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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: May 27, 1998 Commission File No. 1-11632
(Date of earliest event reported)
AMERICAN ANNUITY GROUP, INC.
Incorporated under IRS Employer
the laws of Delaware Identification No. 06-1356481
250 East Fifth Street
Cincinnati, Ohio 45202
Phone: (513) 333-5300
Former name or former address, if changed since last report - not
applicable.
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AMERICAN ANNUITY GROUP, INC.
FORM 8-K
Item 5. OTHER EVENTS.
On May 27, 1998, American Annuity Group, Inc., a Delaware corporation
(AAG or the "Company"), and AAG Holding Company, Inc., an Ohio corporation and
wholly-owned subsidiary of AAG ("AAG Holding"), entered into an Underwriting
Agreement relating to the sale by AAG Holding of $100,000,000 aggregate
principal amount of 6-7/8% Senior Notes due 2008 (the "Securities") which are
guaranteed by the Company and issued under a registration statement on Form S-3
(No. 333-41071).
This Current Report on Form 8-K is being filed for the purpose of
filing as exhibits the Underwriting Agreement, the Form of Global Note and the
opinion of Keating, Muething & Klekamp, P.L.L.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
(1) Underwriting Agreement for 6-7/8% Senior Notes due 2008.
(4) Form of Global Note for 6-7/8% Senior Notes due 2008
evidencing the terms of such securities as established
by resolutions adopted by the Boards of Directors of AAG
Holding and the Executive Committee of AAG on May 27,
1998.
(5) Opinion of Keating, Muething & Klekamp, P.L.L.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN ANNUITY GROUP, INC.
May 28, 1998 By: /s/ Mark F. Muething
----------------------------------------
Mark F. Muething
Senior Vice President, General Counsel
and Secretary
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EXHIBIT 1
$100,000,000
AAG HOLDING COMPANY, INC.
6 7/8% SENIOR NOTES DUE 2008
UNDERWRITING AGREEMENT
May 27, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
AAG Holding Company, Inc., Ohio corporation (the "COMPANY") and a
wholly owned subsidiary of American Annuity Group, Inc., a Delaware corporation
("AAG"), proposes to issue and sell $100,000,000 principal amount of its 6 7/8%
Senior Notes due 2008 (the "SECURITIES") to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS"). The Securities are to be issued pursuant
to the provisions of an Indenture (including one or more Board Resolutions
relating to the Securities) to be dated as of June 1, 1998 (the "INDENTURE")
between the Company and Star Bank, N.A., as Trustee (the "TRUSTEE") and are to
be guaranteed (THE "GUARANTEE") to the extent set forth in the Indenture by AAG.
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3, which has
become effective, relating to the issuance and sale from time to time of certain
of its unsecured debt securities. The Securities represent a portion of the
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unsecured debt securities registered pursuant to such registration statement.
Such registration statement, as amended at the time of this Agreement, is
hereinafter referred to as the "REGISTRATION STATEMENT", and the prospectus
included in such Registration Statement, as supplemented to reflect the terms of
the Securities and the terms of the offering thereof, as filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE 424(b)") under
the Act, is hereinafter referred to as the "PROSPECTUS". All references to the
Registration Statement and the Prospectus include all documents incorporated by
reference therein. No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act. The terms "SUPPLEMENT" and "AMENDMENT" or
"AMEND" as used in this Agreement with respect to the Registration Statement or
the Prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"EXCHANGE ACT") that are deemed to be incorporated by reference in the
Prospectus.
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at 99.043% of the principal amount thereof (the "PURCHASE PRICE").
SECTION 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose and, subject to the terms and conditions hereof,
severally and not jointly agree (i) to make a public offering of their
respective portions of the Securities as soon after the execution and delivery
of this Agreement as in your judgment is advisable and (ii) initially to offer
the Securities upon the terms set forth in the Prospectus. Subject to the terms
and conditions hereof, the Underwriters severally and not jointly also agree
that (i) they will offer and sell the Securities to the public only in those
jurisdictions, and in such amounts, where due qualification and/or registration
has been effected or an exemption from such qualification and/or registration is
available under the applicable securities or blue sky laws of such jurisdiction,
and (ii) the Securities will be offered and sold only in those jurisdictions
where broker/dealer licensing has been obtained or where there is an exemption
from such licensing; it being understood, however, that such agreement only
covers the initial sale of the Securities by the Underwriters and not any
subsequent sale of such Securities in any trading market.
SECTION 4. Delivery and Payment. The Company will deliver, against
payment of the Purchase Price, the Securities in the form of one or more
permanent global securities in definitive form (the "GLOBAL SECURITIES")
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deposited with the Trustee as custodian for The Depository Trust Company ("DTC")
and registered in the name of Cede & Co., as nominee for DTC. Interests in any
permanent global securities will be held only in book-entry form through DTC,
except in the limited circumstances described in the Prospectus. Payment for the
Securities shall be made by the Underwriters in Federal (same day) funds by
official check or checks or wire transfer to an account at a bank acceptable to
the Donaldson, Lufkin & Jenrette Securities Corporation, drawn to the order of
the Company. The time and date of delivery and payment for the Securities shall
be 9:00 A.M., New York City time, on June 1, 1998 or such other time on the
same or such other date as Donaldson, Lufkin & Jenrette Securities Corporation
and the Company shall agree in writing. The time and date of such delivery and
payment are hereinafter referred to as the "CLOSING DATE".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at the
offices of Taft, Stettinius & Hollister LLP, 425 Walnut Street, Cincinnati, Ohio
on the Closing Date.
SECTION 5. Agreements of the Company and AAG. Each of the Company and
AAG (each an "OFFEROR" and, together, the "OFFERORS") jointly and severally
agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, and (iv) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires 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, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you a signed copy of the Registration Statement as
first filed with the Commission and of each amendment to it, including all
exhibits and documents incorporated therein by reference, and to furnish to you
and each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
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exhibits but including documents incorporated therein by reference, as you may
reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Securities by you, and to use its best efforts to cause any
such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated therein by reference as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue any such registration or qualification in effect
so
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long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Offeror shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Securities,
in any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to the holders of the
Securities as soon as practicable an earnings statement of AAG and its
subsidiaries on a consolidated basis covering the twelve-month period ending
June 30, 1999 that shall satisfy the provisions of Section 11(a) of the Act, and
to advise you in writing when such statement has been so made available.
(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of AAG and its
subsidiaries on a consolidated basis, such financial report to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent public accountants and (ii) to mail and make generally available as
soon as practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of operations and a consolidated statement of
cash flows as of the end of and for such period, and for the period from the
beginning of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding year.
(i) So long as the Securities are outstanding, to furnish to you as
soon as available copies of all reports or other communications furnished to
their security holders or furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Offeror is
listed and such other publicly available information concerning the Offeror and
its subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Offeror's counsel and
the Offeror's accountants in connection with the registration and delivery of
the Securities under the Act and all other fees and
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expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) all expenses in connection with any registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees (which shall not exceed Fifteen Thousand
Dollars ($15,000.00) in the aggregate) and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) any filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Securities by the National Association of Securities Dealers, Inc., (vi) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Securities, (vii) the cost of
printing any certificates representing the Securities, (viii) the costs and
charges of any transfer agent, registrar and/or depositary (including DTC), (ix)
all fees charged by rating agencies for the rating of the Securities, (x) the
fees and expenses of the Trustee and the Trustee's counsel in connection with
the Indenture and the Securities and (xi) all other costs and expenses incident
to the performance of their obligations hereunder for which provision is not
otherwise made in this Section.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Offeror or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Offeror substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
(l) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of the Securities.
(m) To use their best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Offeror prior to
the Closing Date and to satisfy all conditions precedent to the delivery of the
Securities.
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SECTION 6. Representations and Warranties. Each of the
Offerors jointly and severally represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act; (ii) the Registration
Statement, when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) The Offeror has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business as described
in the Prospectus and to own, lease and operate its properties, and is duly
qualified and is in good standing (or the local law equivalent) as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification,
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except where the failure to be so qualified would not have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Offeror and its subsidiaries, taken as a whole.
(e) Each of the Offeror's subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing (or the local law
equivalent), to the extent applicable, or licensed to do business under the laws
of the jurisdiction of its incorporation, has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
presently conducted and as described in the Prospectus, and is duly qualified as
a foreign corporation to transact business and is in good standing (or the local
law equivalent) in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of either Offeror and its respective
subsidiaries taken as a whole.
(f) All the outstanding shares of capital stock of the Offeror have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the
Offeror's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Offeror, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature (each, a
"LIEN").
(h) The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Securities have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Securities will be entitled to
the benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
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affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(j) The Guarantee has been duly authorized by AAG and constitutes a
valid and binding obligation of AAG, enforceable in accordance with its terms
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (B) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(k) The Securities conform as to legal matters to the description
thereof contained in the Prospectus.
(l) Neither the Offeror nor any of its subsidiaries is in violation of
its respective charter or Code of Regulations or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Offeror and its subsidiaries, taken as a whole, to which the
Offeror or any of its subsidiaries is a party or by which the Offeror or any of
its subsidiaries or their respective property is bound.
(m) The execution, delivery and performance of this Agreement, the
Indenture, the Guarantee and the Securities by the Company and AAG, as the case
may be, the compliance by the Company and AAG, as the case may be, with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
Code of Regulations or by-laws of the Offeror or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Offeror and its subsidiaries, taken as a whole, to which the
Offeror or any of its subsidiaries is a party or by which the Offeror or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Offeror, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under any agreement or instrument to which the Offeror or any of its
subsidiaries is a party or by which the Offeror or any of its subsidiaries or
their respective property is bound or (v) result in the suspension, termination
or revocation of any Authorization (as defined below) of the Offeror or any of
its subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
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(n) There are no legal or governmental proceedings pending or, to the
knowledge of the Offeror, threatened to which the Offeror or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(o) Neither the Offeror nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the business, prospects, financial
condition or results of operation of the Offeror and its subsidiaries, taken as
a whole.
(p) Each of the Offeror and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Offeror and its
subsidiaries, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Offeror and its subsidiaries is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or termination of any
such Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Offeror or any of its subsidiaries; except where such failure
to be valid and in full force and effect or to be in compliance, the occurrence
of any such event or the presence of any such restriction would not, singly or
in the aggregate, have a material adverse effect on the business, prospects,
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financial condition or results of operations of the Offeror and its
subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of the Offeror and its subsidiaries, taken as
a whole.
(r) This Agreement has been duly authorized, executed and delivered by
the Offeror.
(s) Ernst & Young LLP are independent public accountants with respect
to the Offeror and its subsidiaries as required by the Act.
(t) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly in all material respects the
consolidated financial position, results of operations and changes in financial
position of AAG and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in all material respects
in accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of AAG.
(u) The Offeror is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(v) There are no contracts, agreements or understandings between the
Offeror and any person granting such person the right to require the Offeror to
file a registration statement under the Act with respect to any securities of
the Offeror or to require the Offeror to include such securities with the
Securities registered pursuant to the Registration Statement.
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(w) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act has indicated to
the Offeror that it is considering (i) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating assigned to the Offeror or any securities of
the Offeror or (ii) any change in the outlook for any rating of the Offeror or
any securities of the Offeror.
(x) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Offeror and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Offeror or any of its subsidiaries
and (iii) neither the Offeror nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(y) Each subsidiary of the Offeror which is engaged in the business of
insurance or reinsurance (collectively, the "INSURANCE SUBSIDIARIES") holds such
insurance licenses, certificates and permits from governmental authorities
(including, without limitation, from the insurance regulatory agencies of the
various jurisdictions where it conducts business (the "INSURANCE LICENSES")) as
are necessary to the conduct of its business as described in the Prospectus; the
Offeror and each Insurance Subsidiary have fulfilled and performed all
obligations necessary to maintain the Insurance Licenses; except as disclosed in
the Prospectus, there is no pending or, to the knowledge of the Offerors,
threatened action, suit, proceeding or investigation that could reasonably be
expected to result in the revocation, termination or suspension of any Insurance
License; and except as disclosed in the Prospectus, no insurance regulatory
agency or body has issued, or commenced any proceeding for the issuance of, any
order or decree impairing, restricting or prohibiting the payment of dividends
by any Insurance Subsidiary to its parent.
(z) Except as disclosed in the Prospectus, the Offeror and its
Insurance Subsidiaries have made no material change in their insurance reserving
practices since the most recent audited financial statements included in the
Prospectus.
(aa) All reinsurance treaties and arrangements to which any Insurance
Subsidiary is a party are in full force and effect and no Insurance Subsidiary
is in violation of or in default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein; no
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<PAGE> 13
Insurance Subsidiary has received any notice from any of the other parties to
such treaties, contracts or agreements that such other party intends not to
perform such treaty and, to the best knowledge of the Offeror and the Insurance
Subsidiaries, the Offeror and the Insurance Subsidiaries have no reason to
believe that any of the other parties to such treaties or arrangements will be
unable to perform such treaty or arrangement except to the extent adequately and
properly reserved for in the consolidated financial statements of AAG included
in the Prospectus.
(bb) The statutory financial statements of the Insurance Subsidiaries,
from which certain ratios and other statistical data included in the
Registration Statement and the Prospectus have been derived, have been prepared
for each relevant period in conformity with statutory accounting principles or
practices required or permitted by the National Association of Insurance
Commissioners and by the appropriate Insurance Department of the jurisdiction of
domicile of each Insurance Subsidiary, and such statutory accounting practices
have been applied on a consistent basis throughout the periods involved, except
as may otherwise be indicated therein or in the notes thereto, and present
fairly in all material respects the statutory financial position of the
Insurance Subsidiaries as of the dates thereof, and the statutory basis results
of operations of the Insurance Subsidiaries for the periods covered thereby.
(cc) Each certificate signed by any officer of the Offeror and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Offeror to the Underwriters as to the
matters covered thereby.
SECTION 7. Indemnification. (a) The Offerors agree jointly and
severally to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by or on behalf of such
Underwriter through you expressly for use therein; provided, however, that the
foregoing indemnity
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agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter who failed to deliver a Prospectus, as then amended
or supplemented, (so long as the Prospectus and any amendment or supplement
thereto was provided by an Offeror to the several Underwriters in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages, liabilities
or judgements caused by any untrue statement or alleged untrue statement of a
material fact contained in the preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the Prospectus, as so amended or supplemented, and such Prospectus
was required by law to be delivered at or prior to the written confirmation of
sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each Offeror, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Offeror within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity in Section 7(a) from the Offeror to such
Underwriter but only with reference to information relating to such Underwriter
furnished in writing to the Company by such Underwriter through you for use in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the 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 (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the
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named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of parties indemnified pursuant to Section 7(a), and by
the Company, in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action 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 the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Offerors on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 7(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not
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<PAGE> 16
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Offerors on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Offerors on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Offerors on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Offerors or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters 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 the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the 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 Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
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<PAGE> 17
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions
(a) All the representations and warranties of the Offerors contained in
this Agreement shall be true and correct in all material respects on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Offerors
or any securities of the Offerors (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Offerors or any securities of the Offerors by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Securities than that on which the Securities were marketed.
(c) You shall have received on the Closing Date certificates dated the
Closing Date, signed by William J. Maney and Mark F. Muething in their
capacities as the Senior Vice President, Chief Financial Officer and Treasurer
and Senior Vice President, General Counsel and Secretary, respectively, of each
Offeror, confirming the matters set forth in Sections 6(x), 8(a) and 8(b) and
stating that the Offeror has complied with all of the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied by the Offeror on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of either Offeror and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
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involving a prospective change in the capital stock or in the long-term debt of
either Offeror or any of its subsidiaries and (iii) neither the Company nor any
of its subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(d)(i),
8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Keating, Muething & Klekamp, P.L.L., counsel for the Company, to the effect
that:
(i) each Offeror has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority
to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and is duly qualified and is in good
standing (or the local law equivalent) as a foreign corporation
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, prospects, financial
condition or results of operations of the Offeror and its subsidiaries,
taken as a whole;
(ii) each of the subsidiaries of AAG which is listed on
Schedule II annexed hereto ("DESIGNATED SUBSIDIARIES") has been duly
incorporated and is validly existing as a corporation in good standing
(or the local law requirement), to the extent applicable, or licensed
to do business under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing (or the local
law equivalent) in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be
in good standing would not have a material adverse effect on the
business, prospects, financial condition or results of operations of
either Offeror and its respective subsidiaries taken as a whole;
(iii) all the outstanding shares of capital stock of each
Offeror have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights;
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<PAGE> 19
(iv) all of the outstanding shares of capital stock of each of
the Designated Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the
respective Offeror, directly or indirectly through one or more
subsidiaries, free and clear of any Lien;
(v) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vi) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vii) the Guarantee has been duly authorized by AAG and
constitutes a valid and binding obligation of AAG, enforceable in
accordance with its terms except as (A) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(viii) this Agreement has been duly authorized, executed and
delivered by each Offeror;
(ix) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before or contemplated by the
Commission;
(x) the statements under the captions "Description of Notes,"
"Description of Debt Securities" and "Underwriting" in the Prospectus
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and Item 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings;
(xi) neither Offeror nor any of its subsidiaries is in
violation of its respective charter or Code of Regulations or by-laws
and, to the best of such counsel's knowledge after due inquiry, neither
Offeror nor any of its subsidiaries is in default in the performance of
any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Offeror and its subsidiaries, taken
as a whole, to which the Offeror or any of its subsidiaries is a party
or by which the Offeror or any of its subsidiaries or their respective
property is bound;
(xii) the execution, delivery and performance of this Agreement,
the Indenture, the Guarantee and the Securities by the Company and AAG,
as the case may be, the compliance by the Company and AAG, as the case
may be, with all the provisions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby will not (A)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (B) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or Code of
Regulations or by-laws of either Offeror or any of its subsidiaries or
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Offeror and its subsidiaries, taken
as a whole, to which the Offeror or any of its subsidiaries is a party
or by which the Offeror or any of its subsidiaries or their respective
property is bound, (C) violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over either Offeror,
any of its subsidiaries or their respective property, (D) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under any agreement or instrument to which either Offeror or any
of its subsidiaries is a party or by which the Offeror or any of its
subsidiaries or their respective property is bound or (E) result in the
suspension, termination or revocation of any Authorization of either
Offeror or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization;
(xiii) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which either
Offeror or any of its subsidiaries is or could be a party or to which
any
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<PAGE> 21
of their respective property is or could be subject that are required
to be described in the Registration Statement or the Prospectus and are
not so described, or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required;
(xiv) such counsel does not know of any violation by either
Offeror or any of its subsidiaries of any Environmental Law, any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or any provisions of the Foreign Corrupt Practices Act or the
rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition or
results of operation of the Offeror and its subsidiaries, taken as a
whole;
(xv) each Offeror and its subsidiaries has such Authorizations
of, and has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all courts
and other tribunals, including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business,
except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial condition
or results of operations of the Offeror and its subsidiaries, taken as
a whole; each such Authorization is valid and in full force and effect
and each Offeror and its subsidiaries is in compliance with all the
terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to
either Offeror or any of its subsidiaries; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of
operations of the Offeror and its subsidiaries, taken as a whole;
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<PAGE> 22
(xvi) neither Offeror is or, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended;
(xvii) to the best of such counsel's knowledge after due inquiry,
there are no contracts, agreements or understandings between either
Offeror and any person granting such person the right to require the
Offeror to file a registration statement under the Act with respect to
any securities of the Offeror or to require the Offeror to include such
securities with the Securities registered pursuant to the Registration
Statement;
(xviii) to the best knowledge of such counsel (which has not
conducted any investigation), each Insurance Subsidiary holds such
insurance licenses, certificates and permits from governmental
authorities (including, without limitation, Insurance Licenses) which
are necessary to the conduct of its business as described in the
Prospectus; to the best knowledge of such counsel, there is no pending
or threatened action, suit, proceeding or investigation that could
reasonably be expected to result in the revocation, termination or
suspension of any Insurance License; and, except as disclosed in the
Prospectus, to the knowledge of such counsel, no insurance regulatory
agency or body has issued, or commenced any proceeding for the issuance
of, any order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its parent;
(xix) to the best knowledge of such counsel, all reinsurance
treaties and arrangements to which any Insurance Subsidiary is a party
are in full force and effect and such counsel is not aware of any
violation of or default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein
by any Insurance Subsidiary; and
(xx) (A) each document, if any, filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus (except for
financial statements and other financial data included therein as to
which no opinion need be expressed) complied when so filed as to form
with the Exchange Act, (B) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for the
financial statements and other financial data included therein as to
which no opinion need be expressed) comply as to form with the Act, (C)
such counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein (except for
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<PAGE> 23
the financial statements and other financial data as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act) contained any 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 and (D) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except
for the financial statements and other financial data, as aforesaid)
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The opinion of Keating, Muething & Klekamp, P.L.L. described in Section
8(e) above shall be rendered to you at the request of the Company and AAG and
shall so state therein.
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Taft, Stettinius & Hollister LLP, counsel for the Underwriters,
as to the matters referred to in Sections 8(e)(v), 8(e)(vi), 8(e)(vii),
8(e)(viii) and 8(e)(x) and clauses 8(e)(xx)(B) (insofar as it relates to the
Prospectus), 8(e)(xx)(C) and 8(e)(xx)(D).
In giving such opinions with respect to the matters covered by Section
8(e)(xx), Keating, Muething & Klekamp, P.L.L. may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but is without independent check or verification except as specified.
In giving such opinions with respect to the matters covered by clauses
8(e)(xx)(B), 8(e)(xx)(C) and 8(e)(xx)(D) above, Taft, Stettinius & Hollister LLP
may state that their opinion and belief are based upon their participation in
the preparation of the Prospectus and any amendments or supplements thereto
(other than the documents incorporated therein by reference) and review and
discussion of the contents thereof (including the documents incorporated therein
by reference), but are without independent check or verification except as
specified.
(h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Ernst & Young LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information
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<PAGE> 24
contained in or incorporated by reference into the Registration Statement and
the Prospectus.
(i) The Securities shall have been rated "A-" by Duff & Phelps and
"Baa3" by Moody's Investors Service, Inc.
(j) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(k) The Offerors shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by them on or prior to the Closing Date.
SECTION 9. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of either Offeror on
any exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of either
Offeror and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
-24-
<PAGE> 25
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the proportion which the principal
amount of Securities set forth opposite its name in Schedule I bears to the
aggregate principal amount of Securities which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of Securities which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Offerors. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or AAG, to
Mark F. Muething, 250 East Fifth Street, Cincinnati, Ohio 45202 and (ii) if to
any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Offerors and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Offerors, the officers
or directors of the Offerors or any person controlling the Offerors, (ii)
-25-
<PAGE> 26
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Offerors agree to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Offerors shall be liable for all expenses which they have
agreed to pay pursuant to Section 5(j) hereof. The Offerors also agree to
reimburse the several Underwriters, their directors and officers and any persons
controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the fees disbursements of counsel) incurred by
them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement, including the indemnity
agreements contained in Section 7 hereof, has been and is made solely for the
benefit of and shall be binding upon the Offerors, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Offerors' directors and the Offerors' officers who sign the
Registration Statement and any person controlling either of the Offerors and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Securities from any of the several Underwriters merely
because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-26-
<PAGE> 27
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
AAG HOLDING COMPANY, INC.
By: /s/ Mark F. Muething
--------------------------------------
Name: Mark F. Muething
Title: Senior Vice President
AMERICAN ANNUITY GROUP, INC.
By: /s/ Mark F. Muething
--------------------------------------
Name: Mark F. Muething
Title: Senior Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By /s/ Leandro S. Galban, Jr.
-----------------------------------
Name: Leandro S. Galban, Jr.
Title: Managing Director
-27-
<PAGE> 28
SCHEDULE I
Underwriters Principal Amount of
- ------------ Securities
to be Purchased
---------------
Donaldson, Lufkin & Jenrette Securities
Corporation $ 50,000,000.00
Bear, Stearns & Co. Inc. 50,000,000.00
---------------
Total $100,000,000.00
<PAGE> 29
SCHEDULE II
<TABLE>
<CAPTION>
Percentage of
State of Common Equity
Name of Company Incorporation Ownership by AAG
--------------- ------------- ----------------
<S> <C> <C>
AAG Holding Company, Inc. Ohio 100%
Great American Life Insurance Company Ohio 100%
American Memorial Life Insurance Company South Dakota 100%
Loyal American Life Insurance Company Ohio 100%
AAG Securities, Inc. Ohio 100%
Annuity Investors Life Insurance Company Ohio 100%
CSW Management Services, Inc. Texas 100%
International Funeral Associates Delaware 100%
American DataSource, Inc. Delaware 100%
Lifestyle Financial Investments, Inc. Ohio 100%
Retirement Resource Group, Inc. Indiana 100%
Arkansas National Life Insurance Company Arkansas 100%
General Accident Life Assurance Company of Puerto Rico 99.9%
Puerto Rico, Inc.
</TABLE>
-2-
<PAGE> 1
EXHIBIT 4
- ---------------- ---------------------
Number $100,000,000.00
SB0001
- ---------------- ---------------------
CUSIP 000336 AE 7
SEE REVERSE FOR CERTAIN DEFINITIONS
AAG HOLDING COMPANY, INC.
6 7/8% SENIOR NOTES DUE 2008
guaranteed to the extent set forth herein by
AMERICAN ANNUITY GROUP, INC.
AAG Holding Company, Inc., a corporation duly organized and existing under the
laws of the State of Ohio (herein referred to as the "Company"), for value
received, hereby promises to pay to
CEDE & CO.
6 7/8% 6 7/8%
DUE 2008 DUE 2008
or registered assigns, the principal sum of One Hundred Million DOLLARS
on June 1, 2008 and to pay interest on said principal sum at the rate per annum
specified above in semiannual payments on June 1 and December 1, commencing
December 1, 1998 to holders of record on the preceding May 15 and November 15,
respectively. Reference is hereby made to the further provisions of this
Security as set forth on the reverse hereof.
This Security shall not be valid unless the certificate of
authentication hereof has been executed by the Trustee or an Authenticating
Agent appointed by the Company.
In Witness Whereof, AAG Holding Company, Inc. has caused this
instrument to be signed by its Vice President by a facsimile of his signature
and has caused a facsimile of its corporate seal to be imprinted hereon,
attested by its Secretary by facsimile signature.
AAG Holding Company, Inc.
Dated: June 1, 1998
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities described in the within-mentioned Indenture.
<TABLE>
<CAPTION>
<S> <C> <C>
BY: BY: BY:
- --------------------------------- --------------------------------------- -----------------------------------
Authorized Signer Christopher P. Miliano Vice President Mark F. Muething Secretary
</TABLE>
<PAGE> 2
AAG HOLDING COMPANY, INC.
6 7/8% SENIOR NOTES DUE 2008
1. INTEREST
AAG Holding Company, Inc. ("Company"), an Ohio corporation, promises to pay
interest on the principal amount of this Senior Note at the rate per annum shown
above. The Company will pay interest semiannually on June 1 and December 1 of
each year, commencing December 1, 1998. Interest on the Senior Note will
initially accrue from June 1, 1998, and thereafter from the most recent date to
which interest has been paid. Interest on the Senior Note shall be computed on
the basis of a 360 day year of twelve 30-day months.
2. METHOD OF PAYMENT
The Company will pay interest on the Senior Notes (except defaulted
interest) to the persons who are registered holders of Senior Notes at the close
of business on May 15 or November 15 next preceding the interest payment date
even though Senior Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Senior Notes to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal and interest by
check payable in such money. It may mail an interest check to a holder's
registered address.
3. PAYING AGENT AND REGISTRAR
Initially, Securities Transfer Company, One East Fourth Street, Cincinnati,
Ohio 45202, will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice. The Company or any of
its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE
This Senior Note is one of a duly authorized issue of Senior Debt Securities
of the Company (herein called the "Debt Securities") of the series hereinafter
specified, which series is limited (except as otherwise provided in the
Indenture referred to below) in an aggregate principal amount to $100,000,000,
all such Debt Securities issued and to be issued pursuant to Board Resolutions
dated May 27, 1998, the Indenture dated as of May 27, 1998 among the Company,
American Annuity Group, Inc. as guarantor (the "Guarantor"), a Delaware
corporation, and Star Bank, N.A., as trustee (herein called the "Trustee," which
term includes any successor Trustee under the Indenture), (herein called the
"Indenture"), to which reference is hereby made for a statement of the rights
and limitations of rights thereunder of the holders of the Debt Securities and
of the rights, duties, obligations and immunities and the Company and the
Trustee for each series of Debt Securities, and of the terms upon which the Debt
Securities are, and are to be, authenticated and delivered. As provided in the
Indenture, the Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, in
various authorized denominations, may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption
provisions, if any, may be subject to different sinking funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This Senior Note is one of a series of
Debt Securities designated therein as 6 7/8% Senior Notes Due 2008.
5. OPTIONAL REDEMPTION
The Senior Notes will be subject to redemption at the option of the Company,
in whole or in part, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to the sum of (i) the principal amount of the Senior
Notes being redeemed plus accrued interest thereon to the redemption date, and
(ii) the Make-Whole Amount (as defined below), if any, with respect to such
Senior Notes.
"Make-Whole Amount" means, in connection with any optional redemption of any
Senior Notes, the excess, if any, of (i) the sum, as determined by a Quotation
Agent (as defined herein) of the present values of the principal amount of such
Senior Notes, together with scheduled payments of interest from the redemption
date to the Stated Maturity of the Senior Notes, in each case discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) over
(ii) 100% of the principal amount of the Senior Debentures to be redeemed.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using 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, calculated on the third
Business Day preceding the redemption date, plus in each case .20%. (20 basis
points).
"Comparable Treasury Issue" means the U. S. Treasury 5 5/8% Note due May 15,
2008. If such security shall cease to be outstanding then Comparable Treasury
Issue shall mean the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the remaining term from the redemption
date to the Stated Maturity Date of the Senior 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 Senior Debentures.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Indenture Trustee after consultation with the Company. "Reference Treasury
Dealer" means a primary U.S. Government securities dealer.
"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
<PAGE> 3
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 Indenture Trustee obtains
fewer than three such Reference Treasury Dealer Quotations, the average of such
Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Indenture 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 Indenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such redemption date.
6. MATURITY
The Company will redeem all Senior Notes outstanding on June 1, 2008 at
a redemption price of 100% of principal amount, plus accrued interest to the
redemption date.
7. DENOMINATIONS, TRANSFER, EXCHANGE
The Senior Notes are issuable only in registered forms without coupons;
beneficial owners may hold denominations of $1,000 and any integral multiple
thereof. Until this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is 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.
This Senior Note may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary,
unless and until this Senior Note is exchanged in whole or in part for Senior
Note in definitive form.
8. DISCHARGE PRIOR TO MATURITY
If the Company at any time deposits with the Trustee money or U.S.
Government Obligations sufficient to pay principal and interest on the Senior
Notes to redemption or maturity, the Company will be discharged from the
Indenture and the Senior Notes, and holders must look only to the deposited
money and securities for payment. U.S. Government Obligations are securities
backed by the full faith and credit of the United States.
9. AMENDMENT, SUPPLEMENT AND WAIVERS
Subject to certain exceptions, the Indenture or the Senior Notes may be
amended or supplemented with the consent of the holders of a majority in
principal amount of the outstanding Senior Notes, and any past default or
compliance with any provision may be waived with the consent of the holders of a
majority in outstanding principal amount of the Senior Notes. Without the
consent of any Note holder, the Company and the Trustee may amend or supplement
the Indenture to cure any ambiguity, defect or inconsistency or to make any
change that does not adversely affect the rights of any Note holder.
10. SUCCESSOR COMPANY
When a successor corporation assumes all the obligations of its predecessor
under the Senior Notes and the Indenture, the predecessor corporation will be
released from those obligations.
11. TRUSTEE DEALINGS WITH THE COMPANY
Star Bank, National Association, the Trustee under the Indenture, or any
Trustee may act as Trustee in connection with issues of indebtedness issued by
the company and, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates (as
defined in the Indenture), and may otherwise deal with the company or its
Affiliates, as if it were not Trustee.
12. AUTHENTICATION
This Senior Note shall not be valid until authenticated by the manual
signature of the Trustee or an Authenticating Agent.
13. ABBREVIATIONS
Customary abbreviations may be used in the name of a Debenture holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=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).
<PAGE> 4
GUARANTEE OF AMERICAN ANNUITY GROUP, INC.
FOR VALUE RECEIVED, American Annuity Group, Inc., a Delaware corporation
(the "Guarantor"), hereby unconditionally guarantees to the holders of the
Senior Notes the due and punctual payment of the principal or interest on said
Senior Notes, when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, according to the terms herein and of the
Indenture previously referred to therein (the "Guaranty").
The Guarantor agrees to determine, at least one Business Day prior to the
date upon which a payment of principal of or interest on said Senior Notes are
due and payable, whether the Company has available the funds to make such
payment as the same shall become due and payable. In case of the failure of the
Company punctually to pay any such principal, premium, if any, or interest, the
Guarantor agrees to cause any such payment to be made punctually when and as the
same shall become due and payable, whether at maturity, upon redemption, or
otherwise, and as if such payment were made by the Company.
The Guarantor agrees that its obligations under the Indenture shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Senior Notes or said Indenture, the
absence of any action to enforce the same, any waiver or consent by the holder
of said Senior Notes with respect to any provisions thereof, the recovery of any
judgment against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor has waived diligence, presentment,
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to said Senior Notes or indebtedness
evidenced thereby, and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Senior Note and the Indenture.
The Guarantor is subrogated to all rights of the holder of said Senior
Notes against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guaranty; provided, however, that the
Guarantor is not, without the consent of the holders of all of the Senior Notes
then outstanding, entitled to enforce or to receive any payments arising out of
or based upon such right of subrogation until the principal of and premium, if
any, and interest on all Senior Notes shall have been paid in full or payment
thereof shall have been provided for in accordance with said Indenture.
Notwithstanding anything to the contrary contained herein or contained in
the Indenture, if following any payment of principal or interest by the Company
on the Senior Notes to the holders of the Senior Notes it is determined by a
final decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy (including any debtor-in-possession) as a
preference under 11 U.S.C. Section 547 and such payment is paid by such holder
to such trustee in bankruptcy, then and to the extent of such repayment, the
obligations of the Guarantor under the Indenture remain in full force and
effect.
This Guarantee shall not be valid or become obligatory for any purpose with
respect to a Senior Note until the certificate of authentication on such
Security shall have been signed by the Trustee (or the Authentication Agent).
This Guarantee is governed by the laws of the State of Ohio without regard
to conflicts of laws principles thereof.
IN WITNESS WHEREOF, AMERICAN ANNUITY GROUP, INC. has caused this Guarantee
to be signed in its corporate name by the facsimile signature of two of its
officers thereunto duly authorized and has caused a facsimile of its corporate
seal to be affixed hereunto or imprinted or otherwise reproduced hereon.
AMERICAN ANNUITY GROUP, INC. ATTEST:
By: __________________________________ By: _____________________________
Name: Christopher P. Miliano Name: Mark F. Muething
Title: Vice President Title: Secretary
[SEAL]
<PAGE> 5
whether at maturity, upon redemption, or otherwise, and as if such payment were
made by the Company.
The Guarantor agrees that its obligations under the Indenture shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Senior Notes or said Indenture, the
absence of any action to enforce the same, any waiver or consent by the holder
of said Senior Notes with respect to any provisions thereof, the recovery of any
judgment against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor has waived diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest or notice with respect to said Senior Notes or indebtedness evidenced
thereby, and all demands whatsoever and covenants that this Guarantee will not
be discharged except by complete performance of the obligations contained in the
Indenture.
The Guarantor is subrogated to all rights of the holder of said Senior Notes
against the Company in respect of any amounts paid by the Guarantor pursuant to
the provisions of this Guaranty; provided, however, that the Guarantor is not,
without the consent of the holders of all of the Senior Notes then outstanding,
entitled to enforce or to receive any payments arising out of or based upon such
right of subrogation until the principal of and premium, if any, and interest on
all Senior Notes shall have been paid in full or payment thereof shall have been
provided for in accordance with said Indenture.
Notwithstanding anything to the contrary contained herein, if following any
payment of principal or interest by the Company on the Senior Notes to the
holders of the Senior Notes it is determined by a final decision of a court of
competent jurisdiction that such payment shall be avoided by a trustee in
bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C.
Section 547 and such payment is paid by such holder to such trustee in
bankruptcy, then and to the extent of such repayment, the obligations of the
Guarantor under the Indenture remain in full force and effect.
This Guarantee is not valid or obligatory for any purpose with respect to a
Debt Security until the certificate of authentication on such Security shall
have been signed by the Trustee (or the Authentication Agent).
This Guarantee is governed by the laws of the State of New York.
IN WITNESS WHEREOF, AMERICAN ANNUITY GROUP, INC. has caused this Guaranty to
be signed in its corporate name by the undersigned duly authorized and has
caused a facsimile of its corporate seal to be affixed hereunto.
AMERICAN ANNUITY GROUP, INC. ATTEST:
By: __________________________________ By: _____________________________
Name: Christopher P. Miliano Name: Mark F. Muething
Title: Vice President Title: Secretary
<PAGE> 6
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 Social Security or Tax-ID No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type Assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent 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
other side of this Senior Note)
<PAGE> 1
EXHIBIT 5
FACSIMILE (513) 579-6957
May 28, 1998
Direct Dial: (513) 579-6517
E-Mail: [email protected]
American Annuity Group, Inc AAG Holding Company, Inc.
250 East Fifth Street 250 East Fifth Street
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
Gentlemen:
We have acted as counsel to American Annuity Group, Inc. ("AAG") and
AAG Holding Company, Inc. (the "Company"), in connection with the Registration
Statement on Form S-3 (Registration No. 333-41071) filed with the Securities and
Exchange Commission on November 26, 1997 and the Prospectus Supplement dated May
27, 1998 (hereafter referred to as the "Registration Statement") relating to the
public offering of an aggregate principal amount of One Hundred Million Dollars
($100,000,000) of 6-7/8% Senior Notes due 2008 (the "Securities").
In reaching the conclusions expressed herein, we have examined and
relied upon the original or copies, certified to our satisfaction, of (i) the
Articles of Incorporation and the Code of Regulations of the Company; (ii) the
Certificate of Incorporation, as amended, and By-Laws of AAG; (iii) copies of
resolutions of the Board of Directors of the Company and AAG, or committees
thereof, authorizing the issuance of the Securities and related matters; (iv)
the Registration Statement and all exhibits thereto; and (v) such other
documents and instruments as we have deemed necessary for the expression of
opinion herein contained. In making the foregoing examinations, we have assumed
the genuineness of all signatures and 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. As to various
questions of fact material to this opinion, we have relied, to the extent we
deem reasonably appropriate, upon representations or certificates of officers or
directors of the Company and AAG and upon documents, records and instruments
furnished to us by the Company and AAG, without independent check or
verification of their accuracy.
Based on the foregoing, we are of the opinion that when, and if,
issued, delivered and paid for, the Securities will be duly authorized, validly
issued and binding obligations of the Company
<PAGE> 2
American Annuity Group, Inc.
AAG Holding Company, Inc.
Page 2
May 28, 1998
and the guaranty of the Securities by AAG will be a duly authorized, validly
issued and binding obligation of AAG.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In providing this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Commission promulgated thereunder.
Yours truly,
KEATING, MUETHING & KLEKAMP, P.L.L.
By:/s/ Paul V. Muething
--------------------------------
Paul V. Muething
cc: Mr. Mark F. Muething
