DISTRIBUTION AGREEMENT

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                                                                     Exhibit 1.1

                                                                 
                       AMERICAN INTERNATIONAL GROUP, INC.

                              U.S. $25,139,770,000

                                MEDIUM-TERM NOTES
                                    SERIES G
                                  SERIES AIG-FP
                      SERIES MP, MATCHED INVESTMENT PROGRAM

                             DISTRIBUTION AGREEMENT

                                                                October 12, 2006

To the Agents named in Annex VI hereto.

Ladies and Gentlemen:

     American International Group, Inc., a Delaware corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
up to U.S. $25,139,770,000 aggregate principal amount, or the equivalent of up
to U.S. $25,139,770,000 aggregate principal amount in one or more foreign or
composite currencies, of its Medium-Term Notes, Series G; Medium-Term Notes,
Series AIG-FP; and Medium-Term Notes, Series MP, Matched Investment Program
(collectively, the "SECURITIES"), and agrees with each of you (individually, an
"AGENT", and collectively, the "AGENTS") as set forth in this Agreement.

     Subject to the terms and conditions stated herein, the Company hereby
appoints each Agent as an agent of the Company for the purpose of soliciting and
receiving offers to purchase the Securities from the Company, and the Company
and the Agents agree that whenever the Company determines to sell Securities
directly to any Agent as principal for resale to others, the Company and such
Agent will, unless otherwise agreed by them, enter into a separate agreement,
substantially in the form of Annex I hereto, relating to such sale (each, a
"TERMS AGREEMENT") or another agreement relating to such sale, which shall be
subject to the terms and conditions stated herein, in each case in accordance
with Section 2(b) hereof. The Company reserves the right to sell Securities
directly on its own behalf and to enter into agreements substantially identical
hereto with other broker-dealers as Agents. This Agreement shall not be
construed to create either an obligation on the part of the Company to sell any
Securities or an obligation of the Agents to purchase Securities as principal.

     The terms and rights of the Securities shall be as specified in or
established pursuant to the Indenture, dated as of October 12, 2006 (the
"INDENTURE"), between the Company and The Bank of New York, as Trustee (the
"TRUSTEE"). The Securities shall have the maturity ranges, annual interest rates
(if any), redemption provisions and other terms set forth in the Prospectus
referred to below as it may be supplemented from time to time. The Securities
may be issued in amounts denominated in United States dollars or in amounts
denominated in foreign currencies, including the Euro, or any composite
currency. References herein to amounts stated in United States dollars shall be
deemed to refer to the equivalent amount of foreign currency or composite
currency to the extent applicable. The Securities will be issued, and the terms
thereof established,

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from time to time by the Company in accordance with the Indenture and the
Administrative Procedure attached hereto as Attachment A (the "PROCEDURE") and,
if applicable, such terms will be specified in a related Terms Agreement.

     1. The Company represents and warrants to, and agrees with, each Agent
that:

          (a) The registration statements on Form S-3 (Registration Nos.
333-106040 and 333-31024) in respect of the Securities have been filed with the
Securities and Exchange Commission (the "COMMISSION"); such registration
statements and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to such Agent, excluding exhibits to such
registration statements, but including all documents incorporated by reference
in the prospectus included in the latest registration statement, have been
declared effective by the Commission in such form; and no stop order suspending
the effectiveness of any such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in the latest registration statement or
filed with the Commission pursuant to Rule 424(a) of the rules and regulations
of the Commission under the Securities Act of 1933, as amended (the "ACT") is
hereinafter called a "PRELIMINARY PROSPECTUS;" the various parts of such
registration statements, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statements at the time such part of the registration statements became effective
but excluding Form T-1, each as amended at the time such part of the
registration statements most recently became effective, are hereinafter
collectively called the "REGISTRATION STATEMENT;" the prospectus (including, if
applicable, any prospectus supplement) relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter called the
"PROSPECTUS;" any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth only the terms of a
particular issue of the Securities (a "PRICING SUPPLEMENT"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), and incorporated therein by reference;
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement; and
any reference to the "PROSPECTUS AS AMENDED OR SUPPLEMENTED," other than in
Section 1(c)(i)(B) hereof, shall be deemed to refer to and include the
Prospectus as amended or supplemented (including by the applicable Pricing
Supplement filed in accordance with Section 4(a) hereof and any other prospectus
supplement specifically referred to in such Pricing Supplement) in relation to
Securities to be sold pursuant to this Agreement, in the form filed or
transmitted for filing with the Commission pursuant to Rule 424(b) under the Act
and in accordance with Section 4(a) hereof, including any documents incorporated
by reference therein as of the date of such filing);

          (b) No order preventing or suspending the use of any Preliminary
Prospectus or any "issuer free writing prospectus" as defined in Rule 433 under
the Act relating to the Securities (an "ISSUER FREE WRITING PROSPECTUS") has
been issued by the Commission, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the


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requirements of the Act and the Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by any Agent
expressly for use therein;

          (c) (i) With respect to any issue of Securities, (A) the "APPLICABLE
TIME" will be such time on the date of the applicable Terms Agreement as is
specified therein as the Applicable Time, or, if either the Terms Agreement does
not specify the Applicable Time or if such Securities are not being sold
pursuant to a Terms Agreement, the Applicable Time shall mean the time
immediately prior to the time of the first sale by an Agent (including, without
limitation, a contract of sale by an Agent) of such Securities or with respect
to Securities sold by such Agent as agent, the Applicable Time shall mean each
time of sale (including, without limitation, a contract of sale) of such
Securities, and (B) the "PRICING DISCLOSURE PACKAGE" shall mean the Prospectus
as amended or supplemented immediately prior to the Applicable Time taken
together with any Term Sheet prepared pursuant to Section 4(a) hereof in
connection with such issue of Securities and any other free writing prospectus
that the Company and such Agent shall expressly agree in writing to include as
part of the Pricing Disclosure Package with respect to such issue of Securities;
(ii) with respect to each issue of Securities, the Pricing Disclosure Package,
as of the Applicable Time, will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading; and (iii) with respect to each issue of Securities, each Issuer
Free Writing Prospectus, if any, included in the Pricing Disclosure Package,
will not conflict with the information contained in the Registration Statement,
the Prospectus or the Prospectus as amended or supplemented and, taken together
with the Pricing Disclosure Package, as of the Applicable Time, will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided, however, that
the representations and warranties in clauses (ii) and (iii) of this Section
1(c) shall not apply to statements or omissions made in any Pricing Disclosure
Package or Issuer Free Writing Prospectus in reliance upon and in conformity
with information furnished in writing to the Company by any Agent expressly for
use therein;

          (d) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or, in the case of an Annual Report on Form 10-K,
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or, in the case of any other document
filed under the Exchange Act, omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not


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misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by any Agent specifically
for use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities, or to any statements in any such document which does not
constitute part of the Registration Statement or Prospectus pursuant to Rule 412
under the Act;

          (e) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act, and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto and as of its date as to the Prospectus and any supplement thereto,
contain an untrue statement of a material fact or, in the case of the
Registration Statement, omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or, in the
case of the Prospectus, omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to (i) that part of the Registration Statement which constitutes
the Statement of Eligibility (Form T-1) under the Trust Indenture Act of the
Trustee, (ii) any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by any Agent
expressly for use in the Prospectus as amended or supplemented to relate to a
particular issuance of Securities and (iii) any statement which does not
constitute part of the Registration Statement or Prospectus pursuant to Rule 412
under the Act;

          (f) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of Delaware, and has full power and
authority to own its properties and to conduct its business as described in the
Prospectus;

          (g) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as amended or supplemented there
has not been (i) any material change in the capital stock (other than as
occasioned by Common Stock having been issued pursuant to the Company's employee
stock purchase plans, equity incentive option plans and upon conversion of
convertible securities), or (ii) any material adverse change in or affecting the
financial position, shareholders' equity or results of operations of the Company
and its consolidated subsidiaries considered as an entirety, in each case,
otherwise than as set forth or contemplated in such Prospectus as amended or
supplemented (any such change described in clause (ii) is referred to as a
"MATERIAL ADVERSE CHANGE");

          (h) The series constituting the Securities has been duly authorized
and established in conformity with the Indenture and, when the terms of a
particular Security and of the issue and sale thereof have been duly authorized
and established by all necessary corporate action in conformity with the
Indenture and such Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture, and delivered against payment therefor
as contemplated by this Agreement and any applicable Terms Agreement, such
Security will have been duly executed, authenticated, issued and delivered and
will constitute a valid and legally binding obligation of the Company entitled
to the benefits provided by the Indenture; the Indenture has been duly
authorized and qualified under the Trust Indenture Act and constitutes a valid
and legally binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar


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laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture conforms and the Securities will
conform in all material respects to the descriptions thereof in the Prospectus
as amended or supplemented;

          (i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated, will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, or result in
any violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties, except, in each case, for such breaches, conflicts, defaults and
violations that would not have a material adverse effect on the business,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries considered as an entirety (a "MATERIAL ADVERSE EFFECT") or
affect the validity of the Securities, nor will such action result in any
violation of the provisions of the Restated Certificate of Incorporation, as
amended, or the By-Laws of the Company; and no consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body is required by the Company for the solicitation of offers to purchase
Securities and the issue and sale of the Securities or the consummation by the
Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such consents, approvals, authorizations,
orders, registrations or qualifications the failure to obtain or make would not
have a Material Adverse Effect or affect the validity of the Securities, and
such consents, approvals, authorizations, orders, registrations or
qualifications as have been, or will have been prior to the date of this
Agreement, obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or qualifications as may be
required under state securities or Blue Sky laws (including insurance laws of
any state relating to offers and sales of securities in such state) in
connection with the solicitation by such Agent of offers to purchase the
Securities from the Company and with purchases of the Securities by such Agent
as principal, as the case may be, both in the manner contemplated hereby; and

          (j) There is no action, suit or proceeding pending, or to the
knowledge of the executive officers of the Company, threatened against the
Company or any of its subsidiaries, which has, or may reasonably be expected in
the future to have, a Material Adverse Effect, except as set forth or
contemplated in the Prospectus as amended or supplemented; and, at each Time of
Delivery (as defined in Section 2(b) hereof), there will not be any action, suit
or proceeding pending, or to the knowledge of the executive officers of the
Company, threatened against the Company or any of its subsidiaries, which will
have had, or may reasonably be expected in the future to have, a Material
Adverse Effect, except as set forth or contemplated in the Prospectus as amended
or supplemented.

     2. (a) On the basis of the representations and warranties, and subject to
the terms and conditions, herein set forth, each of the Agents hereby severally
and not jointly agrees, as agent of the Company, to use its best efforts to
solicit and receive offers to purchase the Securities from the Company upon the
terms and conditions set forth herein, in the Prospectus as amended or
supplemented from time to time and in any applicable Term Sheet.


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          The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. During such time as the
solicitation of offers to purchase the Securities shall be suspended, the
Company shall not be required to comply with the provisions of Sections 4(g),
4(h) and 4(i).

          The Company agrees to pay each Agent a commission, at the time of
settlement of each sale of Securities by the Company as a result of a
solicitation made by such Agent, in an amount to be agreed to by the Company and
such Agent at the time of solicitation, it being understood and agreed that the
commissions may not be the same for each Agent.

          As Agents, you are authorized to solicit offers to purchase the
Securities only in authorized denominations as set forth in the Prospectus or
the applicable Pricing Supplement at a purchase price equal to 100% of their
principal amount unless otherwise indicated on the applicable Term Sheet, if
any, and Pricing Supplement. Each Agent shall communicate to the Company, orally
or in writing, each offer to purchase Securities other than those rejected by
such Agent. The Company shall have the sole right to accept offers to purchase
Securities and may reject any proposed purchase of Securities as a whole or in
part. The Agents shall have the right, in their discretion reasonably exercised,
to reject any offer to purchase Securities, as a whole or in part, and any such
rejection by the Agents shall not be deemed a breach of their agreements
contained herein.

          (b) Unless the Company and the Agents otherwise agree, each sale of
Securities to any Agent as principal shall be made in accordance with the terms
of this Agreement and a Terms Agreement which will provide for the sale of such
Securities to, and the purchase thereof by, such Agent. A Terms Agreement may
also specify certain provisions relating to the reoffering of such Securities by
such Agent. The commitment of any Agent to purchase Securities pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
include a specification of the principal amount of Securities to be purchased by
any Agent pursuant thereto, the price to be paid to the Company for such
Securities, the currency in which such Securities are to be denominated, any
provisions relating to rights of, and default by, underwriters acting together
with such Agent in the reoffering of the Securities, and the time (each a "TIME
OF DELIVERY") and place of delivery of and payment for such Securities. Such
Terms Agreement shall also specify any requirements for officers' certificates,
opinions of counsel and accountants' letters pursuant to Section 4 hereof.

          (c) Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase, and purchases by any Agent
as principal of, Securities, and the payment in each case therefor, are set
forth in the Procedure. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by each
of them in the Procedure as it may be amended from time to time by written
agreement between the Agents and the Company.

          (d) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as a principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer,


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sell or deliver, such Security in, or to residents of, the country issuing such
currency (or if such Security is denominated in euros, not to residents of the
12 member states of the European Monetary Union; or if such Security is
denominated in a composite currency, not to residents in any country issuing a
currency comprising a portion of such composite currency), except, in each case,
as permitted by applicable law.

          (e) Each Agent represents and agrees with the Company that it will
comply with or observe any restrictions or limitations set forth in the
Prospectus as amended or supplemented on persons to whom, or the jurisdictions
in which, or in the manner in which, the Securities may be offered, sold, resold
or delivered.

     3. Any documents required to be delivered pursuant to Section 6 hereof
shall be made available to the Agents at the office of the Company's counsel,
Sullivan & Cromwell LLP, 125 Broad Street, New York, New York 10004.

     4. The Company covenants and agrees with each Agent:

          (a) To make no amendment or supplement (other than an amendment or
supplement as a result of the Company's filing of a report under the Exchange
Act) to the Registration Statement or the Prospectus after the date of any Terms
Agreement and prior to the related Time of Delivery which shall be disapproved
by any Agent party to such Terms Agreement promptly after reasonable notice
thereof; to prepare, with respect to any Securities to be sold by the Company
through or to such Agent pursuant to this Agreement, a Pricing Supplement and,
if applicable, a Term Sheet (as defined below) with respect to such Securities
in a form previously approved by such Agent and to file such Pricing Supplement
or Term Sheet pursuant to Rule 424(b) or Rule 433(d) under the Act within the
time required by such rule; to make no amendment or supplement to the
Registration Statement or the Prospectus, other than any Term Sheet (as defined
below), Pricing Supplement or any report filed under the Exchange Act, at any
other time prior to having afforded each Agent a reasonable opportunity to
review it; if requested by such Agent prior to the Applicable Time, to prepare
an Issuer Free Writing Prospectus that is a final term sheet relating to such
Securities in the form set forth in Annex II hereto (each a "TERM SHEET"), and
to file such term sheet pursuant to Rule 433(d) under the Act within the time
required by such rule; to file promptly all material required to be filed by the
Company pursuant to Rule 433(d) under the Act; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such same
period to advise such Agent, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed with, or transmitted for filing to, the Commission (other than an
amendment or supplement as a result of the Company's filing of a report under
the Exchange Act or any Pricing Supplement that relates to Securities not
purchased through or by such Agent), of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order


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preventing or suspending the use of any such prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;

          (b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;

          (c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, and with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement or Term Sheet (except
as provided in the Procedure) or amendment or supplement relating solely to an
offering of securities other than the Securities, in the form in which it is
filed with, or transmitted for filing to, the Commission pursuant to Rule 424
under the Act, both in such quantities as such Agent may reasonably request from
time to time; and, if the delivery of a prospectus is required at any time
within 90 days after sale of the Securities (including Securities purchased from
the Company by such Agent as principal) and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify such Agent
as promptly as practicable and request such Agent to suspend solicitation of
offers to purchase Securities from the Company, in its capacity as agent of the
Company and, if so notified, such Agent shall forthwith cease such
solicitations; and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal which such Agent proposes to sell, upon the reasonable request of such
Agent, the Company shall promptly prepare and file with the Commission such an
amendment or supplement, the expense of such preparation and filing to be borne
by the Company if such amendment or supplement occurs within 90 days of the date
of the relevant Pricing Supplement or Term Sheet and if after such 90-day
period, by such Agent;

          (d) To make generally available to its security holders as soon as
practicable, but in any event not later than 90 days after the close of the
period covered thereby, an earnings statement or statements of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations of the Commission thereunder (including, at
the option of the Company, Rule 158) and covering each twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the date of any sale of Securities hereunder;


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          (e) That, from the date of any Terms Agreement with such Agent and
continuing to and including the earlier of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to the Company
by such Agent and (ii) the related Time of Delivery, the Company will not,
without the prior consent of such Agent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company that mature more than
nine months after such Time of Delivery, have the same maturity, and are
otherwise substantially similar to the Securities. The restriction imposed by
this Section 4(e) shall not apply to an issue of debt securities denominated in
a currency other than U.S. dollars or to an issue of debt securities of which at
least 90% (based on gross offering proceeds) is offered and sold outside the
United States or to guarantees by the Company of debt securities of its
subsidiaries;

          (f) That each acceptance by the Company of an offer to purchase
Securities hereunder, and each sale of Securities to such Agent pursuant to a
Terms Agreement, shall be deemed to be an affirmation to such Agent that the
representations and warranties of the Company contained in or made pursuant to
this Agreement are true and correct in all material respects as of the date of
such acceptance or of such Terms Agreement as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented at such time);

          (g) That each time the Registration Statement or the Prospectus shall
be amended or supplemented as a result of the filing by the Company of its
Annual Report on Form 10-K under the Exchange Act, and each time, if so
indicated in the applicable Terms Agreement, the Company sells Securities to
such Agent as principal, the Company shall furnish or cause to be furnished
forthwith to such Agent, upon its request, a certificate of officers of the
Company satisfactory to such Agent, dated the date of such supplement, amendment
or Time of Delivery related to such sale, in form satisfactory to such Agent in
its reasonable judgment to the effect that the statements contained in the
certificate referred to in Section 6(g) hereof which were last furnished to such
Agent are true and correct, in all material respects, at such date, as though
made at and as of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(g) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date;

          (h) That each time the Registration Statement or the Prospectus shall
be amended or supplemented as a result of the filing by the Company of its
Annual Report on Form 10-K under the Exchange Act, and each time, if so
indicated in the applicable Terms Agreement, the Company sells Securities to
such Agent as principal, the Company shall furnish or cause to be furnished
forthwith to such Agent, upon its request, a written opinion and letter of
Sullivan & Cromwell LLP, counsel for the Company, and a written opinion of
Kathleen E. Shannon, Senior Vice President and Deputy General Counsel of the
Company, or, in either case, other counsel satisfactory to such Agent in its
reasonable judgment, dated the date of such amendment, supplement or Time of
Delivery relating to such sale, each in form satisfactory to such Agent in its
reasonable judgment to the effect that such Agent may rely on the opinion and
letter referred to in Section 6(c) or the opinion referred to in Section 6(d)
hereof, as the case may be, which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion or letter shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of either such opinion, an opinion and letter of the same
tenor as the opinion and letter


                                       9

<PAGE>

referred to in Section 6(c) or an opinion of the same tenor as the opinion
referred to in Section 6(d) hereof, as the case may be, but modified to relate
to the Registration Statement and the Prospectus as amended and supplemented to
such date; and

          (i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented as a result of the filing by the Company of its
Annual Report on Form 10-K under the Exchange Act to set forth financial
information included in or derived from the Company's consolidated financial
statements, or, if so indicated in the applicable Terms Agreement, each time the
Company sells Securities to such Agent as principal, the Company shall cause its
independent registered public accounting firm forthwith to furnish such Agent,
upon its request, a letter, dated the date of such amendment, supplement or Time
of Delivery relating to such sale, in form satisfactory to such Agent in its
reasonable judgment, of the same tenor as the letter referred to in Section 6(e)
hereof but modified to relate to the Registration Statement and the Prospectus
as amended or supplemented to the date of such letter, with such changes as may
be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the extent
such financial statements and other information are available as of a date not
more than five business days prior to the date of such letter; provided,
however, that where such amendment or supplement only sets forth unaudited
quarterly financial information, the scope of such letter may be limited to
relate to such unaudited financial information unless any other accounting or
financial information included therein is of a character that, in the reasonable
judgment of the Agents, such other information should be addressed by such
letter.

      4A. (a) The Company and each Agent agree that the Agents may prepare and
use one or more preliminary term sheets relating to the Securities containing
customary information; provided that such information has been approved by the
Company in writing or orally before the first communication containing such
information is used;

          (b) Each Agent represents that it has not and will not use, authorize
use of, refer to, or participate in the planning for use of, any written
communication that constitutes an offer to sell or the solicitation of an offer
to buy the Securities other than (A) any written communication permitted under
subparagraph (a) above, (B) any Term Sheet or (C) any written communication
prepared by such Agent and approved by the Company in advance in writing;

          (c) Except in the case of Securities sold directly by the Company,
with respect to any particular issuance of Securities, the Company represents to
the Agent purchasing or soliciting the purchase of such Securities that it has
not and will not use, authorize use of, refer to, or participate in the planning
for use of, any written communication that constitutes an offer to sell or the
solicitation of an offer to buy such Securities other than (A) any written
communication permitted under subparagraph (a) above, (B) any Term Sheet or (C)
any written communication approved by such Agent in advance in writing;

          (d) The Company represents and agrees that it has complied and will
comply with the requirements of Rule 433 under the Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping; and

          (e) With respect to any issue of Securities, the Company agrees that
if at any time following the relevant Applicable Time until and including the
related Time of Delivery any


                                       10

<PAGE>

event occurred or occurs as a result of which an Issuer Free Writing Prospectus
included in the relevant Pricing Disclosure Package would conflict with the
information in the Registration Statement, the Prospectus, the Prospectus as
amended or supplemented or the Pricing Supplement or, taken together with the
relevant Pricing Disclosure Package, would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances then prevailing, not
misleading, the Company will give prompt notice thereof to the relevant Agents
and, if requested by such Agents, will prepare and furnish without charge to
each Agent an Issuer Free Writing Prospectus or other document which will
correct such conflict, statement or omission; provided, however, that this
representation and warranty shall not apply to any statements or omissions in an
Issuer Free Writing Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by an Agent expressly for use
therein.

     5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to such Agent; (ii) the reasonable fees and
expenses of counsel for the Agents in connection with the transactions
contemplated hereunder; (iii) the cost of printing, word-processing or
reproducing this Agreement, any Terms Agreement, any Indenture, any Blue Sky and
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses in
connection with the qualification of the Securities for offering and sale under
state securities laws as provided in Section 4(b) hereof, including fees and
disbursements of the Company's counsel in connection with such qualification and
in connection with the Blue Sky and legal investment surveys; (v) any fees
charged by security rating services for rating the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with any Indenture and the Securities; (viii) any advertising
expenses connected with the solicitation of offers to purchase and the sale of
Securities so long as such advertising expenses have been approved by the
Company; and (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. Each Agent shall pay all other fees and expenses it incurs.

     6. The obligation of any Agent, as agent of the Company, to solicit offers
to purchase the Securities and the obligation of any Agent to purchase
Securities as principal pursuant to any Terms Agreement, shall be subject, in
such Agent's reasonable discretion, to the condition that all representations
and warranties and other statements of the Company herein are true and correct,
in all material respects, at and as of the date of this Agreement, the date of
each such solicitation, any settlement date related to the acceptance of such an
offer, and each Time of Delivery, the condition that the Company shall have
performed, in all material respects, all of its obligations hereunder
theretofore in each case to be performed and the following additional
conditions, where applicable:

          (a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission or, to the knowledge of the
executive officers of the Company, shall be


                                        11

<PAGE>

contemplated by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;

          (b) Such Agent shall have received, upon its request, from Davis Polk
& Wardwell, counsel to the Agents, such opinion, dated the date of this
Agreement and the Time of Delivery as specified in the applicable Terms
Agreement, with respect to the validity of the Securities, the Registration
Statement, the Prospectus as amended or supplemented, and other related matters
as such Agent may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters;

          (c) Such Agent shall have received an opinion and letter of Sullivan &
Cromwell LLP, counsel for the Company, or other counsel satisfactory to such
Agent in its reasonable judgment, dated the date of this Agreement and any
applicable date referred to in Section 4(h), to the effect set forth in Annex
III hereto;

          (d) Such Agent shall have received an opinion of Kathleen E. Shannon,
Senior Vice President and Deputy General Counsel of the Company, or other
counsel satisfactory to such Agent in its reasonable judgment, dated the date of
this Agreement and any applicable date referred to in Section 4(i), to the
effect set forth in Annex IV hereto;

          (e) At 11:00 A.M., New York City time, on the date of this Agreement
and on any applicable date referred to in Section 4(i), the independent
registered public accounting firm who have audited the financial statements of
the Company and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to such Agent a letter, dated such
applicable date, in form and substance satisfactory to such Agent, to the effect
set forth in Annex V hereto;

          (f) Since the respective dates as of which information is given in the
Prospectus as amended or supplemented, there has not been any Material Adverse
Change which, in the judgment of the Agents, materially impairs the investment
quality of the Securities, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented;

           (g) The Company shall have furnished or caused to be furnished to such
Agent a certificate of the Chief Executive Officer, the President, any Vice
Chairman, any Executive or Senior Vice President or any Vice President and a
principal financial or accounting officer of the Company, dated the date of this
Agreement and any applicable date referred to in Section 4(g), in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this Agreement
are true and correct, in all material respects, as of such applicable date, that
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied, in all material respects, at or prior to such
applicable date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are threatened by the Commission, and that, since the
respective dates as of which information is given in the Prospectus as amended
or supplemented, there has not been any Material Adverse Change, otherwise than
as set forth or contemplated in the Prospectus as amended or supplemented; and


                                        12
<PAGE>

          (h) During the period between the date of any Terms Agreement and the
related Time of Delivery, there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally on
the New York Stock Exchange if the effect of any such event, in the reasonable
judgment of such Agent, is to make it impracticable or inadvisable to proceed
with the purchase by such Agent of Securities from the Company, as principal;
(ii) a general moratorium on commercial banking activities in New York declared
by either Federal or New York State authorities; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, other than any such outbreak,
escalation or declaration arising out of or relating to the U.S. war on
terrorism that does not represent a significant departure from the conditions
that exist on the date of any Terms Agreement, if the effect of any such event
in the reasonable judgment of such Agent is to make it impracticable or
inadvisable to proceed with the purchase of Securities by such Agent from the
Company as principal on the terms and in the manner contemplated by the
Prospectus as amended or supplemented; (iv) the suspension in trading in the
Company's common stock, par value $2.50 per share, on the New York Stock
Exchange, if the effect of such event in the reasonable judgment of such Agent
is to make it impracticable or inadvisable to proceed with the purchase of
Securities by such Agent from the Company as principal; or (v) any downgrading
in the rating accorded the Company's senior debt securities by Moody's Investors
Service, a subsidiary of Moody's Corporation, or Standard & Poor's, a division
of the McGraw-Hill Companies, Inc.

     7. (a) The Company will indemnify and hold harmless each Agent and each
person, if any, who controls any of the Agents within the meaning of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Agent or such controlling person may become subject, under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented, or any
amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent and such controlling
person for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such action or claim as incurred; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented, or any such
amendment or supplement, or any Issuer Free Writing Prospectus, in reliance upon
and in conformity with written information furnished to the Company by such
Agent expressly for use therein; and provided, further, that the foregoing
indemnity agreement contained in this Section 7(a), with respect to any
Preliminary Prospectus, preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented, or any amendment or
supplement thereto or any Issuer Free Writing Prospectus, shall not inure to the
benefit of any Agent from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling such
Agent where (i) prior to the Applicable Time the Company shall have notified
such Agent that any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus contains an untrue statement of material fact or omits to state
therein a material fact


                                       13

<PAGE>

necessary in order to make the statements therein not misleading, (ii) such
untrue statement or omission of a material fact was corrected in a further
amendment or supplement to the Preliminary Prospectus, preliminary prospectus
supplement, Registration Statement, Prospectus as amended or supplemented or,
where permitted by law, an Issuer Free Writing Prospectus, and such corrected
Prospectus or Issuer Free Writing Prospectus was provided to such Agent prior to
the Applicable Time, (iii) such corrected Preliminary Prospectus, preliminary
prospectus supplement, Registration Statement, Prospectus or Issuer Free Writing
Prospectus (excluding any document incorporated by reference therein) was not
conveyed to such person at or prior to the contract for sale of the Securities
to such person and (iv) such loss, claim, damage or liability would not have
occurred had the corrected Preliminary Prospectus, preliminary prospectus
supplement, Registration Statement, Prospectus or Issuer Free Writing Prospectus
(excluding any document incorporated by reference therein) been conveyed to such
person as provided for in clause (iii) above.

          (b) Each Agent, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities to
which the Company or such controlling person may become subject, under the Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented or any such amendment or supplement, or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company or such controlling person in connection with investigating or defending
any such action or claim as incurred.

          (c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.


                                       14

<PAGE>

          (d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to contribute
any amount in excess of the amount by w