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Securities Purchase Agreement - American International Group Inc. and United States Department of the Treasury

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SECURITIES PURCHASE AGREEMENT

dated as of

November 25, 2008

between

American International Group, Inc.

and

United States Department of the Treasury

TABLE OF CONTENTS


		Page

Article 1
Purchase; Closing
1.1	Purchase		1
1.2	Closing		1
1.3	Interpretation		4

Article 2
Representations and Warranties

2.1	Disclosure		4
2.2	Representations and Warranties of the Company		5

Article 3
Covenants

3.1	Consummation of Purchase and Charter Amendment		13
3.2	Expenses		15
3.3	Sufficiency of Authorized Common Stock; Exchange Listing		15
3.4	Certain Notifications Until Closing		15
3.5	Information and Confidentiality		15

Article 4
Additional Agreements

4.1	Purchase of Restricted Securities		16
4.2	Legends		16
4.3	Certain Transactions		18
4.4	Transfer of Purchased Securities, the Warrant and Warrant Shares		18
4.5	Registration Rights		18
4.6	Voting of Warrant Shares		30
4.7	Depositary Shares		30
4.8	Restriction on Dividends and Repurchases		30
4.9	Repurchase of Investor Securities		31
4.10	Executive Compensation		33
4.11	Restrictions on Lobbying		35
4.12	Restrictions on Expenses		35
4.13	Risk Management Committee		36
4.14	Dividend Rate Adjustment		36


		Page

Article 5
Miscellaneous
5.1	Termination		36
5.2	Survival of Representations and Warranties		36
5.3	Amendment		37
5.4	Waiver of Conditions		37
5.5	Governing Law: Submission to Jurisdiction, Etc.		37
5.6	Notices		37
5.7	Definitions		38
5.8	Assignment		39
5.9	Severability		39
5.10	Entire Agreement		39
5.11	No Third Party Beneficiaries		39


SCHEDULE A:		ADDITIONAL TERMS AND CONDITIONS
SCHEDULE B:		CAPITALIZATION
SCHEDULE C:		LITIGATION
SCHEDULE D:		COMPLIANCE WITH LAWS
SCHEDULE E:		REGULATORY AGREEMENTS

LIST OF ANNEXES


ANNEX A:		FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
ANNEX B-1:		FORM OF WAIVER FOR THE SENIOR EXECUTIVE OFFICERS AND THE SENIOR PARTNERS
ANNEX B-2:		FORM OF WAIVER FOR THE COMPANY
ANNEX C:		FORM OF OPINION
ANNEX D:		FORM OF WARRANT

INDEX OF DEFINED TERMS


		Location of
Term		Definition
Affiliate		5.7(b)
Agreement		Recitals
Appraisal Procedure		4.9(c)(i)
Bankruptcy Exceptions		2.2(d)
Benefit Plans		1.2(d)(iv)
Board of Directors		2.2(f)
Business Combination		5.8
business day		1.3
Capitalization Date		2.2(b)
Certificate of Designations		1.2(d)(iii)
Charter		2.2(a)
Closing		1.2(a)
Closing Date		1.2(a)
Code		2.2(n)
Common Stock		2.1
Company		Recitals
Company Financial Statements		2.2(h)
Company Material Adverse Effect		2.1(a)
Company Reports		2.2(i)(i)
Company Subsidiary; Company Subsidiaries		2.2(i)(i)
Control		4.9(c)(iii)
control; controlled by; under common control with		5.7(b)
Controlled Group		2.2(n)
Credit Agreement		1.2(b)
EESA		1.2(d)(iv)
Equity Interests		5.7(b)
ERISA		2.2(n)
Exchange Act		2.1(b)
Fair Market Value		4.9(c)(ii)
FRBNY		1.2(b)
Fund		5.7(b)
GAAP		2.1(a)
Governmental Entities		1.2(c)
Holder		4.5(k)(i)
Holders' Counsel		4.5(k)(ii)
Indemnitee		4.5(g)(i)
Information		3.5(b)
Investor		Recitals
Junior Stock		4.8(c)
knowledge of the Company; Company's knowledge		5.7(c)

iii


		Location of
Term		Definition
Last Fiscal Year		2.1(b)
officers		5.7(c)
Parity Stock		4.8(c)
Pending Underwritten Offering		4.5(l)
Permitted Repurchases		4.8(a)(ii)
Piggyback Registration		4.5(a)(iv)
Plan		2.2(n)
Preferred Stock		Recitals
Previously Disclosed		2.1(b)
Proprietary Rights		2.2(u)
Purchase		Recitals
Purchase Price		1.1
Purchased Securities		Recitals
register; registered; registration		4.5(k)(iii)
Registrable Securities		4.5(k)(iv)
Registration Expenses		4.5(k)(v)
Regulatory Agreement		2.2(s)
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415		4.5(k)(vi)
SEC		2.1(b)
Securities Act		2.2(a)
Selling Expenses		4.5(k)(vii)
Senior Executive Officers		4.10
Senior Partners		4.10
Series C Preferred Stock		2.2(b)
Share Dilution Amount		4.8(a)(ii)
Shelf Registration Statement		4.5(a)(ii)
Signing Date		2.1(a)
Special Registration		4.5(i)
Stockholder Proposal		3.1(b)
subsidiary		5.7(a)
Tax; Taxes		2.2(o)
Transfer		4.4
Warrant		Recitals
Warrant Shares		2.2(d)

SECURITIES PURCHASE AGREEMENT

Recitals:

WHEREAS, American International Group, Inc. (the "Company") intends to issue in a privateplacement 4,000,000 shares of the Series D Fixed Rate Cumulative Perpetual Preferred Stock (the"Preferred Stock") and a warrant (the "Warrant", and together with the Preferred Stock, the"Purchased Securities") to purchase 53,798,766 shares of the Company's common stock and the UnitedStates Department of the Treasury (the "Investor") intends to purchase (the "Purchase") from theCompany the Purchased Securities; and

WHEREAS, the Purchase will be governed by this Securities Purchase Agreement (including theSchedules and Annexes hereto) (the "Agreement").

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,covenants and agreements set forth herein, the parties agree as follows:

Article 1
Purchase; Closing

1.1 Purchase. On the terms and subject to the conditions set forth in this Agreement, theCompany agrees to sell to the Investor, and the Investor agrees to purchase from the Company, atthe Closing (as hereinafter defined), the Purchased Securities for $40,000,000,000 (the "PurchasePrice").

1.2 Closing.

(a) On the terms and subject to the conditions set forth in this Agreement, the closing of thePurchase (the "Closing") will take place at the location specified in Schedule A, at thetime and on the date set forth in Schedule A, or as soon as practicable thereafter, or atsuch other place, time and date as shall be agreed between the Company and the Investor. The timeand date on which the Closing occurs is referred to in this Agreement as the "Closing Date".

(b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section 1.2,at the Closing (i) the Company will deliver the Preferred Stock and the Warrant, in each case asevidenced by one or more certificates dated the Closing Date and bearing appropriate legends ashereinafter provided for, (ii) upon verification of receipt of the Preferred Stock and Warrant atthe Investor's custodian, the Investor shall pay the Purchase Price by instructing the FederalReserve Bank of New York (the "FRBNY"), acting as fiscal agent of the Investor, to debit theInvestor's General Account for the Purchase Price, and the Investor is hereby directed by theCompany to pay the Purchase Price directly to the FRBNY as a credit to the account on the books ofthe FRBNY evidencing a prepayment in the amount of the Purchase Price of the Company's indebtednessto the FRBNY under the Credit Agreement dated as of September 22,

2008 between the Company and theFRBNY, as amended from time to time (the "Credit Agreement").

(c) The respective obligations of each of the Investor and the Company to consummate thePurchase are subject to the fulfillment (or waiver by the Investor and the Company, as applicable)prior to the Closing of the conditions that (i) any approvals or authorizations of all UnitedStates and other governmental, regulatory or judicial authorities (collectively, "GovernmentalEntities") required for the consummation of the Purchase shall have been obtained or made in formand substance reasonably satisfactory to each party and shall be in full force and effect and allwaiting periods required by United States and other applicable law, if any, shall have expired and(ii) no provision of any applicable United States or other law and no judgment, injunction, orderor decree of any Governmental Entity shall prohibit the purchase and sale of the PurchasedSecurities as contemplated by this Agreement.

(d) The obligation of the Investor to consummate the Purchase is also subject to thefulfillment (or waiver by the Investor) at or prior to the Closing of each of the followingconditions:

(i) (A) the representations and warranties of the Company set forth in (x) Section2.2(g) of this Agreement shall be true and correct in all respects as though made on and asof the Closing Date, (y) Sections 2.2(a) through (f) shall be true and correct in allmaterial respects as though made on and as of the Closing Date (other than representationsand warranties that by their terms speak as of another date, which representations andwarranties shall be true and correct in all material respects as of such other date) and (z)Sections 2.2(h) through (v) (disregarding all qualifications or limitations set forth insuch representations and warranties as to "materiality", "Company Material Adverse Effect"and words of similar import) shall be true and correct as though made on and as of theClosing Date (other than representations and warranties that by their terms speak as ofanother date, which representations and warranties shall be true and correct as of suchother date), except to the extent that the failure of such representations and warrantiesreferred to in this Section 1.2(d)(i)(A)(z) to be so true and correct, individually or inthe aggregate, does not have and would not reasonably be expected to have a Company MaterialAdverse Effect and (B) the Company shall have performed in all material respects allobligations required to be performed by it under this Agreement at or prior to the Closing;

(ii) the Investor shall have received a certificate signed on behalf of the Company bya senior executive officer certifying to the effect that the conditions set forth in Section1.2(d)(i) have been satisfied;

(iii) the Company shall have duly adopted and filed with the Secretary of State of itsjurisdiction of organization or other applicable Governmental Entity the certificate ofdesignations for the Preferred Stock in substantially the form attached hereto as Annex A(the "Certificate of Designations") and such filing shall have been accepted;

(iv) (A) the Company shall have taken all necessary action to effect such changes toits compensation, bonus, incentive and other benefit plans, arrangements and agreements(including golden parachute, severance and employment agreements) (collectively, "BenefitPlans") with respect to the Senior Executive Officers (and to the extent necessary for suchchanges to be legally enforceable, each of the Senior ExecutiveOfficers shall have duly consented in writing to such changes), as may be necessary,during the period that the Investor owns any debt or equity securities of the Companyacquired pursuant to this Agreement or the Warrant, in order to comply with Section 111(b)of the Emergency Economic Stabilization Act of 2008 ("EESA"), including the provisions forSystemically Significant Failing Institutions, as implemented by guidance or regulationthereunder, including Notice 2008-PSSFI, that has been issued and is in effect as of theClosing Date, including provisions prohibiting severance payments to the Senior ExecutiveOfficers, (B) the Company shall have taken all necessary action to effect such changes toits Benefit Plans with respect to the U.S.-based Senior Partners (and to the extentnecessary for such changes to be legally enforceable, each of the U.S.-based Senior Partnersshall have duly consented in writing to such changes), as may be necessary, during theperiod that the Investor owns any debt or equity securities of the Company acquired pursuantto this Agreement or the Warrant, in order to comply with the requirements in Section 4.10of this Agreement, (C) the Company shall have used its best efforts to take all necessaryaction to effect such changes to its Benefit Plans with respect to the other Senior Partners(and to the extent necessary for such changes to be legally enforceable, to have each of theother Senior Partners duly consent in writing to such changes), as may be necessary, duringthe period that the Investor owns any debt or equity securities of the Company acquiredpursuant to this Agreement or the Warrant, in order to comply with the requirements inSection 4.10 of this Agreement and (D) the Investor shall have received a certificate signedon behalf of the Company by a senior executive officer certifying to the effect that theconditions set forth in Section 1.2(d)(iv)(A) and (B) have been satisfied;

(v) each of the Company's Senior Executive Officers and the U.S-based Senior Partnersshall have delivered to the Investor, and the Company shall have delivered to the Investor,a written waiver in the form attached hereto as Annex B-1 (for the Senior Executive Officersand Senior Partners) or Annex B-2 (for the Company) releasing the Investor and the Company,and in the case of the Company's waiver, releasing the Investor, from any claims that suchSenior Executive Officers or Senior Partners may otherwise have against the Company or theInvestor, and in the case of the Company, any claims it may have against the Investor, ineach case as a result of the issuance, on or prior to the Closing Date, of any such guidanceor regulations or as a result of the requirements in Section 4.10 of this Agreement whichrequire the modification of, and the agreement of the Company hereunder to modify, the termsof any Benefit Plans with respect to the Senior Executive Officers and, as applicable, withrespect to the Senior Partners to eliminate or modify any provisions of such Benefit Plansthat would not be in compliance with the requirements of Section 111(b) of the EESA,including the provisions for Systemically Significant Failing Institutions, as implemented

by guidance or regulation thereunder, including Notice 2008-PSSFI, that has been issued andis in effect as of the Closing Date, and the requirements in Section 4.10 of this Agreement;

(vi) the Company shall have delivered to the Investor a written opinion from counsel tothe Company (which may be internal counsel), addressed to the Investor and dated as of theClosing Date, in substantially the form attached hereto as Annex C;

(vii) the Company shall have delivered certificates in proper form or, with the priorconsent of the Investor, evidence of shares in book-entry form, evidencing the PreferredStock to the Investor or its designee(s); and

(viii) the Company shall have duly executed the Warrant in substantially the formattached hereto as Annex D and delivered such executed Warrant to the Investor or itsdesignee(s).

1.3 Interpretation.When a reference is made in this Agreement to "Recitals," "Articles," "Sections," "Annexes" or"Schedules" such reference shall be to a Recital, Article or Section of, or Annex or Schedule to,this Agreement. The terms defined in the singular have a comparable meaning when used in theplural, and vice versa. References to "herein", "hereof", "hereunder" and the like refer to thisAgreement as a whole and not to any particular section or provision, unless the context requiresotherwise. The table of contents and headings contained in this Agreement are for referencepurposes only and are not part of this Agreement. Whenever the words "include," "includes" or"including" are used in this Agreement, they shall be deemed followed by the words "withoutlimitation." No rule of construction against the draftsperson shall be applied in connection withthe interpretation or enforcement of this Agreement, as this Agreement is the product ofnegotiation between sophisticated parties advised by counsel. All references to "$" or "dollars"mean the lawful currency of the United States of America. Except as expressly stated in thisAgreement, all references to any statute, rule or regulation are to the statute, rule or regulationas amended, modified, supplemented or replaced from time to time (and, in the case of statutes,include any rules and regulations promulgated under the statute) and to any section of any statute,rule or regulation include any successor to the section. References to a "business day" shall meanany day except Saturday, Sunday and any day on which banking institutions in the State of New Yorkgenerally are authorized or required by law or other governmental actions to close.

Article 2
Representations and Warranties

2.1 Disclosure.

(a) "Company Material Adverse Effect" means a material adverse effect on (i) the business,results of operation or financial condition of the Company and its consolidated subsidiaries takenas a whole; provided, however, that Company Material Adverse Effect shall

not be deemed to includethe effects of (A) changes after the date of this Agreement (the "Signing Date") in generalbusiness, economic or market conditions (including changes generally in prevailing interest rates,credit availability and liquidity, currency exchange rates and price levels or trading volumes inthe United States or foreign securities or credit markets), or any outbreak or escalation ofhostilities, declared or undeclared acts of war or terrorism, in each case generally affecting theindustries in which the Company and its subsidiaries operate, (B) changes or proposed changes afterthe Signing Date in generally accepted accounting principles in the United States ("GAAP") orregulatory accounting requirements, or authoritativeinterpretations thereof, (C) changes or proposed changes after the Signing Date in securities,insurance and other laws of general applicability or related policies or interpretations ofGovernmental Entities (in the case of each of these clauses (A), (B) and (C), other than changes oroccurrences to the extent that such changes or occurrences have or would reasonably be expected tohave a materially disproportionate adverse effect on the Company and its consolidated subsidiariestaken as a whole relative to comparable U.S. insurance or financial services organizations), or(D) changes in the market price or trading volume of the Company's common stock, par value $2.50per share ("Common Stock"), or any other equity, equity-related or debt securities of the Companyor its consolidated subsidiaries (it being understood and agreed that the exception set forth inthis clause (D) does not apply to the underlying reason giving rise to or contributing to any suchchange); or (ii) the ability of the Company to consummate the Purchase and the other transactionscontemplated by this Agreement and the Warrant and perform its obligations hereunder or thereunderon a timely basis.

(b) "Previously Disclosed" means information set forth or incorporated in the Company's AnnualReport on Form 10-K for the most recently completed fiscal year of the Company filed with theSecurities and Exchange Commission (the "SEC") prior to the Signing Date (the "Last Fiscal Year")or in its other reports and forms filed with or furnished to the SEC under Sections 13(a), 14(a) or15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") on or after the last day of theLast Fiscal Year and prior to the Signing Date.

2.2 Representations and Warranties of the Company. Except as Previously Disclosed, the Company represents and warrants to the Investor that as ofthe Signing Date and as of the Closing Date (or such other date specified herein):

(a) Organization, Authority and Significant Subsidiaries. The Company has been dulyincorporated and is validly existing and in good standing under the laws of its jurisdiction oforganization, with the necessary power and authority to own its properties and conduct its businessin all material respects as currently conducted; except as has not had, individually or in theaggregate, and would not reasonably be expected to have a Company Material Adverse Effect, theCompany has been duly qualified as a foreign corporation for the transaction of business and is ingood standing under the laws of each other jurisdiction in which it owns or leases properties orconducts any business so as to require such qualification; each subsidiary of the Company that is a"significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X under the SecuritiesAct of 1933 (the "Securities Act") has been duly organized and is validly existing in good standingunder the laws of its jurisdiction of organization. The Restated Certificate of Incorporation ofthe Company, as amended (the "Charter") and bylaws

of the Company, copies of which have beenprovided to the Investor prior to the Signing Date, are true, complete and correct copies of suchdocuments as in full force and effect as of the Signing Date.

(b) Capitalization. The authorized capital stock of the Company, and the outstandingcapital stock of the Company (including securities convertible into, or exercisable or exchangeablefor, capital stock of the Company) as of the most recent fiscal month-end preceding the SigningDate (the "Capitalization Date") is set forth on Schedule B. The outstanding shares ofcapital stock of the Company have been duly authorized and are validlyissued and outstanding, fully paid and nonassessable, and subject to no preemptive rights (andwere not issued in violation of any preemptive rights). As of the Signing Date, the Company doesnot have outstanding any securities or other obligations providing the holder the right to acquireCommon Stock that is not reserved for issuance, and the Company has not made any other commitmentto authorize, issue or sell any Common Stock, except as specified on Schedule B andincluding the Series C Perpetual, Convertible, Participating Preferred Stock, par value $5.00 pershare (the "Series C Preferred Stock"). Since the Capitalization Date, the Company has not issuedany shares of Common Stock, other than (i) shares issued upon the exercise of stock options ordelivered under other equity-based awards or other convertible securities or warrants which wereissued and outstanding on the Capitalization Date and disclosed on Schedule B and (ii)shares disclosed on Schedule B.

(c) Preferred Stock. The Preferred Stock has been duly and validly authorized, and,when issued and delivered pursuant to this Agreement, such Preferred Stock will be duly and validlyissued and fully paid and non-assessable, will not be issued in violation of any preemptive rights,and will rank pari passu with all other series or classes of the Company's preferred stock, whetheror not issued or outstanding, with respect to the payment of dividends and the distribution ofassets in the event of any dissolution, liquidation or winding up of the Company.

(d) The Warrant and Warrant Shares. The Warrant has been duly authorized and, whenexecuted and delivered as contemplated hereby, will constitute a valid and legally bindingobligation of the Company enforceable against the Company in accordance with its terms, except asthe same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similarlaws affecting the enforcement of creditors' rights generally and general equitable principles,regardless of whether such enforceability is considered in a proceeding at law or in equity("Bankruptcy Exceptions"). The shares of Common Stock issuable upon exercise of the Warrant (the"Warrant Shares") have been duly authorized and reserved for issuance upon exercise of the Warrantand when so issued in accordance with the terms of the Warrant will be validly issued, fully paidand non-assessable.

(e) Authorization, Enforceability.

(i) The Company has the corporate power and authority to execute and deliver thisAgreement and the Warrant and, subject to the approval of its stockholders described inSection 3.1(b), to carry out its obligations hereunder and thereunder (which

includes theissuance of the Preferred Stock, Warrant and Warrant Shares). The execution, delivery andperformance by the Company of this Agreement and the Warrant and the consummation of thetransactions contemplated hereby and thereby have been duly authorized by all necessarycorporate action on the part of the Company and its stockholders, and no further approval orauthorization is required on the part of the Company or its stockholders, except asdescribed in Section 3.1(b). This Agreement is a valid and binding obligation of the Companyenforceable against the Company in accordance with its terms, subject to the BankruptcyExceptions.

(ii) The execution, delivery and performance by the Company of this Agreement and theWarrant and the consummation of the transactions contemplatedhereby and thereby and compliance by the Company with the provisions hereof andthereof, will not (A) violate, conflict with, or result in a breach of any provision of, orconstitute a default (or an event which, with notice or lapse of time or both, wouldconstitute a default) under, or result in the termination of, or accelerate the performancerequired by, or result in a right of termination or acceleration of, or result in thecreation of, any lien, security interest, charge or encumbrance upon any of the propertiesor assets of the Company or any Company Subsidiary under any of the terms, conditions orprovisions of (i) subject to the approval of the Company's stockholders as described inSection 3.1(b), its organizational documents or (ii) any note, bond, mortgage, indenture,deed of trust, license, lease, agreement or other instrument or obligation to which theCompany or any Company Subsidiary is a party or by which it or any Company Subsidiary may bebound, or to which the Company or any Company Subsidiary or any of the properties or assetsof the Company or any Company Subsidiary may be subject, or (B) subject to compliance withthe statutes and regulations referred to in the next paragraph, violate any statute, rule orregulation or any judgment, ruling, order, writ, injunction or decree applicable to theCompany or any Company Subsidiary or any of their respective properties or assets except, inthe case of clauses (A)(ii) and (B), for those occurrences that, individually or in theaggregate, have not had and would not reasonably be expected to have a Company MaterialAdverse Effect.

(iii) Other than the filing of the Certificate of Designations with the Secretary ofState of its jurisdiction of organization or other applicable Governmental Entity, anycurrent report on Form 8-K required to be filed with the SEC, such filings and approvals asare required to be made or obtained under any state "blue sky" laws, the filing of any proxystatement contemplated by Section 3.1(b) and such as have been made or obtained, no noticeto, filing with, exemption or review by, or authorization, consent or approval of, anyGovernmental Entity is required to be made or obtained by the Company in connection with theconsummation by the Company of the Purchase except for any such notices, filings,exemptions, reviews, authorizations, consents and approvals the failure of which to make orobtain would not, individually or in the aggregate, reasonably be expected to have a CompanyMaterial Adverse Effect.

(f) Anti-takeover Provisions and Rights Plan. The Board of Directors of the Company(the "Board of Directors") has taken all necessary action to ensure that the transactions

contemplated by this Agreement and the Warrant and the consummation of the transactionscontemplated hereby and thereby, including the exercise of the Warrant in accordance with itsterms, will be exempt from any anti-takeover or similar provisions of the Company's Charter andbylaws, and any other provisions of any applicable "moratorium", "control share", "fair price","interested stockholder" or other anti-takeover laws and regulations of any jurisdiction. TheCompany has taken all actions necessary to render any stockholders' rights plan of the Companyinapplicable to this Agreement and the Warrant and the consummation of the transactionscontemplated hereby and thereby, including the exercise of the Warrant by the Investor inaccordance with its terms.

(g) No Company Material Adverse Effect. Since the last day of the last completedfiscal period for which the Company has filed a Quarterly Report on Form 10-Q or an Annual Reporton Form 10-K with the SEC prior to the Signing Date, no fact, circumstance, event,change, occurrence, condition or development has occurred that, individually or in theaggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.

(h) Company Financial Statements. The financial statements of the Company and itsconsolidated subsidiaries (collectively, the "Company Financial Statements") included orincorporated by reference in the Company Reports filed with the SEC since December 31, 2006,present fairly in all material respects the consolidated financial position of the Company and itsconsolidated subsidiaries as of the dates indicated therein (or if amended prior to the SigningDate, as of the date of such amendment) and the consolidated results of their operations for theperiods specified therein; and except as stated therein, such financial statements (A) wereprepared in conformity with GAAP applied on a consistent basis (except as may be noted therein),(B) have been prepared from, and are in accordance with, the books and records of the Company andthe Company Subsidiaries and (C) complied as to form, as of their respective dates of filing withthe SEC, in all material respects with the applicable accounting requirements and with thepublished rules and regulations of the SEC with respect thereto.

(i) Reports.

(i) Since December 31, 2006, the Company and each subsidiary of the Company (each a"Company Subsidiary" and, collectively, the "Company Subsidiaries") has timely filed(subject to any permitted extension) all reports, registrations, documents, filings,statements and submissions, together with any amendments thereto, that it was required tofile with any Governmental Entity (the foregoing, collectively, the "Company Reports") andhas paid all fees and assessments due and payable in connection therewith, except, in eachcase, as would not, individually or in the aggregate, reasonably be expected to have aCompany Material Adverse Effect. As of their respective dates of filing, the CompanyReports complied in all material respects with all statutes and applicable rules andregulations of the applicable Governmental Entities. In the case of each such CompanyReport filed with or furnished to the SEC, such Company Report (A) did not, as of its dateor if amended prior to the Signing Date, as of the date of such amendment, contain an untruestatement of a material fact or omit to state a material fact necessary in order to make thestatements made

therein, in light of the circumstances under which they were made, notmisleading, and (B) complied as to form in all material respects with the applicablerequirements of the Securities Act and the Exchange Act. With respect to all other CompanyReports, the Company Reports were complete and accurate in all material respects as of theirrespective dates. No executive officer of the Company or any Company Subsidiary has failedin any respect to make the certifications required of him or her under Section 302 or 906 ofthe Sarbanes-Oxley Act of 2002.

(ii) The records, systems, controls, data and information of the Company and theCompany Subsidiaries are recorded, stored, maintained and operated under means (includingany electronic, mechanical or photographic process, whether computerized or not) that areunder the exclusive ownership and direct control of the Company or the Company Subsidiariesor their accountants (including all means of access thereto and therefrom), except for anynon-exclusive ownership and non-direct control that would not reasonably be expected to havea material adverse effect on the system of internalaccounting controls described below in this Section 2.2(i)(ii). The Company (A) hasimplemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e)of the Exchange Act) to ensure that material information relating to the Company, includingthe consolidated Company Subsidiaries, is made known to the chief executive officer and thechief financial officer of the Company by others within those entities, and (B) hasdisclosed, based on its most recent evaluation prior to the Signing Date, to the Company�soutside auditors and the audit committee of the Board of Directors (x) any significantdeficiencies and material weaknesses in the design or operation of internal controls overfinancial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonablylikely to adversely affect the Company's ability to record, process, summarize and reportfinancial information and (y) any fraud, whether or not material, that involves managementor other employees who have a significant role in the Company's internal controls overfinancial reporting.

(j) No Undisclosed Liabilities. Neither the Company nor any of the CompanySubsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent orotherwise) which are not properly reflected or reserved against in the Company Financial Statementsto the extent required to be so reflected or reserved against in accordance with GAAP, except for(A) liabilities that have arisen since the last fiscal year end in the ordinary and usual course ofbusiness and consistent with past practice and (B) liabilities that, individually or in theaggregate, have not had and would not reasonably be expected to have a Company Material AdverseEffect.

(k) Offering of Securities. Neither the Company nor any person acting on its behalfhas taken any action (including any offering of any securities of the Company under circumstanceswhich would require the integration of such offering with the offering of any of the PurchasedSecurities under the Securities Act, and the rules and regulations of the SEC promulgatedthereunder), which might subject the offering, issuance or sale of any of the Purchased Securitiesto Investor pursuant to this Agreement to the registration requirements of the Securities Act.

(l) Litigation and Other Proceedings. Except (i) as set forth on Schedule Cor (ii) as would not, individually or in the aggregate, reasonably be expected to have a CompanyMaterial Adverse Effect, there is no (A) pending or, to the knowledge of the Company, threatened,claim, action, suit, investigation or proceeding, against the Company or any Company Subsidiary orto which any of their assets are subject nor is the Company or any Company Subsidiary subject toany order, judgment or decree or (B) unresolved violation, criticism or exception by anyGovernmental Entity with respect to any report or relating to any examinations or inspections ofthe Company or any Company Subsidiaries.

(m) Compliance with Laws. Except as would not, individually or in the aggregate,reasonably be expected to have a Company Material Adverse Effect, the Company and the CompanySubsidiaries have all permits, licenses, franchises, authorizations, orders and approvals of, andhave made all filings, applications and registrations with, Governmental Entities that are requiredin order to permit them to own or lease their properties and assets and to carry on their businessas presently conducted and that are material to the business of the Company or such CompanySubsidiary. Except as set forth on Schedule D, the Company and the CompanySubsidiaries have complied in all respects and are not in default or violation of, and none ofthem is, to the knowledge of the Company, under investigation with respect to or, to the knowledgeof the Company, have been threatened to be charged with or given notice of any violation of, anyapplicable domestic (federal, state or local) or foreign law, statute, ordinance, license, rule,regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of anyGovernmental Entity, other than such noncompliance, defaults or violations that would not,individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.Except for statutory or regulatory restrictions of general application or as set forth onSchedule D, no Governmental Entity has placed any restriction on the business or propertiesof the Company or any Company Subsidiary that would, individually or in the aggregate, reasonablybe expected to have a Company Material Adverse Effect.

(n) Employee Benefit Matters. Except as would not reasonably be expected to have,either individually or in the aggregate, a Company Material Adverse Effect: (A) each "employeebenefit plan" (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of1974, as amended ("ERISA")) providing benefits to any current or former employee, officer ordirector of the Company or any member of its "Controlled Group" (defined as any organization whichis a member of a controlled group of corporations within the meaning of Section 414 of the InternalRevenue Code of 1986, as amended (the "Code")) that is sponsored, maintained or contributed to bythe Company or any member of its Controlled Group and for which the Company or any member of itsControlled Group would have any liability, whether actual or contingent (each, a "Plan") has beenmaintained in compliance with its terms and with the requirements of all applicable statutes, rulesand regulations, including ERISA and the Code; (B) with respect to each Plan subject to Title IV ofERISA (including, for purposes of this clause (B), any plan subject to Title IV of ERISA that theCompany or any member of its Controlled Group previously maintained or contributed to in the sixyears prior to the Signing Date), (1) no "reportable event" (within the meaning of Section 4043(c)of ERISA), other than a reportable event for which the notice period referred to in Section4043(c) of ERISA has been waived, has occurred in the three years prior to the Signing Date or isreasonably expected to occur, (2) no

"accumulated funding deficiency" (within the meaning ofSection 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in the threeyears prior to the Signing Date or is reasonably expected to occur, (3) the fair market value ofthe assets under each Plan exceeds the present value of all benefits accrued under such Plan(determined based on the assumptions used to fund such Plan) and (4) neither the Company nor anymember of its Controlled Group has incurred in the six years prior to the Signing Date, orreasonably expects to incur, any liability under Title IV of ERISA (other than contributions to thePlan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan(including any Plan that is a "multiemployer plan", within the meaning of Section 4001(c)(3) ofERISA); and (C) each Plan that is intended to be qualified under Section 401(a) of the Code hasreceived a favorable determination letter from the Internal Revenue Service with respect to itsqualified status that has not been revoked, or such a determination letter has been timely appliedfor but not received by the Signing Date, and nothing has occurred, whether by action or by failureto act, which could reasonably be expected to cause the loss, revocation or denial of suchqualified status or favorable determination letter.

(o) Taxes. Except as would not, individually or in the aggregate, reasonably beexpected to have a Company Material Adverse Effect, (i) the Company and the Company Subsidiarieshave filed all federal, state, local and foreign income and franchise Tax returns required to befiled through the Signing Date, subject to permitted extensions, and have paid all Taxes duethereon, and (ii) no Tax deficiency has been determined adversely to the Company or any of theCompany Subsidiaries, nor does the Company have any knowledge of any Tax deficiencies. "Tax" or"Taxes" means any federal, state, local or foreign income, gross receipts, property, sales, use,license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, advalorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other likeassessment or charge of any kind whatsoever, together with any interest or penalty, imposed by anyGovernmental Entity.

(p) Properties and Leases. Except as would not, individually or in the aggregate,reasonably be expected to have a Company Material Adverse Effect, the Company and the CompanySubsidiaries have good and marketable title to all real properties and all other properties andassets owned by them, in each case free from liens, encumbrances, claims and defects (other thanliens, encumbrances, claims or defects created pursuant to the Guarantee and Pledge Agreement,dated as of September 22, 2008, between the Company and the FRBNY) that would affect the valuethereof or interfere with the use made or to be made thereof by them. Except as would not,individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect,the Company and the Company Subsidiaries hold all leased real or personal property under valid andenforceable leases with no exceptions that would interfere with the use made or to be made thereofby them.

(q) Environmental Liability. Except as would not, individually or in the aggregate,reasonably be expected to have a Company Material Adverse Effect:

(i) there is no legal, administrative, or other proceeding, claim or action of anynature seeking to impose, or that would reasonably be expected to result in the

impositionof, on the Company or any Company Subsidiary, any liability relating to the release ofhazardous substances as defined under any local, state or federal environmental statute,regulation or ordinance, including the Comprehensive Environmental Response, Compensationand Liability Act of 1980, pending or, to the Company's knowledge, threatened against theCompany or any Company Subsidiary;

(ii) to the Company's knowledge, there is no reasonable basis for any such proceeding,claim or action; and

(iii) neither the Company nor any Company Subsidiary is subject to any agreement,order, judgment or decree by or with any court, Governmental Entity or third party imposingany such environmental liability.

(r) Risk Management Instruments. Except as would not, individually or in theaggregate, reasonably be expected to have a Company Material Adverse Effect, all derivativeinstruments, including, swaps, caps, floors and option agreements, whether entered into for theCompany's own account, or for the account of one or more of the Company Subsidiaries or its ortheir customers, were entered into (i) only in the ordinary course of business, (ii) in accordancewith prudent practices and in all material respects with all applicable laws, rules,regulations and regulatory policies and (iii) with counterparties believed to be financiallyresponsible at the time; and each of such instruments constitutes the valid and legally bindingobligation of the Company or one of the Company Subsidiaries, enforceable in accordance with itsterms, except as may be limited by the Bankruptcy Exceptions. Neither the Company or the CompanySubsidiaries, nor, to the knowledge of the Company, any other party thereto, is in breach of any ofits obligations under any such agreement or arrangement other than such breaches that would not,individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(s) Agreements with Regulatory Agencies. Except as set forth on Schedule E,neither the Company nor any Company Subsidiary is subject to any material cease-and-desist or othersimilar order or enforcement action issued by, or is a party to any material written agreement,consent agreement or memorandum of understanding with, or is a party to any commitment letter orsimilar undertaking to, or is subject to any capital directive by, or since December 31, 2006, hasadopted any board resolutions at the request of, any Governmental Entity (other than the primaryinsurance regulators with jurisdiction over the Company Subsidiaries) that currently restricts inany material respect the conduct of its business or that in any material manner relates to itscapital adequacy, its liquidity and funding policies and practices, its ability to pay dividends,its credit, risk management or compliance policies or procedures, its internal controls, itsmanagement or its operations or business. Each item in the immediately preceding sentence andwithout taking into consideration of the parenthetical provided therein, is referred to herein as a"Regulatory Agreement." Neither the Company nor any Company Subsidiary has been advised sinceDecember 31, 2006 by any such Governmental Entity that it is considering issuing, initiating,ordering, or requesting any such Regulatory Agreement (other than any such Regulatory Agreementthat does not have a Company Material Adverse Effect). Except as set forth on Schedule E,the Company and each Company Subsidiary are in compliance in all material respects with eachRegulatory Agreement to which it is party or subject, and neither the

Company nor any CompanySubsidiary has received any notice from any Governmental Entity indicating that either the Companyor any Company Subsidiary is not in compliance in all material respects with any such RegulatoryAgreement.

(t) Insurance. The Company and the Company Subsidiaries are insured with reputableinsurers against such risks and in such amounts as the management of the Company reasonably hasdetermined to be prudent and consistent with industry practice. The Company and the CompanySubsidiaries are in material compliance with their insurance policies and are not in default underany of the material terms thereof, each such policy is outstanding and in full force and effect,all premiums and other payments due under any material policy have been paid, and all claimsthereunder have been filed in due and timely fashion, except, in each case, as would not,individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(u) Intellectual Property. Except as would not, individually or in the aggregate,reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each CompanySubsidiary owns or otherwise has the right to use, all intellectual property rights, including alltrademarks, trade dress, trade names, service marks, domain names, patents, inventions, tradesecrets, know-how, works of authorship and copyrights therein, that are used in the conduct oftheir existing businesses and all rights relating to the plans, design andspecifications of any of its branch facilities ("Proprietary Rights") free and clear of allliens and any claims of ownership by current or former employees, contractors, designers or othersand (ii) neither the Company nor any of the Company Subsidiaries is materially infringing,diluting, misappropriating or violating, nor has the Company or any or the Company Subsidiariesreceived any written (or, to the knowledge of the Company, oral) communications alleging that anyof them has materially infringed, diluted, misappropriated or violated, any of the ProprietaryRights owned by any other person. Except as would not, individually or in the aggregate,reasonably be expected to have a Company Material Adverse Effect, to the Company's knowledge, noother person is infringing, diluting, misappropriating or violating, nor has the Company or any orthe Company Subsidiaries sent any written communications since January 1, 2006 alleging that anyperson has infringed, diluted, misappropriated or violated, any of the Proprietary Rights owned bythe Company and the Company Subsidiaries.

(v) Brokers and Finders. No broker, finder or investment banker is entitled to anyfinancial advisory, brokerage, finder's or other fee or commission in connection with thisAgreement or the Warrant or the transactions contemplated hereby or thereby based upon arrangementsmade by or on behalf of the Company or any Company Subsidiary for which the Investor could have anyliability.

Article 3
Covenants

3.1 Consummation of Purchase and Charter Amendment.

(a) Subject to the terms and conditions of this Agreement, each of the parties will use itscommercially reasonable efforts in

good faith to take, or cause to be taken, all actions, and todo, or cause to be done, all things necessary, proper or desirable, or advisable under applicablelaws, so as to permit consummation of the Purchase as promptly as practicable and otherwise toenable consummation of the transactions contemplated hereby and shall use commercially reasonableefforts to cooperate with the other party to that end.

(b) The Company shall call a special meeting of its stockholders to vote on a proposal (the"Stockholder Proposal") to amend the Company's Charter to allow the Preferred Stock to rank seniorto the Series C Preferred Stock and any other series of preferred stock issued by the Company. Inconnection with such meeting, the Company shall prepare (and the Investor will reasonably cooperatewith the Company to prepare) and file with the SEC as promptly as practicable (but in no event morethan ten business days after the issuance of the Series C Preferred Stock) a preliminary proxystatement, shall use its reasonable best efforts to respond to any comments of the SEC or its staffthereon and to cause a definitive proxy statement related to such stockholders' meeting to bemailed to the Company's stockholders not more than five business days after clearance thereof bythe SEC. The Company shall notify the Investor promptly of the receipt of any comments from theSEC or its staff with respect to the proxy statement and of any request by the SEC or its staff foramendments or supplements to such proxy statement or for additional information and will supply theInvestor with copies of allcorrespondence between the Company or any of its representatives, on the one hand, and the SECor its staff, on the other hand, with respect to such proxy statement. If at any time prior tosuch stockholders' meeting there shall occur any event that is required to be set forth in anamendment or supplement to the proxy statement, the Company shall as promptly as practicableprepare and mail to its stockholders such an amendment or supplement. Each of the Investor and theCompany agrees promptly to correct any information provided by it or on its behalf for use in theproxy statement if and to the extent that such information shall have become false or misleading inany material respect, and the Company shall as promptly as practicable prepare and mail to itsstockholders an amendment or supplement to correct such information to the extent required byapplicable laws and regulations. The Company shall consult with the Investor prior to filing anyproxy statement, or any amendment or supplement thereto, and provide the Investor with a reasonableopportunity to comment thereon. In the event that the approval of the Stockholder Proposal is notobtained at such special stockholders meeting, the Company shall include a proposal to approve suchproposal at a meeting of its stockholders no less than once in each subsequent twelve-month periodbeginning on January 1, 2009 until such approval is obtained or made.

(c) None of the information supplied by the Company or any of the Company Subsidiaries forinclusion in any proxy statement in connection with any such stockholders meeting of the Companywill, at the date it is filed with the SEC, when first mailed to the Company's stockholders and atthe time of any stockholders meeting, and at the time of any amendment or supplement thereof,contain any untrue statement of a material fact or omit to state any material fact necessary inorder to make the statements therein, in light of the circumstances under which they are made, notmisleading.

3.2 Expenses.Unless otherwise provided in this Agreement or the Warrant, each of the parties hereto willbear and pay all costs and expenses incurred by it or on its behalf in connection with thetransactions contemplated under this Agreement or the Warrant, including fees and expenses of itsown financial or other consultants, investment bankers, accountants and counsel.

3.3 Sufficiency of Authorized Common Stock; Exchange Listing.

(a) During the period from the Closing Date until the date on which the Warrant has been fullyexercised, the Company shall at all times have reserved for issuance, free of preemptive or similarrights, a sufficient number of authorized and unissued Warrant Shares to effectuate such exercise.Nothing in this Section 3.3 shall preclude the Company from satisfying its obligations in respectof the exercise of the Warrant by delivery of shares of Common Stock which are held in the treasuryof the Company. As soon as reasonably practicable following the Closing, the Company shall, at itsexpense, cause the Warrant Shares to be listed on the same national securities exchange on whichthe Common Stock is listed, subject to official notice of issuance, and shall maintain such listingfor so long as any Common Stock is listed on such exchange.

(b) If requested by the Investor, the Company shall promptly use its reasonable best effortsto cause the Preferred Stock to be approved for listing on a national securities exchange aspromptly as practicable following such request.

3.4 Certain Notifications Until Closing.From the Signing Date until the Closing, the Company shall promptly notify the Investor of (i)any fact, event or circumstance of which it is aware and which would reasonably be expected tocause any representation or warranty of the Company contained in this Agreement to be untrue orinaccurate in any material respect or to cause any covenant or agreement of the Company containedin this Agreement not to be complied with or satisfied in any material respect and (ii) except asPreviously Disclosed, any fact, circumstance, event, change, occurrence, condition or developmentof which the Company is aware and which, individually or in the aggregate, has had or wouldreasonably be expected to have a Company Material Adverse Effect; provided, however, that deliveryof any notice pursuant to this Section 3.4 shall not limit or affect any rights of or remediesavailable to the Investor; provided, further, that a failure to comply with this Section 3.4 shallnot constitute a breach of this Agreement or the failure of any condition set forth in Section 1.2to be satisfied unless the underlying Company Material Adverse Effect or material breach wouldindependently result in the failure of a condition set forth in Section 1.2 to be satisfied.

3.5 Information and Confidentiality.

(a) Until such time as the Investor ceases to own any Preferred Stock, or except as otherwiseagreed, the Company shall provide the Investor (i) the information required to be provided by theCompany to FRBNY pursuant to Section 5.04 of the Credit Agreement and within the time periods fordelivery thereof specified in the Credit Agreement and (ii) the notices required by Section 5.05 ofthe Credit Agreement and within the time periods for delivery

thereof specified in the CreditAgreement. After the termination of the Credit Agreement, such informational and noticerequirements as are provided in Section 5.04 and Section 5.05 of the Credit Agreement shall remainin full force and effect until such time as the Investor no longer owns any Preferred Stock. Inaddition, until such time as the Investor ceases to own any debt or equity securities pursuant tothis Agreement or the Warrant, or except as otherwise agreed, the Company shall provide theInvestor a bi-annual report on the steps taken by the Company to comply in all respects withSection 111(b) of the EESA, including the provisions for Systemically Significant FailingInstitutions, as implemented by any guidance or regulation thereunder, including Notice 2008-PSSFI,and with Section 4.10 of this Agreement. In addition, the Company shall promptly provide theInvestor such other information and notices as the Investor may reasonably request from time totime.

(b) The Investor will use reasonable best efforts to hold, and will use reasonable bestefforts to cause its agents, consultants, contractors and advisors to hold, in confidence allnon-public records, books, contracts, instruments, computer data and other data and information(collectively, "Information") concerning the Company furnished or made available to it by theCompany or its representatives pursuant to this Agreement (except to the extent that suchinformation can be shown to have been (i) previously known by such party on a non-confidentialbasis, (ii) in the public domain through no fault of such party or (iii) later lawfully acquiredfromother sources by the party to which it was furnished (and without violation of any otherconfidentiality obligation)); provided that nothing herein shall prevent the Investor fromdisclosing any Information to the extent required by applicable laws or regulations or by anysubpoena or similar legal process.

Article 4
Additional Agreements

4.1 Purchase of Restricted Securities.The Investor acknowledges that the Purchased Securities and the Warrant Shares have not beenregistered under the Securities Act or under any state securities laws. The Investor (a) isacquiring the Purchased Securities pursuant to an exemption from registration under the SecuritiesAct with no present intention to distribute them to any person in violation of the Securities Actor any applicable U.S. state securities laws, (b) will not sell or otherwise dispose of any of thePurchased Securities or the Warrant Shares, except in compliance with the registration requirementsor exemption provisions of the Securities Act and any applicable U.S. state securities laws, and(c) has such knowledge and experience in financial and business matters and in investments of thistype that it is capable of evaluating the merits and risks of the Purchase and of making aninformed investment decision.

4.2 Legends.

(a) The Investor agrees that all certificates or other instruments representing the Warrantand the Warrant Shares will bear a legend substantially to the following effect:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BETRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATINGTHERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO ANEXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS."

(b) In addition, the Investor agrees that all certificates or other instruments representingthe Preferred Stock will bear a legend substantially to the following effect:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED (THE �SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAYNOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENTRELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS ORPURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OFTHE SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ONTHE EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANYTRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1)REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THESECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THESECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENTWHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIESREPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON ITREASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THESECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIEDINSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THEREGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACHPERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICESUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.�

(c) In the event that any Purchased Securities or Warrant Shares (i) become registered underthe Securities Act or (ii) are eligible to be transferred without restriction in accordance withRule 144 or another exemption from registration under the Securities Act (other than Rule 144A),the Company shall issue new certificates or other instruments representing such

PurchasedSecurities or Warrant Shares, which shall not contain the applicable legends in Sections 4.2(a) and(b) above; provided that the Investor surrenders to the Company thepreviously issued certificates or other instruments. Upon Transfer of all or a portion of theWarrant in compliance with Section 4.4 the Company shall issue new certificates or otherinstruments representing the Warrant, which shall not contain the applicable legend in Section4.2(b) above; provided that the Investor surrenders to the Company the previously issuedcertificates or other instruments.

4.3 Certain Transactions. The Company will not merge or consolidate with, or sell, transfer or lease all orsubstantially all of its property or assets to, any other party unless the successor, transferee orlessee party (or its ultimate parent entity), as the case may be (if not the Company), expresslyassumes the due and punctual performance and observance of each and every covenant, agreement andcondition of this Agreement to be performed and observed by the Company.

4.4 Transfer of Purchased Securities, the Warrant and Warrant Shares. Subject to compliance with applicable securities laws, the Investor shall be permitted totransfer, sell, assign or otherwise dispose of ("Transfer") all or a portion of the PurchasedSecurities, the Warrant or Warrant Shares at any time, and the Company shall take all steps as maybe reasonably requested by the Investor to facilitate the Transfer of the Purchased Securities, theWarrant and the Warrant Shares.

4.5 Registration Rights.

(a) Registration.

(i) Subject to the terms and conditions of this Agreement, the Company covenants andagrees that as promptly as practicable after notification from the Investor, and in anyevent no later than 15 days after such notification, the Company shall prepare and file withthe SEC a Shelf Registration Statement covering all Registrable Securities (or otherwisedesignate an existing Shelf Registration Statement filed with the SEC to cover theRegistrable Securities), and, to the extent the Shelf Registration Statement has nottheretofore been declared effective or is not automatically effective upon such filing, theCompany shall use reasonable best efforts to cause such Shelf Registration Statement to bedeclared or become effective and to keep such Shelf Registration Statement continuouslyeffective and in compliance with the Securities Act and usable for resale of suchRegistrable Securities for a period from the date of its initial effectiveness until suchtime as there are no Registrable Securities remaining (including by refiling such ShelfRegistration Statement (or a new Shelf Registration Statement) if the initial ShelfRegistration Statement expires). So long as the Company is a well known seasoned issuer (asdefined in Rule 405 under the Securities Act) at the time of filing of the ShelfRegistration Statement with the SEC, such Shelf Registration Statement shall be designatedby the Company as an automatic Shelf Registration Statement.

(ii) Any registration pursuant to Section 4.5(a)(i) shall be effected by means of ashelf registration on an appropriate form under Rule 415 under the Securities Act (a "ShelfRegistration Statement"). If the Investor or any other Holder intends todistribute any Registrable Securities by means of an underwritten offering it shallpromptly so advise the Company and the Company shall take all reasonable steps to facilitatesuch distribution, including the actions required pursuant to Section 4.5(c); provided thatthe Company shall not be required to facilitate an underwritten offering of RegistrableSecurities unless the expected gross proceeds from such offering exceed $200 million. Thelead underwriters in any such distribution shall be selected by the Holders of a majority ofthe Registrable Securities to be distributed.

(iii) The Company shall not be required to effect a registration (including a resale ofRegistrable Securities from an effective Shelf Registration Statement) or an underwrittenoffering pursuant to Section 4.5(a): (A) with respect to securities that are notRegistrable Securities; or (B) if the Company has notified the Investor and all otherHolders that in the good faith judgment of the Board of Directors, it would be materiallydetrimental to the Company or its securityholders for such registration or underwrittenoffering to be effected at such time, in which event the Company shall have the right todefer such registration for a period of not more than 45 days after receipt of the requestof the Investor or any other Holder; provided that such right to delay a registration orunderwritten offering shall be exercised by the Company (1) only if the Company hasgenerally exercised (or is concurrently exercising) similar black-out rights against holdersof similar securities that have registration rights and (2) not more than three times in any12-month period and not more than 90 days in the aggregate in any 12-month period.

(iv) If during any period when an effective Shelf Registration Statement is notavailable, the Company proposes to register any of its equity securities, other than aregistration pursuant to Section 4.5(a)(i) or a Special Registration, and the registrationform to be filed may be used for the registration or qualification for distribution ofRegistrable Securities, the Company will give prompt written notice to the Investor and allother Holders of its intention to effect such a registration (but in no event less than tendays prior to the anticipated filing date) and will include in such registration allRegistrable Securities with respect to which the Company has received written requests forinclusion therein within ten business days after the date of the Company's notice (a"Piggyback Registration"). Any such person that has made such a written request maywithdraw its Registrable Securities from such Piggyback Registration by giving writtennotice to the Company and the managing underwriter, if any, on or before the fifth businessday prior to the planned effective date of such Piggyback Registration. The Company mayterminate or withdraw any registration under this Section 4.5(a)(iv) prior to theeffectiveness of such registration, whether or not Investor or any other Holders haveelected to include Registrable Securities in such registration.

(v) If the registration referred to in Section 4.5(a)(iv) is proposed to beunderwritten, the Company will so advise Investor and all other Holders as a part of thewritten notice given pursuant to Section 4.5(a)(iv). In such event, the right of Investor

and all other Holders to registration pursuant to Section 4.5(a) will be conditioned uponsuch persons' participation in such underwriting and the inclusion of such person�sRegistrable Securities in the underwriting if such securities are of the same class ofsecurities as the securities to be offered in the underwritten offering, and each suchperson will (together with the Company and the other persons distributing their securitiesthrough such underwriting) enter into an underwriting agreement in customary form withthe underwriter or underwriters selected for such underwriting by the Company; provided thatthe Investor (as opposed to other Holders) shall not be required to indemnify any person inconnection with any registration. If any participating person disapproves of the terms ofthe underwriting, such person may elect to withdraw therefrom by written notice to theCompany, the managing underwriters and the Investor (if the Investor is participating in theunderwriting).

(vi) If either (x) the Company grants "piggyback" registration rights to one or morethird parties to include their securities in an underwritten offering under a ShelfRegistration Statement pursuant to Section 4.5(a)(ii) or (y) a Piggyback Registration underSection 4.5(a)(iv) relates to an underwritten offering on behalf of the Company, and ineither case the managing underwriters advise the Company that in their reasonable opinionthe number of securities requested to be included in such offering exceeds the number whichcan be sold without adversely affecting the marketability of such offering (including anadverse effect on the per share offering price), the Company will include in such offeringonly such number of securities that in the reasonable opinion of such managing underwriterscan be sold without adversely affecting the marketability of the offering (including anadverse effect on the per share offering price), which securities will be so included in thefollowing order of priority: (A) first, in the case of a Piggyback Registration underSection 4.5(a)(iv), the securities the Company proposes to sell, (B) then the RegistrableSecurities of the Investor and all other Holders who have requested inclusion of RegistrableSecurities pursuant to Section 4.5(a)(ii) or Section 4.5(a)(iv), as applicable, pro rata onthe basis of the aggregate number of such securities or shares owned by each such person and(C) lastly, any other securities of the Company that have been requested to be so included,subject to the terms of this Agreement; provided, however, that if the Company has, prior tothe Signing Date, entered into an agreement with respect to its securities that isinconsistent with the order of priority contemplated hereby then it shall apply the order ofpriority in such conflicting agreement to the extent that it would otherwise result in abreach under such agreement.

(b) Expenses of Registration. All Registration Expenses incurred in connection withany registration, qualification or compliance hereunder shall be borne by the Company. All SellingExpenses incurred in connection with any registrations hereunder shall be borne by the holders ofthe securities so registered pro rata on the basis of the aggregate offering or sale price of thesecurities so registered.

(c) Obligations of the Company. The Company shall use its reasonable best efforts,for so long as there are Registrable Securities outstanding, to take such actions as are in itscontrol to become a well-known seasoned issuer (as defined in Rule 405 under the Securities Act)

and once the Company becomes a well-known seasoned issuer to take such actions as are in itscontrol to remain a well-known seasoned issuer. In addition, whenever required to effect theregistration of any Registrable Securities or facilitate the distribution of Registrable Securitiespursuant to an effective Shelf Registration Statement, the Company shall, as expeditiously asreasonably practicable:

(i) Prepare and file with the SEC, not later than fifteen (15) days after the request,a registration statement with respect to such Registrable Securities and use allcommercially reasonable efforts to cause such registration statement to become effective, orprepare and file with the SEC not later than ten (10) days after the request a prospectussupplement with respect to a proposed offering of such Registrable Securities pursuant to aneffective registration statement, subject to Section 4.5(d), and, upon the request of theHolders of a majority of the Registrable Securities registered thereunder, use allcommercially reasonable efforts to keep such registration statement effective and keep suchprospectus supplement current until the securities described therein are no longerRegistrable Securities.

(ii) Prepare and file with the SEC such amendments and supplements to the applicableregistration statement and the prospectus or prospectus supplement used in connection withsuch registration statement as may be necessary to comply with the provisions of theSecurities Act with respect to the disposition of all securities covered by suchregistration statement.

(iii) Furnish to the Holders and any underwriters such number of copies of theapplicable registration statement and each such amendment and supplement thereto (includingin each case all exhibits) and of a prospectus, including a preliminary prospectus, inconformity with the requirements of the Securities Act, and such other documents as they mayreasonably request in order to facilitate the disposition of Registrable Securities owned orto be distributed by them.

(iv) Use its reasonable best efforts to register and qualify the securities covered bysuch registration statement under such other securities or Blue Sky laws of suchjurisdictions as shall be reasonably requested by the Holders or any managingunderwriter(s), to keep such registration or qualification in effect for so long as suchregistration statement remains in effect, and to take any other action which may bereasonably necessary to enable such seller to consummate the disposition in suchjurisdictions of the securities owned by such Holder; provided that the Company shall not berequired in connection therewith or as a condition thereto to qualify to do business or tofile a general consent to service of process in any such states or jurisdictions.

(v) Notify each Holder of Registrable Securities at any time when a prospectus relatingthereto is required to be delivered under the Securities Act of the happening of any eventas a result of which the applicable prospectus, as then in effect, includes an untruestatement of a material fact or omits to state a material fact required to

be stated thereinor necessary to make the statements therein not misleading in light of the circumstancesthen existing.

(vi) Give written notice to the Holders:

(A) when any registration statement filed pursuant to Section 4.5(a) or anyamendment thereto has been filed with the SEC (except for any amendment effected bythe filing of a document with the SEC pursuant to theExchange Act) and when such registration statement or any post-effectiveamendment thereto has become effective;

(B) of any request by the SEC for amendments or supplements to anyregistration statement or the prospectus included therein or for additionalinformation;

(C) of the issuance by the SEC of any stop order suspending the effectivenessof any registration statement or the initiation of any proceedings for thatpurpose;

(D) of the receipt by the Company or its legal counsel of any notificationwith respect to the suspension of the qualification of the Common Stock for sale inany jurisdiction or the initiation or threatening of any proceeding for suchpurpose;

(E) of the happening of any event that requires the Company to make changes inany effective registration statement or the prospectus related to the registrationstatement in order to make the statements therein not misleading (which noticeshall be accompanied by an instruction to suspend the use of the prospectus untilthe requisite changes have been made); and

(F) if at any time the representations and warranties of the Company containedin any underwriting agreement contemplated by Section 4.5(c)(x) cease to be trueand correct.

(vii) Use its reasonable best efforts to prevent the issuance or obtain the withdrawalof any order suspending the effectiveness of any registration statement referred to inSection 4.5(c)(vi)(C) at the earliest practicable time.

(viii) Upon the occurrence of any event contemplated by Section 4.5(c)(v)or4.5(c)(vi)(E), promptly prepare a post-effective amendment to such registration statement ora supplement to the related prospectus or file any other required document so that, asthereafter delivered to the Holders and any underwriters, the prospectus will not contain anuntrue statement of a material fact or omit to state any material fact necessary to make thestatements therein, in light of the circumstances under which they were made, notmisleading. If the Company notifies the Holders in accordance with Section 4.5(c)(vi)(E)

to suspend the use of the prospectus until the requisite changes to the prospectus have beenmade, then the Holders and any underwriters shall suspend use of such prospectus and usetheir reasonable best efforts to return to the Company all copies of such prospectus (at theCompany's expense) other than permanent file copies then in such Holders' or underwriters�possession. The total number of days that any such suspension may be in effect in any12-month period shall not exceed 90 days.

(ix) Use reasonable best efforts to procure the cooperation of the Company's transferagent in settling any offering or sale of Registrable Securities, including withrespect to the transfer of physical stock certificates into book-entry form inaccordance with any procedures reasonably requested by the Holders or any managingunderwriter(s).

(x) If an underwritten offering is requested pursuant to Section 4.5(a)(ii), enter intoan underwriting agreement in customary form, scope and substance and take all such otheractions reasonably requested by the Holders of a majority of the Registrable Securitiesbeing sold in connection therewith or by the managing underwriter(s), if any, to expedite orfacilitate the underwritten disposition of such Registrable Securities, and in connectiontherewith in any underwritten offering (including making members of management andexecutives of the Company available to participate in "road shows", similar sales events andother marketing activities), (A) make such representations and warranties to the Holdersthat are selling stockholders and the managing underwriter(s), if any, with respect to thebusiness of the Company and its subsidiaries, and the Shelf Registration Statement,prospectus and documents, if any, incorporated or deemed to be incorporated by referencetherein, in each case, in customary form, substance and scope, and, if true, confirm thesame if and when requested, (B) use its reasonable best efforts to furnish the underwriterswith opinions of counsel to the Company, addressed to the managing underwriter(s), if any,covering the matters customarily covered in such opinions requested in underwrittenofferings, (C) use its reasonable best efforts to obtain "cold comfort" letters from theindependent certified public accountants of the Company (and, if necessary, any otherindependent certified public accountants of any business acquired by the Company for whichfinancial statements and financial data are included in the Shelf Registration Statement)who have certified the financial statements included in such Shelf Registration Statement,addressed to each of the managing underwriter(s), if any, such letters to be in customaryform and covering matters of the type customarily covered in "cold comfort" letters, (D) ifan underwriting agreement is entered into, the same shall contain indemnification provisionsand procedures customary in underwritten offerings (provided that the Investor shall not beobligated to provide any indemnity), and (E) deliver such documents and certificates as maybe reasonably requested by the Holders of a majority of the Registrable Securities beingsold in connection therewith, their counsel and the managing underwriter(s), if any, toevidence the continued validity of the representations and warranties made pursuant toclause (A) above and to evidence compliance with any customary conditions contained in theunderwriting agreement or other agreement entered into by the Company.

(xi) Make available for inspection by a representative of Holders that are sellingstockholders, the managing underwriter(s), if any, and any attorneys or accountants retainedby such Holders or managing underwriter(s), at the offices where normally kept, duringreasonable business hours, financial and other records, pertinent corporate documents andproperties of the Company, and cause the officers, directors and employees of the Company tosupply all information in each case reasonably requested (and of the type customarilyprovided in connection with due diligence conducted in connection with a registered publicoffering of securities) by any such representative, managing underwriter(s), attorney oraccountant in connection with such Shelf Registration Statement.

(xii) Use reasonable best efforts to cause all such Registrable Securities to be listedon each national securities exchange on which similar securities issued by the Company arethen listed or, if no similar securities issued by the Company are then listed on anynational securities exchange, use its reasonable best efforts to cause all such RegistrableSecurities to be listed on such securities exchange as the Investor may designate.

(xiii) If requested by Holders of a majority of the Registrable Securities beingregistered and/or sold in connection therewith, or the managing underwriter(s), if any,promptly include in a prospectus supplement or amendment such information as the Holders ofa majority of the Registrable Securities being registered and/or sold in connectiontherewith or managing underwriter(s), if any, may reasonably request in order to permit theintended method of distribution of such securities and make all required filings of suchprospectus supplement or such amendment as soon as practicable after the Company hasreceived such request.

(xiv) Timely provide to its security holders earning statements satisfying theprovisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

(d) Suspension of Sales. Upon receipt of written notice from the Company that a registrationstatement, prospectus or prospectus supplement contains or may contain an untrue statement of amaterial fact or omits or may omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading or that circumstances exist that makeinadvisable use of such registration statement, prospectus or prospectus supplement, the Investorand each Holder of Registrable Securities shall forthwith discontinue disposition of RegistrableSecurities until the Investor and/or Holder has received copies of a supplemented or amendedprospectus or prospectus supplement, or until the Investor and/or such Holder is advised in writingby the Company that the use of the prospectus and, if applicable, prospectus supplement may beresumed, and, if so directed by the Company, the Investor and/or such Holder shall deliver to theCompany (at the Company's expense) all copies, other than permanent file copies then in theInvestor and/or such Holder's possession, of the prospectus and, if applicable, prospectussupplement covering such Registrable Securities current at the time of receipt of such notice. Thetotal number of days that any such suspension may be in effect in any 12-month period shall notexceed 90 days.

(e) Termination of Registration Rights. A Holder's registration rights as to any securitiesheld by such Holder (and its Affiliates, partners, members and former members) shall not beavailable unless such securities are Registrable Securities.

(f) Furnishing Information.

(i) Neither the Investor nor any Holder shall use any free writing prospectus (asdefined in Rule 405) in connection with the sale of Registrable Securities without the priorwritten consent of the Company.

(ii) It shall be a condition precedent to the obligations of the Company to take anyaction pursuant to Section 4.5(c) that Investor and/or the selling Holders and theunderwriters, if any, shall furnish to the Company such information regardingthemselves, the Registrable Securities held by them and the intended method of dispositionof such securities as shall be required to effect the registered offering of theirRegistrable Securities.

(g) Indemnification.

(i) The Company agrees to indemnify each Holder and, if a Holder is a person other thanan individual, such Holder's officers, directors, employees, agents, representatives andAffiliates, and each Person, if any, that controls a Holder within the meaning of theSecurities Act (each, an "Indemnitee"), against any and all losses, claims, damages,actions, liabilities, costs and expenses (including reasonable fees, expenses anddisbursements of attorneys and other professionals incurred in connection withinvestigating, defending, settling, compromising or paying any such losses, claims, damages,actions, liabilities, costs and expenses), joint or several, arising out of or based uponany untrue statement or alleged untrue statement of material fact contained in anyregistration statement, including any preliminary prospectus or final prospectus containedtherein or any amendments or supplements thereto or any documents incorporated therein byreference or contained in any free writing prospectus (as such term is defined in Rule 405)prepared by the Company or authorized by it in writing for use by such Holder (or anyamendment or supplement thereto); or any omission to state therein a material fact requiredto be stated therein or necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading; provided that the Company shallnot be liable to such Indemnitee in any such case to the extent that any such loss, claim,damage, liability (or action or proceeding in respect thereof) or expense arises out of oris based upon (A) an untrue statement or omission made in such registration statement,including any such preliminary prospectus or final prospectus contained therein or any suchamendments or supplements thereto or contained in any free writing prospectus (as such termis defined in Rule 405) prepared by the Company or authorized by it in writing for use bysuch Holder (or any amendment or supplement thereto), in reliance upon and in conformitywith information regarding such Indemnitee or its plan of distribution or ownershipinterests which was furnished in writing to the Company by such Indemnitee for use inconnection with such registration statement, including any

such preliminary prospectus orfinal prospectus contained therein or any such amendments or supplements thereto, or (B)offers or sales effected by or on behalf of such Indemnitee "by means of" (as defined inRule 159A) a "free writing prospectus" (as defined in Rule 405) that was not authorized inwriting by the Company.

(ii) If the indemnification provided for in Section 4.5(g)(i) is unavailable to anIndemnitee with respect to any losses, claims, damages, actions, liabilities, costs orexpenses referred to therein or is insufficient to hold the Indemnitee harmless ascontemplated therein, then the Company, in lieu of indemnifying such Indemnitee, shallcontribute to the amount paid or payable by such Indemnitee as a result of such losses,claims, damages, actions, liabilities, costs or expenses in such proportion as isappropriate to reflect the relative fault of the Indemnitee, on the one hand, and theCompany, on the other hand, in connection with the statements or omissions which resulted insuch losses, claims, damages, actions, liabilities, costs or expenses as well as any otherrelevantequitable considerations. The relative fault of the Company, on the one hand, and ofthe Indemnitee, on the other hand, shall be determined by reference to, among other factors,whether the untrue statement of a material fact or omission to state a material fact relatesto information supplied by the Company or by the Indemnitee and the parties' relativeintent, knowledge, access to information and opportunity to correct or prevent suchstatement or omission; the Company and each Holder agree that it would not be just andequitable if contribution pursuant to this Section 4.5(g)(ii) were determined by pro rataallocation or by any other method of allocation that does not take account of the equitableconsiderations referred to in Section 4.5(g)(i). No Indemnitee guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the Securities Act) shall beentitled to contribution from the Company if the Company was not guilty of such fraudulentmisrepresentation.

(h) Assignment of Registration Rights. The rights of the Investor to registration ofRegistrable Securities pursuant to Section 4.5(a) may be assigned by the Investor to a transfereeor assignee of Registrable Securities with a liquidation preference or, in the case of RegistrableSecurities other than Preferred Stock, a market value, no less than an amount equal $200 million;provided, however, the transferor shall, within ten days after such transfer, furnish to theCompany written notice of the name and address of such transferee or assignee and the number andtype of Registrable Securities that are being assigned. For purposes of this Section 4.5(h),"market value" per share of Common Stock shall be the last reported sale price of the Common Stockon the national securities exchange on which the Common Stock is listed or admitted to trading onthe last trading day prior to the proposed transfer, and the "market value" for the Warrant (or anyportion thereof) shall be the market value per share of Common Stock into which the Warrant (orsuch portion) is exercisable less the exercise price per share.

(i) Clear Market. With respect to any underwritten offering of Registrable Securitiesby the Investor or other Holders pursuant to this Section 4.5, the Company agrees not to effect(other than pursuant to such registration or pursuant to a Special Registration) any public sale ordistribution, or to file any Shelf Registration Statement (other than such registration or aSpecial Registration) covering, in the case of an underwritten offering of Common Stock orWarrants,

any of its equity securities or, in the case of an underwritten offering of PreferredStock, any preferred stock of the Company, or, in each case, any securities convertible into orexchangeable or exercisable for such securities, during the period not to exceed ten days prior and60 days following the effective date of such offering or such longer period up to 90 days as may berequested by the managing underwriter for such underwritten offering. The Company also agrees tocause such of its directors and senior executive officers to execute and deliver customary lock-upagreements in such form and for such time period up to 90 days as may be requested by the managingunderwriter. "Special Registration" means the registration of (A) equity securities and/or optionsor other rights in respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or(B) shares of equity securities and/or options or other rights in respect thereof to be offered todirectors, members of management, employees, consultants, customers, lenders or vendors of theCompany or Company Subsidiaries or in connection with dividend reinvestment plans.

(j) Rule 144; Rule 144A. With a view to making available to the Investor and Holdersthe benefits of certain rules and regulations of the SEC which may permit the sale of theRegistrable Securities to the public without registration, the Company agrees to use itsreasonable best efforts to:

(i) make and keep public information available, as those terms are understood anddefined in Rule 144(c)(1) or any similar or analogous rule promulgated under the SecuritiesAct, at all times after the Signing Date;

(ii) (A) file with the SEC, in a timely manner, all reports and other documentsrequired of the Company under the Exchange Act, and (B) if at any time the Company is notrequired to file such reports, make available, upon the request of any Holder, suchinformation necessary to permit sales pursuant to Rule 144A (including the informationrequired by Rule 144A(d)(4) under the Securities Act);

(iii) so long as the Investor or a Holder owns any Registrable Securities, furnish tothe Investor or such Holder forthwith upon request: a written statement by the Company as toits compliance with the reporting requirements of Rule 144 under the Securities Act, and ofthe Exchange Act; a copy of the most recent annual or quarterly report of the Company; andsuch other reports and documents as the Investor or Holder may reasonably request inavailing itself of any rule or regulation of the SEC allowing it to sell any such securitiesto the public without registration; and

(iv) take such further action as any Holder may reasonably request, all to the extentrequired from time to time to enable such Holder to sell Registrable Securities withoutregistration under the Securities Act.

(k) As used in this Section 4.5, the following terms shall have the following respectivemeanings:

(i) "Holder" means the Investor and any other holder of Registrable Securities to whomthe registration rights conferred by this Agreement have been transferred in compliance withSection 4.5(h) hereof.

(ii) "Holders' Counsel" means one counsel for the selling Holders chosen by Holdersholding a majority interest in the Registrable Securities being registered.

(iii) "Register," "registered," and "registration" shall refer to a registrationeffected by preparing and (A) filing a registration statement in compliance with theSecurities Act and applicable rules and regulations thereunder, and the declaration orordering of effectiveness of such registration statement or (B) filing a prospectus and/orprospectus supplement in respect of an appropriate effective registration statement on FormS-3.

(iv) "Registrable Securities" means (A) all Preferred Stock, (B) the Warrant (subjectto Section 4.5(p)) and (C) any equity securities issued or issuable directly or indirectlywith respect to the securities referred to in the foregoing clauses ((A) or (B) by way ofconversion, exercise or exchange thereof, including the Warrant Shares, or share dividend orshare split or in connection with a combination of shares, recapitalization,reclassification, merger, amalgamation, arrangement, consolidation or otherreorganization, provided that, once issued, such securities will not be RegistrableSecurities when (1) they are sold pursuant to an effective registration statement under theSecurities Act, (2) except as provided below in Section 4.5(o), they may be sold pursuant toRule 144 without limitation thereunder on volume or manner of sale, (3) they shall haveceased to be outstanding or (4) they have been sold in a private transaction in which thetransferor's rights under this Agreement are not assigned to the transferee of thesecurities. No Registrable Securities may be registered under more than one registrationstatement at any one time.

(v) "Registration Expenses" mean all expenses incurred by the Company in effecting anyregistration pursuant to this Agreement (whether or not any registration or prospectusbecomes effective or final) or otherwise complying with its obligations under this Section4.5, including all registration, filing and listing fees, printing expenses, fees anddisbursements of counsel for the Company, blue sky fees and expenses, expenses incurred inconnection with any "road show", the reasonable fees and disbursements of Holders' Counsel,and expenses of the Company's independent accountants in connection with any regular orspecial reviews or audits incident to or required by any such registration, but shall notinclude Selling Expenses.

(vi) "Rule 144", "Rule 144A", "Rule 159A", "Rule 405" and "Rule 415" mean, in eachcase, such rule promulgated under the Securities Act (or any successor provision), as thesame shall be amended from time to time.

(vii) "Selling Expenses" mean all discounts, selling commissions and stock transfertaxes applicable to the sale of Registrable Securities and fees and disbursements

of counselfor any Holder (other than the fees and disbursements of Holders' Counsel included inRegistration Expenses).

(l) At any time, any holder of Securities (including any Holder) may elect to forfeit itsrights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeitingsuch rights shall nonetheless be entitled to participate under Section 4.5(a)(iv) � (vi) in anyPending Underwritten Offering to the same extent that such Holder would have been entitled to ifthe holder had not withdrawn; and provided, further, that no such forfeiture shall terminate aHolder's rights or obligations under Section 4.5(f) with respect to any prior registration orPending Underwritten Offering. "Pending Underwritten Offering" means, with respect to any Holderforfeiting its rights pursuant to this Section 4.5(l), any underwritten offering of RegistrableSecurities in which such Holder has advised the Company of its intent to register its RegistrableSecurities either pursuant to Section 4.5(a)(ii) or 4.5(a)(iv) prior to the date of such Holder�sforfeiture.

(m) Specific Performance. The parties hereto acknowledge that there would be noadequate remedy at law if the Company fails to perform any of its obligations under this Section4.5 and that the Investor and the Holders from time to time may be irreparably harmed by any suchfailure, and accordingly agree that the Investor and such Holders, in addition to any other remedyto which they may be entitled at law or in equity, to the fullest extent permitted and enforceableunder applicable law shall be entitled to compel specific performance of theobligations of the Company under this Section 4.5 in accordance with the terms and conditionsof this Section 4.5.

(n) No Inconsistent Agreements. The Company shall not, on or after the Signing Date,enter into any agreement with respect to its securities that may impair the rights granted to theInvestor and the Holders under this Section 4.5 or that otherwise conflicts with the provisionshereof in any manner that may impair the rights granted to the Investor and the Holders under thisSection 4.5. In the event the Company has, prior to the Signing Date, entered into any agreementwith respect to its securities that is inconsistent with the rights granted to the Investor and theHolders under this Section 4.5 (including agreements that are inconsistent with the order ofpriority contemplated by Section 4.5(a)(vi)) or that may otherwise conflict with the provisionshereof, the Company shall use its reasonable best efforts to amend such agreements to ensure theyare consistent with the provisions of this Section 4.5.

(o) Certain Offerings by the Investor. In the case of any securities held by theInvestor that cease to be Registrable Securities solely by reason of clause (2) in the definitionof "Registrable Securities," the provisions of Sections 4.5(a)(ii), clauses (iv), (ix) and(x)-(xii) of Section 4.5(c), Section 4.5(g) and Section 4.5(i) shall continue to apply until suchsecurities otherwise cease to be Registrable Securities. In any such case, an "underwritten"offering or other disposition shall include any distribution of such securities on behalf of theInvestor by one or more broker-dealers, an "underwriting agreement" shall include any purchaseagreement entered into by such broker-dealers, and any "registration statement" or "prospectus"shall include any offering document approved by the Company and used in connection with suchdistribution.

(p) Registered Sales of the Warrant. The Holders agree to sell the Warrant or anyportion thereof under the Shelf Registration Statement only beginning 30 days after notifying theCompany of any such sale, during which 30-day period the Investor and all Holders of the Warrantshall take reasonable steps to agree to revisions to the Warrant to permit a public distribution ofthe Warrant, including entering into a warrant agreement and appointing a warrant agent.

4.6 Voting of Warrant Shares. Notwithstanding anything in this Agreement to the contrary, the Investor shall not exerciseany voting rights with respect to the Warrant Shares.

4.7 Depositary Shares. Upon request by the Investor in connection with a proposed transfer of the Preferred Stock,the Company shall promptly enter into a depositary arrangement, pursuant to customary agreementsreasonably satisfactory to the Investor and with a depositary reasonably acceptable to theInvestor, pursuant to which the Preferred Stock may be deposited and depositary shares, eachrepresenting a fraction of a Preferred Stock as specified by the Investor, may be issued. From andafter the execution of any such depositary arrangement, and the deposit of any Preferred Stockpursuant thereto, the depositary shares issued pursuant thereto shall be deemed "Preferred Stock"and, as applicable, "Registrable Securities" for purposes of this Agreement.

4.8 Restriction on Dividends and Repurchases.

(a) Prior to the earlier of (x) the fifth anniversary of the Closing Date and (y) the date onwhich the Preferred Stock has been redeemed in whole or the Investor has transferred all of thePreferred Stock to third parties which are not Affiliates of the Investor, neither the Company norany Company Subsidiary shall, without the consent of the Investor:

(i) declare or pay any dividend or make any distribution on the Common Stock (otherthan (A) regular quarterly cash dividends of not more than the amount of the last quarterlycash dividend per share declared or, if lower, publicly announced an intention to declare,on the Common Stock prior to November 25, 2008, as adjusted for any stock split, stockdividend, reverse stock split, reclassification or similar transaction, (B)) dividendspayable solely in shares of Common Stock and (C) dividends or distributions of rights orJunior Stock in connection with a stockholders' rights plan); or

(ii) redeem, purchase or acquire any shares of Common Stock or other capital stock orother equity securities of any kind of the Company, or any trust preferred securities issuedby the Company or any Affiliate of the Company, other than (A) redemptions, purchases orother acquisitions of the Preferred Stock, (B) redemptions, purchases or other acquisitionsof shares of Common Stock or other Junior Stock, in each case in this clause (B) inconnection with the administration of any employee benefit plan in the ordinary course ofbusiness (including purchases to offset the Share Dilution Amount (as defined below)pursuant to a publicly announced repurchase plan) and consistent with past practice;provided that any purchases to offset the Share Dilution Amount shall in no event exceed theShare Dilution Amount, (C) any redemption or

repurchase of rights pursuant to anystockholders' rights plan, (D) the acquisition by the Company or any of the CompanySubsidiaries of record ownership in Junior Stock or Parity Stock for the beneficialownership of any other persons (other than the Company or any other Company Subsidiary),including as trustees or custodians (the "Permitted Repurchases"), and (E)the exchange orconversion of Junior Stock for or into other Junior Stock or of Parity Stock or trustpreferred securities for or into other Parity Stock (with the same or lesser aggregateliquidation amount) or Junior Stock, in each case set forth in this clause (E), solely tothe extent required pursuant to binding contractual agreements entered into prior to theSigning Date or any subsequent agreement for the accelerated exercise, settlement orexchange thereof for Common Stock. "Share Dilution Amount" means the increase in the numberof diluted shares outstanding (determined in accordance with GAAP, and as measured from thedate of the Company's most recently filed Company Financial Statements prior to the ClosingDate) resulting from the grant, vesting or exercise of equity-based compensation toemployees and equitably adjusted for any stock split, stock dividend, reverse stock split,reclassification or similar transaction.

(b) Until such time as the Investor ceases to own any Preferred Stock, the Company shall notrepurchase any Preferred Stock from any holder thereof, whether by means of open market purchase,negotiated transaction, or otherwise, other than Permitted Repurchases, unless it offers torepurchase a ratable portion of the Preferred Stock then held by the Investor on the same terms andconditions.

(c) "Junior Stock" means Common Stock, the Series C Preferred Stock (after the Company�sstockholders approve the amendment described in Section 3.1(b) to the Charter to have the PreferredStock rank senior to the Series C Preferred Stock) and any other class or series of stock of theCompany the terms of which expressly provide that it ranks junior to the Preferred Stock as todividend rights and/or as to rights on liquidation, dissolution or winding up of the Company."Parity Stock" means the Series C Preferred Stock (before the Company's stockholders approve theCharter amendment referred to above) and any class or series of stock of the Company the terms ofwhich do not expressly provide that such class or series will rank senior or junior to thePreferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding upof the Company (in each case without regard to whether dividends accrue cumulatively ornon-cumulatively).

4.9 Repurchase of Investor Securities.

(a) Following the redemption in whole of the Preferred Stock held by the Investor or theTransfer by the Investor of all of the Preferred Stock to one or more third parties not affiliatedwith the Investor and so long as the Investor does not Control the Company, the Company mayrepurchase, in whole or in part, at any time any other equity or debt securities of the Companyowned by the Investor or the Warrant or Warrant Shares and then held by the Investor, upon noticegiven as provided in clause (b) below, at the Fair Market Value of the equity security. For theavoidance of doubt, while there is Board of Directors control (or the potential to gain Board ofDirectors control as a result of existing contractual rights) by the

Investor (or any affiliate ofthe Investor), the Company may not exercise its rights under this Section 4.9.

(b) Notice of every repurchase of equity securities of the Company held by the Investor shallbe given at the address and in the manner set forth for such party in Section 5.6. Each notice ofrepurchase given to the Investor shall state: (i) the number and type of securities to berepurchased, (ii) the Board of Directors' determination of Fair Market Value of such securities and(iii) the place or places where certificates representing such securities are to be surrendered forpayment of the repurchase price. The repurchase of the securities specified in the notice shalloccur as soon as practicable following the determination of the Fair Market Value of thesecurities.

(i) "Appraisal Procedure" means a procedure whereby two independent appraisers, onechosen by the Company and one by the Investor, shall mutually agree upon the Fair MarketValue. Each party shall deliver a notice to the other appointing its appraiser within 10days after the Appraisal Procedure is invoked. If within 30 days after appointment of thetwo appraisers they are unable to agree upon the Fair Market Value, a third independentappraiser shall be chosen within 10 days thereafter by the mutual consent of such first twoappraisers. The decision of the third appraiser so appointed and chosen shall be givenwithin 30 days after the selection of such third appraiser. If three appraisers shall beappointed and the determination of one appraiser is disparate from the middle determinationby more than twice the amount by which the other determination isdisparate from the middle determination, then the determination of such appraiser shallbe excluded, the remaining two determinations shall be averaged and such average shall bebinding and conclusive upon the Company and the Investor; otherwise, the average of allthree determinations shall be binding upon the Company and the Investor. The costs ofconducting any Appraisal Procedure shall be borne by the Company.

(ii) "Fair Market Value" means, with respect to any security, the fair market value ofsuch security as determined by the Board of Directors, acting in good faith in reliance onan opinion of a nationally recognized independent investment banking firm retained by theCompany for this purpose and certified in a resolution to the Investor. If the Investordoes not agree with the Board of Directors' determination, it may object in writing within10 days of receipt of the Board of Directors' determination. In the event of such anobjection, an authorized representative of the Investor and the chief executive officer ofthe Company shall promptly meet to resolve the objection and to agree upon the Fair MarketValue. If the chief executive officer and the authorized representative are unable to agreeon the Fair Market Value during the 10-day period following the delivery of the Investor�sobjection, the Appraisal Procedure may be invoked by either party to determine the FairMarket Value by delivery of a written notification thereof not later than the 30th day afterdelivery of the Investor's objection.

(iii) "Control" means the power to direct the management and policies of the Company,directly or indirectly, whether through the ownership of voting securities, by contract, bythe power to control the Board of Directors or otherwise.

4.10 Executive Compensation.

(a) Until such time as the Investor ceases to own any debt or equity securities of the Companyacquired pursuant to this Agreement or the Warrant, the Company shall take all necessary action toensure that its Benefit Plans with respect to the Senior Executive Officers comply in all respectswith Section 111(b) of the EESA, including the provisions for Systemically Significant FailingInstitutions, as implemented by any guidance or regulation thereunder, including Notice 2008-PSSFI,that has been issued and is in effect as of the Closing Date, including but not limited toprovisions prohibiting severance payments to Senior Executive Officers, and shall not adopt any newBenefit Plan with respect to its Senior Executive Officers that does not comply therewith. "SeniorExecutive Officers" means the Company's "senior executive officers" as defined in subsection111(b)(3) of the EESA and regulations issued thereunder, including the rules set forth in 31 CFRPart 30, that have been issued and are in effect as of the Closing Date.

(b) (1) In addition, the Company shall, until such time as the Investor ceases to own any debtor equity securities of the Company acquired pursuant to this Agreement or the Warrant, take allnecessary action to limit any "golden parachute payments" to the employees of the Company and theCompany Subsidiaries who as of the Closing Date participate in the Company's Senior Partners Plan(other than the Senior Executive Officers) (the "Senior Partners") to the amounts permitted by theregulations relating to participants in the EESA Capital Purchase Program and the guidelines andrules relating thereto, including the rules set forth in 31 CFR Part 30, that have been issued andare in effect as of the Closing Date, as if such Senior Partners were Senior Executive Officers forpurposes of the EESA (except that equity denominated awards settled solely in equity shall not beincluded in such limit on "golden parachute payments" to Senior Partners).

(2) In furtherance of the Company's commitment to limit golden parachute payments toSenior Partners as set forth in Section 4.10(b)(1), and to ensure compliance with theprovisions of the EESA Capital Purchase Program and the guidelines and regulations relatingthereto applicable to Senior Partners pursuant to Section 4.10(b)(1), it is further agreedthat the Company shall take all necessary action to ensure that the sum of (A) a SeniorPartner's annual bonus for 2009, (B) all retention payments paid or payable to such SeniorPartner under any retention arrangement between the Senior Partner and the Company for anyperiod ending on or prior to March 31, 2010 and (C) any and all amounts paid or payable tosuch Senior Partner in connection with the termination of such Senior Partner's employmentprior to March 31, 2010 which would be taken into account in applying the compensationlimitation under Section 4.10(b)(1) above, other than any payments pursuant to outstandingawards under the Company's Senior Partners Plan, shall not exceed 3.5 times the sum of suchSenior Partner's base salary and target annual bonus for 2008. For this purpose, actualannual bonus for 2009

and target annual bonus for 2008 will include supplemental bonus andquarterly cash payments under the Company's historic quarterly bonus program consistent with, and inamounts not exceeding, past practice.

(3) Notwithstanding the other provisions of this Section 4.10(b), the Company�sobligations under this Section 4.10(b) shall be on a best efforts basis with respect to theSenior Partners who are not U.S.-based to the extent of its existing Benefit Plans. Withoutderogation of the condition set forth in Section 1.2(d)(v), the Company shall use its bestefforts to obtain from all the Senior Partners and deliver to the Investor prior to theClosing or as promptly as possible thereafter a waiver in the form attached hereto as AnnexB-1.

(c) Unless the Investor ceases to own any debt or equity securities of the Company acquiredpursuant to this Agreement or the Warrant, the Company shall take all necessary action to ensurethat the annual bonus pools payable to the Senior Executive Officers and the Senior Partners inrespect of each of 2008 and 2009 shall not exceed the average of the annual bonus pools paid to theSenior Executive Officers and the Senior Partners for 2006 and 2007 (in each case exclusive of theCompany's historic quarterly bonus program including but not limited to supplemental bonus andquarterly cash payments, the amount of which will not increase for any participant) and subject toappropriate adjustment for new hires and departures.

(d) For the reasons set forth in Section 4.10(b)(2) above and in furtherance thereof, theCompany shall, as soon as practicable, take all necessary action to amend its Executive SeverancePlan, effective not later than March 11, 2010, to require that the benefits thereunder will bereduced by any remuneration attributable to a participant's subsequent employment during therelevant severance period.

(e) The Company confirms that none of (i) the proceeds of the Purchase Price nor (ii) thefunds provided to the Company under the Credit Agreement (collectively "the Funds"), shall be usedto pay annual bonuses, or other future cash performance awards to executives of the Company orSenior Partners. The parties desire that this confirmation be auditable and agree that there are anumber of appropriate methods for verifying this confirmation (particularly in light of expectedbusiness changes at the Company). Until the date that any annual bonuses in respect of 2009 arepaid, it is agreed that the test for the foregoing will be that, at the time when any annualbonuses or cash performance awards granted after the date of this Agreement are paid to executiveofficers or Senior Partners, the Company will have received aggregate dividends, distributions andother payments from its subsidiaries subsequent to September 16, 2008 greater than the aggregateamount of such annual bonuses, such cash performance awards and amounts paid pursuant to AIG�shistoric quarterly bonus program (including but not limited to supplemental bonus and quarterlycash payments, the amount of which will not increase for any participant) paid to executiveofficers and Senior Partners subsequent to that date. At and after the date that any annualbonuses in respect of 2009 are paid, the test for the foregoing confirmation will be that, at thetime when any annual bonuses or cash performance awards granted after the date of this Agreementare vested or otherwise earned by executive officers or Senior Partners, the aggregate adjusted netincome for the relevant year (being the year in which

or in respect of which such bonuses or awardsare vested or so earned) of the insurance company subsidiaries of the Company included for suchyear in the consolidated financial statements of the Company, excluding any such adjusted netincome that was dividended or otherwisedistributed to the Company and taken into account in satisfying the test under the priorsentence, shall exceed the aggregate amount of such annual bonuses, such cash performance awardsand amounts pursuant to AIG's historic quarterly bonus program (including but not limited tosupplemental bonus and quarterly cash payments, the amount of which will not increase for anyparticipant), in each case vested or otherwise earned in or in respect of such year. Each partyagrees to negotiate in good faith and promptly at the request of the other to develop additional oralternative appropriate formulations to test for this confirmation.

(f) The Company confirms that none of the Funds shall be used to pay any electively deferredcompensation in respect of or otherwise resulting from the termination of the deferred compensationplans by the Company or the Company subsidiaries as described in Item 5.02 of the Company's CurrentReport on Form 8-K dated November 18, 2008.

4.11 Restrictions on Lobbying. Until such time as the Investor ceases to own any Preferred Stock, the Company shall continueto maintain and implement its comprehensive written policy on lobbying, governmental ethics andpolitical activity and distribute such policy to all Company employees and lobbying firms involvedin any such activity. Any material amendments to such policy shall require the prior writtenconsent of the Investor until the Investor no longer owns any Preferred Stock, and any materialdeviations from such policy, whether in contravention thereof or pursuant to waivers provided forthereunder, shall promptly be reported to the Investor. Such policy shall, at a minimum, (i)require compliance with all applicable law; (ii) apply to the Company, the Company Subsidiaries andaffiliated foundations; (iii) govern (a) the provision of items of value to any governmentofficials; (b) lobbying and (c) political activities and contributions; and (iv) provide for (a)internal reporting and oversight and (b) mechanisms for addressing non-compliance with the policy.

4.12 Restrictions on Expenses. Until such time as the Investor ceases to own any Preferred Stock, the Company shall continueto maintain and implement its comprehensive written policy on corporate expenses and distributesuch policy to all Company employees. Any material amendments to such policy shall require theprior written consent of the Investor until such time as the Investor no longer owns any PreferredStock, and any material deviations from such policy, whether in contravention thereof or pursuantto waivers provided for thereunder, shall promptly be reported to the Investor. Such policy shall,at a minimum: (i) require compliance with all applicable law; (ii) apply to the Company and theCompany Subsidiaries; (iii) govern (a) the hosting, sponsorship or other payment for conferencesand events, (b) the use of corporate aircraft, (c) travel accommodations and expenditures, (d)consulting arrangements with outside service providers, (e) any new lease or acquisition of realestate, (f) expenses relating to office or facility renovations or relocations and (g) expensesrelating to entertainment or holiday parties; and (iv) provide for (a) internal reporting andoversight and (b) mechanisms for addressing non-compliance with the policy.

4.13 Risk Management Committee. Within 30 days of the Closing Date, and until such time as the Investor ceases to own anyPreferred Stock, the Warrant or any other equity or debt securities of the Company, the Companyshall establish and maintain a risk management committee of the Board of Directors that willoversee the major risks involved in the Company's business operations and review the Company�sactions to mitigate and manage those risks.

4.14 Dividend Rate Adjustment. The dividend rate on the Preferred Stock beneficially owned at the time by the Investor issubject to adjustment in the sole discretion of the Secretary of the Department of the Treasury inlight of, inter alia, then-prevailing economic conditions and the financial condition of theCompany, with the objective of protecting the U.S. taxpayer.

Article 5
Miscellaneous

5.1 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by either the Investor or the Company if the Closing shall not have occurred by the 30thcalendar day following the Signing Date; provided, however, that in the event the Closing has notoccurred by such 30th calendar day, the parties will consult in good faith to determine whether toextend the term of this Agreement, it being understood that the parties shall be required toconsult only until the fifth day after such 30th calendar day and not be under any obligation toextend the term of this Agreement thereafter; provided, further, that the right to terminate thisAgreement under this Section 5.1(a) shall not be available to any party whose breach of anyrepresentation or warranty or failure to perform any obligation under this Agreement shall havecaused or resulted in the failure of the Closing to occur on or prior to such date; or

(b) by either the Investor or the Company in the event that any Governmental Entity shall haveissued an order, decree or ruling or taken any other action restraining, enjoining or otherwiseprohibiting the transactions contemplated by this Agreement and such order, decree, ruling or otheraction shall have become final and nonappealable; or

In the event of termination of this Agreement as provided in this Section 5.1, this Agreement shallforthwith become void and there shall be no liability on the part of either party hereto exceptthat nothing herein shall relieve either party from liability for any breach of this Agreement.

5.2 Survival of Representations and Warranties. All covenants and agreements, other than those which by their terms apply in whole or in partafter the Closing, shall terminate as of the Closing. The representations and warranties of theCompany made herein or in any certificates delivered in connection with the Closing shall survivethe Closing without limitation.

5.3 Amendment. No amendment of any provision of this Agreement will be effective unless made in writing andsigned by an officer or a duly authorized representative of each party; provided that the Investormay unilaterally amend any provision of this Agreement to the extent required to comply with anychanges after the Signing Date in applicable federal statutes. No failure or delay by any party inexercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall anysingle or partial exercise thereof preclude any other or further exercise of any other right, poweror privilege. The rights and remedies herein provided shall be cumulative of any rights orremedies provided by law.

5.4 Waiver of Conditions. The conditions to each party's obligation to consummate the Purchase are for the sole benefitof such party and may be waived by such party in whole or in part to the extent permitted byapplicable law. No waiver will be effective unless it is in a writing signed by a duly authorizedofficer of the waiving party that makes express reference to the provision or provisions subject tosuch waiver.

5.5 Governing Law: Submission to Jurisdiction, Etc. This Agreement, and the rights and obligations of the parties hereunder, shall be governed by,and construed and interpreted in accordance with, United States federal law and not the law of anyState. To the extent that a court looks to the laws of any State to determine or define the UnitedStates federal law, it is the intention of the parties hereto that such court shall look only tothe laws of the State of New York without regard to the rules of conflicts of laws. Each of theparties hereto agrees (a) to submit to the exclusive jurisdiction and venue of the United StatesDistrict Court for the District of Columbia and the United States Court of Federal Claims for anyand all actions, suits or proceedings arising out of or relating to this Agreement or the Warrantor the transactions contemplated hereby or thereby, and (b) that notice may be served upon (i) theCompany at the address and in the manner set forth for notices to the Company in Section 5.6 and(ii) the Investor in accordance with federal law. To the extent permitted by applicable law, eachof the parties hereto hereby unconditionally waives trial by jury in any legal action or proceedingrelating to this Agreement or the Warrant or the transactions contemplated hereby or thereby.

5.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to theother will be in writing and will be deemed to have been duly given (a) on the date of delivery ifdelivered personally, or by facsimile, upon confirmation of receipt, or (b) on the second businessday following the date of dispatch if delivered by a recognized next day courier service. Allnotices to the Company shall be delivered to the address set forth below, or pursuant to such otherinstruction as may be designated in writing by the Company to the Investor. All notices to theInvestor shall be delivered as set forth below, or pursuant to such other instructions as may bedesignated in writing by the Investor to the Company.

If to the Investor:

United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 2312
Washington, D.C. 20220
Attention: Assistant General Counsel (Banking and Finance)
Facsimile: (202) 622-1974

If to the Company:

American International Group, Inc.
70 Pine Street, New York, New York 10270
Attention: General Counsel
Facsimile: (212) 785-2175
Telephone: (212) 770-7000

with a copy to:

Sullivan & Cromwell LLP
125 Broad Street, New York, New York 10004
Attention: Robert W. Reeder III, Michael M. Wiseman
Telephone: (212) 558-4000

5.7 Definitions.

(a) When a reference is made in this Agreement to a subsidiary of a person, the term"subsidiary� means any corporation, partnership, joint venture, limited liability company or otherentity (x) of which such person or a subsidiary of such person is a general partner or (y) of whicha majority of the voting securities or other voting interests, or a majority of the securities orother interests of which having by their terms ordinary voting power to elect a majority of theboard of directors or persons performing similar functions with respect to such entity, is directlyor indirectly owned by such person and/or one or more subsidiaries thereof; provided that no Fundshall be a subsidiary for purposes of this Agreement.

(b) The term "Fund" means any investment vehicle managed by the Company or an Affiliate of theCompany and created in the ordinary course of the Company's asset management business for thepurpose of selling Equity Interests in such investment vehicle to third parties. "EquityInterests" means shares of capital stock, partnership interests, membership interests in a limitedliability company, beneficial interests in a trust or other equity interests in any entity, and anyoption, warrant or other right entitling the holder thereof to purchase or otherwise acquire anysuch equity interest.

(c) The term "Affiliate" means, with respect to any person, any person directly or indirectlycontrolling, controlled by or under common control with, such other person. For purposes of thisdefinition, "control" (including, with correlative meanings, the terms �controlled

by� and "undercommon control with") when used with respect to any person, means the possession, directly orindirectly, of the power to cause the direction of management and/or policies of such person,whether through the ownership of voting securities by contract or otherwise.

(d) The terms "knowledge of the Company" or "Company's knowledge" mean the actual knowledgeafter reasonable and due inquiry of the "officers" (as such term is defined in Rule 3b-2 under theExchange Act, but excluding any Vice President or Secretary) of the Company.

5.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor liability arising hereunder or byreason hereof shall be assignable by any party hereto without the prior written consent of theother party, and any attempt to assign any right, remedy, obligation or liability hereunder withoutsuch consent shall be void, except (a) an assignment, in the case of a Business Combination, asdefined below, where such party is not the surviving entity, or a sale of substantially all of itsassets, to the entity which is the survivor of such Business Combination or the purchaser in suchsale and (b) as provided in Section 4.5. "Business Combination" means merger, consolidation,statutory share exchange or similar transaction that requires the approval of the Company�sstockholders.

5.9 Severability. If any provision of this Agreement or the Warrant, or the application thereof to any person orcircumstance, is determined by a court of competent jurisdiction to be invalid, void orunenforceable, the remaining provisions hereof, or the application of such provision to persons orcircumstances other than those as to which it has been held invalid or unenforceable, will remainin full force and effect and shall in no way be affected, impaired or invalidated thereby, so longas the economic or legal substance of the transactions contemplated hereby is not affected in anymanner materially adverse to any party. Upon such determination, the parties shall negotiate ingood faith in an effort to agree upon a suitable and equitable substitute provision to effect theoriginal intent of the parties.

5.10 Entire Agreement. This Agreement (including the Annexes and Schedules hereto) constitutes the entire agreement,and supersedes all other prior agreements, understandings, representations and warranties, bothwritten and oral, between the parties, with respect to the subject matter hereof.

5.11 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon anyperson or entity other than the Company and the Investor any benefit, right or remedies, exceptthat the provisions of Section 4.5 shall inure to the benefit of the persons referred to in thatSection.

[Signature Page Follows]

In witness whereof, this Agreement has been duly executed and delivered by the duly authorizedrepresentatives of the parties hereto as of the date written below.


AMERICAN INTERNATIONAL GROUP, INC.
By:	/s/David L. Herzog
	Name:	David L. Herzog
	Title:	Executive Vice President and Chief FinancialOfficer

UNITED STATES DEPARTMENT OF THE TREASURY
By:	/s/Neel Kashkari
	Name:	Neel Kashkari
	Title:	Interim Assistant Secretary for FinancialStability

Date: November 25, 2008

SCHEDULE A

ADDITIONAL TERMS AND CONDITIONS

Company Information:

Name of the Company: American International Group, Inc.

Corporate or other organizational form: Corporation

Jurisdiction of Organization: Delaware

Terms of the Purchase:

Series of Preferred Stock Purchased: Series D Fixed Rate Cumulative Perpetual PreferredStock

Per Share Liquidation Preference of Preferred Stock: $10,000

Number of Shares of Preferred Stock Purchased: 4,000,000

Dividend Payment Dates on the Preferred Stock: February 1, May 1, August 1 and November 1

Number of Warrant Shares: 53,798,766

Exercise Price of the Warrant: Initially $2.50 per share of Common Stock

Closing:


Location of Closing:		Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004

Time of Closing:		3:00 p.m., New York time

Date of Closing:		November 25, 2008

SCHEDULE B

CAPITALIZATION

Capitalization Date: October 31, 2008

Common Stock

Par value: $2.50 per share

Total Authorized: 5,000,000,000

Outstanding: 2,689,938,313

Subject to warrants, options, convertible securities, etc.: Up to 154,738,080 shares arereserved for issuance pursuant to the Purchase Contract Agreement between the Company andThe Bank of New York, as Purchase Contract Agent, dated as of May 16, 2008

Reserved for benefit plans and other issuances: 169,420,587

Remaining authorized but unissued: 2,310,061,687

Shares issued after Capitalization Date (other than pursuant to warrants, options,convertible securities, etc. as set forth above): 22,524

Serial Preferred Stock

Par value: $5.00 per share

Total Authorized: 6,000,000

Outstanding (by series): None

Reserved for issuance: 100,000

Remaining authorized but unissued: 5,900,000

SCHEDULE C

LITIGATION

List any exceptions to the representation and warranty in Section 2.2(l) of the Securities PurchaseAgreement.

If none, please so indicate by checking the box: þ.

SCHEDULE D

COMPLIANCE WITH LAWS

List any exceptions to the representation and warranty in the second sentence of Section 2.2(m) ofthe Agreement.

If none, please so indicate by checking the box: þ.

List any exceptions to the representation and warranty in the last sentence of Section 2.2(m) ofthe Securities Purchase Agreement.

If none, please so indicate by checking the box: þ.

SCHEDULE E

REGULATORY AGREEMENTS

List any exceptions to the representation and warranty in Section 2.2(s) of the Agreement.

If none, please so indicate by checking the box: þ.

ANNEX A

FORM OF CERTIFICATE OF DESIGNATIONS

[SEE ATTACHED]

ANNEX B-1

FORM OF WAIVER FOR THE SENIOR EXECUTIVE OFFICERS
AND THE SENIOR PARTNERS

In consideration for the benefits I will receive as a result of the participation of AmericanInternational Group, Inc. (together with its subsidiaries and affiliates, the "Company") in theUnited States Department of the Treasury's Program for Systemically Significant FailingInstitutions (as set forth in Notice 2008-PSSFI) and any other economic stabilization programimplemented by the Department of the Treasury under the Emergency Economic Stabilization Act of2008 (the "Act") either prior to or subsequent to the date of this letter from me (any suchprogram, including the Program for Systemically Significant Failing Institutions, an "EESAProgram"), I hereby voluntarily waive any claim against any of the United States and the Company,the Company's Board of Directors, any individual member of the Company's Board of Directors and theCompany's officers, employees, representatives and agents for any changes to my compensation orbenefits that are required to comply with the regulations issued by the Department of the Treasuryin connection with an EESA Program, including without limitation the regulations issued on October20, 2008, as well as the limitations under the letter agreement between me and the Company datedNovember 12, 2008 regarding the term sheet agreement between the Company and United StatesDepartment of the Treasury (the "Limitations").

I acknowledge that the aforementioned regulations and Limitations may require modification ofthe compensation, bonus, incentive and other benefit plans, arrangements, policies and agreements(including so-called "golden parachute" agreements), whether or not in writing, that I may havewith the Company or in which I may participate as they relate to the period the United States holdsany equity or debt securities of the Company acquired through an EESA Program, including withoutlimitation the Program for Systemically Significant Failing Institutions, or for any other periodapplicable under such EESA Program or Limitations, as the case may be.

This waiver includes all claims I may have under the laws of the United States or any staterelated to the requirements imposed by the aforementioned regulations and Limitations, includingwithout limitation a claim for any compensation or other payments or benefits I would otherwisereceive, any challenge to the process by which the aforementioned regulations or Limitations are orwere adopted and any tort or constitutional claim about the effect of these regulations orLimitations on my employment relationship.

Intending to be legally bound, I have executed this Waiver

as of this ___th day of November, 2008.





Name:

ANNEX B-2

FORM OF WAIVER FOR THE COMPANY

In consideration for the benefits that it will receive as a result of its participation in theUnited States Department of the Treasury's Programs for Systemically Significant FailingInstitutions (as set forth in Notice 2008-PSSFI) and any other economic stabilization programimplemented by the Department of the Treasury under the Emergency Economic Stabilization Act of2008 (the "EESA") either prior to or subsequent to the date of this letter (any such program,including the Programs for Systemically Significant Failing Institutions, an "EESA Program"),American International Group, Inc. (together with its subsidiaries and affiliates, the "Company")hereby voluntarily waives any claim against the United States for any changes to compensation orbenefits of the Company's employees that are required to comply with the regulations issued by theDepartment of the Treasury in connection with an EESA Program, including without limitation theregulations issued on October 14, 2008 and the requirements of Section 4.10 of the SecuritiesPurchase Agreement dated as of November 25, 2008 between the Company and the United StatesDepartment of the Treasury.

The Company acknowledges that the aforementioned regulations and such requirements may requiremodification of the compensation, bonus, incentive and other benefit plans, arrangements, policiesand agreements (including so-called "golden parachute" agreements), whether or not in writing, thatthe Company may have with its employees or in which such employees may participate as theregulations and such requirements relate to the period the United States holds any equity or debtsecurities of the Company acquired through an EESA Program, including without limitation thePrograms for Systemically Significant Failing Institutions Program, or for any other periodapplicable under such EESA Program.

This waiver includes all claims the Company may have under the laws of the United States or anystate related to the requirements imposed by the aforementioned regulations and such requirements,including without limitation a claim for any compensation or other payments or benefits theCompany's employees would otherwise receive, any challenge to the process by which theaforementioned regulations are or were adopted and any tort or constitutional claim about theeffect of these regulations on the Company's employment relationship with its employees.

ANNEX C

FORM OF OPINION

(a) The Company has been duly incorporated and is an existing corporation in good standingunder the laws of the state of its incorporation.

(b) The Preferred Stock has been duly and validly authorized, and, when issued and deliveredpursuant to the Agreement, the Preferred Stock will be validly issued and fully paid andnon-assessable, will not be issued in violation of any preemptive rights.

(c) The Warrant has been duly authorized and, when executed and delivered as contemplatedhereby, will constitute a valid and legally binding obligation of the Company enforceable againstthe Company in accordance with its terms, except as the same may be limited by applicablebankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws affectingthe creditors' rights and general equitable principles, regardless of whether such enforceabilityis considered in a proceeding at law or in equity.

(d) The shares of Common Stock issuable upon exercise of the Warrant have been duly authorizedand reserved for issuance upon exercise of the Warrant and when so issued in accordance with theterms of the Warrant will be validly issued, fully paid and non-assessable.

(e) The Company has the corporate power and authority to execute and deliver the Agreement andthe Warrant to carry out its obligations thereunder (which includes the issuance of the PreferredStock, Warrant and Warrant Shares).

(f) The execution, delivery and performance by the Company of the Agreement and the Warrantand the consummation of the transactions contemplated thereby have been duly authorized by allnecessary corporate action on the part of the Company and its stockholders, and no further approvalor authorization is required on the part of the Company, other than the vote of the stockholdersdescribed in Section 3.1(b) of the Agreement.

(g) The Agreement is a valid and binding obligation of the Company enforceable against theCompany in accordance with its terms, except as the same may be limited by applicable bankruptcy,insolvency, reorganization, moratorium or similar laws affecting the creditors' rights and generalequitable principles, regardless of whether such enforceability is considered in a proceeding atlaw or in equity; provided, however, such counsel need express no opinion with respect to Section3.1(b) or Section 4.5(g) or the severability provisions of the Agreement insofar as Section 3.1(b)or Section 4.5(g)is concerned.

ANNEX D

FORM OF WARRANT

[SEE ATTACHED]