveness of the Shelf Registration Statement, from the Company's
independent accountants, Deloitte & Touche, LLP in the customary form
and covering matters of the type customarily covered in comfort
letters by underwriters in connection with secondary underwritten
offerings, and affirming the matters set forth in the comfort letters
delivered pursuant to Section 7(d) of the Purchase Agreement, without
exception;
(B) set forth in full or incorporate by reference in the underwriting
agreement, if any, the indemnification provisions and procedures of
Section 8 hereof with respect to all parties to be indemnified pursuant
to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause
(A) above.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Purchasers and the underwriters(s), if any, and
each selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing;
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(x) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification
of the Transfer Restricted Securities under the securities or Blue Sky
laws of such jurisdictions as the selling Holders or underwriter(s) may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by any Registration Statement; provided,
however, that the Company shall not be required to register or qualify to
transact business where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xi) shall issue, upon the request of any Holder of Senior Notes
covered by the Shelf Registration Statement, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Senior Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Senior Notes held by
such Holder shall be surrendered to the Company for cancellation;
(xii) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xiii) use its reasonable efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (x) above;
(xiv) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustees under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with The Depository Trust Company;
(xv) cooperate and assist in any filings required to be made with
the NASD and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xvi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such an offering, beginning with the first month
of the Company's first fiscal quarter commencing after the effective date
of the Registration Statement; and
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<PAGE>
(xvii) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the
terms of the TIA; and execute and use its reasonable best efforts to cause
the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(b)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(b)(i) and (iv)
hereof, or until it is advised in writing (the "Advice") by the Company that the
use of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the Prospectus. If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(b)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(b)(i) and (iv)
hereof or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses associated with and incident to the Company's performance
of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made by the Purchasers or any Holder with the NASD and reasonable counsel fees
and disbursements in connection therewith (and, if applicable, the fees and
expenses of any "qualified independent underwriter" that may be required by the
rules and regulations of the NASD)); (ii) all reasonable fees and disbursements
of compliance with federal securities and state Blue Sky or securities laws
(including all fees and expenses of one counsel to the underwriter(s) in
connection with compliance with state Blue Sky or securities laws); (iii) all
expenses of printing (including printing certificates for the Exchange Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company; (v) all fees and expenses of the Trustee under the Indenture to the
extent provided in the Indenture and of any escrow agent, custodian or exchange
agent required in connection with the consummation of the Exchange Offer; and
(vi) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
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<PAGE>
The Company shall, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) Notwithstanding the foregoing, the Company shall not be liable for the
fees and expenses of counsel to the Purchasers, holders of Transfer Restricted
Securities or underwriters of Transfer Restricted Securities, except pursuant to
Section 8 hereof and as follows: in connection with any Registration Statement
required by this Agreement (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement), the Company shall
reimburse the Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the description of the
plan of distribution with respect to the Exchange Notes contained in the
Exchange Offer Registration Statement or registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
in an amount not to exceed $25,000 of not more than one counsel, as may be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
SECTION 8. INDEMNIFICATION
(a) Indemnification by the Company. Upon any registration of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, pursuant to Sections 3 and 4 hereof, and in consideration of the
agreements of the Purchasers contained herein, and as an inducement to the
Purchasers to purchase the Notes, the Company shall and hereby agrees to, (i)
indemnify and hold harmless each Holder of Transfer Restricted Securities and
Broker-Dealer Transfer Restricted Securities, as applicable, to be included in
such registration and each person who participates as a placement or sales agent
or as an underwriter in any offering or sale of such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder, agent or underwriter may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, were registered under the Act, or any preliminary,
final or summary Prospectus contained therein or furnished by the Company to any
such Holder, agent or underwriter, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) reimburse such Holder, such agent
and such underwriter for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement, or
preliminary, final or summary Prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein; and provided, further that
Company shall not be liable under the indemnity agreement in this subsection (a)
with respect to any preliminary prospectus to the extent that any such loss,
claim, damage or liability of such person results from the fact that such person
sold or transferred securities to a person as to whom it shall be established
that there was not sent or given, at or prior to written confirmation of
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<PAGE>
such sale, a copy of the prospectus or of the prospectus as then amended or
supplemented in any case where such delivery is required by the Act if the
Company previously furnished copies thereof in the quantity requested in
accordance with the applicable provisions of the underwriting agreement and the
loss, claim, damage or liability of such person results from an untrue statement
or omission of a material fact contained in the preliminary prospectus and
corrected in the prospectus or the prospectus as amended or supplemented.
(b) Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, in
any Registration Statement filed pursuant to Sections 3 and 4 hereof and to
entering into any underwriting agreement, if any, with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter named in any
such underwriting agreement, if any, severally and not jointly, to (i) indemnify
and hold harmless the Company, and, in the case of a Shelf Registration
Statement, all other Holders of Transfer Restricted Securities, against any
losses, claims, damages or liabilities to which the Company, or such other
Holders of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, or any
preliminary, final or summary Prospectus contained therein or furnished by the
Company to any such Holder, agent or underwriter, if any, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter expressly for use therein, and (ii) reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such Holder shall be required to undertake
liability to any person under this Section 8(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of
such Holder's Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the
14
<PAGE>
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless the indemnified party shall have been
advised by counsel that representation of the indemnified party by counsel
provided by the indemnifying party would be inappropriate due to actual or
potential conflicting interests between the indemnifying party and the
indemnified party, including situations in which there are one or more legal
defenses available to the indemnified party that are different from or
additional to those available to the indemnifying party; provided, however, that
the indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all indemnified parties,
except to the extent that local counsel, in addition to its regular counsel, is
required in order to effectively defend against such action or proceeding. The
indemnifying party shall not be required to indemnify any indemnified party for
any amount paid or payable by such indemnified party in the settlement of any
action, proceeding or investigation without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. It is understood that
contribution under this subsection (d) is unavailable to indemnified parties to
the same extent that indemnification is unavailable under the proviso at the end
of subsection (a) above. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) or
Broker-Dealer Transfer Restricted Securities, as applicable, exceeds the amount
of any damages which such Holder has otherwise been
15
<PAGE>
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Transfer
Restricted Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' and any underwriters' obligations in this
Section 8(d) to contribute shall be several in proportion to the principal
amount of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, registered or underwritten, as the case may be, by
them and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each Holder, agent and underwriter and each person, if any, who controls any
Holder, agent or underwriter within the meaning of the Act; and the obligations
of the Holders and any underwriters contemplated by this Section 8 shall be in
addition to any liability which the respective Holder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Act.
SECTION 9. [Reserved].
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may, subject to Section 10 and
applicable law, sell such Transfer Restricted Securities in an Underwritten
Offering. In any such Underwritten Offering, the investment banker or investment
bankers and manager or managers that will administer the offering will be
selected by the holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering; provided, that such
investment bankers and managers must be reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages (including the
liquidated damages contemplated hereby) would not be adequate compensation for
any loss incurred by reason of a breach
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<PAGE>
by it of the provisions of this Agreement and hereby agrees to waive the defense
in any action for specific performance in which a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Adjustments Affecting the Notes. The Company shall not take any
action, or permit any change to occur, with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate the
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
American Re Corporation
555 College Road East
Princeton, NJ 08543
Attention: Robert K. Burgess, General Counsel
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz
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<PAGE>
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustees at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the Notes, the
Indenture and the Purchase Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
American Re Corporation
By:_______________________________
Name:
Title:
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
Smith Barney Inc.
UBS Securities LLC
By:________________________________
(Goldman, Sachs & Co.)
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<PAGE>
Exhibit 8
January 29, 1997
American Re Corporation
555 College Road East
Princeton, N.J. 08543
Ladies and Gentlemen:
We have acted as special counsel for American Re Corporation, a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-4 (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the issuance by the
Company of $500,000,000 aggregate principal amount of its 7.45% Senior
Notes due 2026, Series B (the "Exchange Notes"), which are to be offered by the
Company in exchange for $500,000,000 aggregate principal amount of its
outstanding 7.45% Senior Notes due 2026 (the "Old Notes").
We have examined the Registration Statement and the Indenture dated as
of December 24, 1996 (the "Indenture") between the Company and State Street
Trust and Bank Company, as Trustee (the "Trustee"), which has been filed with
the Commission as an Exhibit to the Registration Statement. In addition, we
have examined, and have relied as to matters of fact upon, the originals or
copies, certified or otherwise identified to our satisfaction, of
<PAGE>
American Re Corporation -2- January 29, 1997
such corporate records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such other and further
investigations, as we have deemed relevant and necessary as a basis for the
opinion hereinafter set forth.
In such examination, we have assumed that the Indenture has been duly
authorized, executed and delivered by the Trustee. In addition, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we hereby advise you that the statements made in the
Registration Statement under the caption "United States Federal Income Tax
Consequences" is the opinion of this firm.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States. This opinion is rendered to
you solely in connection with the above-described transaction and may not be
relied upon for any other purpose without our prior written consent.
<PAGE>
American Re Corporation -3- January 29, 1997
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
SIMPSON THACHER & BARTLETT
<PAGE>
Exhibit 12
American Re Corporation
Computation of Ratio of Earnings to Fixed Charges
(Dollars in millions)
<TABLE>
<CAPTION>
Year ended Nine months ended
December 31, September 30,
1993 1994 1995 1995 1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income (loss) before income taxes 144.0 120.7 (159.4) 149.7 215.0
Earnings before fixed charges:
Interest expense 66.1 60.0 60.7 47.7 40.5
Interest portion of rental expense 2.8 3.2 3.8 2.7 2.9
-------------------------------------------------------------------
Earnings before fixed charges 212.9 183.9 (94.9) 200.1 258.4
===================================================================
Fixed charges:
Interest expense 66.1 60.0 60.7 47.7 40.5
Interest portion of rental expense 2.8 3.2 3.8 2.7 2.9
-------------------------------------------------------------------
Fixed charges 68.9 63.2 64.5 50.4 43.4
QUIPS interest - - 6.8 1.7 15.1
Paid-in-kind preferred dividend 0.9 - - - -
-------------------------------------------------------------------
Total fixed charges 69.8 63.2 71.3 52.1 58.5
===================================================================
Ratio of earnings to fixed charges 3.1 2.9 (1.3) 3.8 4.4
===================================================================
<CAPTION>
Pro-forma (1) Year ended Nine months ended
December 31, September 30,
1995 1995 1996
-------------------------------------------
<S> <C> <C> <C>
Income (loss) before income taxes (145.8) 159.9 225.3
Earnings before fixed charges:
Interest expense 47.1 37.5 30.2
Interest portion of rental expense 3.8 2.7 2.9
-------------------------------------------
Earnings before fixed charges (94.9) 200.1 258.4
===========================================
Fixed charges:
Interest expense 47.1 37.5 30.2
Interest portion of rental expense 3.8 2.7 2.9
-------------------------------------------
Fixed charges 50.9 40.2 33.1
QUIPS interest 6.8 1.7 15.1
-------------------------------------------
Total fixed charges 57.7 41.9 48.2
===========================================
Pro-forma ratio of earnings to fixed charges (1.6) 4.8 5.4
===========================================
</TABLE>
(1) Pro-forma for the issuance of the Notes and the application of the net
proceeds therefrom in the manner described under "Use of Proceeds".
<PAGE>
EXHIBIT 21
AMERICAN RE CORPORATION
and Subsidiaries
<TABLE>
<CAPTION>
State/Country/Date Primary
Name of Incorporation Business Activities
- ---- ---------------- -------------------
<S> <C> <C>
American Re Corporation(1)........................... Delaware/1991 Holding Company
American Re-Insurance Company........................ Delaware/1917 Reinsurance
American Re Inversiones, S.A...................... Chile/1986 Holding Company
American Re-Insurance Company (Chile) S.A....... Chile/1981 Reinsurance
American Alternative Insurance Corporation........... New York/1923 Alternative Market Insurance
American Re Asset Management, Inc.................... Delaware/1995 Investment Management
AM-RE Managers, Inc.................................. Delaware/1988 Alternative Markets
Becher + Carlson Risk Management Inc.............. California/1983 Risk Management
Becher + Carlson Management, Ltd................ Bermuda/1981 Captive Management
Becher + Carlson Brokerage, Ltd.............. Bermuda/1986 Brokerage
AM-RE Managers (Bermuda) Ltd............... Bermuda/1990 Underwriting Management
Becher + Carlson Insurance Services, Inc........ California/1981 Agency
AM-RE Brokers, Inc........................... Delaware/1978 Reinsurance Brokerage
Becher + Carlson Insurance Agency of Ohio....... Ohio/1994 Agency
AM-RE Services, Inc.................................. Delaware/1980 Consulting Services
AM-RE Consultants, Inc............................ Delaware/1994 Consulting Services
American Re Holdings, Ltd............................ England/1988 Holding Company
American Re Management, Ltd....................... England/1988 Underwriting Management
American Re Managers International, Ltd........... England/1988 Representative Office
American Re Management (Vienna) GmbH.............. Austria/1991 Representative Office
ARB International, Ltd............................ England/1989 Lloyd's Brokerage
Risk Management Partners, Ltd.(2)................. England/1994 Insurance Joint Venture
Princeton Eagle Holding (Bermuda) Limited............ Bermuda/1994 Holding Company
Princeton Eagle Insurance Company Limited......... Bermuda/1994 Rent-a-Captive Facility
Princeton Eagle West Holding Inc..................... Delaware/1995 Holding Company
Princeton Eagle West Insurance Company............ Bermuda/1995 Rent-a-Captive Facility
The Princeton Excess and Surplus Lines
Insurance Company................................. Delaware/1995 Surplus Lines Insurance
</TABLE>
- ----------
(1) Indentations indicate subsidiaries. All ownership is 100% of common stock
other than directors' qualifying shares or where local laws or customs in
foreign jurisdictions require multiple shareholders (for example, American
Re Managers International, Ltd. owns 1 share of American Re Management
(Vienna) GmbH).
(2) A joint venture 50% owned by American Re Holdings, Ltd. and 50% owned by
Arthur J. Gallagher (UK) Ltd.
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
American Re Corporation and its subsidiaries on Form S-4, of our reports dated
January 29, 1996, appearing in and incorporated by reference in the Annual
Report on Form 10-K of American Re Corporation for the year ended December 31,
1995 and to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
January 24, 1997
<PAGE>
Exhibit 24
LIMITED POWER OF ATTORNEY
WHEREAS, AMERICAN RE CORPORATION, a Delaware corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4 (the "Registration Statement"), with such
amendments (including post-effective amendments) as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto, in connection with the Company's offer to exchange up to $500 Million
of its 7.45% Senior Notes due 2026, Series B, for any and all of its outstanding
7.45% Senior Notes due 2026, Series A;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, as the case may be, of the Company does hereby appoint Robert
K. Burgess, James R. Fisher and George T. O'Shaughnessy, Jr. his true and lawful
attorneys-in-fact and with full power of substitution and resubstitution,
(i) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, the Registration Statement
including the exhibits thereto and any and all amendments thereto as said
attorneys-in-fact or any of them shall deem necessary or appropriate, together
with all instruments necessary or incidental in connection therewith, to file
the same or cause the same to be filed with the Commission, and to appear before
the Commission in connection with any matter relating thereto; and
(ii) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, any application,
statement, petition, notice, or other document, or any amendment thereto, or any
exhibit filed in connection therewith, which is required to register or qualify
the securities being offered under the securities or blue-sky laws of all states
as may be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Said attorneys-in-fact shall have full power and authority to do and perform in
the name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable in connection with such Registration Statement
or related securities or blue-sky filings, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of said attorneys-in-fact.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of January, 1997.
/s/ Claus Helbig
----------------------------
Claus Helbig
<PAGE>
LIMITED POWER OF ATTORNEY
WHEREAS, AMERICAN RE CORPORATION, a Delaware corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4 (the "Registration Statement"), with such
amendments (including post-effective amendments) as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto, in connection with the Company's offer to exchange up to $500 Million
of its 7.45% Senior Notes due 2026, Series B, for any and all of its outstanding
7.45% Senior Notes due 2026, Series A;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, as the case may be, of the Company does hereby appoint Robert
K. Burgess, James R. Fisher and George T. O'Shaughnessy, Jr. his true and lawful
attorneys-in-fact and with full power of substitution and resubstitution,
(i) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, the Registration Statement
including the exhibits thereto and any and all amendments thereto as said
attorneys-in-fact or any of them shall deem necessary or appropriate, together
with all instruments necessary or incidental in connection therewith, to file
the same or cause the same to be filed with the Commission, and to appear before
the Commission in connection with any matter relating thereto; and
(ii) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, any application,
statement, petition, notice, or other document, or any amendment thereto, or any
exhibit filed in connection therewith, which is required to register or qualify
the securities being offered under the securities or blue-sky laws of all states
as may be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Said attorneys-in-fact shall have full power and authority to do and perform in
the name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable in connection with such Registration Statement
or related securities or blue-sky filings, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of said attorneys-in-fact.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of January, 1997.
/s/ Hans Rathnow
------------------------------
Hans Rathnow
<PAGE>
LIMITED POWER OF ATTORNEY
WHEREAS, AMERICAN RE CORPORATION, a Delaware corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4 (the "Registration Statement"), with such
amendments (including post-effective amendments) as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto, in connection with the Company's offer to exchange up to $500 Million
of its 7.45% Senior Notes due 2026, Series B, for any and all of its outstanding
7.45% Senior Notes due 2026, Series A;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, as the case may be, of the Company does hereby appoint Robert
K. Burgess, James R. Fisher and George T. O'Shaughnessy, Jr. his true and lawful
attorneys-in-fact and with full power of substitution and resubstitution,
(i) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, the Registration Statement
including the exhibits thereto and any and all amendments thereto as said
attorneys-in-fact or any of them shall deem necessary or appropriate, together
with all instruments necessary or incidental in connection therewith, to file
the same or cause the same to be filed with the Commission, and to appear before
the Commission in connection with any matter relating thereto; and
(ii) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, any application,
statement, petition, notice, or other document, or any amendment thereto, or any
exhibit filed in connection therewith, which is required to register or qualify
the securities being offered under the securities or blue-sky laws of all states
as may be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Said attorneys-in-fact shall have full power and authority to do and perform in
the name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable in connection with such Registration Statement
or related securities or blue-sky filings, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of said attorneys-in-fact.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of January, 1997.
/s/ Hans-Jurgen Schinzler
------------------------------------
Hans-Jurgen Schinzler
<PAGE>
LIMITED POWER OF ATTORNEY
WHEREAS, AMERICAN RE CORPORATION, a Delaware corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4 (the "Registration Statement"), with such
amendments (including post-effective amendments) as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto, in connection with the Company's offer to exchange up to $500 Million
of its 7.45% Senior Notes due 2026, Series B, for any and all of its outstanding
7.45% Senior Notes due 2026, Series A;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, as the case may be, of the Company does hereby appoint Robert
K. Burgess, James R. Fisher and George T. O'Shaughnessy, Jr. his true and lawful
attorneys-in-fact and with full power of substitution and resubstitution,
(i) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, the Registration Statement
including the exhibits thereto and any and all amendments thereto as said
attorneys-in-fact or any of them shall deem necessary or appropriate, together
with all instruments necessary or incidental in connection therewith, to file
the same or cause the same to be filed with the Commission, and to appear before
the Commission in connection with any matter relating thereto; and
(ii) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, any application,
statement, petition, notice, or other document, or any amendment thereto, or any
exhibit filed in connection therewith, which is required to register or qualify
the securities being offered under the securities or blue-sky laws of all states
as may be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Said attorneys-in-fact shall have full power and authority to do and perform in
the name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable in connection with such Registration Statement
or related securities or blue-sky filings, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of said attorneys-in-fact.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of January, 1997.
/s/ Paul H. Inderbitzin
-------------------------------
Paul H. Inderbitzin
<PAGE>
LIMITED POWER OF ATTORNEY
WHEREAS, AMERICAN RE CORPORATION, a Delaware corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
Registration Statement on Form S-4 (the "Registration Statement"), with such
amendments (including post-effective amendments) as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto, in connection with the Company's offer to exchange up to $500 Million
of its 7.45% Senior Notes due 2026, Series B, for any and all of its outstanding
7.45% Senior Notes due 2026, Series A;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, as the case may be, of the Company does hereby appoint Robert
K. Burgess, James R. Fisher and George T. O'Shaughnessy, Jr. his true and lawful
attorneys-in-fact and with full power of substitution and resubstitution,
(i) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, the Registration Statement
including the exhibits thereto and any and all amendments thereto as said
attorneys-in-fact or any of them shall deem necessary or appropriate, together
with all instruments necessary or incidental in connection therewith, to file
the same or cause the same to be filed with the Commission, and to appear before
the Commission in connection with any matter relating thereto; and
(ii) to execute in his name, place, and stead, in his capacity as a director or
officer, or both, as the case may be, of the Company, any application,
statement, petition, notice, or other document, or any amendment thereto, or any
exhibit filed in connection therewith, which is required to register or qualify
the securities being offered under the securities or blue-sky laws of all states
as may be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Said attorneys-in-fact shall have full power and authority to do and perform in
the name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable in connection with such Registration Statement
or related securities or blue-sky filings, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts of said attorneys-in-fact.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
20th day of January, 1997.
/s/ Edward B. Jobe
-------------------------------
Edward B. Jobe
<PAGE>
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
---------------------
American Re Corporation
(Exact name of obligor as specified in its charter)
Delaware 13-3672116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 College Road East
Princeton, NJ 08543
(Address of principal executive offices) (Zip Code)
--------------------
Senior Notes
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington, D.C.,
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as Exhibit
1 to Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to commence
business was necessary or issued is on file with the Securities and
Exchange Commission as Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified
in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange Commission as
Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File No. 33-37823) and
is incorporated herein by reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 24th of January, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Gerald R. Wheeler
---------------------------------------
Gerald R. Wheeler
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by American Re
Corporation of its Senior Notes, we hereby consent that reports of examination
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Gerald R. Wheeler
---------------------------------------
Gerald R. Wheeler
Vice President
Dated: January 24, 1997
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business June 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ............... 1,787,130
Interest-bearing balances ........................................ 7,756,486
Securities.......................................................... 8,430,910
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary .............................. 4,090,665
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 4,426,059
Allowance for loan and lease losses ................. 70,088
Loans and leases, net of unearned income and allowances .......... 4,355,971
Assets held in trading accounts .................................... 880,647
Premises and fixed assets .......................................... 367,731
Other real estate owned ............................................ 1,067
Investments in unconsolidated subsidiaries ......................... 65,772
Customers' liability to this bank on acceptances outstanding ....... 33,530
Intangible assets .................................................. 68,505
Other assets........................................................ 1,002,465
----------
Total assets ....................................................... 28,840,879
==========
LIABILITIES
Deposits:
In domestic offices............................................... 7,531,683
Noninterest-bearing ............................... 5,387,924
Interest-bearing .................................. 2,143,759
In foreign offices and Edge subsidiary ........................... 12,050,265
Noninterest-bearing ............................... 46,768
Interest-bearing .................................. 12,003,497
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary .............................. 5,337,231
Demand notes issued to the U.S. Treasury and Trading Liabilities ... 871,847
Other borrowed money ............................................... 794,349
Bank's liability on acceptances executed and outstanding ........... 33,530
Other liabilities .................................................. 665,616
----------
Total liabilities .................................................. 27,284,521
----------
EQUITY CAPITAL
Common stock ....................................................... 29,931
Surplus ............................................................ 276,915
Undivided profits .................................................. 1,247,942
Cumulative foreign currency translation adjustments ................ 1,570
----------
Total equity capital ............................................... 1,556,358
----------
Total liabilities and equity capital ............................... 28,840,879
==========
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE>
LETTER OF TRANSMITTAL
FOR
7.45% SENIOR NOTES
DUE 2026
OF
AMERICAN RE CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1997 (THE "EXPIRATION DATE") UNLESS EXTENDED BY AMERICAN RE
CORPORATION.
EXCHANGE AGENT:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C>
BY HAND: BY MAIL:
State Street Bank and Trust Company (INSURED OR REGISTERED RECOMMENDED)
Two International Place State Street Bank and Trust Company
Fourth Floor Two International Place
Boston, Massachusetts 02110 Fourth Floor
Attention: Corporate Trust Operations Boston, Massachusetts 02110
Nancy Bowker Attention: Corporate Trust Operations
Nancy Bowker
BY OVERNIGHT EXPRESS: BY FACSIMILE:
State Street Bank and Trust Company (617) 664-5371
Two International Place (For Eligible Institutions Only)
Fourth Floor BY TELEPHONE:
Boston, Massachusetts 02110 (617) 664-5602
Attention: Corporate Trust Operations Attn: Nancy Bowker
Nancy Bowker
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges receipt of the Prospectus dated , 1997
(the "Prospectus") of American Re Corporation (the "Company"), and this Letter
of Transmittal (the "Letter of Transmittal"), which together describe the
Company's offer (the "Exchange Offer") to exchange $1,000 in principal amount of
its new 7.45% Senior Notes due 2026, Series B (the "Exchange Notes") for each
$1,000 in principal amount of outstanding 7.45% Senior Notes due 2026, Series A
(the "Old Notes"). The terms of the Exchange Notes are identical in all material
respects (including principal amount, interest rate and maturity) to the terms
of the Old Notes for which they may be exchanged pursuant to the Exchange Offer,
except that the Exchange Notes are freely transferable by holders thereof
(except as provided herein or in the Prospectus) and are not subject to any
covenant regarding registration under the Securities Act of 1933, as amended
(the "Securities Act").
The undersigned has checked the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW
<PAGE>
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS
INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND
REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS
LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, the Certificate Numbers and Principal
Amounts should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES TENDERED HEREWITH
AGGREGATE
NAME(S) AND ADDRESS(ES) OF PRINCIPAL AMOUNT PRINCIPAL
REGISTERED HOLDER(S) CERTIFICATE REPRESENTED AMOUNT
(PLEASE FILL IN) NUMBER(S)* BY OLD NOTES* TENDERED**
<S> <C> <C> <C>
Total
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, the holder will be deemed to have tendered the
full aggregate principal amount represented by such Notes. See instruction 2.
This Letter of Transmittal is to be used either if certificates representing
Old Notes are to be forwarded herewith or if delivery of Old Notes is to be made
by book-entry transfer to an account maintained by the Exchange Agent at The
Depository Trust Company, pursuant to the procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus. Delivery of
documents to the book-entry transfer facility does not constitute delivery to
the Exchange Agent.
Holders whose Old Notes are not immediately available or who cannot deliver
their Old Notes and all other documents required hereby to the Exchange Agent on
or prior to the Expiration Date must tender their Old Notes according to the
guaranteed delivery procedure set forth in the Prospectus under the caption "The
Exchange Offer-- Procedures for Tendering Old Notes."
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ______________________________________________
/ / The Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s) _______________________________________________
Name of Eligible Institution that Guaranteed Delivery ______________________
Date of Execution of Notice of Guaranteed Delivery _________________________
<PAGE>
If Delivered by Book-Entry Transfer:
Account Number _____________________________________________________________
/ / CHECK HERE IF NEW NOTES ARE TO BE DELIVERED TO PERSON OTHER THAN PERSON
SIGNING THE LETTER OF TRANSMITTAL:
Name _________________________________________________________________________
(Please Print)
Address ______________________________________________________________________
(Including Zip Code)
/ / CHECK HERE IF NEW NOTES ARE TO BE DELIVERED TO ADDRESS DIFFERENT FROM THAT
LISTED ELSEWHERE IN THIS LETTER OF TRANSMITTAL:
Address ______________________________________________________________________
(Including Zip Code)
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THIS PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name _______________________________________________________________________
Address ____________________________________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Old Notes that were acquired as result
of market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. Any holder who is an "affiliate" of the Company or who has
an arrangement or understanding with respect to the distribution of the Exchange
Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who
purchased Old Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act must
comply with the registration and prospectus delivery requirements under the
Securities Act.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the above-described principal amount
of the Old Notes indicated above. Subject to, and effective upon, the acceptance
for exchange of the Old Notes tendered herewith, the undersigned hereby
exchanges, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Old Notes. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company, in connection with the Exchange
Offer) to cause the Old Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Old Notes and to acquire Exchange
Notes issuable upon the exchange of such tendered Old Notes, and that, when the
same are accepted for exchange, the Company will acquire good and unencumbered
title to the tendered Old Notes, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim. The undersigned
also warrants that it will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of tendered Old
Notes or transfer ownership of such Old Notes on the account books maintained by
the book-entry transfer facility. The undersigned further agrees that acceptance
of any and all validly tendered Old Notes by the Company and the issuance of
Exchange Notes in exchange therefor shall constitute performance in full by the
Company of its obligations under the Registration Rights Agreement (as defined
in the Prospectus) and that the Company shall have no further obligations or
liabilities thereunder except as provided in the first paragraph of Section 2 of
said agreement.
The Exchange Offer is subject to certain conditions as set forth in the
Prospectus under the caption "The Exchange Offer--Certain Conditions to the
Exchange Offer." The undersigned recognizes that as a result of these conditions
(which may be waived, in whole or in part, by the Company), as more particularly
set forth in the Prospectus, the Company may not be required to exchange any of
the Old Notes tendered hereby and, in such event, the Old Notes not exchanged
will be returned to the undersigned at the address shown above. In addition, the
Company may amend the Exchange Offer at any time prior to the Expiration Date if
any of the conditions set forth under "The Exchange Offer--Certain Conditions to
the Exchange Offer" occur.
By tendering, each holder of Old Notes represents that the Exchange Notes
acquired in the exchange will be obtained in the ordinary course of such
holder's business, that such holder has no arrangement with any person to
participate in the distribution of such Exchange Notes, that such holder is not
an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act and that such holder is not engaged in, and does not intend to
engage in, a distribution of the Exchange Notes. Any holder of Notes using the
Exchange Offer to participate in a distribution of the Exchange Notes (i) cannot
rely on the position of the staff of the Securities and Exchange Commission (the
"Commission") enunciated in its interpretive letter with respect to Exxon
Capital Holdings Corporation (available April 13, 1989) or similar letters and
(ii) must comply with the registration and prospectus requirements of the
Securities Act in connection with a secondary resale transaction.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities, it acknowledges
that it will deliver a prospectus in connection with any resale of such Exchange
Notes, however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
<PAGE>
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Old Notes may be withdrawn at any time
prior to the Expiration Date in accordance with the terms of this Letter of
Transmittal. See Instruction 2.
Certificates for all Exchange Notes delivered in exchange for tendered Old
Notes and any Old Notes delivered herewith but not exchanged, and registered in
the name of the undersigned, shall be delivered to the undersigned at the
address shown below the signature of the undersigned.
TENDER HOLDER(S) SIGN HERE
(Complete accompanying substitute Form W-9)
________________________________________________________________________________
________________________________________________________________________________
Signature(s) of Holder(s)
Dated ___________________ Area Code and Telephone Number ___________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for Old Notes. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, please set forth the
full title of such person.) See Instruction 3.
Name(s) ________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
(Including Zip Code)
Area Code and Telephone No. ____________________________________________________
Taxpayer Identification No. ____________________________________________________
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTION 3)
Authorized Signature ___________________________________________________________
Name ___________________________________________________________________________
Title __________________________________________________________________________
Address ________________________________________________________________________
Name of Firm ___________________________________________________________________
Area Code and Telephone No. ____________________________________________________
Dated __________________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
A holder of Old Notes may tender the same by (i) properly completing and
signing the Letter of Transmittal or a facsimile thereof (all references in the
Prospectus to the Letter of Transmittal shall be deemed to include a facsimile
thereof) and delivering the same, together with the certificate or certificates
representing the Old Notes being tendered and any required signature guarantees
and any other document required by the Letter of Transmittal, to the Exchange
Agent at its address set forth above on or prior to the Expiration Date (or
complying with the procedure for book-entry transfer described below) or (ii)
complying with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ANY
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER, AND EXCEPT
AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS
SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
BE USED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY
DELIVERY. NO OLD NOTES OR LETTERS OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY.
If tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal and the Exchange Notes to be issued in exchange therefor are to
be issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall include
any participant in The Depository Trust Company (also referred to as a
"book-entry transfer facility") whose name appears on a security listing as the
owner of Old Notes), the signature of such signer need not be guaranteed. In any
other case, the tendered Old Notes must be endorsed or accompanied by written
instruments of transfer in form satisfactory to the Company and duly executed by
the registered holder, and the signature on the endorsement or instrument of
transfer must be guaranteed by a bank, broker, dealer, credit union, savings
association, clearing agency or other institution (each an "Eligible
Institution") that is a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended. If the Exchange Notes and/or Old Notes not exchanged are to be
delivered to an address other than that of the registered holder appearing on
the note register for the Old Notes, the signature on the Letter of Transmittal
must be guaranteed by an Eligible Institution.
The Exchange Agent will make a request within two business days after the
date of receipt of this Prospectus to establish accounts with respect to the Old
Notes at the book-entry transfer facility for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the book-entry transfer facility's system
may make book-entry delivery of Old Notes by causing such book-entry transfer
facility to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with the book-entry transfer facility's
procedures for such transfer. Although delivery of Old Notes may be effected
through book-entry transfer into the Exchange Agent's account at the book-entry
transfer facility, an appropriate Letter of Transmittal with any required
signature guarantee and all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent on or prior to
the Expiration Date, or, if the guaranteed delivery procedures described below
are complied with, within the time period provided under such procedures.
<PAGE>
If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or Old Notes to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected if the Exchange Agent has received on
or prior to the Expiration Date, a letter, telegram or facsimile transmission
(receipt confirmed by telephone and an original delivered by guaranteed
overnight courier) from an Eligible Institution setting forth the name and
address of the tendering holder, the names in which the Old Notes are registered
and, if possible, the certificate numbers of the Old Notes to be tendered, and
stating that the tender is being made thereby and guaranteeing that within three
business days after the Expiration Date, the Old Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account at the book-entry transfer facility), will be delivered
by such Eligible Institution together with a properly completed and duly
executed Letter of Transmittal (and any other required documents). Unless Old
Notes being tendered by the above-described method are deposited with the
Exchange Agent within the time period set forth above (accompanied or preceded
by a properly completed Letter of Transmittal and any other required documents),
the Company may, at its option, reject the tender. Copies of the notice of
guaranteed delivery ("Notice of Guaranteed Delivery") which may be used by
Eligible Institutions for the purposes described in this paragraph are available
from the Exchange Agent.
A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at the book-entry transfer facility)
is received by the Exchange Agent, or (ii) a Notice of Guaranteed Delivery or
letter, telegram or facsimile transmission to similar effect (as provided above)
from an Eligible Institution is received by the Exchange Agent. Issuances of
Exchange Notes in exchange for Old Notes tendered pursuant to a Notice of
Guaranteed Delivery or letter, telegram or facsimile transmission to similar
effect (as provided above) by an Eligible Institution will be made only against
deposit of the Letter of Transmittal (and any other required documents) and the
tendered Old Notes.
If the Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Old Notes, such Old Notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered holder or holders appear on the Old Notes.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Old Notes for exchange.
2. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Old Notes evidenced by a
submitted certificate is tendered, the tendering holder should fill in the
principal amount tendered in the box entitled "Principal Amount Tendered." A
newly issued certificate for the principal amount of Old Notes submitted but not
tendered will be sent to such holder as soon as practicable after the Expiration
Date. All Old Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise clearly indicated.
<PAGE>
For a withdrawal to be effective, a written notice of withdrawal sent by
telegram, facsimile transmission (receipt confirmed by telephone) or letter must
be received by the Exchange Agent at the address set forth herein prior to the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having tendered the Old Notes to be withdrawn (the "Depositor"), (ii)
identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes), (iii) specify the principal
amount of Notes to be withdrawn, (iv) include a statement that such holder is
withdrawing his election to have such Old Notes exchanged, (v) be signed by the
holder in the same manner as the original signature on the Letter of Transmittal
by which such Old Notes were tendered or as otherwise described above (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee under the Indenture register the transfer of such
Old Notes into the name of the person withdrawing the tender and (vi) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. The Exchange Agent will return the properly withdrawn Old
Notes promptly following receipt of notice of withdrawal. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the book-entry
transfer facility to be credited with the withdrawn Old Notes or othewise comply
with the book-entry transfer facility procedure. All questions as to the
validity of notices of withdrawals, including time of receipt, will be
determined by the Company and such determination will be final and binding on
all parties.
Any Old Notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
the book-entry transfer facility pursuant to the book-entry transfer procedures
described above, such Old Notes will be credited to an account with such
book-entry transfer facility specified by the holder) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described under the caption "Procedures for Tendering Old Notes" in
the Prospectus at any time on or prior to the Expiration Date.
3. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered holder(s) of the
Old Notes tendered hereby, the signature must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Old Notes registered in different names are tendered, it will
be necessary to complete, sign and submit as many separate copies of this Letter
of Transmittal as there are different registrations of Old Notes.
When this Letter of Transmittal is signed by the registered holder or
holders (which term, for the purposes described herein, shall include the
book-entry transfer facility whose name appears on a security listing as the
owner of the Old Notes) of Old Notes listed and tendered hereby, no endorsements
of certificates or separate written instruments of transfer or exchange are
required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holder of the Old Notes listed, such Old Notes must be
endorsed or accompanied by separate written instruments of transfer or exchange
in form satisfactory to the Company and duly executed by the registered holder,
in either case signed exactly as the name or names of the registered holder or
holders appear(s) on the Notes.
<PAGE>
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority so to act must be submitted.
Endorsements on certificates or signatures on separate written instruments
of transfer or exchange required by this Instruction 3 must be guaranteed by an
Eligible Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Old Notes are tendered: (i) by a registered
holder of such Old Notes, for the holder of such Old Notes; or (ii) for the
account of an Eligible Institution.
4. TRANSFER TAXES.
The Company shall pay all transfer taxes, if any, applicable to the transfer
and exchange of Old Notes to it or its order pursuant to the Exchange Offer. If,
however, certificates representing Exchange Notes or Old Notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or are to
be issued in the name of, any person other than the registered holder of the Old
Notes tendered, or if tendered Old Notes are registered in the name of any
person other than the person signing the Letter of Transmittal, or if a transfer
tax is imposed for any reason other than the exchange of Old Notes pursuant to
the Exchange Offer, then the amount of any such transfer taxes (whether imposed
on the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exception therefrom
is not submitted herewith the amount of such transfer taxes will be billed
directly to such tendering holder.
Except as provided in this Instruction 4, it will not be necessary for
transfer tax stamps to be affixed to the Notes listed in this Letter of
Transmittal.
5. WAIVER OF CONDITIONS.
The Company reserves the right to waive in its reasonable judgment, in whole
or in part, any of the conditions to the Exchange Offer set forth in the
Prospectus.
6. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed,
should contact the Exchange Agent at the address indicated above for further
instructions.
7. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent at the address and telephone number set forth
above. In addition, all questions relating to the Exchange Offer, as well as
requests for assistance or additional copies of the Prospectus and this Letter
of Transmittal, may be directed to American Re Corporation, 655 College Road
East, Princeton, New Jersey 08543, attention: Investor Relations.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
CERTIFICATES FOR NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
7.45% SENIOR NOTES DUE 2026, SERIES A
IN EXCHANGE FOR NEW
7.45% SENIOR NOTES DUE 2026, SERIES B
OF
AMERICAN RE CORPORATION
Registered holders of outstanding 7.45% Senior Notes due 2026, Series A (the
"Old Notes") who wish to tender their Old Notes in exchange for a like principal
amount of new 7.45% Senior Notes due 2026, Series B (the "Exchange Notes") and
whose Old Notes are not immediately available or who cannot deliver their Notes
and Letter of Transmittal (and any other documents required by the Letter of
Transmittal) to State Street Bank and Trust Company (the "Exchange Agent") prior
to the Expiration Date, may use this Notice of Guaranteed Delivery or one
substantially equivalent hereto. This Notice of Guaranteed Delivery may be
delivered by hand or sent by facisimile transmission (receipt confirmed by
telephone and an original delivered by guaranteed overnight courier) or mail to
the Exchange Agent. See "The Exchange Offer--Procedure for Tendering Old Notes"
in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C>
BY HAND: BY MAIL:
State Street Bank and Trust Company (INSURED OR REGISTERED RECOMMENDED)
Two International Place State Street Bank and Trust Company
Fourth Floor Two International Place
Boston, Massachusetts 02110 Fourth Floor
Attention: Corporate Trust Operations Boston, Massachusetts 02110
Nancy Bowker Attention: Corporate Trust Operations
Nancy Bowker
BY OVERNIGHT EXPRESS: BY FACSIMILE:
State Street Bank and Trust Company 617-664-5371
Two International Place (For Eligible Institutions Only)
Fourth Floor BY TELEPHONE:
Boston, Massachusetts 02110 617-664-5602
Attention: Corporate Trust Operations Att: Nancy Bowker
Nancy Bowker
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution (as defined in the Prospectus), such
signature guarantee must appear in the applicable space provided on the Letter
of Transmittal for Guarantee of Signatures.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders the principal amount of Notes indicated
below, upon the terms and subject to the conditions contained in the prospectus
dated , 1997 of American Re Corporation (the "Prospectus"), receipt of
which is hereby acknowledged.
DESCRIPTION OF SECURITIES TENDERED
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
REGISTERED HOLDER AS IT CERTIFICATE NUMBER(S) PRINCIPAL AMOUNT
APPEARS ON THE OLD NOTES OF OLD NOTES OF OLD NOTES
NAME OF TENDERING HOLDER (PLEASE PRINT) TENDERED TENDERED
<S> <C> <C> <C>
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
- --------------------- --------------------- --------------------- ---------------------
</TABLE>
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended, hereby guarantees to deliver to the Exchange Agent at one of
its addresses set forth above, the certificates representing the Old Notes (or a
confirmation of book-entry transfer of such Old Notes into the Exchange Agent's
account at the book-entry transfer facility), together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, and any other documents required by the Letter of
Transmittal within three business days after the Expiration Date (as defined in
the Prospectus and the Letter of Transmittal).
<TABLE>
<S> <C>
Name of Firm:
Address: (Authorized Signature)
Title:
(Zip Code) Name:
Area Code and Telephone No.: (Please type or print)
Date:
</TABLE>
NOTE: DO NOT SEND NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OLD NOTES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -----------------------------------------------------
<S> <C> <C>
1. An individual The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent
committee for a person(3)
designated ward,
minor, or
incompetent person
7. a. The usual The
revocable savings grantor-trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust
account that is The actual owner(1)
not a legal or
valid trust under
State law
- -----------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<S> <C> <C>
- -----------------------------------------------------
8. Sole proprietorship The owner(4)
account
9. A valid trust, The legal entity.
estate, or pension (Do not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, The organization
or other tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- ---------------------------------------------
- ---------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES.
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CIVIL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
