Exhibit 10.2

January 15, 2009

Summary of Terms

Eligible Asset Guarantee

 

Eligible Assets:   

A pool of financial instruments consisting of securities backed by residential
and commercial real estate loans and corporate debt, derivative transactions
that reference such securities, loans, and associated hedges, as agreed, and
such other financial instruments as the U.S. government (USG) has agreed to
guarantee or lend against (the Pool). Each specific financial instrument in the
Pool must be identified on signing of the guarantee agreement. Financial
instruments in the Pool will remain on the books of institution but will be
appropriately “ring-fenced.”

 

The following financial instruments will be excluded from the Pool: (i) foreign
assets (definition to be provided by USG); (ii) assets originated or issued on
or after March 14, 2008; (iii) equity securities; and (iv) any other assets that
USG deems necessary to exclude.

Size:    The Pool contains up to $118 billion of financial instruments. More
specifically, the Pool includes cash assets with a current book (i.e., carrying)
value of up to $37 billion and a derivatives portfolio with maximum potential
future losses of up to $81 billion (based on valuations agreed between
institution and USG).

Term and Coverage

of Guarantee:

   Guarantee is in place for 10 years for residential assets and 5 years for
non-residential assets. Residential assets will include loans secured solely by
1-4 family residential real estate, securities predominately collateralized by
such loans, and derivatives that predominately reference such securities.
Institution has the right to terminate the guarantee at any time (with the
consent of USG), and the parties will negotiate in good faith as to an
appropriate fee or rebate in connection with any permitted termination. If
institution terminates the guarantee, it must prepay any

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January 15, 2009

 

  

outstanding Federal Reserve loan (described below) in full.

 

Guarantee covers Eligible Losses on the Pool. Eligible Losses are the aggregate
incurred credit losses (net of any gains and recoveries) on the Pool during the
term of the guarantee, beyond the January 15, 2009, marks and credit valuation
adjustments for the Pool (as agreed between institution and USG). Eligible
Losses do not include unrealized mark-to-market losses but do include realized
losses from a sale permitted under the asset management template (described
below).

Deductible:   

Institution absorbs all Eligible Losses in the Pool up to $10 billion.

 

USG (UST/FDIC) will share Eligible Losses in the Pool in excess of that amount,
up to $10 billion. All Eligible Losses beyond the institution’s deductible will
be shared USG (90%) and institution (10%).

Financing:   

Federal Reserve will provide a non-recourse loan facility to institution,
subject to institution’s 10% loss sharing. Federal Reserve loan commitment will
terminate (and any loans thereunder will mature) on the termination dates of USG
guarantee. Institution has the right to terminate the Federal Reserve loan
commitment and prepay any Federal Reserve loans at any time (with consent of
Federal Reserve).

 

Federal Reserve will charge a fee on undrawn amounts of 20 bp per annum and a
floating interest rate on drawn amounts of OIS plus 300 bp per annum. Interest
and fee payments will be with recourse to the institution.

 

Institution may draw on Federal Reserve loan facility if and when additional
mark-to-market and incurred credit losses on the Pool reach $18 billion.

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January 15, 2009

 

Fee for Guarantee –

Preferred Stock and

Warrants:

   Institution will issue to USG (UST/FDIC) (i) $4 billion of preferred stock
with an 8% dividend rate (under terms described below); and (ii) warrants with
an aggregate exercise value of 10% of the total amount of preferred issued. The
fee may be adjusted, as necessary, based on the results of an actuarial analysis
of the final composition of the Pool, as required under section 102(c) of the
Emergency Economic Stabilization Act of 2008.

Management of

Assets:

   Institution generally will manage the financial instruments in the Pool in
accordance with its ordinary business practices, but will be required to comply
with an asset management template provided by USG. This template will require
institution, among other things, to obtain USG approval (not to be unreasonably
withheld) before any Material Disposition. A Material Disposition is a
disposition of financial instruments in the Pool that creates an Eligible Loss
that, combined with other dispositions of Pool instruments in the same year,
exceeds 1% of the Pool size at the beginning of the year. This template also
will include, among other things, a foreclosure mitigation policy acceptable to
USG.

Revenues and Risk

Weighting:

   Institution will retain the income stream from the Pool. Risk weighting for
the financial instruments in the Pool will be 20%. Dividends:    Institution is
prohibited from paying common stock dividends in excess of $.01 per share per
quarter for three years without USG consent. A factor taken into account for
consideration of USG consent is the ability to complete a common stock offering
of appropriate size.

Executive

Compensation:

   An executive compensation plan, including bonuses, that rewards long-term
performance and profitability, with appropriate limitations, must be submitted
to, and

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January 15, 2009

 

   approved by, USG. Executive compensation requirements will be consistent with
the terms of the preferred stock purchase agreement between USG and institution.

Corporate

Governance:

   Other matters as specified, consistent with the terms of the preferred stock
purchase agreement between USG and institution.