ex4-2.htm


    Exhibit
      4.2

     

    Capital
      Replacement Covenant, dated as of November 27, 2007 (this
“Covenant”), by Citigroup Inc., a Delaware corporation (the
“Corporation”), in favor of, and for the benefit of, each Covered
      Debtholder (as defined below).

     

    Recitals

     

    A.           On
      the date hereof, the Corporation is issuing $750,500,000 aggregate principal
      amount of its 7.875% Junior Subordinated Deferrable Interest Debentures due
      December 15, 2067 (the “Notes”) to Citigroup Capital XX, a Delaware
      statutory trust (the “Trust”).

     

    B.           On
      the date hereof, the Trust is issuing $750,000,000 aggregate liquidation amount
      of its 7.875% Enhanced Trust Preferred Securities (the “Enhanced TRUPS”®1
      and, together with the Notes, the
“Securities”).

     

    C.           This
      Covenant is the “Capital Replacement Covenant” referred to in the Prospectus,
      dated November 19, 2007, relating to the Enhanced TRUPS (the
“Prospectus”).

     

    D.           The
      Corporation is entering into this Covenant and disclosing the content of this
      Covenant in the manner provided below with the intent that the covenants
      provided for in this Covenant be enforceable by each Covered Debtholder and
      that
      the Corporation be estopped from disregarding the covenants in this Covenant,
      in
      each case to the fullest extent permitted by applicable law.

     

    E.           The
      Corporation acknowledges that reliance by each Covered Debtholder upon the
      covenants in this Covenant is reasonable and foreseeable by the Corporation
      and
      that, were the Corporation to disregard its covenants in this Covenant, each
      Covered Debtholder would have sustained an injury as a result of its reliance
      on
      such covenants.

     

    NOW,
      THEREFORE, the Corporation hereby covenants and agrees as
      follows in favor of and for the benefit of each Covered Debtholder.

     

    SECTION
      1. 
 Definitions.  Capitalized terms used in this Covenant
      (including the Recitals) have the meanings set forth in Schedule I
      hereto.

     

    SECTION
      2.  
Limitation on Repayment, Redemption and Purchase of
      Securities.  The Corporation hereby promises and covenants to,
      and for the benefit of, each Covered Debtholder that the Corporation shall
      not,
      and shall cause its Subsidiaries, including the Trust, not to, repay, redeem
      or
      purchase all or any part of the Securities before the Termination Date except
      to
      the extent that (a) the total amount repaid or the applicable redemption or
      purchase price is equal to or less than the sum of the following
      amounts:

    ______________

    
      
        	
                1

              	
                
                  TruPS®
                    is a
                    registered service mark of Citigroup Global Markets
                    Inc.  Citigroup Global Markets Inc. has applied for patent
                    protection for the Enhanced TruPS®
                    structure
                    described in the prospectus dated November 19, 2007 with respect
                    to the
                    Enhanced TruPS.

                

              


      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)
       the Applicable Percentage of the aggregate amount of (a) net cash
      proceeds received by the Corporation or its Subsidiaries from the sale of Common
      Stock and rights to acquire Common Stock to Persons that are not Subsidiaries
      of
      the Corporation, (b) the Market Value of any Common Stock that the
      Corporation or its Subsidiaries have delivered as consideration for property
      or
      assets in an arm’s length transaction and (c) the Market Value of any
      Common Stock that the Corporation and its Subsidiaries have issued to Persons
      other than the Corporation and its Subsidiaries in connection with the
      conversion of any convertible or exchangeable securities, other than securities
      for which the Corporation or any of its Subsidiaries has received equity credit
      from any NRSRO, in each case since the most recent Measurement Date (without
      double counting proceeds received in any prior Measurement Period);
      plus

     

    (ii) 
      the Applicable Percentage of the aggregate net cash proceeds received by the
      Corporation or its Subsidiaries since the most recent Measurement Date (without
      double counting proceeds received in any prior Measurement Period) from the
      sale
      of Mandatorily Convertible Preferred Stock, Debt Exchangeable for Common Equity,
      Debt Exchangeable for Preferred Equity and REIT Preferred Securities;
      plus

     

    (iii) 
      the Applicable Percentage of the aggregate amount of net cash proceeds received
      by the Corporation and its Subsidiaries since the most recent Measurement Date
      (without double counting proceeds received in any prior Measurement Period)
      from
      the sale of Qualifying Capital Securities;

     

    in
      each case to Persons that are not Subsidiaries of the Corporation and (b) the
      Corporation has obtained the prior concurrence or approval of the Federal
      Reserve (which includes the Board of Governors of the Federal Reserve System
      and
      the Federal Reserve Bank of New York, or its successor as the Corporation’s
      primary federal banking regulator) if such concurrence or approval is then
      required under the Federal Reserve’s capital rules.  For the avoidance
      of doubt, persons covered by the Corporation’s dividend reinvestment plan and
      employee benefit plans shall be deemed not to be Subsidiaries of the Corporation
      for purposes of this Section 2; provided, however, that the provisions
      of this Section 2 shall not apply to (i) the purchase of the Securities or
      any
      portion thereof in connection with the distribution thereof, (ii) purchases
      of the Securities or any portion thereof by Affiliates of the Corporation in
      connection with market-making or other secondary-market activities or (iii)
      any
      distribution of the Notes to holders of the Enhanced TruPS upon a dissolution
      of
      the Trust.  For purposes of this Covenant, the term “repay” includes
      the defeasance by the Corporation of the Notes as well as the satisfaction
      and
      discharge of its obligations under the Indenture with respect to the
      Notes.

     

    SECTION
      3.  
Covered Debt

     

    (a)       The
      Corporation represents and warrants that the Initial Covered Debt is Eligible
      Debt.

     

     (b)     
      On the Redesignation Date or during the 30-day period immediately preceding
      the
      Redesignation Date with respect to the then-effective Covered Debt,
      the

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Corporation
      shall identify the series of Eligible Debt that will become the Covered Debt
      on
      and after such Redesignation Date in accordance with the following
      procedures:

     

    (A)           the
      Corporation shall identify each series of its then-outstanding long-term
      indebtedness for money borrowed that is Eligible Debt;

     

    (B)           if
      only one series of the Corporation’s then-outstanding long-term indebtedness for
      money borrowed is Eligible Debt, such series shall become the Covered Debt
      on
      the related Redesignation Date;

     

    (C)           if
      the Corporation has more than one outstanding series of long-term indebtedness
      for money borrowed that is Eligible Debt, then the Corporation shall identify
      the series that has the latest occurring final maturity date as of the date
      the
      Corporation is applying the procedures in this Section 3(b) and such series
      shall become the Covered Debt on the related Redesignation Date;

     

    (D)           the
      series of outstanding long-term indebtedness for money borrowed that is
      determined to be Covered Debt pursuant to clause (B) or (C) above shall be
      the
      Covered Debt for purposes of this Covenant for the period commencing on the
      related Redesignation Date and continuing to, but not including, the
      Redesignation Date as of which a new series of outstanding long-term
      indebtedness is next determined to be the Covered Debt pursuant to the
      procedures set forth in this Section 3(b); and

     

    (E)           in
      connection with such identification of a new series of Covered Debt, the
      Corporation shall give the notice provided for in Section 4 within the time
      frame provided for in such section.

     

    (c)      The
      Corporation agrees that, if at any time the Covered Debt is held by a trust
      (for
      example, where the Covered Debt is part of an issuance of trust preferred
      securities), a holder of the securities issued by such trust may enforce this
      Covenant directly against the Corporation (including by instituting legal
      proceedings) as though such holder owned Covered Debt directly, and the holders
      of such trust securities shall be deemed to be Covered Debtholders for purposes
      of this Covenant for so long as the indebtedness held by such trust remains
      Covered Debt hereunder.

     

    SECTION
      4. 
 Notice.  In order to give effect to the intent of the
      Corporation described in Recital D, the Corporation covenants that:

     

    (a)       simultaneous
      with the execution of this Covenant or as soon as practicable after the date
      hereof, it shall (i) give notice to the Holders of the Initial Covered
      Debt, in the manner provided in the indenture relating to the Initial Covered
      Debt, of this Covenant and the rights granted to such Holders hereunder and
      (ii) file a copy of this Covenant with the Commission as an exhibit to a
      Current Report on Form 8-K under the Exchange Act;

     

    (b)       so
      long as the Corporation is a reporting company under the Exchange Act, the
      Corporation will include in each annual report filed with the Commission on
      Form
      10-K under the Exchange Act a description of the covenant set forth in
      Section 2 and identify

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    the
      series of long-term indebtedness for borrowed money that is Covered Debt as
      of
      the date such Form 10-K is filed with the Commission;

     

    (c)       within
      30 days after a series of the Corporation’s long-term indebtedness for money
      borrowed (1) becomes Covered Debt or (2) ceases to be Covered Debt, the
      Corporation will give notice of such occurrence to the holders of such long-term
      indebtedness for money borrowed in the manner provided for in the indenture,
      fiscal agency agreement or other contract or instrument under which such
      long-term indebtedness for money borrowed was issued and, thereafter, publicly
      announce such occurrence (a) in a Current Report on Form 8-K under the
      Exchange Act which either describes this Covenant and incorporates this Covenant
      by reference to a previously filed exhibit to a Current Report on Form 8-K
      or
      includes a copy of this Covenant, and (b) in the Corporation’s quarterly
      report on Form 10-Q or the Corporation’s annual report on Form 10-K,
      as applicable (or any successor to such forms), that immediately follows the
      public announcement;

     

    (d)       if,
      and only if, the Corporation ceases to be a reporting company under the Exchange
      Act, the Corporation will (1) post on its website or any other similar
      electronic platform generally available to the public the information otherwise
      required to be included in Exchange Act filings pursuant to clauses (b) and
      (c)
      of this Section 4 and (2), to the
      extent permitted by Bloomberg or any other similar third-party vendor that
      makes
      available to the marketplace information with respect to securities that are
      Covered Debt by posting such information on an electronically accessible screen
      (each an “Investor
      Screen”), cause a
      notation to be included on each such Investor Screen identifying the relevant
      series of indebtedness of the Corporation that is Covered Debt from time to
      time
      as Covered Debt for purposes of this Covenant and cause a hyperlink to a
      conformed copy of this Covenant to be included on the Investor Screen for each
      series of Covered Debt (but only so long as such series is Covered Debt);
      and

     

    (e)       promptly
      upon request by any Holder of Covered Debt, the Corporation will provide such
      Holder with a conformed copy of the executed version of this
      Covenant.

     

    SECTION
      5. 
 Term.  (a)  The obligations of the
      Corporation pursuant to this Covenant shall remain in full force and effect
      until the earliest date (the “Termination Date”) to occur of (1) the
      date, if any, on which the Holders of a majority by principal amount of the
      then-effective Covered Debt consent or agree, as evidenced by a resolution
      of a
      meeting of the Holders or otherwise in writing, to the termination of this
      Covenant, (2) the date on which the Corporation has no outstanding Eligible
      Subordinated Debt or Eligible Senior Debt (in each case without giving effect
      to
      the rating requirement in clause (ii) of the definition of each such term),
      (3)
November 27, 2047 or, if
      earlier, when all of the Securities have been paid, redeemed or purchased in
      full in compliance with this Capital Replacement Covenant, and (4) the
      occurrence of an event of default and acceleration under the indenture relating
      to the Notes.  From and after the Termination Date, the obligations of
      the Corporation pursuant to this Covenant shall be of no further force or
      effect.

     

    (b)           For
      purposes of Section 5(a)(1) and Section 6, the Holders whose consent or
      agreement is required to terminate the covenants in Section 2 or to amend or
      supplement

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    the
      obligations of the Corporation under this Covenant shall be the Holders of
      the
      then-effective Covered Debt as of a record date established by the Corporation
      that is not more than 45 days prior to the date on which the Corporation
      proposes that such termination, amendment or supplement becomes
      effective.

     

    SECTION
      6. 
 Amendments.  This Covenant may be amended or
      supplemented from time to time by a written instrument signed by the Corporation
      with the consent of the Holders of a majority by principal amount of the
      then-effective series of Covered Debt;  provided that this
      Covenant may be amended or supplemented from time to time by a written
      instrument signed only by the Corporation (and without the consent of the
      Holders of the then-effective series of Covered Debt) if (i) such amendment
      or supplement eliminates Common Stock, Debt Exchangeable for Common Stock,
      rights to acquire Common Stock, and/or Mandatorily Convertible Preferred Stock
      as a Replacement Capital Security, if after the date of this Covenant, the
      Corporation has been advised in writing by a nationally recognized independent
      accounting firm or an accounting standard or interpretive guidance of an
      existing accounting standard issued by an organization or regulator that has
      responsibility for establishing or interpreting accounting standards in the
      United States becomes effective such that there is more than an insubstantial
      risk that failure to eliminate Common Stock, Debt Exchangeable for Common Stock,
      rights to acquire Common Stock and/or Mandatorily Convertible Preferred Stock
      as
      a Replacement Capital Security would result in a reduction in the Corporation’s
      earnings per share as calculated in accordance with generally accepted
      accounting principles in the United States; (ii) such amendment or
      supplement is not adverse to the Holders of the then-effective series of Covered
      Debt and an officer of the Corporation has delivered a written certificate
      to
      the Holders of the then-effective Covered Debt in the manner provided for in
      the
      indenture, fiscal agency agreement or other instrument with respect to such
      Covered Debt stating that, in his or her determination, such amendment or
      supplement would not adversely affect the Holders of the then-effective Covered
      Debt; or (iii) the effect of such amendment or supplement is solely to
      impose additional restrictions on, or eliminate certain of, the types of
      securities qualifying as Replacement Capital Securities (other than the
      securities covered by clause (i) above), and an officer of the Corporation
      has delivered a written certificate to the Holders of the then-effective Covered
      Debt in the manner provided for in the indenture, fiscal agency agreement or
      other instrument with respect to such Covered Debt stating that, in his or
      her
      determination, such amendment or supplement would not adversely affect the
      Holders of the then-effective Covered Debt.  For the avoidance of
      doubt, an amendment or supplement that adds new types of Qualifying Capital
      Securities or modifies the requirements of the Qualifying Capital Securities
      described herein would not be adverse to the rights of the Holders of the
      then-effective Covered Debt if, following such amendment or supplement, this
      Covenant would satisfy clause (ii) of the definition of Qualifying Capital
      Replacement Covenant.

     

    SECTION
      7.  
Miscellaneous.  (a)  This Covenant shall be
      governed by and construed in accordance with the laws of the State of New
      York.

     

    (b)           This
      Covenant shall be binding upon the Corporation and its successors and assigns
      and shall inure to the benefit of the Covered Debtholders as they exist from
      time to time (it being understood and agreed by the Corporation that any Person
      who is a Covered Debtholder at the time such Person acquires or holds Covered
      Debt shall retain its status as a Covered

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Debtholder
      for so long as the series of long-term indebtedness for borrowed money owned
      by
      such Person is Covered Debt and, if such Person initiates a claim or proceeding
      to enforce its rights under this Covenant after the Corporation has violated
      its
      covenants in Section 2 and before the series of long-term indebtedness for
      money borrowed held by such Person is no longer Covered Debt, such Person’s
      rights under this Covenant shall not terminate by reason of such series of
      long-term indebtedness for money borrowed no longer being Covered
      Debt).

     

    (c)           All
      demands, notices, requests and other communications to the Corporation under
      this Covenant shall be deemed to have been duly given and made if in writing
      and
      (i) if served by personal delivery upon the Corporation, on the day so delivered
      (or, if such day is not a Business Day, the next succeeding Business Day),
      (ii)
      if delivered by registered post or certified mail, return receipt requested,
      or
      sent by a national or international courier service, on the date of receipt
      (or,
      if such date of receipt is not a Business Day, the next succeeding Business
      Day), or (iii) if sent by telecopier, on the day telecopied, or if not a
      Business Day, the next succeeding Business Day; provided that the
      telecopy is promptly confirmed by telephone confirmation thereof, in each case
      to the Corporation at the address set forth below, or at such other address
      as
      the Corporation may thereafter notify to Covered Debtholders or post on the
      Corporation’s website as the address for notices under this
      Covenant:

     

    Citigroup
      Inc.

    399
      Park Avenue

    New
      York, New York 10043

    (212)
      559-1000

     Attention:  Assistant
      Treasurer

     

    
 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     IN
      WITNESS WHEREOF, the Corporation has caused this Covenant to be
      executed by its duly authorized officer, as of the day and year first above
      written.

     

    
      	 	
              CITIGROUP
                INC.

            
	 	 	 	 
	 	
              By:

            	
              /s/
                Charles E. Wainhouse

            
	 	 	
              Name:

            	
              Charles
                E. Wainhouse

            
	 	 	
              Title:

            	
              Assistant
                Treasurer

            


    

    
 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    DEFINITIONS

     

    “Affiliate”
      of any specified Person means any other Person directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such specified Person.  For the purposes of this definition, “control”
when used with respect to any specified Person means the power to direct the
      management and policies of such Person, directly or indirectly, whether through
      the ownership of voting securities, by contract or otherwise; and the terms
      “controlling” and “controlled” have meanings correlative to the
      foregoing.

     

    “Alternative
      Payment Mechanism” means, with respect to any Qualifying Capital
      Securities, provisions in the related transaction documents requiring the
      Corporation to issue (or use Commercially Reasonable Efforts to issue) one
      or
      more types of APM Qualifying Securities raising eligible proceeds at least
      equal
      to the deferred Distributions on such Qualifying Capital Securities and apply
      the proceeds to pay unpaid Distributions on such Qualifying Capital Securities,
      commencing on the earlier of (x) the first Distribution Date after
      commencement of a deferral period on which the Corporation pays current
      Distributions on such Qualifying Capital Securities and (y) the fifth
      anniversary of the commencement of such deferral period, and that:

     

    (a)    define
      “eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism,
      the net proceeds (after underwriters’ or placement agents’ fees, commissions or
      discounts and other expenses relating to the issuance or sale of the relevant
      securities, where applicable, and including the fair market value of property
      received by the Corporation or any of its Subsidiaries as consideration for
      such
      APM Qualifying Securities) that the Corporation has received during the 180
      days
      prior to the related Distribution Date from the issuance of APM Qualifying
      Securities, up to the Preferred Cap in the case of APM Qualifying Securities
      that are Qualifying Preferred Stock or Mandatorily Convertible Preferred
      Stock;

     

    (b)    may
      permit the Corporation to pay current Distributions on any Distribution Date
      out
      of any source of funds but (x) require the Corporation to pay deferred
      Distributions only out of eligible proceeds and (y) prohibit the
      Corporation from paying deferred Distributions out of any source of funds other
      than eligible proceeds;

     

    (c)    if
      deferral of Distributions continues for more than one year, require the
      Corporation not to, and cause its Subsidiaries not to, redeem or purchase any
      of
      the Corporation’s securities ranking junior to or pari passu with any
      APM Qualifying Securities the proceeds of which were used to settle deferred
      interest during the relevant deferral period until at least one year after
      all
      deferred Distributions have been paid (a “Repurchase
      Restriction”);

     

    (d)    notwithstanding
      clause (b) of this definition, if the Federal Reserve disapproves the
      Corporation’s sale of APM Qualifying Securities or the use of the proceeds
      thereof to pay deferred Distributions, may (if the Corporation elects to so
      provide in the terms of such Qualifying Capital Securities) permit the
      Corporation to pay deferred Distributions from any source or, if the Federal
      Reserve does not disapprove the Corporation’s issuance and sale of APM
      Qualifying Securities but disapproves the use of the proceeds thereof to pay
      deferred Distributions, may (if the Corporation elects to so provide in the
      terms of such Qualifying Capital Securities) permit the Corporation to use
      such
      proceeds for other purposes and to

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    continue
      to defer Distributions, without a breach of its obligations under the
      transaction documents related to the Qualifying Capital Securities;

     

    (e)    may
      include a provision that, notwithstanding the APM Maximum Obligation and the
      Preferred Cap for purposes of paying deferred interest, limits the ability
      of
      the Corporation to sell shares of Common Stock, Qualifying Warrants, or
      Mandatorily Convertible Preferred Stock above an aggregate cap specified in
      the
      transaction documents (a “Share Cap”), subject to the Corporation’s
      agreement to use commercially reasonable efforts to increase the Share Cap
      (i) only to the extent that it can do so and simultaneously satisfy its
      future fixed or contingent obligations under other securities and derivative
      instruments that provide for settlement or payment in shares of Common Stock
      or
      (ii) if the Corporation cannot increase the Share Cap as contemplated in the
      preceding clause, by requesting its Board of Directors to adopt a resolution
      for
      shareholder vote at the next annual shareholders meeting occurring at least
      4
      months after the date on which the Share Cap has been reached to increase the
      number of shares of its authorized Common Stock for purposes of satisfying
      its
      obligations to pay deferred Distributions;

     

    (f)    limit
      the obligation of the Corporation to issue (or use Commercially Reasonable
      Efforts to issue) APM Qualifying Securities that are Common Stock and Qualifying
      Warrants to settle deferred Distributions pursuant to the Alternative Payment
      Mechanism either (A) during the first five years of any deferral period or
      (B) before an anniversary of the commencement of any deferral period that
      is not earlier than the fifth such anniversary and not later than the ninth
      such
      anniversary (as designated in the terms of such Qualifying Capital Securities)
      with respect to deferred Distributions attributable to the first five years
      of
      such deferral period, either:

     

    (i)    to
      an aggregate amount of such securities, the net proceeds from the issuance
      of
      which is equal to 2% of the product of the average of the Market Value of the
      Common Stock on the ten consecutive trading days ending on the fourth trading
      day immediately preceding the date of issuance multiplied by the total number
      of
      issued and outstanding shares of Common Stock as of the date of the
      Corporation’s most recent publicly available consolidated financial statements;
      or

     

    (ii)    to
      a number of shares of Common Stock and Qualifying Warrants, in the aggregate,
      not in excess of 2% of the outstanding number of shares of Common Stock as
      of
      the date of the Corporation’s most recent publicly available consolidated
      financial statements (the “APM Maximum Obligation”);

     

    (g)    limit
      the right of the Corporation to issue APM Qualifying Securities that are
      Qualifying Preferred Stock and Mandatorily Convertible Preferred Stock to settle
      deferred Distributions pursuant to the Alternative Payment Mechanism to an
      aggregate amount of Qualifying Preferred Stock and still-outstanding Mandatorily
      Convertible Preferred Stock issued pursuant to the Alternative Payment
      Mechanism, the net proceeds from the issuance of which with respect to all
      deferral periods is equal to 25% of the liquidation or outstanding principal
      amount of the securities that are the subject of the related Alternative Payment
      Mechanism (the “Preferred Cap”);

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (h)    in
      the case of Qualifying Capital Securities other than non-cumulative perpetual
      preferred stock, include a Bankruptcy Claim Limitation Provision;
      and

     

    (i)    may
      permit the Corporation, at its option, to provide that if it is involved in
      a
      merger, consolidation, amalgamation, binding share exchange or conveyance,
      transfer or lease of assets substantially as an entirety to any other person
      or
      a similar transaction (a “Business Combination”) where immediately
      after the consummation of the Business Combination more than 50% of the
      surviving or resulting entity’s voting stock is owned by the shareholders of the
      other party to the Business Combination, then clauses (a) through
      (c) of this definition will not apply to any deferral period that is
      terminated on the next Distribution Date following the date of consummation
      of
      the Business Combination (or if later, at any time within 90 days following
      the
      date of consummation of the Business Combination);

     

    provided
      (and it being understood) that:

     

    (a)    the
      Corporation shall not be obligated to issue (or use Commercially Reasonable
      Efforts to issue) APM Qualifying Securities for so long as a Market Disruption
      Event has occurred and is continuing;

     

    (b)    if,
      due to a Market Disruption Event or otherwise, the Corporation is able to raise
      and apply some, but not all, of the eligible proceeds necessary to pay all
      deferred Distributions on any Distribution Date, the Corporation will apply
      any
      available eligible proceeds to pay accrued and unpaid Distributions on the
      applicable Distribution Date in chronological order subject to the APM Maximum
      Obligation, Share Cap and Preferred Cap, as applicable; and

     

    (c)    if
      the Corporation has outstanding more than one class or series of securities
      under which it is obligated to sell a type of APM Qualifying Securities and
      apply some part of the proceeds to the payment of deferred Distributions, then
      on any date and for any period the amount of net proceeds received by the
      Corporation from those sales and available for payment of deferred Distributions
      on such securities shall be applied to such securities on a pro rata
      basis up to the APM Maximum Obligation, Share Cap and the Preferred Cap, as
      applicable, in proportion to the total amounts that are due on such securities,
      or on such other basis as the Federal Reserve may approve.

     

    “APM
      Maximum Obligation” has the meaning specified in clause (f) of the
      definition of Alternative Payment Mechanism.

     

    “APM
      Qualifying Securities” means, with respect to an Alternative Payment
      Mechanism, any Debt Exchangeable for Preferred Equity or any Mandatory Trigger
      Provision, one or more of the following (as designated in the transaction
      documents for any Qualifying Capital Securities that include an Alternative
      Payment Mechanism or a Mandatory Trigger Provision or for any Debt Exchangeable
      for Preferred Equity, as applicable):

     

    (a)    Common
      Stock;

     

    (b)    Qualifying
      Warrants;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)    Mandatorily
      Convertible Preferred Stock; or

     

    (d)    Qualifying
      Preferred Stock;

     

    provided
      (and it being understood) that (i) if the APM Qualifying Securities for any
      Alternative Payment Mechanism or Mandatory Trigger Provision or for any Debt
      Exchangeable for Preferred Equity include both Common Stock and Qualifying
      Warrants, such Alternative Payment Mechanism, Mandatory Trigger Provision or
      Debt Exchangeable for Preferred Equity may permit, but need not require, the
      Corporation to issue Qualifying Warrants and (ii) such Alternative Payment
      Mechanism, Mandatory Trigger Provision or Debt Exchangeable for Preferred Equity
      may permit, but need not require, the Corporation to issue Mandatorily
      Convertible Preferred Stock.

     

    “Applicable
      Percentage” means:

     

    (i),
      with respect to any sale of Common Stock or rights to acquire Common Stock
      (a)
      133% with respect to any repayment, redemption or purchase prior to November
      27,
      2017, (b) 200% with respect to any repayment, redemption or purchase on or
      after
      November 27, 2017 and prior to November 27, 2037, and (c) 400% on or after
      November 27, 2037;

     

    (ii)
      with respect to Debt Exchangeable
      for Common Equity, Debt Exchangeable for Preferred Equity, Mandatorily
      Convertible Preferred Stock, REIT Preferred Securities and Qualifying Capital
      Securities described under clause (i) of the definition of that term, 100%
      prior
      to November 27, 2017, 150%
      on or after November 27,
      2017 and prior to November
      27, 2037 and 300% on or after November 27, 2037;

     

    (iii)
      with respect to Qualifying Capital
      Securities described under clause (ii) of the definition of that term, 100%
      prior to the November 27,
      2037, and 200% on or after November 27, 2037;
      and

     

    (iv)
      with respect to Qualifying Capital
      Securities described under clause (iii) of the definition of that term,
      100%.

     

    “Appropriate
      Federal Banking Agency” means, as to a Depository Institution Subsidiary,
      the Federal bank regulatory agency or authority that is the “appropriate Federal
      banking agency” (within the meaning of 12 U.S.C. § 1813(q)) with respect to
      such Depository Institution Subsidiary.

     

    “Bankruptcy
      Claim Limitation Provision” means, with respect to any Qualifying Capital
      Securities that have an Alternative Payment Mechanism or a Mandatory Trigger
      Provision, provisions that, upon any liquidation, dissolution, winding up
      or reorganization or in connection with any insolvency, receivership or
      proceeding under any bankruptcy law with respect to the issuer, limit the claim
      of the holders of such securities to Distributions that accumulate during
      (A) any deferral period, in the case of securities that have an Alternative
      Payment Mechanism or (B) any period in which the issuer fails to satisfy
      one or more financial tests set forth in the terms of such securities or related
      transaction agreements, in the case of securities that have a Mandatory Trigger
      Provision, to:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (i)    in
      the case of Qualifying Capital Securities that have an Alternative Payment
      Mechanism or Mandatory Trigger Provision with respect to which the APM
      Qualifying Securities do not include Qualifying Preferred Stock or Mandatorily
      Convertible Preferred Stock, 25% of the stated or principal amount of such
      Qualifying Capital Securities then outstanding; and

     

    (ii)    in
      the case of any other Qualifying Capital Securities, an amount not in excess
      of
      the sum of (x) two years of accumulated and unpaid Distributions and
      (y) an amount equal to the excess, if any, of the Preferred Cap over the
      aggregate amount of net proceeds from the sale of Qualifying Preferred Stock
      and
      Mandatorily Convertible Preferred Stock that is still outstanding that the
      issuer has applied to pay such Distributions pursuant to the Alternative Payment
      Mechanism or the Mandatory Trigger Provision; provided that the holders
      of such Qualifying Capital Securities agree in the instrument governing such
      Qualifying Capital Securities that, to the extent the remaining claim exceeds
      the amount set forth in clause (x), the amount they receive in respect of such
      excess shall not exceed the amount they would have received if the claim for
      such excess ranked pari passu with the interests of the holders, if
      any, of Qualifying Preferred Stock.

     

    In
      the case of any cumulative preferred stock that includes a Bankruptcy Claim
      Limitation Provision, such provision shall limit the liquidation preference
      of
      such cumulative preferred stock to (a) its stated amount plus (b) an amount
      in
      respect of accumulated and unpaid dividends not in excess of the amount set
      forth in clause (i) or (ii) above, as applicable.

     

    “Business
      Day” means any day that is not a Saturday or Sunday and that is not day on
      which banking institutions generally in the City of New York are authorized
      or
      obligated by law or executive order to be closed.

     

    “Commercially
      Reasonable Efforts” means, for purposes of selling APM Qualifying
      Securities, commercially reasonable efforts to complete the offer and sale
      of
      APM Qualifying Securities to third parties that are not Subsidiaries of the
      Corporation in public offerings or private placements. The Corporation shall
      not
      be considered to have made Commercially Reasonable Efforts to effect a sale
      of
      APM Qualifying Securities if it determines not to pursue or complete such sale
      solely due to pricing, coupon, dividend rate or dilution
      considerations.

     

    “Commission”
      means the United States Securities and Exchange Commission.

     

    “Common
      Stock” means common stock of the Corporation (including treasury shares of
      common stock and shares of common stock sold pursuant to the Corporation’s
      dividend reinvestment plan and employee benefit plans).

     

    “Corporation”
      means the Person named as the “Corporation” in the first paragraph of this
      Covenant, until a successor corporation shall have become such, and thereafter
      “Corporation” shall mean such successor corporation.

     

    “Covenant”
      has the meaning specified in the introduction to this instrument.

     

    “Covered
      Debt” means (i) at the date of this Covenant and continuing to, but not
      including, the first Redesignation Date, the Initial Covered Debt and
      (ii) thereafter, commencing with each Redesignation Date and continuing to
      but not including the next succeeding

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Redesignation
      Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered
      Debt for such period.

     

    “Covered
      Debtholder” means each Person (whether a Holder or a beneficial owner
      holding through a participant in a clearing agency) that buys or holds long-term
      indebtedness for money borrowed of the Corporation during the period that such
      long-term indebtedness for money borrowed is Covered Debt.

     

    “Debt
      Exchangeable for Common Equity” means a security or combination of
      securities (together in this definition, “such securities”)
      that:

     

    (i)    gives
      the holder a beneficial interest in (a)  a stock purchase contract, that
      obligates the holder to purchase Common Stock, that will be settled in three
      years or less, with the number of shares of Common Stock purchasable pursuant
      to
      such stock purchase contract to be within a range established at the time of
      issuance of the subordinated debt securities referred to in clause (b), subject
      to customary anti-dilution adjustments and (b) subordinated debt securities
      of the Corporation or one of its Subsidiaries that are non-callable prior to
      the
      settlement date of the stock purchase contract;

     

    (ii)    provides
      that the holders directly or indirectly grant the Corporation a security
      interest in such subordinated debt securities and their proceeds (including
      any
      substitute collateral permitted under the transaction documents) to secure
      the
      holders’ direct or indirect obligation to purchase Common Stock pursuant to such
      stock purchase contracts;

     

    (iii)    includes
      a remarketing feature pursuant to which the subordinated debt securities are
      remarketed to new investors commencing not later than the last distribution
      date
      that is at least one month prior to the settlement date of the stock purchase
      contract; and

     

    (iv)    provides
      for the proceeds raised in the remarketing to be used to purchase Common Stock
      under the stock purchase contracts and, if there has not been a successful
      remarketing of the subordinated debt securities by the settlement date of the
      stock purchase contract, provides that the stock purchase contracts will be
      settled by the Corporation exercising its remedies as a secured party with
      respect to the subordinated debt securities or other collateral directly or
      indirectly pledged by holders in the Debt Exchangeable for Common
      Equity.

     

    “Debt
      Exchangeable for Preferred Equity” means a security or combination of
      securities (together in this definition, “such securities”)
      that:

     

    (i)    gives
      the holder a beneficial interest in (a) subordinated debt securities of the
      Corporation or one of its Subsidiaries (in this definition, the “issuer”)
      permitting the issuer to defer Distributions in whole or in part on such
      securities for one or more Distribution Periods of up to at least seven years
      without any remedies other than Permitted Remedies and that are the most junior
      subordinated debt of the issuer (or rank pari passu with the most
      junior subordinated debt of the issuer) and (b) a stock purchase contract
      that obligates the holder to acquire a beneficial interest in Qualifying
      Preferred Stock;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (ii)    provides
      that the holders directly or indirectly grant to the issuer a security interest
      in such subordinated debt securities and their proceeds (including any
      substitute collateral permitted under the transaction documents) to secure
      the
      holders’ direct or indirect obligation to purchase Qualifying Preferred Stock
      pursuant to such stock purchase contract;

     

    (iii)    includes
      a remarketing feature pursuant to which the subordinated debt of the issuer
      is
      remarketed to new investors commencing not later than the first Distribution
      Date that is at least five years after the date of issuance of such securities
      or earlier in the event of an early settlement event based on (a) the
      capital ratios of the Corporation, (b) the capital ratios of the
      Corporation as anticipated by the Federal Reserve, or (c) the dissolution
      of the issuer of such Debt Exchangeable for Preferred Equity;

     

    (iv)    provides
      for the proceeds raised in the remarketing to be used to purchase Qualifying
      Preferred Stock under the stock purchase contracts and, if there has not been
      a
      successful remarketing by the first Distribution Date that is six years after
      the date of issuance of such securities, provides that the stock purchase
      contracts will be settled by the Corporation exercising its rights as a secured
      creditor with respect to the subordinated debt securities or other collateral
      directly or indirectly pledged by investors in the Debt Exchangeable for
      Preferred Equity;

     

    (v)    includes
      a Qualifying Capital Replacement Covenant that will apply to such securities
      and
      to any Qualifying Preferred Stock issued pursuant to the stock purchase
      contracts; provided that such Qualifying Capital Replacement Covenant
      will not include Debt Exchangeable for Common Equity or Debt Exchangeable for
      Preferred Equity as “Replacement Capital Securities”; and

     

    (vi)    after
      the issuance of such Qualifying Preferred Stock, provides the holder with a
      beneficial interest in such Qualifying Preferred Stock.

     

    “Depository
      Institution Subsidiary” means any Subsidiary of the Corporation that is a
      depository institution within the meaning of 12 C.F.R. § 204.2(m).

     

    “Distribution
      Date” means, as to any Qualifying Capital Securities or Debt Exchangeable
      for Preferred Equity, the dates on which Distributions on such securities are
      scheduled to be made.

     

    “Distribution
      Period” means, as to any Qualifying Capital Securities, each period from
      and including a Distribution Date for such securities to but not including
      the
      next succeeding Distribution Date for such securities.

     

    “Distributions”
      means, as to any Qualifying Capital Securities or Debt Exchangeable for
      Preferred Equity, dividends, interest or other income distributions to the
      holders thereof that are not the Corporation or Subsidiaries of the
      Corporation.

     

    “Eligible
      Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible
      Subordinated Debt is then outstanding, Eligible Senior Debt.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Eligible
      Senior Debt” means, at any time in respect of any issuer, each series of
      outstanding unsecured long-term indebtedness for money borrowed of such issuer
      that:

     

    (i)      upon
      a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks most
      senior among the issuer’s then outstanding classes of unsecured indebtedness for
      money borrowed;

     

    (ii)      is
      then assigned a rating by at least one NRSRO (provided that this clause
      shall apply on a Redesignation Date only if on such date the issuer has
      outstanding senior long-term indebtedness for money borrowed that satisfies
      the
      requirements of clauses (i), (iii) and (iv) that is then assigned a rating
      by at
      least one NRSRO);

     

    (iii)      has
      an outstanding principal amount of not less than $100,000,000; and

     

    (iv)      was
      issued through or with the assistance of a commercial or investment banking
      firm
      or firms acting as underwriters, initial purchasers or placement or distribution
      agents.

     

    For
      purposes of this definition as applied to securities with a CUSIP number, each
      issuance of long-term indebtedness for money borrowed that has (or, if such
      indebtedness is held by a trust or other intermediate entity established
      directly or indirectly by the issuer, the securities of such intermediate entity
      that have) a separate CUSIP number shall be deemed to be a series of the
      issuer’s long-term indebtedness for money borrowed that is separate from each
      other series of such indebtedness.

     

    “Eligible
      Subordinated Debt” means, at any time in respect of any issuer, each series
      of the issuer’s then-outstanding unsecured long-term indebtedness for money
      borrowed that:

     

    (i)      upon
      a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks
      subordinate to the issuer’s then-outstanding most senior series of unsecured
      indebtedness for money borrowed and ranks senior to the Notes;

     

    (ii)      is
      then assigned a rating by at least one NRSRO (provided that this clause
      (ii) shall apply on a Redesignation Date only if on such date the issuer has
      outstanding subordinated long-term indebtedness for money borrowed that
      satisfies the requirements in clauses (i), (iii) and (iv) that is then assigned
      a rating by at least one NRSRO);

     

    (iii)      has
      an outstanding principal amount of not less than $100,000,000; and

     

    (iv)      was
      issued through or with the assistance of a commercial or investment banking
      firm
      or firms acting as underwriters, initial purchasers or placement or distribution
      agents.

     

    For
      purposes of this definition as applied to securities with a CUSIP number, each
      issuance of long-term indebtedness for money borrowed that has (or, if such
      indebtedness is held by a trust or other intermediate entity established
      directly or indirectly by the issuer, the securities of such intermediate entity
      that have) a separate CUSIP number shall be deemed to be a series of
      the

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    issuer’s
      long-term indebtedness for money borrowed that is separate from each other
      series of such indebtedness.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934 or any statute successor
      thereto, in each case as amended from time to time.

     

    “Federal
      Reserve” means the Board of Governors of the Federal Reserve System and any
      regional Federal Reserve Bank in which the Corporation owns stock, or their
      successor as the Corporation’s primary federal banking regulator, or the staff
      thereof.

     

    “Holder”
      means, as to the Covered Debt then in effect, each holder of such Covered Debt
      as reflected on the securities register maintained by or on behalf of the
      Corporation with respect to such Covered Debt and each beneficial owner holder
      through a participant in a clearing agency.

     

    “Initial
      Covered Debt” means the Corporation’s junior subordinated debt securities
      underlying the 6.00% Capital Securities (TruPS®) issued
      by Citigroup
      Capital XI (CUSIP: 17307Q205).

     

    “Intent-Based
      Replacement Disclosure” means, as to any Qualifying Preferred Stock or
      Qualifying Capital Securities, that the issuer has publicly stated its
      intention, either in the prospectus or other offering document under which
      such
      securities were initially offered for sale or in filings with the Commission
      made by the issuer under the Exchange Act prior to or contemporaneously with
      the
      issuance of such securities, that to the extent that the Qualifying Preferred
      Stock or Qualifying Capital Securities provide the issuer with rating agency
      equity credit at the time of repayment at maturity or earlier redemption or
      defeasance, the issuer will repay, redeem or purchase, and will cause that
      its
      subsidiaries shall purchase, such securities only with the proceeds of
      securities that have equity-like characteristics at the time of repayment,
      redemption or purchase that are the same as or more equity-like than the
      securities then being redeemed or purchased, raised within 180 days prior to
      the
      applicable repayment, redemption or purchase date.  Notwithstanding
      the use of the term “Intent-Based Replacement Disclosure” in the definitions of
“Qualifying Capital Securities” and “Qualifying Preferred Stock,” the
      requirement in each such definition that a particular security or the related
      transaction documents include Intent-Based Replacement Disclosure shall be
      disregarded and given no force or effect for so long as the Corporation is
      a
      financial holding company or a bank holding company within the meaning of the
      Bank Holding Company Act of 1956, as amended.

     

    “Mandatorily
      Convertible Preferred Stock” means cumulative preferred stock with
      (a) no prepayment obligation on the part of the issuer thereof, whether at
      the election of the holders or otherwise and (b) a requirement that the
      preferred stock convert into Common Stock of the Corporation within three years
      from the date of its issuance at a conversion ratio within a range established
      at the time of issuance of the preferred stock, subject to customary
      anti-dilution adjustments.

     

    “Mandatory
      Trigger Provision” means, as to any Qualifying Capital Securities,
      provisions in the terms thereof or of the related transaction agreements
      that:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (a)    require
      the issuer of such securities to make payment of Distributions on such
      securities only pursuant to the issue and sale of APM Qualifying Securities
      within two years of a failure of the issuer to satisfy one or more financial
      tests set forth in the terms of such securities or related transaction
      agreements, in amount such that the net proceeds of such sale are at least
      equal
      to the amount of unpaid Distributions on such securities (including without
      limitation all deferred and accumulated amounts) and require the application
      of
      the net proceeds of such sale to pay such unpaid Distributions, provided
that (i) if the Mandatory Trigger Provision does not require the
      issuance and sale within one year of such failure, the amount of Common Stock
      and/or Qualifying Warrants the net proceeds of which the issuer must apply
      to
      pay such Distributions pursuant to such provision may not exceed the APM Maximum
      Obligation and (ii) the amount of Qualifying Preferred Stock and still
      outstanding Mandatorily Convertible Preferred Stock the net proceeds of which
      the issuer may apply to pay such Distributions pursuant to such provision may
      not exceed the Preferred Cap;

     

    (b)    if
      the provisions described in clause (a) do not require such issuance and
      sale within one year of such failure, include a Repurchase
      Restriction;

     

    (c)     prohibit
      the issuer of such securities from redeeming or purchasing any of its securities
      ranking upon the liquidation, dissolution or winding up of the Corporation
      junior to or pari passu with any APM Qualifying Securities the proceeds
      of which were used to settle deferred interest during the relevant deferral
      period prior to the date six months after the issuer applies the net proceeds
      of
      the sales described in clause (a) above to pay such deferred Distributions
      in
      full;

     

    (d)    include
      a Bankruptcy Claim Limitation Provision; and

     

    (e)    may
      permit the issuer, at its option, to provide that if it is involved in a
      Business Combination where immediately after the consummation of the Business
      Combination more than 50% of the surviving or resulting entity’s voting stock is
      owned by the shareholders of the other party to the Business Combination, then
      clauses (a) , (b) and (c) of this definition will not apply to any
      deferral period that is terminated on the next Distribution Date following
      the
      date of consummation of the Business Combination (or, if later, at any time
      within 90 days following the date of such consummation);

     

    provided
      (and it being understood) that:

     

    (i)    the
      issuer will not be obligated to issue (or use Commercially Reasonable Efforts
      to
      issue) APM Qualifying Securities for so long as a Market Disruption Event has
      occurred and is continuing;

     

    (ii)    if,
      due to a Market Disruption Event or otherwise, the issuer is able to raise
      and
      apply some, but not all, of the eligible proceeds necessary to pay all deferred
      Distributions on any Distribution Date, the issuer will apply any available
      eligible proceeds to pay accrued and unpaid Distributions on the applicable
      Distribution Date in chronological order subject to the APM Maximum Obligation
      and Preferred Cap, as applicable; and

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (iii)    if
      the issuer has outstanding more than one class or series of securities under
      which it is obligated to sell a type of APM Qualifying Securities and applies
      some part of the proceeds to the payment of deferred Distributions, then on
      any
      date and for any period the amount of net proceeds received by the issuer from
      those sales and available for payment of deferred Distributions on such
      securities shall be applied to such securities on a pro rata basis up
      to the APM Maximum Obligation and the Preferred Cap, as applicable, in
      proportion to the total amounts that are due on such securities.

     

    No
      remedy other than Permitted Remedies will arise by the terms of such securities
      or related transaction agreements in favor of the holders of such Qualifying
      Capital Securities as a result of the issuer’s failure to pay Distributions
      because of the Mandatory Trigger Provision until Distributions have been
      deferred for one or more Distribution Periods that total together at least
      ten
      years.

     

    “Market
      Disruption Event” shall have the meaning given to it
      in the indenture relating to the relevant securities.

     

    “Market
      Value” with respect to Common Stock means, on any date, the closing sale
      price per share of Common Stock (or, if no closing sale price is reported,
      the
      average of the bid and ask prices or, if more than one in either case, the
      average of the average bid and the average ask prices) on that date as reported
      in composite transactions by the New York Stock Exchange or, if the Common
      Stock
      is not then listed on the New York Stock Exchange, as reported by the principal
      U.S. securities exchange on which the Common Stock is traded or quoted; if
      the
      Common Stock is not either listed or quoted on any U.S. securities exchange
      on
      the relevant date, the market price will be the average of the mid-point of
      the
      bid and ask prices for the Common Stock on the relevant date submitted by at
      least three nationally recognized independent investment banking firms selected
      by the Corporation for this purpose.

     

    “Measurement
      Date” means, with respect to any repayment, redemption or purchase of
      junior subordinated debt securities or capital securities, the date six months
      prior to delivery of notice of such repayment or redemption or the date of
      such
      purchase.

     

    “Measurement
      Period” means the period from a Measurement Date to the related notice date
      or purchase date.  Measurement Periods cannot run
      concurrently.

     

    “Non-Cumulative”
      means, with respect to any Qualifying Capital Securities, that the issuer may
      elect not to make any number of periodic Distributions without any remedy
      arising under the terms of the securities or related agreements in favor of
      the
      holders, other than one or more Permitted Remedies.

     

    “No
      Payment Provision” means a provision or provisions in the transaction
      documents for securities (referred to in this definition as “such
      securities”) that include the following:

     

    (a)    an
      Alternative Payment Mechanism; and

     

    (b)    an
      Optional Deferral Provision modified and supplemented from the general
      definition of that term to provide that the issuer of such securities may,
      in
      its sole discretion, or

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (if
      the issuer elects to so provide in the terms of such securities) shall in
      response to a directive or order from, or memorandum of understanding with,
      the
      Federal Reserve, defer in whole or in part payment of Distributions on such
      securities for one or more consecutive Distribution Periods of up to five years
      or, if a Market Disruption Event has occurred and is continuing, ten years,
      without any remedy other than Permitted Remedies and the obligations (and
      limitations on obligations) described in the definition of “Alternative Payment
      Mechanism” applying.

     

    “NRSRO”
      means a nationally recognized statistical rating organization within the meaning
      of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act.

     

    “Optional
      Deferral Provision” means, as to any Qualifying Capital Securities, a
      provision in the terms thereof or of the related transaction agreements to
      the
      effect that:

     

    (a)      (i) the
      issuer of such Qualifying Capital Securities may, in its sole discretion, or
      shall in response to a directive or order from, or memorandum of understanding
      with, the Federal Reserve, defer in whole or in part payment of Distributions
      on
      such securities for one or more consecutive Distribution Periods of up to five
      years or, if a Market Disruption Event is continuing, ten years, without any
      remedy other than Permitted Remedies and (ii) such securities are subject
      to an Alternative Payment Mechanism (provided that such Alternative
      Payment Mechanism need not apply during the first five years of any deferral
      period and need not include an APM Maximum Obligation, Preferred Cap, Bankruptcy
      Claim Limitation Provision or Repurchase Restriction); or

     

    (b)      the
      issuer of such Qualifying Capital Securities may, in its sole discretion, or
      shall in response to a directive or order from, or memorandum of understanding
      with, the Federal Reserve, defer or skip in whole or in part payment of
      Distributions on such securities for one or more consecutive Distribution
      Periods of up to at least ten years without any remedy other than Permitted
      Remedies.

     

    “Permitted
      Remedies” means, as to any security or combination of securities, one or
      more of the following remedies:

     

    (a)    rights
      in favor of the holders of such securities permitting such holders to elect
      one
      or more directors of the issuer (including any such rights required by the
      listing requirements of any stock or securities exchange on which such
      securities may be listed or traded); and

     

    (b)    complete
      or partial prohibitions on the issuer or its subsidiaries paying Distributions
      on or repurchasing common stock or other securities that rank as to
      Distributions paripassu with or junior to such securities for
      so long as distributions on such securities, including deferred distributions,
      have not been paid in full or to such lesser extent as may be specified in
      the
      terms of such securities.

     

    “Person”
      means any individual, corporation, partnership, joint venture, trust, limited
      liability company or corporation, unincorporated organization or government
      or
      any agency or political subdivision thereof.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “Preferred
      Cap” has the meaning specified in clause (g) of the definition of
      Alternative Payment Mechanism.

     

    “Qualifying
      Capital Securities” means securities or combinations of securities (other
      than securities covered by paragraphs (i) and (ii) of Section 2)
      that, in the determination of the Corporation’s Board of Directors, acting in
      its reasonable discretion and reasonably construing the definitions and other
      terms of this Covenant, meet one of the following criteria:

     

    (i)    in
      connection with any repayment, redemption or purchase of Securities prior to
      November 27,
      2017:

     

    (A)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon the liquidation, dissolution or
      winding up of the Corporation, (2) have no maturity or a maturity of at
      least 60 years and (3) either:

     

    (x)    (I)
      have a No Payment Provision or are Non-Cumulative and (II) are subject to a
      Qualifying Capital Replacement Covenant, or

     

    (y)    have
      an Optional Deferral Provision and a Mandatory Trigger Provision and are subject
      to Intent-Based Replacement Disclosure;

     

    (B)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon the liquidation, dissolution or
      winding up of the Corporation, (2) have no maturity or a maturity of at
      least 40 years and are subject to a Qualifying Capital Replacement Covenant
      and
      (3) have an Optional Deferral Provision and a Mandatory Trigger Provision;
      or

     

    (C)    Qualifying
      Preferred Stock; or

     

    (ii)    in
      connection with any repayment, redemption or purchase of Securities at any
      time
      on or after November 27,
      2017 and prior to November
      27, 2037:

     

    (A)    securities
      described under clause (i) of this definition;

     

    (B)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon a liquidation, dissolution or
      winding up of the Corporation, (2) have no maturity or a maturity of at
      least 60 years and (3) either:

     

    (x)    are
      subject to a Qualifying Capital Replacement Covenant and have an Optional
      Deferral Provision, or

     

    (y)    (I) are
      subject to Intent-Based Replacement Disclosure and (II) have a No Payment
      Provision or are Non-Cumulative;

     

    (C)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon a liquidation, dissolution or
      winding up of the Corporation, (2) have no maturity or a maturity of at
      least 40 years and (3) either:

     

    (x)    (I) have
      a No Payment Provision or are Non-Cumulative and (II) are subject to a
      Qualifying Capital Replacement Covenant, or

     

    (y)    have
      an Optional Deferral Provision and a Mandatory Trigger Provision and are subject
      to Intent-Based Replacement Disclosure;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (D)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon a liquidation, dissolution or
      winding-up of the Corporation, (2) have no maturity or a maturity of at
      least 25 years and are subject to a Qualifying Capital Replacement Covenant
      (3) have an Optional Deferral Provision and a Mandatory Trigger Provision;
      or

     

    (E)    securities
      issued by the Corporation or its Subsidiaries that rank (i) senior to the
      Notes and securities that are pari passu with the Notes but
      (ii) junior to all other debt securities of the Corporation (other than
      (x) Notes and securities that are pari passu with the Notes and
      (y) securities that are pari passu with such Qualifying Capital
      Securities) upon its liquidation, dissolution or winding-up, and
      (2) either:

     

    (x)    have
      no maturity or a maturity of at least 60 years and either (I) are
      (a) Non-Cumulative or subject to a No Payment Provision and
      (b) subject to a Qualifying Capital Replacement Covenant or (II) have
      a Mandatory Trigger Provision and an Optional Deferral Provision and are subject
      to Intent-Based Replacement Disclosure, or

     

    (y)    have
      no maturity or a maturity of at least 40 years, are subject to a Qualifying
      Capital Replacement Covenant and have a Mandatory Trigger Provision and an
      Optional Deferral Provision;

     

    (F)    preferred
      stock issued by the Corporation or its Subsidiaries that (1) has no
      prepayment obligation on the part of the issuer thereof, whether at the election
      of the holders or otherwise, (2) has no maturity or a maturity of at least
      60 years and (3) is subject to a Qualifying Capital Replacement Covenant;
      or

     

    (iii)    in
      connection with any repayment, redemption or purchase of Securities at any
      time
      on or after November 27,
      2037 and prior to the Termination Date:

     

    (A)    securities
      described under clause (ii) of this definition;

     

    (B)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon a liquidation, dissolution or
      winding up of the Corporation, (2) either:

     

    (x)    have
      no maturity or a maturity of at least 60 years and are subject to Intent-Based
      Replacement Disclosure, or

     

    (y)    (I) have
      no maturity or a maturity at least 40 years and (II) are subject to a Qualifying
      Capital Replacement Covenant; and

     

    (3)    have
      an Optional Deferral Provision;

     

    (C)    securities
      issued by the Corporation or its Subsidiaries that (1) rank pari
      passu with or junior to the Notes upon a liquidation, dissolution or
      winding up of the Corporation, (2) have no maturity or a maturity at least
      40 years are subject to Intent-Based Replacement Disclosure and (3) are
      Non-Cumulative or have a No Payment Provision;

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (D)    securities
      issued by the Corporation or its Subsidiaries that rank (i) senior to the
      Notes and securities that are pari passu with the Notes but
      (ii) junior to all other debt securities of the Corporation (other than
      (x) Notes and securities that are pari passu with the Notes and
      (y) securities that are pari passu with such Qualifying Capital
      Securities) upon its liquidation, dissolution or winding-up, and
      (2) either:

     

    (x)    have
      no maturity or a maturity of at least 60 years and either (i) have an
      Optional Deferral Provision and are subject to a Qualifying Capital Replacement
      Covenant or (ii) (a) are Non-Cumulative or have a No Payment Provision and
      (b) are subject to Intent-Based Replacement Disclosure, or

     

    (y)    have
      no maturity or a maturity of at least 40 years and either (i) (a) are
      Non-Cumulative or have a No Payment Provision and (b) are subject to a
      Qualifying Capital Replacement Covenant or (ii) are subject to Intent-Based
      Replacement Disclosure and have a Mandatory Trigger Provision and an Optional
      Deferral Provision; or

     

    (E)    preferred
      stock issued by the Corporation or its Subsidiaries that either (1) has no
      maturity or a maturity of at least 60 years and is subject to Intent-Based
      Replacement Disclosure or (2) has a maturity of at least 40 years and is
      subject to a Qualifying Capital Replacement Covenant.

     

    “Qualifying
      Preferred Stock” means non-cumulative perpetual preferred stock of the
      Corporation that (a) ranks pari passu with or junior to all other
      preferred stock of the Corporation, and (b) either (x) is subject to a
      Qualifying Capital Replacement Covenant or (y) is subject to Intent-Based
      Replacement Disclosure and has a provision that prohibits the Corporation from
      paying any dividends thereon upon its failure to satisfy one or more financial
      tests set forth therein, and (c) as to which the transaction documents
      provide for no remedies as a consequence of non-payment of dividends other
      than
      Permitted Remedies.

     

    “Qualifying
      Capital Replacement Covenant” means a replacement capital covenant that is
      substantially similar to this Covenant or a replacement capital covenant, as
      identified by the Corporation’s Board of Directors acting in its reasonable
      discretion and reasonably construing the definitions and other terms of this
      Covenant, (i) entered into by a company that at the time it enters into
      such replacement capital covenant is a reporting company under the Exchange
      Act
      and (ii) that restricts the related issuer from, and requires the related
      issuer to restrict its subsidiaries from, redeeming, repaying or purchasing
      identified securities except to the extent of the applicable percentage of
      the
      net proceeds from the issuance of specified replacement capital securities
      that
      have terms and provisions at the time of redemption, repayment or purchase
      that
      are as or more equity-like than the securities then being redeemed, repaid
      or
      purchased within the six-month period prior to the applicable redemption,
      repayment or purchase date.

     

    “Qualifying
      Warrants” has the meaning specified in the Second Supplemental Indenture,
      dated as of March 6, 2007, between the Corporation and The Bank of New
      York, as trustee.

     

    “Redesignation
      Date” means, as to the then-effective Covered Debt, the earliest of
      (i) the date that is two years prior to the final maturity date of such
      Covered Debt, (ii) if the Corporation elects to redeem, repurchase or
      defease, or a Subsidiary of the Corporation elects to purchase,

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    such
      Covered Debt either in whole or in part with the consequence that after giving
      effect to such redemption, repurchase, defeasance or purchase the outstanding
      principal amount of such Covered Debt is less than $100,000,000, the applicable
      redemption, repurchase, defeasance or purchase date and (iii) if the
      then-effective Covered Debt is not Eligible Subordinated Debt, the date on
      which
      the Corporation issues long-term indebtedness for money borrowed that is
      Eligible Subordinated Debt.

     

    “REIT
      Preferred Securities” means non-cumulative perpetual preferred stock of a
      Subsidiary of a Depository Institution Subsidiary, which issuer Subsidiary
      may
      or may not be a “real estate investment trust” (“REIT”) within the
      meaning of Section 856 of the Internal Revenue Code of 1986, as amended,
      that is exchangeable for non-cumulative perpetual preferred stock of the
      Corporation and satisfies the following requirements:

     

    (a)    such
      non-cumulative perpetual preferred stock of a Subsidiary of the Depository
      Institution Subsidiary and the related non-cumulative perpetual preferred stock
      of the Corporation for which it may be exchanged qualifies as Tier 1 capital
      of
      a Depository Institution Subsidiary under the risk-based capital guidelines
      of
      the Appropriate Federal Banking Agency and related interpretive guidance of
      such
      Agency (for example, in the case of the Office of the Comptroller of the
      Currency, Corporate Decision 97-109) (disregarding any quantitative
      limits);

     

    (b)    such
      non-cumulative perpetual preferred stock of a Subsidiary of the Depository
      Institution Subsidiary must be exchangeable automatically into non-cumulative
      perpetual preferred stock of the Corporation in the event that the Appropriate
      Federal Banking Agency directs such Depository Institution Subsidiary in writing
      to make a conversion because such Depository Institution Subsidiary is
      (i) undercapitalized under the applicable prompt corrective action
      regulations (which, for example, in the case of the Office of the Comptroller
      of
      the Currency and applicable to national banks, are at 12 C.F.R. 6.4(b)),
      (ii) placed into conservatorship or receivership, or (iii) expected to
      become undercapitalized in the near term;

     

    (c)    if
      such Subsidiary of the Depository Institution Subsidiary is a REIT, the
      transaction documents include provisions that would enable the REIT to stop
      paying dividends on its non-cumulative perpetual preferred stock without causing
      the REIT to fail to comply with the income distribution and other requirements
      of the Internal Revenue Code of 1986, as amended, applicable to
      REITs;

     

    (d)    such
      non-cumulative perpetual preferred stock of the Corporation issued upon exchange
      for the non-cumulative perpetual preferred stock of a Subsidiary of a Depository
      Institution Subsidiary issued as part of such transaction ranks pari passu
      with
      or junior to other preferred stock of the Corporation; and

     

    (e)    such
      REIT Preferred Securities and non-cumulative perpetual preferred stock of the
      Corporation for which it may be exchanged are subject to a Qualifying Capital
      Replacement Covenant.

     

    “Replacement
      Capital Securities” means Common Stock, rights to acquire Common Stock,
      Debt Exchangeable for Common Equity, Debt Exchangeable for Preferred
      Equity,

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Mandatorily
      Convertible Preferred Stock, REIT Preferred Securities or Qualifying Capital
      Securities.

     

    “Repurchase
      Restriction” has the meaning specified in clause (c) of the definition
      of “Alternative Payment Mechanism.”

     

    “Securities”
      has the meaning specified in Recital B.

     

    “Share
      Cap” has the meaning specified in clause (e) of the definition of
      Alternative Payment Mechanism.

     

    “Subsidiary”
      of the Corporation means, at any time, any Person the shares of stock or other
      ownership interests of which having ordinary voting power to elect a majority
      of
      the board of directors or other managers of such Person are at the time owned,
      or the management or policies of which are otherwise at the time controlled,
      directly or indirectly through one or more intermediaries (including other
      Subsidiaries) or both, by the Corporation.

     

    “Termination
      Date” has the meaning specified in Section 5(a).

     

    “Trust”
      has the meaning specified in Recital A.

     

     

    
 

    
17