EXECUTION COPY
AMENDMENT NO. 4 TO CREDIT AGREEMENT
     AMENDMENT No. 4 dated as of December 1, 2009, to the Credit Agreement dated
as of September 22, 2008 (as amended from time to time, the “Credit Agreement”),
between AMERICAN INTERNATIONAL GROUP, INC., as Borrower (the “Borrower”), and
the FEDERAL RESERVE BANK OF NEW YORK, as Lender (the “Lender”).
PRELIMINARY STATEMENTS
     WHEREAS, Borrower has requested Lender to make certain changes to the
Credit Agreement as described herein, and Lender has agreed, subject to the
terms and conditions hereinafter set forth, to amend the Credit Agreement to
effect such changes as set forth below.
     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
     Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement. Each reference to “this
Agreement”, “hereof”, “hereunder”, “herein” and “hereby” and each other similar
reference in the Credit Agreement, and each reference in any other Loan Document
to “the Credit Agreement”, “thereof”, “thereunder”, “therein” or “thereby” or
other similar reference to the Credit Agreement, shall, after the Amendment
No. 4 Effective Date (as defined in Section 13 of this Amendment), refer to the
Credit Agreement as amended hereby.
     Section 2. Amendments to Definitions. Section 1.01 of the Credit Agreement
is amended by adding or amending (as applicable) the following definitions to
read in their entirety as follows:
“AIA Closing Date” shall mean the “Closing Date” as defined in the AIA Purchase
Agreement.
“AIA Closing Date Assignments” shall mean the assignment of Loans required to
occur upon or immediately following the

 

--------------------------------------------------------------------------------

 

Closing as defined in, and pursuant to the terms of, the AIA Purchase Agreement.
“AIA Liquidation Preference” shall mean the “Initial Liquidation Preference” as
defined in the LLC Agreement (as defined in the AIA Purchase Agreement).
“AIA LLC” shall mean AIA Aurora LLC, a Delaware limited liability company.
“AIA Preferred Membership Interests” shall mean the “Preferred Units” as defined
in the AIA Purchase Agreement.
“AIA Purchase Agreement” shall mean the Purchase Agreement dated as of June 25,
2009, among American International Group, Inc., as Parent, American
International Reinsurance Company, Ltd., as Seller, and the Federal Reserve Bank
of New York, as Buyer, as in effect from time to time.
“AIRCO” shall mean American International Reinsurance Company, Ltd., a Bermuda
company.
“ALICO Closing Date” shall mean the “Closing Date” as defined in the ALICO
Purchase Agreement.
“ALICO Liquidation Preference” shall mean the “Junior Initial Liquidation
Preference” plus the “Senior Initial Liquidation Preference”, each as defined in
the LLC Agreement (as defined in the ALICO Purchase Agreement).
“ALICO LLC” shall mean ALICO Holdings LLC, a Delaware limited liability company.
“ALICO Preferred Membership Interests” shall mean the “Preferred Units” as
defined in the ALICO Purchase Agreement.
“ALICO Purchase Agreement” shall mean the Purchase Agreement dated as of
June 25, 2009, between American International Group, Inc., as Seller, and the
Federal Reserve Bank of New York, as Buyer, as in effect from time to time.
“Amendment No. 4” shall mean Amendment No. 4 hereto dated as of December 1,
2009.
“Amendment No. 4 Effective Date” shall mean the “Amendment No. 4 Effective Date”
as defined in Amendment No. 4.

2

--------------------------------------------------------------------------------

 

“Insurance Subsidiary Extraordinary Dividend” shall mean any extraordinary
dividend or other distribution by any Insurance Subsidiary to the Borrower or
any other Subsidiary (other than an Insurance Subsidiary), except (i) dividends
or other distributions of Net Cash Proceeds received by an Insurance Subsidiary
in respect of an Asset Sale, Equity Issuance or issuance or incurrence of
Indebtedness that independently gives rise to an obligation on the part of the
Borrower to prepay outstanding Loans and accrued and unpaid interest thereon
under Section 2.10(b), 2.10(c) or 2.10(d), as the case may be, and (ii) any
other dividends or other distributions which the Lender agrees from time to time
shall be excluded from this definition.
“Investment” shall have the meaning assigned to such term in Section 6.04.
“London Inter-bank Offered Rate” shall mean the British Bankers’ Association
London Inter-bank Offered Rate for three-month deposits in Dollars (as set forth
by any service selected by the Lender that has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates), rounded to the nearest thousandth.
“Restricted Subsidiary” shall mean any Material Subsidiary that is not an
Insurance Subsidiary; provided that neither AIA LLC, ALICO LLC nor any of their
respective subsidiaries shall constitute a Restricted Subsidiary for any purpose
hereunder or under any other Loan Document.
     Section 3. Technical Amendment. The Credit Agreement is hereby amended by
replacing each reference to “Permitted Investments Policy” with a reference to
“Permitted Investment Policy”.
     Section 4. Amendment to Prepayment Application Protocol. Annex A of the
Credit Agreement is hereby amended by deleting paragraph (b) in its entirety.
     Section 5. Amendment to Conditions of Lending. Section 4.01(b) of the
Credit Agreement is hereby amended to read in its entirety as follows:
          “(b) The representations and warranties set forth in Article 3 and in
each other Loan Document shall be true and correct on and as of the date of such
Borrowing with the same effect as though made on and as of such date, except
(i) to the extent such representations and warranties expressly relate to an
earlier date, (ii) with respect to the representations set forth in
Sections 3.06 and 3.09(a)(ii) of the Credit Agreement, for the matters disclosed
in AIG’s Annual Report on Form 10-K for the year ended December 31, 2008, as
amended, AIG’s Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2009,

3

--------------------------------------------------------------------------------

 

June 30, 2009 and September 30, 2009, and (iii) with respect to the
representations set forth in Sections 3.09(b) and 3.10 and the second sentence
of Section 3.19 of the Credit Agreement, for the matters disclosed in AIG’s
Annual Report on Form 10-K for the year ended December 31, 2008, as amended
under, “Risk Factors — Change of Control”.”
     Section 6. Amendment to Mandatory Prepayments. Section 2.10 of the Credit
Agreement is hereby amended as follows:
     (a) by replacing each reference in that section to “the fifth Business Day
following the receipt of Net Cash Proceeds” with a reference to “the fifteenth
Business Day following the receipt of Net Cash Proceeds” (this amendment
superseding the same change made pursuant to a letter agreement dated as of
June 30, 2009, between Borrower and Lender);
     (b) by adding the following new paragraph (j):
     “(j) Notwithstanding anything to the contrary contained herein or in any
other Loan Document, as soon as practicable and in any event not later than the
fifteenth Business Day following the receipt of cash proceeds by the Borrower or
any Subsidiary in respect of an Equity Issuance or other disposition of the
Equity Interests of AIA LLC or ALICO LLC or their respective subsidiaries, the
Borrower shall apply an amount equal to 100% of the cash proceeds thereof (net
of (i) all taxes and customary fees, commissions, costs and other expenses
incurred in connection therewith, (ii) the cash proceeds thereof required to be
paid to any Person (other than the Borrower or any Subsidiary) owning any Equity
Interests of AIA LLC or ALICO LLC or their respective subsidiaries, as
applicable (including, without limitation, amounts required to be paid in
respect of the AIA Preferred Membership Interests and/or the ALICO Preferred
Membership Interests)) to prepay outstanding Loans and accrued and unpaid
interest thereon (subject to adjustment in accordance with Section 2.10(i) and
Annex A).”
     (c) by adding the following new paragraph (k):
     “(k) Notwithstanding anything to the contrary contained herein or in any
other Loan Document, (i) on the AIA Closing Date, immediately after the
effectiveness of the AIA Closing Date Assignments and the sale by AIRCO to the
Lender of the AIA Preferred Membership Interests, the Commitment shall be
automatically and permanently reduced by an amount equal to 100% of the AIA
Liquidation Preference, and (ii) on the ALICO Closing Date, immediately after
the sale by Borrower to the Lender of the ALICO Preferred Membership Interests,
the Loans outstanding on such date will be deemed to be prepaid in an aggregate
Original Principal Amount equal to, and the Commitment shall be automatically
and permanently reduced by, an amount equal to 100% of the ALICO Liquidation
Preference. Simultaneously with such

4

--------------------------------------------------------------------------------

 

reduction in the Commitment, the Borrower shall pay (x) all accrued and unpaid
Fees; (y) all accrued and unpaid interest on the Loans assigned to and held by
the Borrower immediately prior to the cancellation of those Loans in accordance
with Section 11 of Amendment No. 4; and (z) all accrued and unpaid interest on
any portion of the Loans that are deemed to be prepaid pursuant to this clause
(k), in each case by increasing the outstanding principal amount of the
remaining Loans by the amount of such Fees or interest, as the case may be.”
     Section 7. Amendments to Negative Covenants.
     (a) Section 6.01(c) of the Credit Agreement is hereby amended by replacing
the reference therein to “Section 6.04(c)” with a reference to
“Section 6.04(a)”.
     (b) Section 6.04 of the Credit Agreement is hereby amended to read in its
entirety as follows:
     “Section 6.04. Investments. Purchase, hold or acquire any Equity Interests,
evidences of indebtedness or other securities of, make or permit to exist any
loans, advances or capital contributions to, or Guarantee the Indebtedness or
other obligations of, or make any other investment in, any other Person (each
such transaction, an “Investment”), except:
     (a) (i) Investments by the Borrower and the Subsidiaries existing on the
Closing Date in the Subsidiaries, and (ii) additional Investments by the
Borrower and the Subsidiaries in the Subsidiaries; provided that (A) any Equity
Interests of a Subsidiary held by a Loan Party shall be pledged pursuant to the
Guarantee and Pledge Agreement (subject to the limitations and exceptions
referred to therein), (B) any loans and advances made to a Loan Party by the
Borrower or any Subsidiary (and any Guarantee thereof by any Loan Party) shall
be (1) unsecured and (2) subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement and (C) Investments made after the Closing
Date by Loan Parties in Subsidiaries that are not Loan Parties (determined
without regard to any write-downs or write-offs of such Investments) shall only
be permitted (x) pursuant to funding commitments in effect on, and disclosed to
the Lender on or prior to, the Closing Date or (y) with the prior written
consent of the Lender;
     (b) Investments in cash and Permitted Investments;
     (c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business; and
     (d) other Investments made in the ordinary course of business of the
Borrower and its Subsidiaries.

5

--------------------------------------------------------------------------------

 

     Notwithstanding the foregoing, the Borrower and its Subsidiaries shall not
be permitted to make any material Investment in illiquid, complex structured
products for which no external market price, liquid market quotes or price based
on common agreed modeling is available except (i) pursuant to Investment
Commitments in effect on the Closing Date and entered into in the ordinary
course of business or (ii) with the prior written consent of the Lender.
Furthermore, the Borrower and its Subsidiaries shall not, without the prior
written consent of the Lender, enter into any commitment or agreement to make
any Investment that would not be permitted under this Section 6.04 to be made on
the date such commitment or agreement is to be entered into, other than any
letter of intent, agreement in principle or similar arrangement with a
commercial counterparty that is non-binding under applicable law.”
     Section 8. Amendment to Events of Default. Section 7(e) of the Credit
Agreement is hereby amended to read in its entirety as follows:
     “(e) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
any Loan Document (other than those specified in paragraphs (b), (c) or
(d) above and other than any default on the obligation to make indemnity
payments under the AIA Purchase Agreement or the ALICO Purchase Agreement) and
such default shall continue unremedied for a period of 10 days after the earlier
of (i) notice thereof from the Lender to the Borrower or (ii) knowledge thereof
of the Borrower;
     Section 9. Amendment to Waiver Mechanics. Section 8.08(b) of the Credit
Agreement is hereby amended to read in its entirety as follows:
     “(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Lender; provided that the Lender may waive
restrictions imposed on the Borrower hereby and obligations of the Borrower
hereunder by written notice to the Borrower.”
     Section 10. Designation of Certain Obligations as Secured Obligations. The
parties hereto hereby agree to designate the following as “Secured Obligations”
for all purposes under the Guarantee and Pledge Agreement:
     (a) the obligations of Borrower pursuant to Article 5 of the AIA Purchase
Agreement; and
     (b) the obligations of the Borrower pursuant to Article 5 of the ALICO
Purchase Agreement.
     Section 11. Certain Other Agreements. The parties hereto hereby agree that
on the AIA Closing Date, immediately after the effectiveness of the AIA

6

--------------------------------------------------------------------------------

 

Closing Date Assignments and the sale by AIRCO to the Lender of the AIA
Preferred Membership Interests, the Loans assigned to and held by the Borrower
and all Obligations (other than Obligations required to be paid in accordance
with Section 2.10(k) as added hereby) with respect thereto shall be
automatically and permanently canceled and shall be deemed not to be outstanding
for any purpose under the Credit Agreement and the other Loan Documents.
     Section 12. Representations of Borrower. The Borrower represents and
warrants on the Amendment No. 4 Effective Date that (i) the representations and
warranties of Borrower contained in Article 3 of the Credit Agreement and by any
Loan Party in any other Loan Document shall be true and correct on and as of the
Amendment No. 4 Effective Date except (a) to the extent such representations and
warranties expressly relate to an earlier date, (b) with respect to the
representations set forth in Sections 3.06 and 3.09(a)(ii) of the Credit
Agreement, for the matters disclosed in AIG’s Annual Report on Form 10-K for the
year ended December 31, 2008, as amended, AIG’s Quarterly Reports on Form 10-Q
for the quarterly periods ended March 31, 2009, June 30, 2009 and September 30,
2009, and (c) with respect to the representations set forth in Sections 3.09(b)
and 3.10 and the second sentence of Section 3.19 of the Credit Agreement, for
the matters disclosed in AIG’s Annual Report on Form 10-K for the year ended
December 31, 2008, as amended, under “Risk Factors — Change of Control” and
(ii) no Default or Event of Default shall exist on the Amendment No. 4 Effective
Date after giving effect to this Amendment.
     Section 13. Conditions to Effectiveness. This Amendment shall become
effective on the date (the “Amendment No. 4 Effective Date”) when, and only
when, each of the following conditions shall have been satisfied to the
satisfaction of Lender:
     (a) Execution of Counterparts. Lender shall have received from Borrower a
counterpart hereof signed by Borrower;
     (b) Execution of Consent. Lender shall have received counterparts of a
consent, substantially in the form of Exhibit 1 to this Amendment, duly executed
by each Guarantor; and
     (c) Expenses. Lender shall have received reimbursement for all costs and
expenses (including fees, charges and disbursements of counsel to Lender) to the
extent required by Section 8.05(a) of the Credit Agreement, including in
connection with the preparation, negotiation and execution of this Amendment.
     Section 14. Certain Consequences of Effectiveness. On and after the
Amendment No. 4 Effective Date, the rights and obligations of the parties hereto
shall be governed by the Credit Agreement as amended by this Amendment; provided
that the rights and obligations of the parties to the Credit Agreement with
respect to the period prior to the Amendment No. 4 Effective Date shall continue
to be governed by the provisions of the Credit Agreement prior to giving

7

--------------------------------------------------------------------------------

 

effect to this Amendment. Each Loan Document, as specifically amended hereby,
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects. Without limiting the foregoing, the Security
Documents and all of the Collateral do, and shall continue to, secure the
payment of all obligations under the Loan Documents as amended hereby.
     Section 15. Consent to Transactions. For purposes of Article 6 of the
Credit Agreement, Lender hereby consents to any reasonably necessary actions
taken by Borrower or any Subsidiary in order to consummate the transactions
contemplated by the AIA Purchase Agreement on or prior to the AIA Closing Date
and any reasonably necessary actions taken by the Borrower or any Subsidiary in
order to consummate the transactions contemplated by the ALICO Purchase
Agreement on or prior to the ALICO Closing Date only to the extent that such
actions are taken in accordance with the terms of the AIA Purchase Agreement or
the ALICO Purchase Agreement, as the case may be; provided that Borrower shall
give Lender prior written notice of any actions taken pursuant to this
authorization other than actions specifically required to be taken by Borrower
or any Subsidiary pursuant to the AIA Purchase Agreement or the ALICO Purchase
Agreement.
     Section 16. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
     Section 17. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Delivery by
telecopier of an executed counterpart of a signature page to this Amendment
shall be effective as delivery of an original executed counterpart of this
Amendment.

8

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

            AMERICAN INTERNATIONAL GROUP, INC.,
as Borrower
      By:  /s/ P. Nicholas Kourides       Name:   P. Nicholas Kourides      
Title:   Attorney-in-Fact       FEDERAL RESERVE BANK OF NEW YORK,
as Lender
      By:  /s/ Sarah Dahlgren       Name:   Sarah Dahlgren       Title:   Senior
Vice President  

 

--------------------------------------------------------------------------------

 

         

EXHIBIT 1
GUARANTOR CONSENT TO
AMENDMENT NO. 4 TO CREDIT AGREEMENT
     Reference is made to Amendment No. 4 dated as of December 1, 2009 between
American International Group, Inc., as Borrower (the “Borrower”) and the Federal
Reserve Bank of New York, as Lender (the “Lender”) (the “Amendment”). Unless
otherwise specifically defined herein, each term used herein that is defined in
the Amendment shall have the meaning assigned to such term in the Amendment.
     Each of the undersigned hereby consents to the Amendment and hereby
confirms and agrees that (a) notwithstanding the effectiveness of the Amendment,
each Loan Document to which it is party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects, except
that, on and after the effectiveness of the Amendment, each reference in the
Loan Documents to the “Credit Agreement”, “thereof”, “thereunder”, “therein” or
“thereby” or similar references to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by the Amendment and (b) the Loan
Documents to which each of the undersigned is a party and all of the Collateral
described therein do, and shall continue to, secure the payment of all
obligations under the Loan Documents, as amended by the Amendment.

            [GUARANTORS]
      By:          Name:           Title: