CERTAIN INFORMATION REDACTED

UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

Dear Ladies and Gentlemen:

The company set forth on the signature page hereto (the "Company") intends to issue in a

private placement the number ofshares of a series ofits preferred stock set forth on Schedule A

hereto (the "Preferred Shares'") and a warrant to purchase the number ofshares ofits common

stock set forth on Schedule A hereto (the"Warran'" and, together with the Preferred Shares, the

"Purchased Securities'") and the United States Department ofthe Treasury (the "Investor')

intends to purchase from the Company the Purchased Securities.

The purpose ofthis letter agreement is to confirm the terms and conditions ofthe

purchase by the Investor ofthe Purchased Securities. Except to the extent supplemented or

superseded by the terms set forth herein or in the Schedules hereto, the provisions contained in

the Securities Purchase Agreement - Standard Terms attached hereto as Exhibit A (the

"Securities Purchase Agreemenf') are incorporated by reference herein. Terms that are defined

in the Securities Purchase Agreement are used in this letter agreement as so defmed. In the event

ofany inconsistency between this letter agreement and the Securities Purchase Agreement, the

terms ofthis letter agreement shall govern.

Each ofthe Company and the Investor hereby confirms its agreement with the other party

with respect to the issuance by the Company ofthe Purchased Securities and the purchase by the

Investor ofthe Purchased Securities pursuant to this letter agreement and the Securities Purchase

Agreement on the terms specified on Schedule A hereto.

This letter agreement (including the Schedules hereto) and the Securities Purchase

Agreement (including the Annexes thereto) and the Warrant constitute the entire agreement, and

supersede aU other prior agreements, understandings, representations and warranties, both

written and oral, between the parties, with respect to the subject matter hereof. This letter

agreement constitutes the "Letter Agreement" referred to in the Securities Purchase Agreement

This letter agreement may be executed in any number ofseparate counterparts, each such

counterpart being deemed to be an original instrument, and all such counterparts wiU together

constitute the same agreement. Executed signature pages to this letter agreement may be

delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature

pages had been delivered.

•••

09SJJI-0002-11807-NYOJ.!6940IZ.4
In witness whereof. this letter agreement has been duly executed and delivered by the

duly authorized representatives ofthe parties hereto as ofthe date written below.

UNITED STATES DEPARTMENT OF THE

TREASURJt / . By: ?'V-;,4-

Name: AlUc, ~ub.&.t

Title: Il'J'f"UtlA As,& I~,.rr ~7~

Fr~~l,. s.,.;!l4'"""

COMPANY: JPMORGAN CHASE &: CO.

By: _

Name:

Title:

Date: lof'1.2001>

I
Oet-Zl-ZDOI ":I'~ fr..SUUIVM , CIll.-LL U. lZS 8_ ST T-T~ •.aaZlllIZ Hili

p.l

In wimc:ss wbercot this lettera~has been duly executed and delivered by tho

duly audIoriitCd rcpresentatiVl:S oftbc panics hado as oftbe date writtl!l\ below.

UND'ED STATES D£PAlTNEN'f OF THE

l'KBASURY

By.~ _

Name:

Tid.r:

Date:: October76, 2001
09Slll-0002-111lO7.NYOJ.2694012.4

SECURITIES PURCHASE AGREEMENT

EXHIBIT A
SCHEDULE A

ADDITIONAL TERMS AND CONDITIONS

Company Information:

Name ofthe Company:

Corporate or other organizational form:

Jurisdiction ofOrganization:

Appropriate Federal Banking Agency:

Notice Information:

JPMorgan Chase & Co.

Corporation

Delaware

Board ofGovemors ofthe Federal Reserve

System

JPMorgan Chase & Co.

270 Park Avenue

New York, NY 10017

Attention: ~cl~C

Facsimile:

with a copy to:

Sullivan & CromweU LLP

125 Broad 8t.

New York, New York 10004

Attention:

Facsimile:

Tenos ofthe Purchase:

Series ofPreferred Stock Purchased: Fixed Rate Cumulative Perpetual Preferred Stock,

Series K

Per Share Liquidation Preference ofPreferred Stock: $10,000

Number ofShares ofPreferred Stock Purchased: 2,500,000

Dividend Payment Dates on the Preferred Stock: March I, June 1, September I and December I of

each year

Number ofInitial Warrant Shares: 88,401,697

Exercise Price ofthe Warrant: $42.42

Purchase Price: $25,000,000,000

Closing:

Location ofClosing: Simpson Thacher & Bartlett LLP

425 Lexington Avenue
Time ofClosing:

Date ofClosing:

Wire Information for Closing:

New York. NY 10017

9:00 a.m., New York time
SCHEDULE B

CAPITALIZATION

Capitalization Date:

Common Stock

Par value:

Total Authorized:

Outstanding:

Subject to warrants, options, convertible

securities, etc.:

Reserved for benefit plans and other issuances:

Remaining authorized but unissued:

Shares issued after Capitalization Date (other

than pursuant to warrants, options,

convertible securities, etc. as set forth

above):

Preferred Stock

Par value:

Total Authorized:

Outstanding (by series):

6.15% Cumulative Preferred Stock, Series E

5.72% Cumulative Preferred Stock, Series F

5.49% Cumulative Preferred Stock, Series G

Fixed-to-Floating Rate Non-cunmlative Perpetual

Preferred Stock, Series I

8.625% Non-Cumulative Perpetual Preferred

Stock, Series i

September 30, 2008

$1.00

9,000,000,000

3,941,633,895

None, other than pursuant to stock options under

benefits plans discussed below.

Approximately 449 million unissued shares of

common stock were reserved for issuance under

various employee or director incentive,

compensation, option and stock purchase plans.

5,058,366,1051

°

$1.00

200,000,000

1,250,000 shares authorized and 818,113 shares

issued and outstanding

1,000,000 shares authorized and 928,825 shares

issued and outstanding

1,000,000 shares authorized and 511,169 shares

issued and outstanding

600,000 shares authorized, issued and outstanding

180,000 shares authorized, issued and outstanding

For the avoidance ofdoubt, this number does not take into account shares of common stock that are

reserved for issuance as described above.

Each ofthe foregoing series of preferred stock was issued using depositary share arrangements.

095331-OOO2.11807.NY03.2694012.4
Reserved for issuance:

Remaining authorized but unissued:

o

196,461,89i

Additionally, please note that certain ofthe Company's outstanding trust preferred instruments

contain covenants requiring the Company issue preferred stock and/or common stock warrants in

specified circumstances where deferred interest has not been paid for given periods oftime. Under the

terms ofsuch instruments, the Company is not currently required to reserve such shares for issuance.

Reference is hereby made to the terms of each ofsuch instruments as filed with the Securities and

Exchange Commission.

Forthe avoidance ofdoubt, this number does take into account issuance ofthe Series K Preferred Stock

contemplated hereby.
SCHEDULEC

REQUIRED STOCKHOLDER APPROVALS

Reguired4

Warrants -- Common Stock Issuance

Charter Amendment

Stock Exchange Rules

% Vote Reguired

If no stockholder approvals are required, please so indicate by checking the box: 181.

4 Ifstockholder approval is required, indicate applicable class/series of capital stock that are required to vote.

09533I-0002-111I07-NY03.2694012.4
SCHEDULE D

LITIGATION

List any exceptions to the representation and warranty in Section 2.2(1) ofthe Securities

Purchase Agreement - Standard Tenns.

Lehman Brothers Holdings Inc. ("Lehman") Bankruptcy Issues

The Company was the clearing bank for Lehman Brothers Inc. ("LBI") and is the largest secured

creditor in the Lehman bankruptcy, according to Lehman's schedules. It is possible that claims may

be asserted against the Company and/or related to the Company's security interests, including by the

Lehman Brothers Holdings Creditors Committee, the SIPA Trustee appointed in the Lehman

Brothers Inc. ("LBI") liquidation and others; in this regard the Creditors Committee has moved to

take wide-ranging discovery ofthe Company pursuant to Rule 2004 ofthe Federal Rules of

Bankruptcy Procedure and the SIPA Trustee has requested information regarding the Company's

liquidation ofsecurities held as collateral for clearing advances and other obligations. One ofthe

potential claims that may be asserted concerns a $7 billion transaction among Barclays Capital Inc.

("BarCap"), LBI and the Company on the eve ofthe commencement ofLBl's SIPA proceeding on

September 19, 2008. Pursuant to instructions from LBI, the Company, as LBI's clearing agent,

transferred $7 billion to a cash collateral account, pending the anticipated completion ofthe transfer

ofapproximately $7 billion ofsecurities to BarCap on the morning ofthe September 19,2008. The

transaction was never completed and the Company applied the $7 billion to reduce LBl's overdraft to

the Company. BarCap asserts that it is the owner ofthe subject funds and/or entitled to the return of

$7 billion in cash or securities from the LBI clearance account The Company asserts, among other

things, that it has a valid prior lien on the $7 billion and was entitled to apply those funds to reduce

LBl's indebtedness to the Company and that BarCap is otherwise bound by a release that the parties

subsequently executed on September 22, 2008. The parties are attempting to resolve this dispute.

Bank ofArnericalBear Stearns Asset Management Issue

Bank ofAmerica ("BofA") has threatened to file suit against Bear Stearns Asset Management

(UBSAM"), a Company Subsidiary, and certain former employees ofBSAM for alleged misconduct

arising out of a "CDO-squared" transaction structured and marketed by BofA in the spring of2007.

The CW was to be composed ofapproximately $2.9 billion ofCOO holdings that would be

purchased by BofA from the High Grade Structured Credit Strategies Fund and the High Grade

Structured Strategies Enhanced Leverage Fund (the "Funds"), which were two hedge funds for which

BSAM served as investment manager. BofA contends that BSAM (in its capacity as collateral

manager ofthe C002

) failed to disclose material facts relating to the Funds and, had such facts been

disclosed, BofA would not have proceeded with the transaction.

The foregoing exceptions shall also be deemed to be exceptions for purposes ofthe representation

and warranty set forth in Section 2.20) ofthe Securities Purchase Agreement - Standard Terms.

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

095331-OOO2.llllO7-NY03.2694012.4
SCHEDULE E

COMPLIANCE WITH LAWS

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

ofthe Securities Purchase Agreement - Standard Terms.

If none, please so indicate by checking the box: 181.

List any exceptions to the representation and warranty in the last sentence of Section 2.2(m) of

the Securities Purchase Agreement - Standard Terms.

If none, please so indicate by checking the box: 181.
SCHEDULEF

REGULATORY AGREEMENTS

List any exceptions to the representation and warranty in Section 2.2(s) ofthe Securities

Purchase Agreement - Standard Terms.

If none, please so indicate by checking the box: 181.
WAIVER

Annex A

I

I

I

!

In consideration for the benefits I willreceive as a result ofmy empl~er'sparticipation in the

United States Department ofthe Treasury's TARP Capital Purchase Jrrogram, I hereby

voluntarily waive any claim against the United States or my employ~for any changes to my

compensation or benefits that are required to comply with the regUlation issued by the

Department ofthe Treasury as published in the Federal Register on ~ber20, 2008.

I acknowledge that this regulation may require modification ofthe compensation, bonus,

incentive and other benefit plans, ammgements, policies and agreements (including so called

"golden parachute" agreements) that 1have with my employer or in which I participate as they

relate to the period the United States holds any equity or debt securities ofmy employer acquired

through the TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws ofthe Unit¢d States or any state

related to the requirements imposed by the aforementioned regulationt including without

limitation a claim for any compensation or other payments I would Otllerwise receive. any

challenge to the process by which this regulation was adopted and any tort or constitutional claim

about the effect ofthese regulations on my employment relationship. j

Dated as ofOctober 27. 2008

Signature

-S810824.DOC Page 4 of4
a.'......... •

"

WAIVER

Annex A

In consideration for the benefits I will receive \as a result ofmy employer's participation in the

United States Department ofthe Treaswy's TARP Capital Pw-chase Program, I bereby

voluntarily waive any claim against the United States or my empJoyer for any changes to my

compensation or benefits that are required to (jomply with the regulation issued by the

Department ofthe Treasury as published in th~ Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification·ofthe compensation, bonus,

incentive and other benefit plans, arrangemen...., policies and agreements (including so called

"golden parachute" agreements) that I have with my employer or in which I participate as they

relate to the period the United States holds any equity or debt securities ofmy employer acquired

through the TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws ofthe United States or any state

related to the requirements imposed by the aforementioned regulation, including without

limitation a claim for any compensation or other payments I would otherwise receive, any

challenge to the process by which this regulation was adopted and any tori or constitutional claim

about the effect ofthese regulations on my e~loymentrelationship.

Signature

,.

Pqe4of4
AnnexA

WAIVER

In consideration for the benefits I will receive as a result ofmy employer's participation in the

United States Department ofthe Treasury's TARP Capital Purchase Program, I hereby

voluntarily waive any claim against the United States or my employer for any changes to my

compensation or benefits that are required to comply with the regulation issued by the

Department ofthe Treasury as published in the Federal Register on October 20,2008.

I acknowledge that this regulation may require modification ofthe compensation, bonus,

incentive and other benefit plans, arrangements, policies and agreements (including so called

"golden parachute" agreements) that I have with my employer or in which I participate as they

relate to the period the United States holds any equity or debt securities ofmy employer acquired

through the TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws ofthe United States or any state

related to the requirements imposed by the aforementioned regulation, including without

limitation a claim for any compensation or other payments I would otherwise receive, any

challenge to the process by which this regulation was adopted and any tort or constitutional claim

about the effect ofthese regulations on my employment relationship.

Dated as ofOctober 27,2008

Signature v

Page 4 of4
Annex A

WAIVER

In consideration for the benefits I will receive as a result ofmy employer's participation in the

United States Department ofthe Treasury's TARP Capital Purchase Program, I hereby voluntarily

waive any claim against the United States or my employer for any changes to my compensation or

benefits that are required to comply with the regulation issued by the Department ofthe Treasury

as published in the Federal Register on October 20,2008.

I acknowledge that this regulation may require modification ofthe compensation, bonus, incentive

and other benefit plans, arrangements, policies and agreements (including so called "golden

parachute" agreements) that I have with my employer or in which I participate as they relate to the

period the United States holds any equity or debt securities of my employer acquired through the

TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws ofthe United States or any state related .

to the requirements imposed by the aforementioned regulation, including without limitation a claim

for any compensation or other payments I would otherwise receive, any challenge to the process by

which this regulation was adopted and any tort or constitutional claim about the effect ofthese

regulations on my employment relationship.

Dated as of October 27, 2008

Signature

4dd0

OTS-#43004I-vl-TARP SEO leiter BlackDOC
AnnexA

WAIVER

In consideration for the benefits I will receive as a result ofmy employer's participation in the

United States Department ofthe Treasury's TARP Capital Purchase Program, I hereby

voluntarily waive any claim against the United States or my employer for any changes to my

compensation or benefits that are required to comply with the regulation issued by the

Department ofthe Treasury as published in the Federal Register on October 20,2008.

I acknowledge that this regulation may require modification ofthe compensation, bonus,

incentive and other benefit plans, arrangements, policies and agreements (including so called

"golden parachute" agreements) that I have with my employer or in which I participate as they

relate to the period the United States holds any equity or debt securities ofmy employer acquired

through the TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws ofthe United States or any state

related to the requirements imposed by the aforementioned regulation, including without

limitation a claim for any compensation or other payments I would otherwise receive, any

challenge to the process by which this regulation was adopted and any tort or constitutional claim

about the effect ofthese regulations on my employment relationship.

Dated as of October 27, 2008

Page 4 of4
JPMORGAN CHASE & CO.

October 28, 2008

United States Department ofthe Treasury

1500 Pennsylvania Avenue, NW

VVashingto~D.C.20220

Re: JPMorgan Chase & Co.

Ladies and Gentlemen:

I have acted as counsel to JPMorgan Chase & Co., a Delaware corporation (the "Company',), in

connection with the purchase by you today of 2,500,000 shares ofthe Company's Fixed Rate

Cumulative Perpetual Preferred Stock, Series K, par value $1 per share and liquidation

preference of $10,000 per share ($25,000,000,000 liquidation preference in the aggregate), and a

warrant to purchase initially up to 88,401,697 shares ofthe Company's common stock, par value

$1 per share. This opinion is being rendered pursuant to Section 1.2(d)(vi) ofthe Letter

Agreement and the related Securities Purchase Agreement - Standard Terms, dated October 26,

2008 (the "Agreement"), between the Company and you.

In my capacity as counsel to the Company, I have examined originals, or copies certified or

otherwise identified to my satisfaction, ofsuch documents, corporate records and other

instruments, and made such other investigations, as I have deemed necessary or appropriate for

the purposes ofthis opinion. In this examination, I have assumed the genuineness of all

signatures, the authenticity of all documents submitted to me as originals, the conformity to

original documents of all documents submitted to me as certified, conformed or photostatic

copies and the authenticity ofthe originals ofsuch copies. In making my examination of

documents executed by parties other than the Company, I have assumed that such parties had the

power, corporate or other, to enter into and perform all obligations thereunder and also have

assumed the due authorization by all requisite action, corporate or other, and execution and

delivery by such parties to such documents and the validity and binding effect thereofon such

parties. As to any facts material to the opinion expressed herein that I have not independently

established or verified I have relied upon statements and representations ofofficers and other

representatives ofthe Company and others.

Based upon the foregoing, I am ofthe opinion that:

1. The Company is duly incorporated and validly existing under the laws ofthe state

ofDelaware.

2. Based solely on the Certificate ofGood Standing ofthe Company dated

October 27,2008, the Company is in good standing under the laws ofthe State of

Delaware.

#520002v:\
I am a member ofthe bar ofthe State ofNew York. This opinion relates solely to the General

Corporation Law ofthe State ofDelaware, and I express no opinion with respect to the effect or

applicability ofthe laws of any otherjurisdictions.

This opinion is solely for your benefit in connection with the Agreement and the related

transactions contemplated thereby, and may not be relied upon by, nor may copies be delivered

to, any other person or entity for any purpose without my prior written consent in each instance.

My opinion is expressly limited to the matters set forth above and I render no opinion, whether

by implication or otherwise, as to any other matters relating to the Company. I assume no

obligation to advise you offacts, circumstances, events or developments that hereafter may be

brought to my attention and that may alter, affect or modify the opinions expressed herein.

Very truly yours,

Neila B. Radin

#520002v:l
.... Certificate K-l

2,500,000 SHARES

THE SECURITIES REPRESENTED BY THis INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER

OBLIGATIONS OF A BANK AND ARE NOT INSURED BY TIlE EEDERAL DEPOSIT INSURANCE CORPORATION

OR ANY OTHER GOVERNMENTAL AGENCY. '~~3~;; ~,:i ;;'i,J:;} J;i;'\f~. ,i~/;.,,;~ :~> . ,--

THE SECURITIES REPRESENTED BY THIS INSTRUMENT' HAVE NOT BEEN REGISTERED UNDER THE'

SECURITIES ACTOF 1933, AS AME1iDJi:~;(IiH¥, "~~~URITIES ACI"'), OR THE SECu;R;I5EmS&i\W~lQF ANY STATE

.AND MAY NOT BE TRANSFERREP;"sOljI);',QROTHERWISE DISPOSED OF EXCBPT::W$rrLB:s<\AtEGISTRATION

STATEMENT RELATING THERETO is iN EFFEcr'\JNDER SUCH ACT AND APpLicABLE"STATE SECURmES

LAWS OR PURSUANT .-:"'". . '."TO,_,',AN EXEMPTION FROM REGIS'I'RATION ,;~h:l r·~":. ''!::'~',UNDER..!:.:-, _SUCH ACT OR SUCH LAWS. EACH _::,,(:,,",. ,.;':~"

PURCHASER'OFTHE5SECURITIES . _. - ' :: - .: .., REPRESENTED BY nnSittlNSIF&UMBlT '; ,'.-it •':..; .. ":: ",': ~:,' '!.:. IS NOTIFIED THAT TIlE SELnER . . _.' ".

MAY BE RELYING ON THE EXEMPTION FROM SECTION 5®F;THE;'SECURITIES ACTPROVIDED BY RULE 144A .

THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS

ACCEPTANCE HEREOF (1) REPRESEt-lTS~T IW,!S A "QUALIFIED INSTITIITIO~~~~Y)$~" DEFINED IN

RULE I44A UNDER THE SECURJF11?~' ~or),~(2} ~GREES THAT IT WILL NOTaIJ~!?~i'~yt;~~;. OTIlERWISE

TRANSFER THE SECURITIES REPRESENTED BY THIS, INSTRUMENT EXCEPT (A) PURSUANT TO A'

REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER TIlE SECURITIES ACT, (B) FOR SO LONG AS

THE SECURITIESREPR~t:NfED BY THIS INSTRUMENT~~~J2:~r~~FOR RESALE PURSUANT TO:.·R;g~¥.}: .

I44A, TO A' PERSON IT RE:ASONABLY BELIEVES IS A "QlJ1Ai~4fl..iS1i:ID1JTIONAL BUYER" AS DEFThlEID'IN -.

RULE I44A UNDER THE SECURITIES ACT THAT PURCHASE:SFOR ITS OWN ACCOUNT OR FOR THE ACCOUNT'

OF A QUALIFIED INSTITUTIONAL ~ijy~1t ,xQ.W1!:0M NOTICE IS GIVEN THAT TH~~,1;~SFER IS BEING MADE

'INRELIANCE ON RULE I44A, (C) TO ~I~SV'ER'QR (D) PURSUANT TO ANY OTHf:R:;A'YA1LABLE EXEMPTION

FROM THE REGISTRATION REQUIREMENTs"of TIlE SECURITIES ACT AND (3) A'GREESTHAT IT WILL GIVE.

TO EACH PERSON TO WHOM THE SECURlTIES REPRESENTED BY TIllS INSTRUMENT ARE TRANSFERRED A

NOTICE SUBSTANTIAbLYTO THE EFFECT OF THIS LEGE~!.~ . . ,. "< :~~"7j:~f

JPMORGAN CHASE& CO.

Incorpo~at~dun<ierthe laws ofthe State ofDelaware

FlXEDRATE Cm1ULATlVE PERPE11JALPREFEilib:~+~t:K, SERIES K

This islocertify that the United States Department oftlie Treasury is the registered owner of

Two Million Five-Hundred Thousand (2,500,000) fully paid and non-assessable shares of Fixed Rate Cumulative

Perpetual Preferred Stock, Series K, par value $1.00 per share and a liquidation preference of $10,000 per share, of

':JPMorgan Chase & Co., a Delaware.corpQration (the"Corporation"), transferable on,th¢bo.oks 9ftheCorporation

'. by the holder hereof, in person or by dulyauthorized'attorney, upon surrender ofthis cerlifidte,propeTly endorsed.

This Certificate is not valid or obligatory for any purpose unless countersigned and registered by the Transfer Agent·

and Registrar. .... '.,' . ;;1{f~t ~~: ~~::1~ (J ..' . ~~ Witness the facsimile seal ofthe Corporation and theJacsimile sigriatuiesofits duly authorized officers.

Dated: October 28~ 2008

/-0

(~~-y~ " .. By: - ,. Name: James Dimon .' . Title: Chairman and ChiefExecutive Officer

By:

Name: Anthony J. Hor£il;'

Title: Corporate Secretary

';-',: '.

:,' .

. '.

~: '. ....,

,..;:~j~":;; _ ~i\~ .~~;,'.r: ;:~.

Countersigned and~i~'" ~ed~ ~;:­

Mellon Investor S~- ;'. es'·;tC, aSTransfer Agent and Registrar .,

NY 12530:284230.3'

,; : ....
(REVERSE OF CERTIFICATE)

:, JP.M0RGAN CHASE & CO. : ,n'•• ' .' : ,'';; ,

....... ,:'!"

The Corporation will furnish without <:;b..ar,g~ to each stockholder who so requests

the powers, designations, preferences and rell;itiv.e"p~i~ipaqng, optional or special rights(

of each class ofstock or series thereof ofthe Corporation and the qualifications,

limitations or restrictions·o.f,such pr.eferences and/or rights. Such requ~st should be

addressed to the Corporationorthe'rransfer Agent. .' ..'. ,. : .'. "

. The following abbreviations, when us~.9jn.-:t4~<Jns<:;J:iption on the face ofthis

certifi'cate,sb:ail be construed as though they ;w~t~,;~1$e1fd~t in full according to

applicable laws or regulations: . " ' ,,' ',,'

',::,"

TEN COMTENENTJTTEN -

UNIFGIFT

MIN ACTas tenantsiiI,coinmoll ,; " .,.'

as tenants by the entireties '.; " ,.,

as joint tenants with rights o(~llryiv~rship,and not as tenants in common ._ , . ".,0-'. .' .

."

"';!

,.~l\1inpl-)

under Uniform Gift to Minors Act

(CusO,:.).;.

(St~te) .....

Additional abbr~yiati0R-sr3;;Y;,also be used though not inth~tJ~PKf,»~1

. .';' ;:" ~:,:. ~:.~~_::~;~?, ~,}.; ;f{"1~it~;'

,'" . . .,:." .:~ ~,. -~: .: .

• - ..='

'. ~'.

,"".

NY 12530:284230.3
" ,,\' ',.

... '.'.

(PLEASE'f~ffP~;:1ypEWR1TENAME AND ~~~.$8?,.:

'·.l1N0LtIDFf.i:IG: ZIP CODE OF ASSIGNEE);',;:::;,;, ...~,::'

..,_,.:~i'~l~· :t? ·t'~.l ShareS;";,\i

of the capital stock represented by the within Certificate, and do hereby irrevocably

constitute and appoint .:. Co .•••••••. Attorney to transfer the said st()c.~ QR:th¢,boQks ofthe

within named Corporaliori.'wlth'rallpower ofsubstitution in the pr~mlse~:":" ..... '

Dated: ---':-----,-----,- _ ., ..:....,...-'

NOTICE: THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND WITH

THE NAME AS WRITTEN UPON THE FACE OF THE CERTWJ€JATE D\l\",EVERY

PARTICULAR, WlTHOUTAI:::I:ERATION OR ENLARGEMENrr::::OR'AN¥~CmANGE

WHATEVER

Signatlire(s~'Guaranteed:

.." .. "~" Ii.. .-.'

THE SIGNATURE'(S~: 'SH0uLD BE GUARANTEED BV AN:' ELIGIBLE

GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN

ASSOCIA,IJQNS AND CREDIT UNIONS,:~Jltl.i:'~~ERSHIP IN AN APPROVEP': . ,.

SIGNA'PoRE" GUARANTEE MEDALLI0lSf.' ':PR:06~), PURSUANT TO RULE.

17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

.- .. '

'~. :.. '.. .'

': .. ' .

;'[:.'
t])e{aware

?lie !First State

PAGE 1

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF

DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT

COPY OF THE CERTIFICATE OF DESIGNATION OF "JPMORGAN CHASE &

CO. ", FILED IN THIS OFFICE ON THE TWENTY-SEVENTH DAY OF OCTOBER,

A.D. 2008, AT 5:26 O'CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE

NEW CASTLE COUNTY RECORDER OF DEEDS.

0691011 8100

081069933

Harriet Smith Windsor, secretary of State

AUTHENTICATION: 6934637

DATE: 10-27-08
10/27/2008 17:35 FAX 3026552480 -> SCANNING raJ002/014

State of Delaware

Secretazy of State

Division of Corporations

Delivered 05:37 P.N 10/27/2008

FILED 05:26 PM 10/27/2008

SRV 081069933 - 0691011 FILE

CERTIFICATE OF DESIGNATIONS, POWERS, PREFERENCES AND RIGHTS

OF

FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES K

OF

.JPMORGAN CHASE & CO.

Pursuant to Section lSI ofthe

General Corporation Law ofthe State ofDelaware

JPMORGAN CHASE & CO., a Delaware coxporation (the "ColpOrationj, HEREBY

CERTIFIES that the following resolution was duly adopted by the Stock Committee (the

"Committee") ofthe Board ofDirectors (the "Board ofDirectors") ofthe Corporation in

accordance with Section 151(g) ofthe General Coxpomtion Law ofthe State ofDelaware

pursuant to the authority conferred upon the Board ofDirectors by the provisions ofthe

Certificate ofIncorporation ofthe Corporation and pursuant to the authority duly delegated

thereto by the Board ofDirectors:

RESOLVED, that pursuant to the provisions ofthe certificate ofincorporation and the

bylaws ofthe Corporation and applicable law, a series ofPreferred Stock, par value $1.00 per

share, ofthe Corporation be and hereby is created, and that the designation and number ofshares

ofsuch series, and the voting and other powers, preferences and relative, participating, optional

or other rights, and the qualifications, limitations and restrictions thereof, ofthe shares ofsuch

series, are as follows:

Part 1. Designation and Number ofShares. There is hereby created out ofthe authorized

and unissued shares ofpreferred stock ofthe Corporation a series ofpreferred stock designated

as the "Fixed Rate Cumulative Perpetual Preferred Stock, Series K" (the "Designated Preferred

Stock"). The authorized number ofshares ofDesignated Preferred Stock shall be 2,500,000.

Part 2. Standard Provisions. The Standard Provisions contained in Annex A attached

hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of

this Certificate ofDesignations to the same extent as ifsuch provisions had been set forth in full

herein.

Part. 3. Definitions. The following teIms are used in this Certificate ofDesignations

(including the Standard Provisions in Annex A hereto) as defined below:

(a) "Common Stock" means the common stock, par value $1.00 per share, ofthe

Corporation.
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(b) "Dividend Payment Date" means March 1, June 1, September 1 and December 1

of each year.

(c) "Junior Stock" means the Common Stock, and any other class or series ofstock of

the Corporation the terms ofwhich expressly provide that it nmks junior to Designated Preferred

Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up ofthe

Corporation.

(d) "Liquidation Amount" means $10,000 per share ofDesignated Preferred Stock.

(e) "Minimum Amount" means $6,250,000,000.

(t) "Parity Stock" means any class or series ofstock ofthe Corporation (other than

Designated Preferred Stock) the terms ofwhich do not expressly provide that such class or series

will rank: senior orjunior to Designated Preferred Stock as to dividend rights and/or as to rights

on liquidation, dissolution or winding up ofthe Corporation (in each case without regard to

whether dividends accrue cumulatively or non-eumulatively). Without limiting the foregoing,

Parity Stock shall include the Corporation's (i) 6.15% Cumulative Preferred Stock, Series E; (ii)

5.72% Cmnulative Preferred Stoc14 Series F; (iii) 5.49% Cumulative Preferred Stock, Series G;

(iv) Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I; and (v) 8.625%

Non-Cumulative Perpetual Preferred Stock, Series J.

(g) ··Signing Date" means October 26, 2008.

Part. 4. Certain Voting Matters. Holders ofshares ofDesignated Preferred Stock will be

entitled to one vote for each such share on any matter on which holders ofDesignated Preferred

Stock are entitled to vote, including any action by written consent.

[Remainder ojPage Intentionally Left Blank]

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IN WITNESS WHEREOF, JPMorgan Chase & Co. has caused this Certificate of

Designations to be signed by Anthony J. Horan, its Corporate Secretary, this 27th day of

October, 2008.

JPMORGAN CHASE & CO.

By: lsi Anthony J. Horan

Name: Anthony J. Horan

Title: Corporate Secretary

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STANDARD PROVISIONS

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ANNEXA

Section 1. General Matters. Each share ofDesignated Preferred Stock shall be identical

in all respects to every other share ofDesignated Preferred Stock. The Designated Preferred

Stock shall be petpetual, subject to the provisions of Section 5 ofthese Standard Provisions that

form a part ofthe Certificate ofDesignations. The Designated Preferred Stock shall rank equally

with Parity Stock and shall rank senior to Junior Stock with respect to the payment ofdividends

and the distribution of assets in the event ofany dissolution, liquidation or winding up ofthe

Corporation.

Section 2. Standard Definitions. As used herein with respect to Designated Preferred

Stock:

(a) "Awlicable Dividend Rate" means (i) during the period from the Original Issue

Date to, but excluding, the first day ofthe first Dividend Period commencing on or after the fifth

anniversary ofthe Original Issue Date, 5% per annwn and (il) from and after the first day ofthe

first Dividend Period commencing on or after the fifth anniversary ofthe Original Issue Date,

9% per annum.

(b) "Awropriate Federal Banking Agency" means the "appropriate Federal banking

agency" with respect to the Corporation as defined in Section 3(q) ofthe Federal Deposit

Insurance Act (12 U.S.C. Section I813(q), or any successor provision.

(c) "Business Combination" means a merger, consolidation, statutory share exchange

or similar transaction that requires the approval ofthe Corporation's stockholders.

(d) "Business Day" means any day except Saturday. Sunday and any day on which

banking institutions in the State ofNew York genemlly are authorized or required by law or

other governmental actions to close.

(e) "Bylaws" means the bylaws ofthe Corporation, as they may be amended from

time to time.

(f) "Certificate ofDesignations" means the Certificate ofDesignations or comparable

instrument relating to the Designated Preferred Stock, ofwhich these Standard Provisions form a

part, as it may be amended from time to time.

(g) "Charter" means the Corporation's certificate or articles ofincorporation, articles

ofassociation, or similar organizational docwnent.

(h) "Dividend Period" has the meaning set forth in Section 3(a).

(i) "Dividend Record Date" has the meaning set forth in Section 3(a).

(j) "Liquidation Preference" has the meaning set forth in Section 4(a).

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(k) "Original Issue Date" means the date on which shares ofDesignated Preferred

Stock are first issued.

(I) "Preferred Director" has the meaning set forth in Section 7(b).

(m) "Preferred Stock" means any and all series ofpreferred stock ofthe Corporation,

including the Designated Preferred Stock.

(n) "Qualified Equity Offering" means the sale and issuance for cash by the

Corporation to persons other than the COIporation or any ofits subsidiaries after the Original

Issue Date ofshares ofperpetual Preferred Stock, Common Stock or any combination ofsuch

stock, that, in each case, qualify as and may be included in Tier 1 capital ofthe Corporation at

the time ofissuance under the applicable risk-based capital guidelines ofthe COIporation's

Appropriate Federal Banking Agency (other than any such sales and issuances made pursuant to

agreements or arrangements entered into, or pursuant to financing plans which were publicly

announced, on or prior to October 13, 2008).

(0) "Share Dilution Amount" has the meaning set forth in Section 3(b).

(p) "Standard Provisions" mean these Standard Provisions that fonn a part ofthe

Certificate ofDesignations relating to the Designated Preferred Stock.

(q) "Successor Preferred Stock" has the meaning set forth in Section 5(a).

(r) "Voting Parity Stock" means, with regard to any matter as to which the holders of

Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) ofthese

Standard Provisions that fonn a part ofthe Certificate ofDesignations, any and all series of

Parity Stock upon which like voting rights have been conferred and are exercisable with respect

to such matter.

Section 3. Dividends.

(a) Rate. Holders ofDesignated Preferred Stock shall be entitled to receive, on each

share ofDesignated Preferred Stock if, as and when declared by the Board ofDirectors or any

duly authorized committee ofthe Board ofDirectors, but only out ofassets legally available

therefor, cumulative cash dividends with respect to each Dividend Period (as defined below) at a

rate per annwn equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of

Designated Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior

Dividend Period on such share ofDesignated Preferred Stock, ifany. Such dividends shall begin

to accrne and be cumulative from the Original Issue Date, shall compound on each subsequent

Dividend Payment Date (i.e., no dividends shall accrue on other dividends unless and until the

first Dividend Payment Date for such other dividends has passed without such other dividends

having been paid on such date) and shall be payable quarterly in arrears on each Dividend

Payment Date, commencing with the first such Dividend Payment Date to occur at least 20

calendar days after the Original Issue Date. In the event that any Dividend Payment Date would

otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be

postponed to the next day that is a Business Day and no additional dividends will accrue as a

result ofthat postponement. The period from and including any Dividend Payment Date to, but

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excluding, the next Dividend Payment Date is a "Dividend Period", provided that the initial

Dividend Period shall be the period from and including the Original Issue Date to, but excluding,

the next Dividend Payment Date.

Dividends that are payable on Designated Preferred Stock in respect of any Dividend

Period shall be computed on the basis ofa 360-day year consisting oftwelve 30-day months. The

amount ofdividends payable on Designated Preferred Stock on any date prior to the end of a

Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day

year consisting oftwelve 30-day months, and actual days elapsed over a 3o-day month.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date

will be payable to holders ofrecord ofDesignated Preferred Stock as they appear on the stock

register ofthe Corporation on the applicable record date, which shall be the 15th calendar day

immediately preceding such Dividend Payment Date or such other record date fIXed by the

Board ofDirectors or any duly authorized committee ofthe Board ofDirectors that is not more

than 60 nor less than 10 days prior to such Dividend Payment Date (each, a "Dividend Record

Date"). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether

or not such day is a Business Day.

Holders ofDesignated Preferred Stock shall not be entitled to any dividends, whether

payable in cash, securities or other property, other than dividends (ifany) declared and payable

on Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of

the Certificate ofDesignations).

(b) Priority ofDividends. So long as any share ofDesignated Preferred Stock

remains outstanding, no dividend or distribution shall be declared or paid on the Common Stock

or any other shares ofJunior Stock (other than dividends payable solely in shares ofCommon

Stock) or Parity Stock, subject to the immediately following paragraph in the case ofParity

Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly,

purchased, redeemed or otherwise acquired for consideration by the COIporation or any ofits

subsidiaries unless all accrued and unpaid dividends for all past Dividend Periods, including the

latest completed Dividend Period (including, ifapplicable as provided in Section 3(a) above,

dividends on such amount), on all outstanding shares ofDesignated Preferred Stock have been or

are contemporaneously declared and paid in full (or have been declared and a sum sufficient for

the payment thereofhas been set aside for the benefit ofthe holders ofshares ofDesignated

Preferred Stock on the applicable record date). The foregoing limitation shall not apply to (i)

redemptions, purchases or other acquisitions ofshares ofCommon Stock or other Junior Stock in

connection with the administration ofany employee benefit plan in the ordinary course of

business (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 the Share Dilution

Amount; (ii) purchases or other acquisitions by a broker-dealer subsidiary ofthe Corporation

solely for the purpose ofmarket-making. stabilization or customer facilitation transactions in

Junior Stock or Parity Stock in the ordinary course ofits business; (iii) purchases by a brokerdealer subsidiary ofthe Corporation ofcapital stock ofthe Corporation for resale pursuant to an

offering by the Corporation ofsuch capital stock underwritten by such broker-dealer subsidiary;

(iv) any dividends or distributions ofrights or Junior Stock in connection with a stockholders'

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rights plan or any redemption orrepurchase ofrights pursuant to any stockholders' rights plan;

(v) the acquisition by the Corporation or any ofits subsidiaries ofrecord ownership in Junior

Stock or Parity Stock for the beneficial ownership of any other persons (other than the

Corporation or any ofits subsidiaries), including as trustees or custodians; and (vi) the exchange

or conversion ofJunior Stock for or into other Junior Stock or ofParity Stock for or into other

Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case,

solely to the extent required pursuant to binding contractual agreements entered into prior to the

Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange

thereoffor Common Stock. "Share Dilution Amount" means the increase in the number of

diluted shares outstanding (determined in accordance with generally accepted accounting

principles in the United States, and as measured from the date ofthe Corporation's consolidated

financial statements most recently filed with the Securities and Exchange Commission prior to

the Original Issue Date) resulting from the grant, vesting or exercise ofequity-based

compensation to employees and equitably adjusted for any stock split, stock dividend, reverse

stock split, reclassification or similar transaction.

When dividends are not paid (or declared and a sum sufficient for payment thereofset

aside for the benefit ofthe holders thereof on the applicable record date) on any Dividend

Payment Date (or, in the case ofParity Stock having dividend payment dates different from the

Dividend Payment Dates, on a dividend payment date falling within a Dividend Period related to

such Dividend Payment Date) in full upon Designated Preferred Stock and any shares ofParity

Stock, all dividends declared on Designated Preferred Stock and all such Parity Stock and

payable on such Dividend Payment Date (or, in the case ofParity Stock having dividend

payment dates different from the Dividend Payment Dates, on a dividend payment date falling

within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so

that the respective amounts ofsuch dividends declared shall bear the same ratio to each other as

all accrued and unpaid dividends per share on the shares ofDesignated Preferred Stock

(including, ifapplicable as provided in Section 3(a) above, dividends on such amount) and all

Parity Stock payable on such Dividend Payment Date (or, in the case ofParity Stock having

dividend payment dates different from the Dividend Payment Dates, on a dividend payment date

falling within the Dividend Period related to such Dividend Payment Date) (subject their

having been declared by the Board ofDirectors or a duly authorized committee ofthe Board of

Directors out oflegally available funds and including, in the case ofParity Stock that bears

cumulative dividends, all accrued but unpaid dividends) bear to each other. Ifthe Board of

Directors or a duly authorized committee ofthe Board ofDirectors detennines not to pay any

dividend or a full dividend on a Dividend Payment Date, the Corporation Will provide written

notice to the holders ofDesignated Preferred Stock prior to such Dividend Payment Date.

Subject to the foregoing. and not otheIWise, such dividends (payable in cash, securities or

other property) as may be determined by the Board ofDirectors or any duly authorized

committee ofthe Board ofDirectors may be declared and paid on any securities, including

Common Stock and otherJunior Stock, from time to time out of any funds legally available for

such payment, and holders ofDesignated Preferred Stock shall not be entitled to participate in

any such dividends.

Section 4. Liguidation Ripts.

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(a) VoluntaIy or Involuntary Liquidation. In the event ofany liquidation, dissolution

or winding up ofthe affairs ofthe Corporation, whether voluntary or involuntary, holders of

Designated Preferred Stock shall be entitled to receive for each share ofDesignated Preferred

Stock, out ofthe assets ofthe Corporation or proceeds thereof (whether capital or swplus)

available for distribution to stockholders ofthe Corporation, subject to the rights ofany creditors

ofthe Corporation, before any distribution ofsuch assets or proceeds is made to or set aside for

the holders ofCommon Stock and any other stock ofthe Corporation ranking juniorto

Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum

of(i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends

(including, ifapplicable as provided. in Section 3(a) above, dividends on such amount), whether

or not declared, to the date of payment (such amounts collectively, the "Liquidation

Preference").

(b) Partial Payment. Ifin any distribution described in Section 4(a) above the assets

ofthe Corporation or proceeds thereof are not sufficient to pay in full the amounts payable with

respect to all outstanding shares ofDesignated Preferred Stock and the corresponding amounts

payable with respect ofany other stock ofthe Corporation ranking equally with Designated

Preferred Stock as to such distribution, holders ofDesignated Preferred Stock and the holders of

such other stock shall share ratably in any such distribution in proportion to the full respective

distributions to which they are entitled.

(c) Residual Distributions. Ifthe Liquidation Preference has been paid in full to all

holders ofDesignated Preferred Stock and the corresponding amounts payable with respect of

any other stock ofthe Corporation ranking equally with Designated Preferred Stock as to such

distribution has been paid in full, the holders ofother stock ofthe Corporation shall be entitled to

receive all remaining assets ofthe Corporation (or proceeds thereof) according to their respective

rights and preferences.

(d) Merger. Consolidation and Sale ofAssets Not Liquidation. For purposes ofthis

Section 4, the merger or consolidation ofthe Corporation with any other corporation or other

entity, including a merger or consolidation in which the holders ofDesignated Preferred Stock

receive cash. securities or other property for their shares, or the sale, lease or exchange (for cash,

securities or other property) ofall or substantially all ofthe assets ofthe Corporation, shall not

constitute a liquidation, dissolution or winding up ofthe Corporation.

Section 5. Redemption.

(a) Optional Redemption. Except as provided below, the Designated Preferred Stock

may not be redeemed prior to the first Dividend Payment Date falling on or after the third

anniversary ofthe Original Issue Date. On or after the first Dividend Payment Date falling on or

after the third anniversary ofthe Original Issue Date, the Corporation, at its option, subject to the

approval ofthe Appropriate Federal Banking Agency, may redeem, in whole or in part, at any

time and from time to time, out offunds legally available therefor, the shares ofDesignated

Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a

redemption price equal to the sum of(i) the Liquidation Amount per share and (li) except as

otherwise provided below, any accrued and unpaid dividends (including, ifapplicable as

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provided in Section 3(a) above, dividends on such amount) (regardless ofwhether any dividends

are actually declared) to, but excluding, the date fixed for redemption.

Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or

after the third anniversary ofthe Original Issue Date, the Corporation, at its option, subject to the

approval ofthe Appropriate Federal Banking Agency, may redeem, in whole or in part, at any

time and from time to time, the shares ofDesignated Preferred Stock at the time outstanding,

upon notice given as provided in Section S(c) below, at a redemption price equal to the sum of(i)

the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and

unpaid dividends (including, ifapplicable as provided in Section 3(a) above, dividends on such

amount) (regardless ofwhether any dividends are actually declared) to, but excluding, the date

fixed for redemption; provided that (x) the Corporation (or any successor by Business

Combination) has received aggregate gross proceeds ofnot less than the Minimum Amount (plus

the "Minimum Amount" as defined in the relevant certificate ofdesignations for each other

outstanding series ofpreferred stock ofsuch successor that was originally issued to the United

States Department ofthe Treasury (the "Successor Preferred Stock'') in connection with the

Troubled Asset ReliefProgram Capital Purchase Program) from one or more Qualified Equity

Offerings (including Qualified Equity Offerings ofsuch successor), and (y) the aggregate

redemption price ofthe Designated Preferred Stock (and any Successor Preferred Stock)

redeemed pursuant to this paragraph may not exceed the aggregate net cash proceeds received by

the Corporation (or any successor by Business Combination) from such Qualified Equity

Offerings (including Qualified Equity Offerings ofsuch successor).

The redemption price for any shares ofDesignated Preferred Stock shall be payable on

the redemption date to the holder ofsuch shares against surrender ofthe certificate(s) evidencing

such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a

redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall

not be paid to the holder entitled to receive the redemption price on the redemption date, but

rather shall be paid to the holder ofrecord ofthe redeemed shares on such Dividend Record Date

relating to the Dividend Payment Date as provided in Section 3 above.

(b) No Sinking Fund. The Designated Preferred Stock will not be subject to any

mandatory redemption, sinking fund or other similar provisions. Holders ofDesignated Preferred

Stock will have no right to require redemption or repurchase of any shares ofDesignated

Preferred Stock.

(c) Notice ofRedemption. Notice ofevery redemption ofshares ofDesignated

Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of

record ofthe shares to be redeemed at their respective last addresses appearing on the books of

the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date

fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively

presumed to have been duly given, whether or not the holder receives such notice, but failure

duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any

holder ofshares ofDesignated Preferred Stock designated for redemption shall not affect the

v~idity ofthe proceedings for the redemption ofany other shares ofDesignated Preferred Stock.

Notwithstanding the foregoing, ifshares ofDesignated Preferred Stock are issued in book-entry

form through The Depository Trust Corporation or any other similar facility, notice of

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redemption may be given to the holders ofDesignated Preferred Stock at such time and in any

manner pennitted by such facility. Each notice ofredemption given to a holder shall state: (1) the

redemption date; (2) the nmnber ofshares ofDesignated Preferred Stock to be redeemed and, if

less than all the shares held by such holder are to be redeemed, the number ofsuch shares to be

redeemed from such holder; (3) the redemption price; and (4) the place or places where

certificates for such shares are to be surrendered for payment ofthe redemption price.

(d) Partial Redemption. In case ofany redemption ofpart ofthe shares ofDesignated

Preferred Stock at the time outstanding, the shares to be redeemed shall be selected eitherpro

rata or in such other manner as the Board ofDirectors or a duly authorized committee thereof

may determine to be fair and equitable. Subject to the provisions hereof, the Board ofDirectors

or a duly authorized committee thereofshall have full power and authority to prescribe the terms

and conditions upon which shares ofDesignated Preferred Stock shall be redeemed from time to

time. Iffewer than all the shares represented by any certificate are redeemed, a new certificate

shall be issued representing the unredeemed shares without charge to the holder thereof.

(e) Effectiveness ofRedemption. Ifnotice ofredemption has been duly given and if

on or before the redemption date specified in the notice all funds necessary for the redemption

have been deposited by the Corporation, in trust for the pro rata benefit ofthe holders ofthe

shares called for redemption, with a bank or trust company doing business in the Borough of

Manhattan, The City ofNew York, and having a capital and smplus ofat least $500 million and

selected by the Board ofDirectors, so as to be and continue to be available solely therefor, then,

notwithstanding that any certificate for any share so called for redemption has not been

surrendered for cancellation, on and after the redemption date dividends shall cease to aceroe on

all shares so called for redemption, all shares so called for redemption shall no longer be deemed

outstanding and all rights with respect to such shares shall forthwith on such redemption date

cease and terminate, except only the right ofthe holders thereof to receive the amount payable on

such redemption from such bank or trust company, without interest. Any funds unclaimed at the

end oftbree years from the redemption date shall, to the extent permitted by law, be released to

the Corporation, after which time the holders ofthe shares so called for redemption shall look

only to the Corporation for payment ofthe redemption price ofsuch shares.

(f) Status ofRedeemed Shares. Shares ofDesignated Preferred Stock that are

redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but

unissued shares ofPreferred Stock (provided that any such cancelled shares ofDesignated

Preferred Stock may be reissued only as shares ofany series ofPreferred Stock other than

Designated Preferred Stock).

Section 6. Conversion. Holders ofDesignated Preferred Stock shares shall have no right

to exchange or convert such shares into any other securities.

Section 7. Voting Rights.

(a) General. The holders ofDesignated Preferred Stock shall not have any voting

rights except as set forth below or as otherwise from time to time required by law.

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(b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on

the shares ofDesignated Preferred Stock have not been paid for an aggregate ofsix quarterly

Dividend Periods or more, whether or not consecutive, the authorized number ofdirectors ofthe

Corporation shall automatically be increased by two and the holders ofthe Designated Preferred

Stock shall have the right, with holders ofshares of any one or more other classes or series of

Voting Parity Stock outstanding at the time, voting together as a class, to elect two directors

(hereinafter the "Preferred Directors" and each a "Preferred Director'') to fill sUl;:h newly

created directorships at the Corporation's next annual meeting ofstockholders (or at a special

meeting called for that purpose prior to such next annual meeting) and at each subsequent annual

meeting ofstockholders until all accrued and unpaid dividends for all past Dividend Periods,

including the latest completed Dividend Period (including, ifapplicable as provided in Section

3(a) above, dividends on such amount), on all outstanding shares ofDesignated Preferred Stock

have been declared and paid in full at which time such right shall terminate with respect to the

Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting

in the event of each and every subsequent default ofthe character above mentioned; provided

that it shall be a qualification for election for any Preferred Director that the election ofsuch

Preferred Director shall not cause the Corporation to violate any corporate governance

requirements ofany securities exchange or other trading facility on which securities ofthe

Corporation may then be listed or traded that listed or traded companies must have a majority of

independent directors. Upon any termination ofthe right ofthe holders ofshares ofDesignated

Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the

Preferred Directors shall cease to be qualified as directors, the term ofoffice ofall Preferred

Directors then in office shall terminate immediately and the authorized number ofdirectors shall

be reduced by the number ofPreferred Directors elected pursuant hereto. Any Preferred Director

may be removed at any time, with or without cause, and any vacancy created thereby may be

filled, only by the affinnative vote ofthe holders a majority ofthe shares ofDesignated Preferred

Stock at the time outstanding voting separately as a class together with the holders ofshares of

Voting Parity Stock, to the extent the voting rights ofsuch holders described above are then

exercisable. Ifthe office ofany Preferred Director becomes vacant for any reason other than

removal from office as aforesaid, the remaining Preferred Director may choose a successor who

shall hold office for the unexpired term in respect ofwhich such vacancy occurred.

(c) Class Voting Rights as to Particular Matters. So long as any shares ofDesignated

Preferred Stock are outstanding, in addition to any other vote or consent ofstockholders required

by law or by the Charter, the vote or consent ofthe holders of at least 66 2/3% ofthe shares of

Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or

by proxy, either in writing without a meeting or by vote at any meeting called for the purpose,

shall be necessary for effecting or validating:

(i) Authorization ofSenior Stock. Any amendment or alteration ofthe

Certificate ofDesignations for the Designated Preferred Stock or the Charter to authorize

or create or increase the authorized amount of, or any issuance of, any shares of, or any

securities convertible into or exchangeable or exercisable for shares of, any class or series

of capital stock ofthe Corporation ranking senior to Designated Preferred Stock with

respect to either or both the payment ofdividends and/or the distribution of assets on any

liquidation, dissolution or winding up ofthe Corporation;

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(ii) Amendment ofDesignated Preferred Stock. Any amendment, alteration

or repeal ofany provision ofthe Certificate ofDesignations for the Designated Preferred

Stock or the Charter (including, unless no vote on such merger or consolidation is

required by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a

merger, consolidation or otherwise) so as to adversely affect the rights, preferences,

privileges or voting powers ofthe Designated Preferred Stock; or

(iii) Share Exchanges. Reclassifications. Mergers and Consolidations. Any

consummation ofa binding share exchange or reclassification involving the Designated

Preferred Stock, or ofa merger or consolidation ofthe Corporation with another

corporation or other entity, unless in each case (x) the shares ofDesignated Preferred

Stock remain outstanding or, in the case ofany such merger or consolidation with respect

to which the Corporation is not the surviving or resulting entity, are converted into or

exchanged for preference securities ofthe surviving or resulting entity or its ultimate

parent, and (y) such shares remaining outstanding or such preference securities, as the

case may be, have such rights, preferences, privileges and voting powers, and limitations

and restrictions thereof, taken as a whole, as are not materially less favorable to the

holders thereofthan the rights, preferences, privileges and voting powers, and limitations

and restrictions thereof, ofDesignated Preferred Stock immediately prior to such

consummation, taken as a whole;

provided, however, that for all purposes ofthis Section 7(c), any increase in the amount ofthe

authorized Preferred Stock, including any increase in the authorized amount ofDesignated

Preferred Stock necessary to satisfy preemptive or similar rights granted by the Corporation to

other persons prior to the Signing Date, or the creation and issuance, or an increase in the

authorized or issued amount, whether pursuant to preemptive or similar rights or otherwise, of

any other series ofPreferred Stock, or any securities convertible into or exchangeable or

exercisable for any other series ofPreferred Stock, ranking equally with and/orjunior to

Designated Pref~d Stock with respect to the payment ofdividends (whether such dividends

are <;wnulative or non-cumulative) and the distribution ofassets upon liquidation, dissolution or

winding up ofthe Corporation will not be deemed to adversely affect the rights, prefc:rences,

privileges or voting powers, and shall not require the affIrmative vote or consent of, the holders

. of outstanding shares ofthe Designated Preferred Stock.

(d) Changes after Provision for Redemption. No vote or consent ofthe holders of

Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the

time when any such vote or consent would otherwise be required pursuant to such Section, all

outstanding shares ofthe Designated Preferred Stock shall have been redeemed, or shall have

been called for redemption upon proper notice and sufficient funds shall have been deposited in

trust for such redemption, in each case pursuant to Section 5 above.

(e) Procedures for Voting and Consents. The rules and procedures for calling and

conducting any meeting ofthe holders ofDesignated Preferred Stock (including, without

limitation, the fixing ofa record date in connection therewith), the solicitation and use ofproxies

at such a meeting, the obtaining ofwritten consents and any other aspect or matter with regard to

such a meeting or such consents shall be governed by any rules ofthe Board ofDirectors or any

duly authorized committee ofthe Board ofDirectors, in its discretion, may adopt from time to

A-9
10/27/2008 17:38 FAX 3026552480 -> SCANNING ~014/014

time, which rules and procedures shall conform to the requirements ofthe Charter, the Bylaws,

and applicable law and the rules of any national securities exchange or other trading facility on

which Designated Preferred Stock is listed or traded at the time.

Section 8. Record Holders. To the fullest extent permitted by applicable law, the

Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record

holder of any share ofDesignated Preferred Stock as the true and lawful owner thereoffor all

purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to

the contrary.

Section 9. Notices. All notices or communications in respect ofDesignated Preferred

Stock shall be sufficiently given ifgiven in writing and delivered in person or by first class mail,

postage prepaid, or ifgiven in such other manner as may be permitted in this Certificate of

Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if

shares ofDesignated Preferred Stock are issued in book-entry fOIlll through The Depository

Trust Corporation or any similar facility. such notices may be given to the holders ofDesignated

Preferred Stock in any manner permitted by such facility.

Section 10. No Preemptive Rights. No share ofDesignated Preferred Stock shall have

any rights ofpreemption whatsoever as to any securities ofthe Corporation, or any warrants,

rights or options issued or granted with respect thereto, regardless ofhow such securities, or such

warrants, rights or options, may be designated, issued or granted.

Section 11. Replacement Certificates. The Corporation shall replace any mutilated

certificate at the holder's expense upon surrender ofthat certificate to the Corporation. The

Corporation shall replace certificates that become destroyed, stolen or lost at the holder's

expense upon delivery to the Corporation ofreasonably satisfactory evidence that the certificate

has been destroyed, stolen or lost, together with any indemnity that may be reasonably required

by the Corporation.

Section 12. Other Rights. The shares ofDesignated Preferred Stock shall not have any

rights, preferences, privileges or voting powers or relative, participating, optional or other special

rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the

Charter or as provided by applicable law.

A-IO
CERTAIN INFORMAnON REDACTED

WARRANT TO PURCHASE COMMON STOCK

THE SECURITIES REPRESENTED BY TInS INSTRUMENT HAVB NOT BEEN

REGISTERED UNDER TIlE SECURITIES ACf OF 1933. AS AMENDED. OR THE

SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED. SOLD OR

OTIIERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT

RELATING TIIERETO IS IN EFFECT UNDER SUCH ACT AND APPUCABLE STATE

SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION

UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO

TIlE RESTRIcrIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES

PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE

INVESTOR REFERRED TO THERElN, A COpy OF WHICH IS ON FILE WITH TIlE

ISSUER. mE SECURITIES REPRESENTED BY TIllS INSTRUMENT MAY NOT BE

SOID OR OTHERWISE TRANSFERRED EXCEPT IN COMPUANCE WITII SAID

AGREEMENT. ANY SALE OR OTIIER TRANSFER NOT IN COMPLIANCE wrm SAID

AGREEMENT wn.L BE VOID.

WARRANT

topurdwe

88,401,697

Shares ofCommon Stock

ofJPMORGAN CHASE &: CO.

Issue Date: October 28, 2008

1. Definitions. Unless the context otherwise requires,. when used herein the

ful19wing terms sball have the meanings indicated.

"A.ffililml' has the meaning ascribed to it in the Purchase Agreement.

"Appraisal Procedur~ meaDS a procedure whereby two independent appDisers, one

chosen by the Company and one by the Original Wmantholder, sba11 mutually agree upon the

determinations thea the subject ofappnUsa1. Each party shall deliver a notice to the other

appointing ita appraiser within 15 days afterthe Appraisal Procedure is invoked. Ifwithin 30

days after appointment oftile two appraisers they are unable to agn:e upon the amount in

question, a third indepeodellt appraiser sball be chosen within 10 days tbereafter by the mutual

conseot ofsuch first two appraisers. The decision ofthe third appraiser so appointed and chosen

shall be given within 30 days aftt.r the selection ofsuch third appraiser. Ifthree appraisers shall

be appointed and the determination ofone appraiser is dispaJate from the middle determination

by more than twice the amount by which the other determination is disparate from the middle

detmmiDation, then the determination ofsuch appraiser shall be excluded, the remaining two

detmninations shall be averaged and such average shall be binding aDd conclusive upon the

Company and the Original WarranthoJder. otherwise, the average ofall three determinations
shall be binding upon the Company and the Original Warrantholder. The costs ofconducting

any Appraisal Procedure shall be borne by the Company.

"Board ofDirectors" means the board ofdirectors ofthe Company. including any duly

authorized committee thereot:

"Business Combination" means a merger. consolidation, statutory share exchange or

similar transaction that requires the approval ofthe Company's stockholders.

"businus day" means any day except Saturday. Sunday and any day on which banking

institutions in the State ofNew York generally are authorized or required by law or other

governmental actions to close.

"Capital StocK' means (A) with respect to any Person that is a corporation or company,

any and all shares, interests, participations or other equivalents (however designated) ofcapital

or capital stock ofsuch Person and (B) with respect to any Person that is not a corporation or

company. any and all partnembip or other equity interests ofsuch Person.

"Charter' means. with respect to any Person, its certificate or articles ofincorporation,

articles of association, orsimilar organizational document

"Common StocK' has the meaning ascribed to it in the Purchase Agreement

"CompanY' means the Person whose name, corporate or other organizational form and

jurisdiction oforganization is set forth in Item 1 ofSchedule A hereto.

"conversion" has the meaning set forth in Section 13(B).

"convertible securities" has the meaning set forth in Section 13(B).

"CPP' has the meaning ascribed to it in the Purchase Agreement

"E:xchange Ad' means the Securities Exchange Act of1934, as am~ or any

successorstatute, and the rules and regulations promulgated thereunder.

"Exercise Prict!' means the amount set forth in Item 2 ofSchedule A hereto.

"Expiration Tune" bas the meaning set forth in Section 3.

"Fair MDrket Val1M!' means, with respect to any secmity or other property, the fair

market value ofsuch security or other property as deteImined by the Board ofDirectors, acting

in good faith or, with respect to Section 14, as detennined by the OriginalWamntbolder acting

in good faith. Forso long as the Original Warrantholder holds this Wurant or any portion

thereo( it may object in writing to the Board ofDirector's calculation offiUr market value within

10 days ofreceipt ofwritteu notice thereot: HtIle Original Warrantholder and the Company are

unable to agree on fair IDaIket value during the 1D-day period fullowing the delivery ofthe

Original Wammtholder's objection, the Appraisal Procedure may be invoked by either party to

2
determine Fair Madc.et Value by delivering written notification thereofnot 1aterthan the 3011a day

after delivCl)' oftbe Original Wammtholder's objection.

"Governmental Entities'.' has the meaning ascnDed to it in the Purchase Agreement.

"Initial Number' has the meaning set forth in Section 13(B).

"Issue Date" means the date set forth in Item 3 ofSchedule A hereto.

"Market Pric~ means, with respect to a particularsecurity, on any given day, the last

reported sale price regular way or, in case no such reported sale takes place on such day, the

average ofthe last closing bid and ask: prices regular way, in either case on the principal national

secwities exchange on which the applicable secmities are listed or admitted to trading. or ifnot

listed or admitted to trading on any national securities exchange, the average ofthe closing bid .

and ask prices as furnished by two members ofthe Financial Industry RegulafoIy Authority, Inc.

selected from time to time by the Company for that pw.pose. "Market Price" shall be determined

without reference to after hours or extended homs trading. Ifsuch security is not listed and

traded in a IDanD.Cf that the quotations referred to above are available for the period required

hereunder, the Muket Price per share ofCommon Stock: shall be deemed to be (i) in the event

that any portion ofthe Warrant is held by the Original Warrantholder, the fair market value per

share ofsuch security as determined in good faith by the Original Wmantholder or (n) in all

other circumstances, the filir market value per share ofsuch security as determined in good filith

by the Board ofDirectors in reliance on an opinion ofa nationally recognized independent

inves1ment banking COIporation retained by the Company for this pmpose and certified in a

resolution to the Warrantholder. For the purposes ofdeteImining the Market Price ofthe

Common Stock on the "trading day" preceding, on or following the occurrence ofan event, (i)

that trading day sba1l be deemed to commence immediately after the regular scheduled closing

time oftrading on the New York Stock Exchange or, iftrading is closed at an earliertime, such

earlier time and (n) that trading day shaII end at the next regular scheduled closing time, or if

trading is closed at an earliertime, such earliertime (for the avoidance ofdoubt, and as an

example, ifthe Market Price is to be determined as ofthe last trading day preceding a specified

event and the closing time oftrading on a particular day is 4:00 p.m. and the specified event

occurs at 5:00 p.m. on that day, the Market Price would be detemrined by reference to such 4:00

p.m. closing price).

"Ordbuzry CAsh Dividentb" means a regular quarterly cash dividend on shares of

Common Stock out ofswplus or net profits legally available therefor (detemJined in accordance

with generally accepted accounting principlesin effect from time to time), providedthat

Ordinary Cash Dividends shall not include any c8sh dividends paid subsequent to the Issue Date

to the extent the aggregate pershare dividends paid on the outstanding Common Stock in any

quarter exceed the amount set forth in Item. 4 ofSchedule Ahereto, as adjusted for any stock .

split, stock dividend, rev~ stock. split, reclassification orsimilartransaction.

"Originlll W'arrantholder' means the United States Department oftbe Treasury. Any

actions specified to be taken by the Original Warrantho&hereunder may only be taken by such

Person and not by any other Wammtholder.

3
"Permitted Transactions" has the meaning set forth in Section 13(B).

"Person" has the meaning given to it in Section 3(a)(9) ofthe Exchange Act and as used

in Sections 13(d)(3) and 14(d)(2) ofthc Exchange Act.

"Per Share Fair Marlcet Value" has the meaning set forth in Section 13(C).

"PreferredShares" means the perpetual preferred stock issued to the Original

Warrantholder on the Issue Date pursuant to the Purchase Agreement

"Pro RaJa Repurchasu' means any purchase ofshares ofCommon Stock by the

Company or any Affiliate thereofpursuant to (A) any tender offer or exchange offersubject to

Section B(e) or 14(e) ofthe Exchange Act orRegulation 14E promulgated thereunder or (B)

any other offer available to substantially all holders ofCommon Stock, in the case ofbotb (A) or

(B), whether for cash, shares ofCapital Stock ofthe Company, o1hersecurities ofthe Company,

evidences ofindebtedness ofthe Company or any other Person or any other property (including,

without limitation, shares ofCapital Stock, othersecurities or evidences ofindebtedness ofa

subsidiary), or any combination thereof; effected while this Warrant is outstanding. The

"Effective Datil' ofa Pro Rata Repurchase sbalI mean the date ofacceptance of shares for

purchase or exchange by the Company under any tender or cxchange offer which is a Pro Rata

Repurchase or the date ofpurchase with respect to any Pro Rata Repurchase that is not a tender

or exchange offer.

"Purchase Agrumenf' means the Securities Purchase Agreement- Standard Terms

incorporated into the Letter Agreement, dated as ofthe date set forth in Item S ofSchedule A

hereto, as anvmded from time to time, between the Company and the United States Department

ofthe Treasury (the "Letter AgreemenfJ, including alIanncxes and schedules thereto.

"QualifiedEquity Offering' has the meaning ascribed to it in the Purchase Agreement

"Regulatory Approvals" respect to the Wmantholder, means, to the extent

applicable and required to pennit the Wmantholder to exercise this Warrant for shares of

Common Stock and to own such Common Stock: without the Wammtholder being in violation of

applicable law, mle orregulation, the receipt ofany necessary approvals and authorizations of;

filings and registrations with, notifications to, or expiration or termination ofany applicable

waiting period under, the Hart-8cott-Rodino AntitnJstImprovements Act of1976, as amended,

and the rules and regulationsthereunder.

"SEC' melDS the U.S. Securities and Exchange Commission.

"Securities Act' means the Securities Act of 1933, as amended, or any successorstatute,

and the rules and Iegulations promulgated thereunder.

"Sharer' bas the meaning set forth in Section 2.

"trading day" means (A) ifthe shares ofCommon Stock are not traded on any national

orregional securities exchange or association or over-the-countermuket, a business day or (B)

ifthe shares ofCommon Stock are traded on any national orregional securities exchange or

4
association or over-the-counter market, a business day on which such relevant xcbange or

quotation system is scheduled to be open for business and on which the shares f Common

Stock (i) are not suspended from trading on any national orregional securities xcbange or

association orover-the-counter marlcet for any period or periods aggregating e balfhour or

longer; and (ii) have traded at least once on the national or regional securities change or

association or over-the-counter market that is the primaIy marlret for the tradin oftbe shares of

Common Stock.

"u.s. GAAP' means United States generally accepted accounting princi lea.

(u) with the consent ofboth the Company and the Wanantholder, by tendering in

cash, by certified or cashier's chcck payable to the order ofthe Company, or by wire 1raDSfer of

immediately available funds to an account designated by the Company.

S
Ifthe Wmantholder does not exercise this Warrant in its entirety, the

Wmantholder will be entitled to receive from the Company within a reasonable time, and in any

event not exceeding three business days, a new warrant in substantially identical form for the

purchase ofthat number ofShares equal to the d.iffe.rcnce between the number ofShares subject

to this Wanant and the number ofShares as to which this Wmant is so exercised.

Notwithstanding anything in this Warrant to the contraIy, the Warrantholder hereby

acknowledges and agrees that its exercise ofthis Warrant for Sharesis subject to the condition

that the Warrantholder will have first received any applicable Regulatory Approvals.

4. Issuance ofSham; AuthoriDtion: ListinK. Certificates for Shares issued upon

exercise ofthis Wurant will be issued in such name or names as the Warrantholder may

designate and will be delivered to such named Person or Persons within a reasonable time, not to

exceed three business days after the date on which this Warrant has been duly exercised in

accordance with the terms ofthis Warrant The Company hereby represents and wamm1s that

any Shares issued upon the exercise ofthis Warrant in accordance with the provisions ofSection

3 will be duly and validly authorized and issued, fully paid and nonassessable and me ftom all

taxes, licos and charges (other than liens or charges created by the Wammtholder, income and

fi:am:hise taxes incurred in connection with the exercise ofthe Wammt or taxes in respect ofany

transfer occurring contemporaneously therewith). The Company agrees that the Shares so issued

will be deemed to have been issued to the Wanantholder as ofthe close ofbusiness on the date

on which this Warrant and payment ofthe Exercise Price are delivered to the Company in

accordance with the terms ofthis Warrant, notwithstanding that the stock transfer books ofthe

Co~y may then be closed or certificatesrepresenting such Shares may not be actually

delivered on such date. The Company will at all timesreserve and keep available, out ofits

authorized but unissued COlDlDOn Stock, solely for the pmpose ofproviding for the exercise of

this Warrant, the aggregate nlDDber of shares ofCommon Stock then issuable upon exercise of

this Warrant at any time. The Company will (A) procure, at its sole expense, the listing'ofthe

Shares issuable upon exercise ofthis Wauant at any time, subject to issuance or notice of

issuance, on all principal stock exchanges on which the Common Stock is then listed ortraded

and (8) maintain sucl1listings ofsuch Shares at all times after issuance. The Company will use

reasonable best efforts to ensure that the Shares may be issued without violation ofany

applicable law orregulation or ofany requirement ofany securities exchange on which the

Shares are listed ortmded.

s. . NoFractional Shares or Scrip. No ftactional Shares orsaip representing

fractional Shares shaD be issued upon any exercise ofthia Warrant. In lieu ofany fracticmal

Share to which the Wamntholder would otherwise be entitled, the Wmantholder sbaIl be

entitled to receive a cash paymrnt equal to the Muket Price ofthe Common Stock: on the last

trading day preceding the date ofexercise less the pro-rated Exercise Price for such fractional

share. '

6. No Ri&hts as Stockholders: TransferBooks. This Warrant does not entitle the

Warrantho1der to any voting rights or other rights as a stockholder ofthe Company priorto the

date ofexercise hereof The Company will at no time close its transfer boob against transfer of

this Wamnt in any manner which inteIferes with the timely exercise ofthis Wmanl

6
7. Charges. Taxes and Expenses. Issuance ofcertificates for Shares to the

Warrantholder upon the exercise ofthis Wammt shall be made without charge to the

Warrantho1del' for any issue or transfer tax or other incidental expense in respect ofthe issuance

ofsuch certificates, all ofwhich taxes and expenses shall be paid by the Company.

8. Transfer!Assignment.

(A) Subject to compliance with clause (B) ofthis Section 8, this Wammt and all rights

hereunder ue transferable. in whole or in part, upon the books ofthe Company by the registered

holder hereofin person or by duly authorized attorney, and a new warrant shall be made and

delivered by the Company, ofthe same tenor and date as this Warrant but registered in the name

ofone or more transferees, upon surrender ofthis Wammt, duly endorsed, to the office or agency

ofthe Company described in Section 3. All expenses (other than stock transfer taxes) and other

charges payable in connection with the preparation, execution and delivery ofthe new wammts

pursuant to this Section 8 sball be paid by the Company.

(B) The transfer ofthe Warrant and the Shares issued upon exercise ofthe Warrant

are subject to the restrictions set forth in Section 4.4 ofthe Purchase Agreement Ifand for so

long as required by the Purchase Agreement, this Warrantshall contain the legends as set fi>rth in

Sections 4.2(a) and 4.2(b) ofthe Purchase Agreement

9. Exchauae and Registry ofWauant. This Warrant is exchangeable, upon the

surrender hereofby the Wamntho1der to the Company. for a new wamnt or warrants oflike

tenor and representing the right to purchase the same aggregate nmnber ofShares. The

Company shall maintain a registry showing the name and address ofthe Warrantholder as the

registered holder ofthis Warrant This Wariant may be surrendered for exchange or exercise in

accordance with its terms, at the office ofthe Company. and the Company shall be entitled to

rely in all respects, prior to written notice to the contraIy. upon such registry.

10. Loss. Theft. Destruction or Mutilation ofWammt. Upon receipt by the Company

ofevidence reasonably satisfactoryto it ofthe loss, theft, destruction ormutilation ofthis

Wammt, and in the case ofany such loss, theft or destruction, upon receipt ofa bond, indemnity

or security reasonably satisfactory to the Company, 01', in the case ofany such mutilation, upon

surrender and cancellation ofthis Warrant, the Company shall make and delivel'. in lieu ofsuch

lost, stolen, destro)'Cd 01' mutilatedWarrant, a new Warrant ofIike tenor and representing the

right to purchase the same aggregate number ofShares as provided for in such lost, stolen,

destroyed ormutilated Wmant

11. SalwdaD. Sundays. Holidays. etc. Ifthe last or appointed day for the taking of

any action orthe ""})iration ofany right required or granted herein shall not be a business day.

then such action may be taken orsuch right may be exercised on the next succPAWing day that is

a business day.

12. Rule I44lnfonnatioD. The Company covenants that it will use its reasonable best

efforts to timely file all reports and other documents required to be filed by it under the

Securities Act and the Exchange Act and the mIes and regulations promulgated by the SEC

thereunder (or, ifthe Company is not required to tiIc such reports. it will, upon the request ofany

7
Wammtholdcr, make publicly available such information as necessary to permitsales pursuant to

Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further

action as any Warrantholder may reasonably request, in each case to the extent required from

time to time to c:nable such holder to, ifpermitted by the t.eIms ofthis Warrant and the Purchase

Agreement, sell this Wanant without registration under the Securities Act within the limitation

oftbc exemptions provided by (A) Rule 144 under the Securities Act, as such mIe may be

amended from time to time, or (B) any successorrule or regulation'hereafter adopted by the

SEC. Upon the written request ofany Wammtholder, the Company will deliver to such

Warrantholder a written statement that it has complied with suc~ requirements.

13. Adjustments and OtherRights. The Exercise Price and the number ofShares

issuable upon exercise ofthis Warrant shall be subject to adjustment from time to time as

fullows; provided, that ifmore than one subsection ofthis Section 13 is applicable to a single

event, the subsection shall be applied that produces the largest adjustment and no single event

shall cause an adjustment under more than one subsection ofthis Section 13 so as to result in

duplication:

(A) Stock S,plita. Subdivisions. Reclassifications or Comhinntions. Ifthe Company

shall (i) declare and pay a dividend ormake a distribution on its Common Stock in shares of

Common Stock, (ii) subdivide or reclassify the outstanding shares ofCommon Stock into a

greater number ofshares, or (iii) combine or reclassify the outstanding shares ofCommon Stock

into a smaller number ofshares. the number ofShares issuable upon exercise ofthis Warrant at

the time ofthe record date for such dividend or distnbution orthe effective date ofsuch

subdivision, combination or reclassification shall be proportionately adjusted so that the

Warrantboldcr after such sbaI1 be entitled to purchase the number ofshares ofCommon

Stock which such holder would have owned or been entitled to receive in respect ofthe shares of

Common Stock subject to this Wmant after such date had this'Warrantbeen exaciscd

immediatelyprior to such date. In such event, the Exercise Price in effect at the time ofthc

record date for such dividend or distribution or the'effective date ofsuch subdivisioD,

combination orreclassification shall be adjusted to the number obtained by dividing (x) the

product of(1) the number ofShares, issuable upon the exercise ofthis Warrant before such

adjustment and (2) the Exercise Price in effect immediately prior to the record or effective date,

as the case may be, for the dividend, distribution, sulxtivision, combination orreclassification

giving rise to this adjumnent by (y) the new number ofShares issuable upon exercise ofthe

Wmant determined pursuant to the immediately preceding sentence.

(B) Certaip Issuances ofQmgnon Shares or ConvertJ.)le Securities. Until the earlier

of(i) the date on which the Original Wanantholder no longer holds this Wmant or any portion

thereofand (li) thetbird anniversary ofthe Issue Date, ifthe Company shall issue shares of

Common Stock (orrights or warrants or othersecurities exercisable or convertible into or

exchangeable (collectively, a "conversionj for shares ofCommon Stock) (collectively,

"convertible securitie.rj (other than in Permitted Tnmsadions (as defined below) or a

transaeUon to which subsection (A) ofthis Section 13 is applicable) without consideration or at a

consideration per share (or having a conversion price pershare) that is less than 90% ofthe

Market Price on the last trading day preceding the date oftbe agreement on pricing such shares

(or such convertible securities) then, in such event

8
(A) the number ofSbares issuable upon the exercise oftbis Warrant immediately

prior to the date ofthe agreement on pricing ofsuch shares (or ofsuch convertible

securities) (the'"Initial Number' shall be increased to the number ob1ained by

multiplying the Initial Number by a fraction (A) the nmnerator ofwhich shall be

the sum. of(x) the number ofsbares ofCommon Stock ofthe'Company

outstanding on such date and (y) the number ofadditional shares ofCommon

Stock issued (or into which convertible securities may be exercised or convert)

and (8) the denominator ofwhich shall be the sum. of(l) the number ofshares of

Common Stock outstanding on such date and (II) the number ofshares of

Common Stock which the aggregate consideration receivable by the Company for

the total number ofshares ofCommon Stock so issued (or mto which convertible

securities may be exercised or convert) would purchase at the Market Price on the

last trading day preceding the date ofthe agreement on pricing such shares (or

such convertJ."ble securities); and

(8)the Exercise Price payable upon exercise ofthe Wammt shall be adjusted by

multiplying such Exercise Price in effect immediately priorto the date ofthe

agreement on pricing of such shares (or ofsuch convert:l"ble secmities) by a

fraction, the numerator ofwhich shall be the number ofshares ofCommon Stock

issuable upon exercise ofthis Warrant prior to such date and the denominator of

which shall be the number ofshares ofCommon Stock issuable upon exercise of

this Warrant immediately after theadjustmcnt descnDed in clause (A) above.

For pwposes ofthe foregoing. the aggregate consideration receivable by the Company in

connection with the issuance ofsuch shares ofCommon Stock or convertible securities shall be

deemed to be equal to the sum. ofthe net offaing price (mcluding the Fair Market Value ofany

non-cash coDSideration and after deduction ofany related expenses payable to third parties) ofall

such securities plus the minimum aggregate amount, ifany, payable upon exercise or conversion

ofany such convertible securities into shaIes ofCommon Stock; and "Permitted Transactions"

sbal1 mean issuances (i) as consideration for or to fimd the acquisition ofbusinesses and/or

related assets, (n) in connection with employee benefit plans and compensation related

arrangements in the ordiDaJy course and consistent with past practice approved by the Board of

Directors. (iiI) in connection with a public orbroadly marketed offering and sale ofCODDDOn

Stock or convcrtl"ble sccuritK:s fur cash conducted by the Company or its affiliates pursuant to

registration under the Securities Act orRule 144A 1hcreundcr on a basis consistent with capital

raising transactions by compamble financial institutioDs and (iv) in connection with the exercise

ofpIeCll1ptive rights on terms existing as ofthe Issue Date. Any adjustment made to

this Section 13(B) sball become effective immediately upon the date ofsuch issuance.

(C) Other Distributions. In case the Company shall fix a record date for the making

ofa distribution to all holden ofshares ofits Common Stock of~ties, evidences of

indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends. dividends of

its Common Stock and other dividends or distn"butions referred to in Section 13(A), in each

such case, the Exercise Price in effect priorto such record date shall be reduced immediately

thereafter to the price determined by multiplying the Exercise Price in effect immediately prior to

the reduction by the quotient of(x) the Market Price ofthe Common Stock on the last trading

day precMing the first date on which the CollDl1On Stock trades regular way on the principal

9
national securities exchange on which the Common Stock is listed or admitted to trading without

the right to receive such distribution, minus the amount ofcash and/or the FairMmct Value of

the securities. evidences ofindebtedness, assets, rights or warrants to be so distributed in respect

ofone share ofCommon Stock (such amount and/or Fair Market Value. the "Per Share Fair

Marlcet Value" divided by (y) such Market Price on such date specified in clause (x); such

adjustmentshall be made successively whenever such a record date is fixed.. In such event, the

number ofSharesissuable upon the exercise ofthis Warrantshall be increased to the number

obtained by dividing (x) the product of(I) the number ofShares issuable upon the exercise of

this Warrant before such adjustment, and (2) the F.xacise Price in effect immediately prior to the

distribution giving rise to this adjustment by (y) the new Exercise Price determined in

accordance with the immediately preceding sentence. In the case ofadjustment for a cash

dividend that is, or is coincident with, a regular quarterly cash dividend, the Per Share Fair

Market Value would be reduced by the per share amount ofthe portion ofthe cash dividend that

would constitute an Ordinary Cash Divi~d In the event that such distribution is notso made,

the Exercise Price and the number of Shares issuable upon exercise ofthis Wamnt then in effect

shall be readjusted, effective as ofthe date when the Board ofDirectors determines not to

distribute such shares, evidences ofindebtedness, assets, rights, cash or wmants, as the case may

be, to the ExCl'cise Price that would then be in effect·and the numberofShares that would then

be issuable upon exercise ofthis Warrant ifsuch record date had not been fixed.

(D) Certain RemJ.n:hases ofCommon Stock. In case the Company effects a Pro Rata

Repurchase ofCommon Stock, then the Exercise Price sba11 be reduced to the price determined

by multiplying the Exercise Price in effect immediately prior to the Effective Date ofsuch Pro

Rata Repurchase by a fraction ofwhich the numerator shaD. be (i) the product of(x) the number

ofshares ofCommon Stock outstanding immediately before such Pro Rata Repurchase and (y)

the MaIket Price ofa share ofCommon Stock on the trading day immediately preceding the first

public announcement by the Company or any ofits Affiliates ofthe intent to effect such Pro Rata

Repurchase, minus (Ii) the aggregate purchase price ofthe Pro Rata Repurchase, and ofwhich

the denominator shall be the product of(i) the number ofshares ofCommon Stock outstanding

iJDIllt4iatelyprior to such Pro Rata Repurchase minus the number ofshares ofCommon S10ck so

repurclwed and (ii) the Market Price per share ofCommon Stock on the trading day

i1:nmcdiately ~ing the first public aunouncemcnt by the Company or any ofits AffiJiates of

the intent to effectsuch Pro Rata Repmchase. In such event, the nmnbcr ofshares ofCommon

Stock issuable upon the exercise ofthis Wammt shall be increased to the number obtained by

dividing (x) the p.roductof(l) the number ofShares issuable upon the exercise oftbis Wammt

before such adjustment, and (2) the Exercise Price in effect immediately prior to the Pro Rata

Repurchase giving rise 19 this adjustment by (y) the new Exercise Price determined in

accordance with the immediately preceding sentence. For the avoidance ofdoubt, no increase to

the Exercise Price or decrease in the number ofShares issuable upon exercise ofthis Warrant

sba11 be made pursuant to this Section 13(D).

(E) Business Combinations. In case ofany Business Combination orreclassification

ofCommon Stock (otherthan a reclassification ofCommon Stock referred to in Section 13(A»,

the Wmantho1der's right to receive Shares upon exercise ofthis Wamnt sba11 be converted into

the right to exercise this Warrant to acquire the number ofshares ofstock or othersecurities or

property (including cash) which the Common Stock issuable (at the time ofsuch Business

Combination orreclassification) upon exercise ofthis Warrant immediately priorto such

10
Business Combination or reclassification would have been entitled to receive upon

consummation ofsuch Business Combination or reclassification; and in any such case, if

necessary, the provisions set forth herein with respect to the rights and interes1s thereafter ofthe

Wanantholder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably

be, to the Wanantholder's right to exercise this Wanant in exchange for any shares ofstock or

othersecurities or property pmsuant to this paragraph. In determining the kind and amount of

stock, securities orthe property receivable upon exercise ofthis Wammt following the

consummation ofsuch Business Combination, ifthe holders ofCommon Stock have the right to

elect the kind or amount ofconsideration receivable upon consummation ofsuch Business

Combination, then the consideration that the Wammtholder shall be entitled to receive upon

exercise sball be deemed to be the types and amounts ofconsideration received by the majority

ofall holders ofthe shares of common stock that affirmatively make an election (or ofall such

holders ifnODe make an election).

(F) RDundini ofCalculations: Mjnimum Actiustments. All calculations under this

Section 13 shall be made to the nearest one-teIith (1/IOth) ofa cent or to the nearest onehundredth (111oath) ofa share, as the case may be. Any provision ofthis Section 13 to the

~ntrary notwithstanding, no adjustment in the Exercise Price or the number ofShares into

which this Wammt is exercisable shall be made ifthe amount ofsuch adjustment would be less

than $0.01 or one-tenth (1/IOth) ofa share ofCommon Stock, but any such amount shall be

carried forward and an adjustment with respect thereto shall be made at the time ofand together

with any subsequent adjustment which, together with such amount and any other am01Dlt or

amounts so carried forward, shall aggregate $0.01 or I/IOth ofa share ofCommon Stock, or

more.

(0) Timjne ofIssuance ofAdditional COPDPQP Stock Upon Certain Adjustments. In

any case in which the provisions ofthis Section 13 shall require that an adjustment shall become

effective immediately after a reconi date for an event, the Company may defer until the

occurrence ofsuch event (i) issuing to the Wamntholder ofthis Waaant exercised after such

record date and before the occurrence ofsuch event the additional shares ofCommon Stock

issuable upon such exercise by reason ofthe adjustment required by such event over and above

the shares ofCommon Stock issuable upon such exercise before giving effect to such adjustment

and (ii) paying to such Warrantholder any amount ofcash in lieu ofa fractional share of

Common Stock; provided, however, that the Company upon request shaD deliver to such

Warrantholder a due bill or other appropriate instrument evidencing such WarranthoIder's right

to receive such additional shares, and such cash, upon the occurrence ofthe event requiring such

adjustment.

(II) CQIII)1etion ofQna)ified Equity Offering. In the event the Company (or any

successor by Business Combination) completes one or more Qualified Equity Offerings on or

priorto December 31, 2009 thatresult in the Company (or any such succ.essor)receiving

aggregate gross proceeds ofnot less than 1()()llAt ofthe aggregate liquidation preference ofthe

Preferred Shares (and any preferred stock issued by any such successor to the Original

Warrantbolder underthe CPP), the ni1mbe:r ofshares ofCommon StockunderlyiDg the portion of

this Wamnt then held by the Original Warrantholdershall be thereafter reduced by a number of

shares ofCommon Stock equal to the product of(i) 0.5 and (ii) the nmnber ofshares underlying

11
the Wamnt on the Issue nate (adjusted to take into account all other theretofore made

adjustments pursuant to this Section 13).

(I) Other Events· For so long as the Original Warran1holdcr holds this Warrant or

any portion thereot; ifany event oeems as to which the prOvisiODS ofthis Section 13 are not

strictly applicable or, ifstrictly applicable, would not, in the good faith judgment ofthe Board of

Directors ofthe Company, Dirly and adequately protect the purchase rights ofthe Warrants in

accordance with the essential intent and principles ofsuch provisions, then the Board of

Directors shall make such adjustments in the application ofsuch provisions, in accordance with

such essential intent and principles, as shall be reasonably necessary, in the good tiUth opinion of

the Board ofDirectors, to protectsuch purchase rights as aforesaid. The Exercise Price or the

number ofShares into which this Warrant is exercisable shall not be acljusted in the event ofa

change in the par value ofthe Common Stock or a change in the jurisdiction ofincorporation of

the Company.

(J) StatLcrpent Reprding Adjustments. Whenever the Exercise Price orthe number of

Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13, the

Company sba11 forthwith tile at the principal office ofthe Company a statementshowing in

reasonable detail the &ets requiring such IUljustment and the Exercise Price that shall be in effect

and the number ofShares into which this Warrant shall be exercisable aftersuch adjustment, and

the Company shall also cause a copy ofsuch statement to be sent by mail, first class postage

prepaid, to each Wammtholder at the address appearing in the Company's records.

(K.) Notice ofAcijustment Eyent. In the event that the Company shall propose to take

any action ofthe type described in this Section 13 (but only ifthe action ofthe type described in

this Section 13 would result in an adjustment in the Exercise Price orthe number ofShares into

which this Warrant is exercisable or a change in the type ofsecurities or property to be delivered

upon exercise ofthis Warrant), the Company shall give notice to the Warrantholder, in the

IIl8DIlel" set forth in Section 13(J), which notice shall specify the record date, ifany, with respect

to any such action and the approximate date on which such action is to take place. Such notice

shall also set forth the facts with respect thereto as shall be fCiISOJl8bly DeCCSS8Iy to indicate the

effect on the Exercise Price and the number, kind or class ofshares or other securities or property

which sball be delivemble upon exercise ofthis Wammt In the case ofany action which would

require the fixing ofa record date, such notice shall be given at least 10 days prior to the date so

fixed, and in case ofall other action, such notice shall be given at least 1S days priorto the taking

ofsuch proposed action. Failure to give such notice, or any defect therein, shall not affect the

legality or validity ofany such action.

(L) Proceedings Prior to Any Action Requiring Adius1mcnl As a condition precedent

to the taking ofany action which would require an adjustment pursuant to this Section 13, the

Company shall take any action whieh may be nccessaty, including obtaining regulatory, New

Yolt StockExchange orstockholder approvals or exemptions, in order that the Company may

thereafter validly and legally issue as fully piid and nonassessable all shares ofCommon Stock

that the WamnthoJdcris entitled to receive upon exercise ofthis WlIITIIlt pursuant to this

Section 13.

12
(M) Adjustment Rules. Any adjustments pursuant to this Section 13 shall be made

successively whenever an event referred to herein shall occur. Ifan adjustment in Exercise Price

made hereunder would reduce the Exercise Price to an amount below par value ofthe Common

Stock, then such adjustment in Exercise Price made hereunder sball reduce the Exercise Price to

the par value ofthe Common Stock. . .

14. Exchange. At anytime following the date on which the shares ofCommon Stock

ofthe Company are no longer listed or admitted to trading on a ~nal securities exchange

(otherthan in connection with any Business Combination), the Original Wanantholder may

cause the Company to exchange all or a portion ofthis Wmant for an economic interest (to be

determined by the Original Warrantholder after consultation with the Company) ofthe Company

classified as permanent equity under U.S. GAAP having a value equal to the Fair Market Value

ofthc portion ofthe Wanant so exchanged. The Original Wamntholdershall calculate any Fair

Market Value required to be calculated pursuant to this Section 14, which sball not be subject to

the Appraisal Procedure.

1s. No JrnmUrment. The Company will not, by amendment ofits Charter or thtough

any reorgani7Jltion, transfer ofassets, consolidation, merger, dissolution, issue orsale of

Securities or any other voluntary action, avoid or seek to avoid the observance or performance of

any ofthe terms to be observed or performed hereunder by the Company, but will at all times in

good faith assist in the canying out ofall the provisions ofthis Wanant and in taldng ofall such

action as may be necessary or appJOPliate in order to protect the rights ofthe Wmantholdcr.

16. Governing Law. ThiJ Warrant will be &ovenaed by and construed. iD

accordaDce with the federal law ofthe UDited States ifaDd to the extent such law u . appBcable, aDd othenriae in accordance with the laws ofthe State ofNew York appUcable

to contracts made ud to be performed entirely within such State. Each ofthe ComJWlY

and the WllITaDtholder agrees Ca> to sublait to the exclusive jurisdictloa and veJlue ofthe

UDited States District Court for the District ofColumbia for uy action, suit or proceedh1l

arIaiD& out of or relatiq to tbJi Warrant or the transaetioaa contemplated hereby, and (b)

dlat notice may be served upoll the Company .tthe addresa in SeetioD 20 below and upon

the Warrantholder at the address for the Warraatholder set forth in the reaistrY

malntabaed by the Company punuant to SectioD 9 hereof. To the extent permitted by

appUcable law, each ofthe Company and the Warrutholder hereby unconditionally

waives trial by jury in any lepl action or proceeding relating to the Warrant or the

transactions contemplated hereby or thereby.

17. Binding Effect. This Warrantshall be binding upon any successors or assigns of

the Company.

18. Ammrlmeob • This Warrant may be amended and the observance ofany term of

this Warrant may be waived only with the written consent ofthe Company and the

Wanantholder.

19 . Prohibited Actions. The Company agrees that it will not take any action which

would entitle the Wammtholder to an adjustment ofthe Exercise Price ifthe total number of

shales ofCommon Stock issuable after such action upon exercise ofthis Warrant, together with

13
all shares ofCommon Stock then outstanding and all shares ofCommon Stock then issuable

upon the exercise ofall outstanding options, warrants, conversion and other rights, would exceed

the total number ofshares ofCOIlBDOn Stock then authorized by its Charter.

20. Notices. Any notice, request, instruction or other document to be given hereunder

by any party to the other will be in writing and will be deemed to have been duly given (a) on the

date ofdeliveIY ifdelivered personally, or by facsimile, upon confirmation ofreceipt, or (b) on

the second business day following the date ofdispatch ifdelivered by a recognized next day

couriersernce. All notices hereunder shall be delivered as set forth in Item 8 ofSchedule A

hereto, or pursuant to such other instructions as may be designated in writing by the party to

receive such notice.

21. Entire Agreement. This Warrant, the forms attached hereto and Schedule A

hereto (the terms ofwhich are incmporated by reference herein), and the Letter Agreement

(including all documents incoIpDrated therein), contain the entire agreement between the parties

with respect to the subject matter hereofand supersede all prior and contemporaneous

arrangements or undertakings with respect thereto.

[RemtJinder ofpage intentionally left blank}

14
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by

a duly authorized offieer.

Dated: October 28, 2008

Attest:

By:

[Signature Page to Warrant]
[Form ofNotice ofExercise)

Date: _

TO: JPMorgan Chase & Co.

RE: Election to Purchase Common Stock

The undersigned. pursuant to the provisions set forth in the attached Warrant, hereby

agrees to subscribe for and purchase the number ofshares ofthe Common Stock set forth below

covered by such Warrant The undersigned, in acconiance with Section 3 ofthe Warrant, hereby

agrees to pay the aggregate Exercise Price for such shares otCommon Stock in the manner set

forth below. A new warrant evidencing the remajnjng shares ofCOIlBDOn Stock covered by such

Warrant, but not yetsubscribed for and purchased, ifany, should be issued in the name set forth

below.

Nwnber ofShares ofCommon Stock _

Method ofPaymem ofExercise Price (note ifcashless exercise pursuant to Section 3(i) ofthe

Warrant or cash exercise pursuant to Section 3[ri) ofthe Warrant, with consent of1he Company

and the Warrantholder)

Aggregate Exercise Price:

HoJder: _

By:

Name: _

Title:
SCBEDULEA

Item!

Name: JPMorgan Chase & Co.

Corporate or other orgaDizational form: Corporation

Jurisdiction oforganization: Delaware

It!mlZ

Exercise Price: $42.42

Item 3

Issue Date: October 28, 2008

Amount oflast dividend declared prior to the Issue Date: $0.38

Date ofLetter Agreement between the Company and the United States Department ofthe

Treasury: October Z6, 2008

!!gj

Number ofshares ofCommon Stock: 88,401,697

!!ml1

Company's address:

JPMorgan Chase & Co.

270 Park Avenue

New Yorlc, New York 10017

1mJ

Notice information:

Ifto the Company:

JPMorgan Chase & Co.

270 Park Avenue

NewYoIk,NY 10017

Attention:

Facsimile: :.

with a copy to:

Sullivan & Cromwell LLP

125 Broad St.

New York, New York 10004

Attention: ~c. c..\e..e.
Facsimile:

Ifto the Wammtholder:

United States Department ofthe Treasury

1500 Pennsylvania Avenue, NW. Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and Finance)

Facsimile: (202) 622-1974

2
SULLNAN & CROMWELL LLP

TELEPHONE: 1-212-558-4000

FACSIMILE: 1-212-558-3588

WWW.SULLCROM.COM

United States Department ofthe Treasury,

1500 Pennsylvania Avenue, NW,

Washington, DC 20220.

Ladies and Gentlemen:

125[!jj~~

JV"ew o/tmtJ JVPl/IOOOIJ-2IJ98

LOS ANGELES. PALO ALTO. WASHINGTON. D.C.

FRANKFURT· LONDON • PARla

BEUINc; • HONG KONG • TOKYO

MELBOlJI'NE • SYDNEY

October 28, 2008

In connection with the purchase today by you pursuant to the Letter

Agreement and related Securities Purchase Agreement - Standard Terms, dated October

26, 2008, between JPMorgan Chase & Co., a Delaware corporation (the "Company"),

and you, of2,500,000 shares (the "Preferred Shares") ofthe Company's Fixed Rate

Cumulative Perpetual Preferred Stock, Series K, par value $1.00 per share and liquidation

preference of$10,000 per share, and a warrant (the "Warrant") to purchase initially up to

88,401,697 shares (the "Warrant Shares") ofthe Company's common stock, par value

$1.00 per share (the "Common Stock") we, as special counsel for the Company, have

examined such corporate records, certificates and other documents, and such questions of

law, as we have considered necessary or appropriate for the purposes ofthis opinion.

Upon the basis ofsuch examination, it is our opinion that:

(1) The Preferred Shares have been duly authorized and, when issued

and delivered against payment in accordance with the Purchase Agreement, will

be validly issued and fully paid and nonassessable.

(2) The Preferred Shares will not be issued in violation of any

preemptive rights provided for in the Company's Restated Certificate of

Incorporation, as amended to the date ofthis opinion, or under the General

Corporation Law ofthe State ofDelaware.

(3) The Preferred Shares will rank as to the payment of dividends and

the distribution of assets in the event of any dissolution, liquidation or winding up

ofthe Company equally with all other series or classes ofthe Company's

preferred stock issued and outstanding on October 28, 2008.

NY12S30:284202.7
United States Department ofthe Treasury -2-

(4) The Warrant has been duly authorized and, when executed and

delivered by the Company in accordance with the Purchase Agreement, will

constitute a valid and legally binding obligation ofthe Company enforceable

against the Company in accordance with its terms, subject to bankruptcy,

insolvency, fraudulent transfer, reorganization, moratorium and similar laws of

general applicability relating to or affecting creditors' rights and to general equity

principles.

(5) The Warrant Shares have been duly authorized and reserved for

issuance upon exercise ofthe Warrant and, when and to the extent issued upon

exercise in accordance with the terms ofthe Warrant, will be validly issued, fully

paid and non-assessable.

(6) The Company has the corporate power and authority to execute

and deliver the Purchase Agreement and the Warrant and to perform its

obligations thereunder (including the issuance ofthe Preferred Shares, the

Warrant and the Warrant Shares).

(7) The execution, delivery and performance by the Company ofthe

Purchase Agreement and the Warrant and the consummation ofthe transactions

contemplated thereby have been duly authorized by all necessary corporate action

on the part ofthe Company and no further corporate action is required on the part

ofthe Company.

(8) The Purchase Agreement, assuming due authorization, execution

and delivery by you; constitutes a valid and legally binding agreement ofthe

Company enforceable against the Company in accordance with its terms, subject

to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and

similar laws ofgeneral applicability relating to or affecting creditors' rights and to

general equity principles; provided, however, that we express no opinion with

respect to the provisions set forth in Section 4.5(g) ofthe Purchase Agreement or

the severability provisions ofthe Purchase Agreement insofar as Section 4. 5(g) is

concerned.

The foregoing opinion is limited to the laws ofthe State ofNew York and

the General Corporation Law ofthe State ofDelaware, and we are expressing no opinion

as to the effect ofthe laws of any other jurisdiction.

With respect to each ofthe matters set forth above, we have assumed, with

your approval, the due incorporation, valid existence and good standing ofthe Company.

We have relied as to certain matters upon information obtained from public officials,

officers ofthe Company and other sources believed by us to be responsible, and we have

assumed that the certificates for the Preferred Shares conform to the specimen thereof

NY12S30:284202.7
United States Department ofthe Treasury -3-

examined by us and have been duly countersigned by a transfer agent and duly registered

by a registrar ofthe Preferred Shares, that the certificates (if any) for the Warrant Shares

will conform to the specimen thereof examined by us and will be duly countersigned by a

transfer agent and duly registered by a registrar ofthe Common Stock (and ifthe Warrant

Shares are issued in uncertificated form, that they will be duly recorded by a transfer

agent and duly registered by a registrar thereof) and that the signatures on all documents

examined by us are genuine, assumptions which we have not independently verified.

This opinion is delivered by us to you as special counsel for the Company,

is solely for your benefit and may not be delivered or disclosed to ~y other person

without our prior written consent.

Very truly yours,

NY12S30:284202.7
JPMORGAN CHASE & CO.

Officer~s Certificate

October 28, 2008

This Officer's Certificate (this "Certificate") is delivered in connection with

Section 1.2(d)(ii) ofthe Securities Purchase Agreement- Standard Tenns (the "SPA")

incorporated into the Letter Agreement, dated as of October 26, 2008, between IPMorgan

Chase & Co. (the "Company") and the United States Department ofthe Treasury (the

"Investor') (the "LetterAgreement" and, together with the SPA, the "Agreemenf').

Capitalized terms used but not defined herein have the meaning ascribed to them

in the Agreement.

The undersigned duly authorized Senior Executive Officer ofthe Company

hereby certifies to the Investor, on behalf ofthe Company, that:

(A) the representations and warranties of the Company set forth in (x) Section

2.2(g) of the Agreement are true and correct in all respects as though made

on and as of the date hereof, (y) Sections 2.2(a) through (f) ofthe

Agreement are true and correct in all material respects as though made on

and as of the date hereof (other than representations and warranties that by

their terms speak as of another date, which representations and warranties

were true and correct in all material respects as of such other date) and (z)

Sections 2.2(h) through (v) ofthe Agreement (disregarding all

qualifications or limitations set forth in such representations and warranties

as to "materiality", "Company Material Adverse Effect" and words of

similar import) are true and correct as though made on and as ofthe date

hereof (other than representations and warranties that by their tenns speak

as of another date, which representations and warranties were true and

correct as ofsuch other date), except to the extent that the failure ofsuch

representations and warranties referred to in this clause (z) to be so true and

correct, individually or in the aggregate, does not have and would not

reasonably be expected to have a Company Material Adverse Effect; and

(B) the Company has performed in all material respects all obligations required

to be perfonned by it under the Agreement at or prior to the date hereof.

(Remainder ofpage intentionally left blank)

095331-0002-1 ID46-NYOJ.27S4681.4
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IN WITNESS WHEREOF, the undersigned has executed this Certificate on the

date fust written above.

COMPANY: JPMORGAN CHASE & CO.

By: G1J() (11_ NaJJ1e0JJt..~ClWIhJA&HTitle: Chl/i;F- RAJUcJAL OM'c.d-
JPMORGAN CHASE & CO.

Officer's Certificate

October 28, 2008

1bis Officer's Certificate (this "Certificate") is delivered in connection with

Section 1.2(d)(iv) ofthe Securities Purchase Agreement - Standard Terms (the "SPA")

incorporated into the Letter Agreement, dated as of October 26, 2008, between JPMorgan

Chase & Co. (the "Company") and the United States Department ofthe Treasury (the

"Investor') (the "LetterAgreement" and, together with the SPA, the "Agreemenf').

Capitalized terms used but not defmed herein have the meaning ascribed to them

in the Agreement.

The undersigned duly authorized Senior Executive Officer ofthe Company

hereby certifies to the Investor, on behalf ofthe Company, that the Company has effected

such changes to its compensation, bonus, incentive and other benefit plans, arrangements

and agreements (including golden parachute, severance and employment agreements)

with respect to its Senior Executive Officers (and to the extent necessary for such

changes to be legally enforceable, each of its Senior Executive Officers has duly

consented in writing to such changes), as may be necessary, during the period that the

Investor owns any debt or equity securities ofthe Company acquired pursuant to the

Agreement or the Warrant, in order to comply with Section 111(b) of the Emergency

Economic Stabilization Act of 2008 as implemented by guidance or regulation thereunder

that has been issued and is in effect as of the date hereof.

(Remainder ofpage intentionally left blank) .
IN WITNESS WHEREOF, the undersigned has executed this Certificate on the

date fIrst written above.

COMPANY: JPMORGAN CHASE & CO.

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By: