1.0.0.3falseCommitments and Contingenciesfalse1$falsefalseiso4217_USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170iso4217_USD_per_sharesDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instanceshares0sharesStandardhttp://www.xbrl.org/2003/instanceshares053us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaaptruenadurationstringNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalse00<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#B23040" size="3"><b>NOTE 14 –
Commitments and Contingencies</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">In the normal course of
business, the Corporation enters into a number of off-balance sheet
commitments. These commitments expose the Corporation to varying
degrees of credit and market risk and are subject to the same
credit and market risk limitation reviews as those instruments
recorded on the Corporation’s Consolidated Balance
Sheet.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" size="2"><b>Credit Extension
Commitments</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation enters
into commitments to extend credit such as loan commitments, SBLCs
and commercial letters of credit to meet the financing needs of its
customers. The unfunded legally binding lending commitments shown
in the following table are net of amounts distributed (e.g.,
syndicated) to other financial institutions of $30.9 billion and
$46.9 billion at December 31, 2009 and 2008. At
December 31, 2009, the carrying amount of these commitments,
excluding commitments accounted for under the fair value option,
was $1.5 billion, including deferred revenue of $34 million and a
reserve for unfunded legally binding lending commitments of $1.5
billion. At December 31, 2008, the comparable amounts were
$454 million, $33 million and $421 million. The carrying amount of
these commitments is recorded in accrued expenses and other
liabilities.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 16px; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The table
below also includes the notional amount of commitments of $27.0
billion and $16.9 billion at December 31, 2009 and 2008, which
are accounted for under the fair value option. However, the table
below excludes the fair value adjustment of $950 million and $1.1
billion on these commitments that was recorded in accrued expenses
and other liabilities. For information regarding the
Corporation’s loan commitments accounted for at fair value,
see <i>Note 20 – Fair Value Measurements.</i></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<p style="BORDER-BOTTOM: #b23040 2pt solid; LINE-HEIGHT: 1px; MARGIN-TOP: 0px; MARGIN-BOTTOM: 2px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%" align="center">
<tr>
<td width="50%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td height="12"></td>
<td height="12" colspan="3"></td>
<td height="12" colspan="3"></td>
<td height="12" colspan="3"></td>
<td height="12" colspan="3"></td>
<td height="12" colspan="3"></td>
</tr>
<tr>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">(Dollars in millions)</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>Expires in 1<br />
Year or Less</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>Expires after 1<br />
Year through 3<br />
Years</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>Expires after 3<br />
Years through<br />
5 Years</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>Expires after<br />
5 Years</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>Total</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.5em; MARGIN-LEFT: 1.5em"><font style="FONT-FAMILY: Arial" size="1"><b>Credit extension commitments,
December 31, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Loan commitments</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>149,248</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>187,585</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>30,897</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>28,489</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>396,219</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Home equity lines of
credit</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>1,810</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>3,272</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>10,667</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>76,924</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>92,673</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Standby letters of credit and
financial guarantees <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(1)</sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>29,794</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>27,789</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>4,923</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>13,739</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>76,245</b></font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Commercial letters of
credit</font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>2,020</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>40</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>–</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>1,465</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>3,525</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Legally binding commitments <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(2)</sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>182,872</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>218,686</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>46,487</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>120,617</b></font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>568,662</b></font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Credit card lines <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(3)</sup></font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>541,919</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>–</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>–</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>–</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b> </b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>541,919</b></font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="MARGIN-LEFT: 1.5em"><font style="FONT-FAMILY: Arial" size="1"><b>Total credit extension commitments</b></font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>724,791</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>218,686</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>46,487</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>120,617</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: Arial" size="1"><b>$</b></font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: Arial" size="1"><b>1,110,581</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.5em; MARGIN-LEFT: 1.5em"><font style="FONT-FAMILY: Arial" size="1"><b>Credit extension commitments,
December 31, 2008</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Loan commitments</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">128,992</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">120,234</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">67,111</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">31,200</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">347,537</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Home equity lines of
credit</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">3,883</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">2,322</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">4,799</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">96,415</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">107,419</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Standby letters of credit and
financial guarantees <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(1)</sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">33,350</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">26,090</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">8,328</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">9,812</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">77,580</font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Commercial letters of
credit</font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">2,228</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">29</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">1</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">1,507</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">3,765</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Legally binding commitments <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(2)</sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">168,453</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">148,675</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">80,239</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">138,934</font></td>
<td valign="bottom"><font size="1">    </font></td>
<td valign="bottom"><font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">536,301</font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="TEXT-INDENT: -1.6em; MARGIN-LEFT: 1.6em"><font style="FONT-FAMILY: ARIAL" size="1">Credit card lines <sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(3)</sup></font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">827,350</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">–</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">–</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">–</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">827,350</font></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="top">
<p style="MARGIN-LEFT: 1.5em"><font style="FONT-FAMILY: Arial" size="1"><b>Total credit extension commitments</b></font></p>
</td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1"> </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">995,803</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">148,675</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">80,239</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">138,934</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font size="1">    </font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">
<font style="FONT-FAMILY: ARIAL" size="1">$</font></td>
<td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right"><font style="FONT-FAMILY: ARIAL" size="1">1,363,651</font></td>
</tr>
</table>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="1%" align="left"><font style="FONT-FAMILY: ARIAL" size="1"><sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(1)</sup></font></td>
<td valign="top" align="left">
<p align="justify"><font style="FONT-FAMILY: ARIAL" size="1">At
December 31, 2009, the notional amount of SBLC and financial
guarantees classified as investment grade and non-investment grade
based on the credit quality of the underlying reference name within
the instrument were $45.1 billion and $31.2 billion compared to
$54.4 billion and $23.2 billion at December 31,
2008.</font></p>
</td>
</tr>
</table>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="1%" align="left"><font style="FONT-FAMILY: ARIAL" size="1"><sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(2)</sup></font></td>
<td valign="top" align="left">
<p align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Includes commitments to unconsolidated VIEs and certain QSPEs
disclosed in <i>Note 9 – Variable Interest Entities</i>,
including $25.1 billion and $41.6 billion to multi-seller conduits,
and $9.8 billion and $6.8 billion to municipal bond trusts at
December 31, 2009 and 2008. Also includes commitments to SPEs
that are not disclosed in <i>Note 9 – Variable Interest
Entities</i> because the Corporation does not hold a significant
variable interest, including $368 million and $980 million to
customer-sponsored conduits at December 31, 2009 and
2008.</font></p>
</td>
</tr>
</table>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="1%" align="left"><font style="FONT-FAMILY: ARIAL" size="1"><sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(3)</sup></font></td>
<td valign="top" align="left">
<p align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Includes business card unused lines of credit.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 16px; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Legally
binding commitments to extend credit generally have specified rates
and maturities. Certain of these commitments have adverse change
clauses that help to protect the Corporation against deterioration
in the borrowers’ ability to pay.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" size="2"><b>Other Commitments</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Global Principal Investments and Other
Equity Investments</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">At December 31, 2009
and 2008, the Corporation had unfunded equity investment
commitments of approximately $2.8 billion and $1.9 billion. These
commitments generally relate to the Corporation’s Global
Principal Investments business which is comprised of a diversified
portfolio of investments in private equity, real estate and other
alternative investments. These investments are made either directly
in a company or held through a fund. Bridge equity commitments
provide equity bridge financing to facilitate clients’
investment activities. These conditional commitments are generally
retired prior to or shortly following funding via syndication or
the client’s decision to terminate. Where the Corporation has
a binding equity bridge commitment and there is a market disruption
or other unexpected event, there is heightened exposure in the
portfolio and higher potential for loss, unless an orderly
disposition of the exposure can be made. At December 31, 2009,
the Corporation did not have any unfunded bridge equity
commitments. The Corporation had funded equity bridges of $1.2
billion that were committed prior to the market disruption. These
equity bridges are considered held for investment and recorded in
other assets. In 2009, the Corporation recorded a total of $670
million in losses in equity investment income related to these
investments. At December 31, 2009, these equity bridges had a
zero balance.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Loan Purchases</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">In 2005, the Corporation
entered into an agreement for the committed purchase of retail
automotive loans over a five-year period, ending June 30,
2010. The Corporation purchased $6.6 billion of such loans in 2009
and purchased $12.0 billion of such loans in 2008 under this
agreement. As of December 31, 2009, the Corporation was
committed for additional purchases of $6.5 billion over the
remaining term of the agreement. All loans purchased under this
agreement are subject to a comprehensive set of credit criteria.
This agreement is accounted for as a derivative liability with a
fair value of $189 million and $316 million at December 31,
2009 and 2008.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 16px; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">At
December 31, 2009, the Corporation had commitments to purchase
loans (e.g., residential mortgage and commercial real estate) of
$2.2 billion which upon settlement will be included in loans or
LHFS.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Operating Leases</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation is a
party to operating leases for certain of its premises and
equipment. Commitments under these leases are approximately $3.1
billion, $2.8 billion, $2.3 billion, $1.9 billion and $1.5 billion
for 2010 through 2014, respectively, and $8.1 billion for all years
thereafter.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Other Commitments</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">At December 31,
2009, the Corporation had commitments to enter into forward-dated
resale and securities borrowing agreements of $51.8 billion. In
addition, the Corporation had commitments to enter into
forward-dated repurchase and securities lending agreements of $58.3
billion. All of these commitments expire within the next 12
months.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Beginning
in the second half of 2007, the Corporation provided support to
certain cash funds managed within <i>GWIM</i>. The funds for which
the Corporation provided support typically invested in high
quality, short-term securities with a portfolio weighted-average
maturity of 90 days or less, including securities issued by SIVs
and senior debt holdings of financial service companies. Due to
market disruptions, certain investments in SIVs and senior debt
securities were downgraded by the ratings agencies and experienced
a decline in fair value. The Corporation entered into capital
commitments under which the Corporation provided cash to these
funds as a result of the net asset value per unit of a fund
declining below certain thresholds. All capital commitments to
these cash funds have been terminated. In 2009 and 2008, the
Corporation recorded losses of $195 million and $1.1 billion
related to these capital commitments.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The
Corporation does not consolidate the cash funds managed within
<i>GWIM</i> because the subordinated support provided by the
Corporation did not absorb a majority of the variability created by
the assets of the funds. In reaching this conclusion, the
Corporation considered both interest rate and credit risk. The cash
funds had total assets under management of $104.4 billion and
$185.9 billion at December 31, 2009 and 2008.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In
connection with federal and state securities regulators, the
Corporation agreed to purchase at par ARS held by certain
customers. During 2009, the Corporation purchased a net $3.8
billion of ARS from its customers. At December 31, 2009, the
Corporation’s outstanding buyback commitment was $291
million.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In
addition, the Corporation has entered into agreements with
providers of market data, communications, systems consulting and
other office-related services. At December 31, 2009, the
minimum fee commitments over the remaining life of these agreements
totaled $2.3 billion.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" size="2"><b>Other Guarantees</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Bank-owned Life Insurance Book Value
Protection</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation sells
products that offer book value protection to insurance carriers who
offer group life insurance policies to corporations,
primarily banks. The book value protection is provided on
portfolios of intermediate investment-grade fixed income securities
and is intended to cover any shortfall in the event
that policyholders surrender their policies and market value
is below book value. To manage its exposure, the Corporation
imposes significant restrictions on surrenders and the manner
in which the portfolio is liquidated and the funds are accessed. In
addition, investment parameters of the underlying portfolio are
restricted. These constraints, combined with structural
protections, including a cap on the amount of
risk assumed on each policy, are designed to provide
adequate buffers and guard against payments even under extreme
stress scenarios. These guarantees are recorded as derivatives and
carried at fair value in the trading portfolio. At
December 31, 2009 and 2008, the notional amount of these
guarantees totaled $15.6 billion and $15.1 billion and the
Corporation’s maximum exposure related to these guaran tees
totaled $4.9 billion and $4.8 billion with estimated maturity
dates between 2030 and 2040. As of December 31, 2009
and 2008, the Corporation has not made a payment under these
products. The probability of surrender has increased due to
investment manager underperformance and the deteriorating financial
health of policyholders, but remains a small percentage of total
notional.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Employee Retirement
Protection</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation sells
products that offer book value protection primarily to plan
sponsors of Employee Retirement Income Security Act of 1974 (ERISA)
governed pension plans, such as 401(k) plans and 457 plans. The
book value protection is provided on portfolios of
intermediate/short-term investment-grade fixed income securities
and is intended to cover any shortfall in the event that plan
participants continue to withdraw funds after all securities
have been liquidated and there is remaining book value.
The Corporation retains the option to exit the contract at any
time. If the Corporation exercises its option, the purchaser can
require the Corporation to purchase high quality fixed income
securities, typically government or government-backed
agency securities, with the proceeds of the liquidated
assets to assure the return of principal. To manage its exposure,
the Corporation imposes significant restrictions and constraints on
the timing of the withdrawals, the manner in which the portfolio is
liquidated and the funds are accessed, and the investment
parameters of the underlying portfolio. These constraints, combined
with structural protections, are designed to provide adequate
buffers and guard against payments even under extreme stress
scenarios. These guarantees are recorded as derivatives and carried
at fair value in the trading portfolio. At December 31, 2009
and 2008, the notional amount of these guarantees totaled $36.8
billion and $37.4 billion with estimated maturity
dates between 2010 and 2014 if the exit option is
exercised on all deals. As of December 31, 2009 and 2008, the
Corporation has not made a payment under these products and has
assessed the probability of payments under these guarantees as
remote.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Indemnifications</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">In the ordinary course of
business, the Corporation enters into various agreements that
contain indemnifications, such as tax indemnifications, whereupon
payment may become due if certain external events occur, such as a
change in tax law. The indemnification clauses are often standard
contractual terms and were entered into in the normal course of
business based on an assessment that the risk of loss would be
remote. These agreements typically contain an early termination
clause that permits the Corporation to exit the agreement upon
these events. The maximum potential future payment under
indemnification agreements is difficult to assess for several
reasons, including the occurrence of an external event, the
inability to predict future changes in tax and other laws, the
difficulty in determining how such laws would apply to parties in
contracts, the absence of exposure limits contained in standard
contract language and the timing of the early termination clause.
Historically, any payments made under these guarantees have been de
minimis. The Corporation has assessed the probability of making
such payments in the future as remote.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Merchant Services</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On June 26, 2009,
the Corporation contributed its merchant processing business to a
joint venture in exchange for a 46.5 percent ownership interest in
the joint venture. The Corporation indemnified the joint venture
for any losses resulting from transactions processed through
June 26, 2009 on the contributed merchant
portfolio.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The
Corporation, on behalf of the joint venture, provides credit and
debit card processing services to various merchants by processing
credit and debit card transactions on the merchants’ behalf.
In connection with these services, a liability may arise in the
event of a billing dispute between the merchant and a cardholder
that is ultimately resolved in the cardholder’s favor and the
merchant defaults upon its obligation to reimburse the cardholder.
A cardholder, through its issuing bank, generally has until the
later of up to six months after the date a transaction is processed
or the delivery of the product or service to present a chargeback
to the joint venture as the merchant processor. If the joint
venture is unable to collect this amount from the merchant, it
bears the loss for the amount paid to the cardholder. The joint
venture is primarily liable for any losses on transactions from the
contributed portfolio that occur after June 26, 2009. However,
if the joint venture fails to meet its obligation to reimburse the
cardholder for disputed transactions, then the Corporation could be
held liable for the disputed amount. In 2009 and 2008, the
Corporation processed $323.8 billion and $369.4 billion of
transactions and recorded losses as a result of these chargebacks
of $26 million and $21 million.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">At
December 31, 2009 and 2008, the Corporation, on behalf of the
joint venture, held as collateral $26 million and $38 million of
merchant escrow deposits which may be used to offset amounts due
from the individual merchants. The joint venture also has the right
to offset any payments with cash flows otherwise due to the
merchant. Accordingly, the Corporation believes that the maximum
potential exposure is not representative of the actual potential
loss exposure. The Corporation believes the maximum potential
exposure for chargebacks would not exceed the total amount of
merchant transactions processed through Visa and MasterCard for the
last six months, which represents the claim period for the
cardholder, plus any outstanding delayed-delivery transactions. As
of December 31, 2009 and 2008, the maximum potential exposure
totaled approximately $131.0 billion and $147.1 billion. The
Corporation does not expect to make material payments in connection
with these guarantees. The maximum potential exposure disclosed
above does not include volumes processed by First Data contributed
portfolios.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Brokerage Business</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">For a portion of the
Corporation’s brokerage business, the Corporation has
contracted with a third party to provide clearing services that
include underwriting margin loans to the Corporation’s
clients. This contract stipulates that the Corporation will
indemnify the third party for any margin loan losses that occur in
its issuing margin to the Corporation’s clients. The maximum
potential future payment under this indemnification was $657
million and $577 million at December 31, 2009 and 2008.
Historically, any payments made under this indemnification have not
been material. As these margin loans are highly collateralized by
the securities held by the brokerage clients, the Corporation has
assessed the probability of making such payments in the future as
remote. This indemnification would end with the termination of the
clearing contract.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Other Derivative
Contracts</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation funds
selected assets, including securities issued by CDOs and CLOs,
through derivative contracts, typically total return swaps, with
third parties and SPEs that are not consolidated on the
Corporation’s Consolidated Balance Sheet. At
December 31, 2009, the total notional amount of these
derivative contracts was approximately $4.9 billion with commercial
banks and $2.8 billion with SPEs. The underlying securities are
senior securities and substantially all of the Corporation’s
exposures are insured. Accordingly, the Corporation’s
exposure to loss consists principally of counterparty risk to the
insurers. In certain circumstances, generally as a result of
ratings downgrades, the Corporation may be required to purchase the
underlying assets, which would not result in additional gain or
loss to the Corporation as such exposure is already reflected in
the fair value of the derivative contracts.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Other Guarantees</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation sells
products that guarantee the return of principal to investors at a
preset future date. These guarantees cover a broad range of
underlying asset classes and are designed to cover the shortfall
between the market value of the underlying portfolio and the
principal amount on the preset future date. To manage its exposure,
the Corporation requires that these guarantees be backed by
structural and investment constraints and certain pre-defined
triggers that would require the underlying assets or portfolio to
be liquidated and invested in zero-coupon bonds that mature at the
preset future date. The Corporation is required to fund any
shortfall at the preset future date between the proceeds of the
liquidated assets and the purchase price of the zero-coupon bonds.
These guarantees are recorded as derivatives and carried at fair
value in the trading portfolio. At December 31, 2009 and 2008,
the notional amount of these guarantees totaled $2.1 billion and
$1.3 billion. These guarantees have various maturities ranging from
two to five years. At December 31, 2009 and 2008, the
Corporation had not made a payment under these products and has
assessed the probability of payments under these guarantees as
remote.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The
Corporation has entered into additional guarantee agreements,
including lease end obligation agreements, partial credit
guarantees on certain leases, real estate joint venture guarantees,
sold risk participation swaps and sold put options that require
gross settlement. The maximum potential future payment under these
agreements was approximately $3.6 billion and $7.3 billion at
December 31, 2009 and 2008. The estimated maturity dates of
these obligations are between 2010 and 2033. The Corporation has
made no material payments under these guarantees.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In
addition, the Corporation has guaranteed the payment obligations of
certain subsidiaries of Merrill Lynch on certain derivative
transactions. The aggregate amount of such derivative liabilities
was approximately $2.5 billion at December 31, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" size="2"><b>Litigation and Regulatory
Matters</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">In the ordinary course of
business, the Corporation and its subsidiaries are routinely
defendants in or parties to many pending and threatened legal
actions and proceedings, including actions brought on behalf of
various classes of claimants. Certain of these actions and
proceedings are based on alleged violations of consumer protection,
securities, environmental, banking, employment and other laws. In
certain of these actions and proceedings, claims for substantial
monetary damages are asserted against the Corporation and its
subsidiaries.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In the
ordinary course of business, the Corporation and its subsidiaries
are also subject to regulatory examinations, information gathering
requests, inquiries and investigations. Certain subsidiaries of the
Corporation are registered broker/dealers or investment advisors
and are subject to regulation by the SEC, the Financial Industry
Regulatory Authority (FINRA), the New York Stock Exchange, the
Financial Services Authority and other domestic, international and
state securities regulators. In connection with formal and informal
inquiries by those agencies, such subsidiaries receive numerous
requests, subpoenas and orders for documents, testimony and
information in connection with various aspects of their regulated
activities.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In view
of the inherent difficulty of predicting the outcome of such
litigation and regulatory matters, particularly where the claimants
seek very large or indeterminate damages or where the matters
present novel legal theories or involve a large number of parties,
the Corporation cannot state with confidence what the eventual
outcome of the pending matters will be, what the timing of the
ultimate resolution of these matters will be, or what the eventual
loss, fines or penalties related to each pending matter may
be.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In
accordance with applicable accounting guidance, the Corporation
establishes reserves for litigation and regulatory matters when
those matters present loss contingencies that are both probable and
estimable. When loss contingencies are not both probable and
estimable, the Corporation does not establish reserves. In some of
the matters described below, including but not limited to the
Lehman Brothers Holdings, Inc. matters, loss contingencies are not
both probable and estimable in the view of management, and
accordingly, reserves have not been established for those matters.
Based on current knowledge, management does not believe that loss
contingencies, if any, arising from pending litigation and
regulatory matters, including the litigation and regulatory matters
described below, will have a material adverse effect on the
consolidated financial position or liquidity of the Corporation,
but may be material to the Corporation’s results of
operations for any particular reporting period.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Adelphia Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Adelphia Recovery Trust
is the plaintiff in a lawsuit pending in the U.S. District Court
for the Southern District of New York, entitled <i>Adelphia
Recovery Trust v. Bank of America, N.A., et al</i>. The lawsuit was
filed on July 6, 2003 and originally named over 700
defendants, including Bank of America, N.A. (BANA), Banc of America
Securities LLC (BAS), Merrill Lynch, Merrill Lynch Capital Corp.,
Fleet National Bank and Fleet Securities, Inc. (collectively Fleet)
and other affiliated entities, and asserted over 50 claims under
federal statutes and state common law relating to loans and other
services provided to various affiliates of Adelphia Communications
Corporation (ACC) and entities owned by members of the founding
family of ACC. The plaintiff seeks compensatory damages of
approximately $5 billion, plus fees, costs and exemplary damages.
The District Court granted in part defendants’ motions to
dismiss, which resulted in the dismissal of approximately 650
defendants from the lawsuit. The plaintiff appealed the
dismissal decision. The primary claims remaining against BANA, BAS,
Merrill Lynch, Merrill Lynch Capital Corp. and Fleet include fraud,
aiding and abetting fraud and aiding and abetting breach of
fiduciary duty. There are several pending defense motions for
summary judgment. Trial is scheduled for September 13,
2010.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Auction Rate Securities
Claims</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On March 25, 2008, a
putative class action, entitled <i>Burton v. Merrill
Lynch & Co., Inc., et al</i>., was filed in the
U.S. District Court for the Southern District of New York
against Merrill Lynch Pierce, Fenner and Smith Incorporated
(MLPF&S) and Merrill Lynch on behalf of persons who purchased
and continue to hold ARS offered for sale by MLPF&S between
March 25, 2003 and February 13, 2008. The complaint
alleges, among other things, that MLPF&S failed to disclose
material facts about ARS. A similar action, entitled
<i>Stanton v. Merrill Lynch & Co., Inc., et al.</i>,
was filed the next day in the same court. On October 31, 2008,
the two cases, entitled <i>In Re Merrill Lynch Auction Rate
Securities Litigation</i>, were consolidated, and, on
December 10, 2008, plaintiffs filed a consolidated class
action amended complaint. Plaintiffs seek to recover alleged losses
in the market value of ARS allegedly caused by the decision of
MLPF&S and Merrill Lynch to discontinue supporting auctions for
ARS. Plaintiffs seek unspecified damages, including rescission,
other compensatory and consequential damages, costs, fees and
interest. On February 27, 2009, defendants filed a motion to
dismiss the consolidated amended complaint in <i>In Re Merrill
Lynch Auction Rate Securities Litigation</i>. On May 22, 2009,
the plaintiffs filed a second amended consolidated complaint. On
July 24, 2009, Merrill Lynch filed a motion to dismiss the
second amended consolidated complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
May 22, 2008, a putative class action, entitled <i>Bondar v.
Bank of America Corporation</i>, was filed in the U.S. District
Court for the Northern District of California against the
Corporation, Banc of America Investment Services, Inc. (BAI) and
BAS on behalf of persons who purchased ARS from the defendants. The
amended complaint, which was filed on January 22, 2009,
alleges, among other things, that the Corporation, BAI and BAS
manipulated the market for, and failed to disclose material facts
about ARS, and seeks to recover unspecified damages for losses in
the market value of ARS allegedly caused by the decision of BAS and
other broker/dealers to discontinue supporting auctions for ARS. On
February 12, 2009, the Judicial Panel on Multidistrict
Litigation (MDL Panel) consolidated Bondar and two related,
individual federal actions into one proceeding in the U.S. District
Court for the Northern District of California. On September 9,
2009, defendants filed their motion to dismiss the second amended
consolidated complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
September 4, 2008, two civil antitrust putative class actions,
<i>Mayor and City Council of Baltimore, Maryland v. Citigroup et
al., and Mayfield et al. v. Citigroup Inc. et al</i>., were filed
in the U.S. District Court for the Southern District of New York
against the Corporation, Merrill Lynch, and other financial
institutions alleging that the defendants conspired to restrain
trade in ARS by artificially supporting auctions and later
withdrawing that support. <i>City Council of Baltimore</i> is
filed on behalf of a class of issuers of ARS underwritten by the
defendants between May 12, 2003 and February 13, 2008 who
seek to recover the alleged above-market interest payments they
claim they were forced to make when the Corporation, Merrill Lynch
and others allegedly discontinued supporting ARS. In addition, the
plaintiffs who also purchased ARS seek to recover claimed losses in
the market value of those securities allegedly caused by the
decision of the financial institutions to discontinue supporting
auctions for the securities. These plaintiffs seek treble damages
and seek to rescind at par their purchases of ARS. <i>Mayfield</i>
is filed on behalf of a class of persons who acquired ARS directly
from defendants and who held those securities as of
February 13, 2008. Plaintiffs seek to recover alleged losses
in the market value of ARS allegedly caused by the decision of the
Corporation and Merrill Lynch and others to discontinue supporting
auctions for the securities. Plaintiffs seek treble damages and
seek to rescind at par their purchases of ARS. On January 15,
2009, defendants, including the Corporation and Merrill Lynch,
filed a motion to dismiss the complaints. On January 25, 2010,
the District Court dismissed the two cases with
prejudice.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Since
October 2007, numerous arbitrations and individual lawsuits have
been filed against the Corporation, BANA, BAS, BAI, MLPF&S and
in some cases Merrill Lynch by parties who purchased ARS.
Plaintiffs in these cases, which assert substantially the same
types of claims, allege that defendants manipulated the market for,
and failed to disclose material facts about, ARS.
Plaintiffs seek compensatory and punitive damages totaling in
excess of $2.6 billion as well as rescission, among other
relief.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Countrywide Bond Insurance
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On September 30,
2008, Countrywide Financial Corporation (CFC) and other Countrywide
entities were named as defendants in an action filed by MBIA
Insurance Corporation (MBIA), entitled <i>MBIA Insurance
Corporation, Inc. v. Countrywide Home Loans, et al</i>., in New
York Supreme Court, New York County. The action relates to bond
insurance policies provided by MBIA with regard to certain
securitized pools of home equity lines of credit and fixed-rate
second lien mortgage loans. MBIA allegedly has paid claims as a
result of defaults in the underlying loans, and claims that these
defaults are the result of improper underwriting. On
August 24, 2009, MBIA filed an amended complaint in the
action, which includes allegations regarding five additional
securitizations, and adds the Corporation and Countrywide Home
Loans Servicing, LP as defendants. The amended complaint alleges
misrepresentation and breach of contract, among other claims, and
seeks unspecified actual and punitive damages, and attorneys’
fees from the Countrywide defendants and from the Corporation as an
alleged successor to the Countrywide defendants. On October 9,
2009, the Corporation and the Countrywide defendants filed a motion
to dismiss certain claims asserted in the amended
complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
January 28, 2009, Syncora Guarantee Inc. (Syncora) filed suit,
entitled <i>Syncora Guarantee Inc. v. Countrywide Home Loans, Inc.,
et al</i>., in New York Supreme Court, New York County against CFC
and certain other Countrywide entities. The action relates to bond
insurance policies provided by Syncora with regard to certain
securitized pools of home equity lines of credit. Syncora allegedly
has paid claims as a result of defaults in the underlying loans,
and claims that these defaults are the result of improper loan
underwriting. The complaint alleges misrepresentation and breach of
contract, among other claims, and seeks unspecified actual and
punitive damages, and attorneys’ fees. The defendants have
moved to dismiss certain of the claims.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
July 10, 2009, MBIA filed a complaint, entitled <i>MBIA
Insurance Corporation, Inc. v. Bank of America Corporation,
Countrywide Financial Corporation, Countrywide Home Loans, Inc.,
Countrywide Securities Corporation, et al.,</i> in Superior Court
of the State of California, County of Los Angeles, against the
Corporation, CFC, various Countrywide entities and other
individuals and entities. MBIA, which amended the complaint on
November 3, 2009, purports to bring the action as subrogee to
the note holders for certain securitized pools of home equity lines
of credit and fixed-rate second lien mortgage loans. The complaint
is based upon the same allegations set forth in the complaints
filed in the <i>MBIA Insurance Corporation Inc., v. Countrywide
Home Loan et al.,</i> action and asserts claims for, among other
things, misrepresentation, breach of contract, and violations of
certain California statutes. The complaint seeks unspecified
damages and declaratory relief. On December 4, 2009, the
Corporation and various defendants filed demurrers in response to
the amended complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
December 11, 2009, Financial Guaranty Insurance Company (FGIC)
filed a complaint, entitled <i>Financial Guaranty Insurance Co., v.
Countrywide Home Loans, Inc</i>., in New York Supreme Court, New
York County, against Countrywide Home Loans, Inc. The action
relates to bond insurance policies provided by FGIC with regard to
certain securitized pools of home equity lines of credit and
fixed-rate second lien mortgage loans. FGIC allegedly has paid
claims as a result of defaults in the underlying loans, and claims
that these defaults are the result of improper loan underwriting.
The complaint alleges misrepresentation and breach of contract,
among other claims, and seeks unspecified actual and punitive
damages, and attorneys’ fees.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Countrywide Equity and Debt Securities
Matters</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">CFC, certain other
Countrywide entities, and certain former officers and directors of
CFC, among others, have been named as defendants in two putative
class actions filed in the U.S. District Court for the Central
District of California relating to certain CFC equity and debt
securities. One case, entitled <i>In re Countrywide Financial Corp.
Securities Litigation</i>, was filed on January 25, 2008 by
certain New York state and municipal pension funds on behalf of
purchasers of CFC’s common stock and certain other equity and
debt securities. The complaint alleges, among other things, that
CFC made misstatements (including in certain SEC filings)
concerning the nature and quality of its loan underwriting
practices and its financial results, in violation of the antifraud
provisions of the Securities Exchange Act of 1934 and Sections 11
and 12 of the Securities Act of 1933. Plaintiffs also assert claims
against BAS, MLPF&S and other underwriter defendants under
Sections 11 and 12 of the Securities Act of 1933. Plaintiffs seek
unspecified compensatory damages, among other remedies. On
December 1, 2008, the court granted in part and denied in part
the defendants’ motions to dismiss the first consolidated
amended complaint, with leave to amend certain claims. Plaintiffs
filed a second consolidated amended complaint. On
April 6, 2009, the District Court denied the motions to
dismiss the amended complaint made by CFC and the underwriters. On
December 9, 2009, the District Court granted in part and
denied in part plaintiffs’ motion for class certification. On
December 23, 2009, defendants sought interlocutory appeal of
certain aspects of the District Court’s class certification
decision. Trial is scheduled for August 2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The other
case, entitled <i>Argent Classic Convertible Arbitrage Fund L.P. v.
Countrywide Financial Corp. et al.</i>, was filed in the U.S.
District Court for the Central District of California on
October 5, 2007 against CFC on behalf of purchasers of certain
Series A and B debentures issued in various private placements
pursuant to a May 16, 2007 CFC offering memorandum. This
matter involves allegations similar to those in the <i>In re
Countrywide Financial Corporation Securities Litigation</i> case,
asserts claims under the antifraud provisions of the Securities
Exchange Act of 1934 and California state law, and seeks
unspecified damages. Plaintiff filed an amended complaint that
added the Corporation as a defendant. On March 9, 2009, the
District Court dismissed the Corporation from the case; CFC remains
as a named defendant. On December 9, 2009, the District Court
denied plaintiff’s motion for class certification. CFC and
Argent Classic, on its own behalf, have reached a settlement in
principle to dismiss the case with prejudice subject to execution
of a definitive settlement agreement. Trial is scheduled for July
2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">CFC has
also responded to subpoenas from the SEC and the U.S. Department of
Justice (the DOJ).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Countrywide FTC
Investigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On June 20, 2008,
the Federal Trade Commission (FTC) issued Civil Investigative
Demands to CFC regarding Countrywide’s mortgage servicing
practices. On January 6, 2010, FTC Staff sent a letter to the
Corporation offering an opportunity to discuss settlement and
enclosing a proposed consent order and draft complaint that
reflects FTC Staff’s views that certain servicing practices
of Countrywide Home Loans, Inc., and Countrywide Home Loans
Servicing, LP, which is now known as BAC Home Loans Servicing, LP,
violate Section 5 of the Federal Trade Commission Act (the FTC
Act) and the Fair Debt Collection Practices Act. FTC Staff also
advised that if consent negotiations are not successful, it will
recommend that an enforcement action seeking injunctive relief and
consumer redress be filed against Countrywide Home Loans, Inc. and
BAC Home Loans Servicing, LP for violations of Section 5 of
the FTC Act and the Fair Debt Collections Practices Act. The
Corporation believes that the servicing practices of Countrywide
Home Loans, Inc. and BAC Home Loans Servicing, LP did not and do
not violate Section 5 of the FTC Act and the Fair Debt
Collections Practices Act. The Corporation is currently involved in
discussions with FTC Staff concerning the Staff’s
views.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Countrywide Mortgage-Backed Securities
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">CFC, certain other
Countrywide entities, certain former CFC officers and directors, as
well as BAS and MLPF&S, are named as defendants in a
consolidated putative class action, entitled <i>Luther v.
Countrywide Home Loans Servicing LP, et al</i>., filed on
November 14, 2007 in the Superior Court of the State of
California, County of Los Angeles, that relates to public offerings
of various MBS. The consolidated complaint alleges, among other
things, that the mortgage loans underlying these securities were
improperly underwritten and failed to comply with the guidelines
and processes described in the applicable registration statements
and prospectus supplements, in violation of Sections 11 and 12 of
the Securities Act of 1933, and seeks unspecified compensatory
damages, among other relief. In March 2009, defendants moved to
dismiss the case in the</font> <font style="FONT-FAMILY: ARIAL" size="1">Superior Court. On June 15, 2009, the Superior Court
entered an order staying the state court proceeding and directing
the plaintiffs to file suit in Federal Court. On August 24,
2009, the plaintiffs filed a complaint in the U.S. District Court
for the Central District of California seeking a declaratory
judgment that the Superior Court had subject matter jurisdiction
over their claims. The District Court dismissed the declaratory
judgment action. On January 6, 2010, the Superior Court lifted
the stay entered on June 15, 2009 and dismissed
plaintiffs’ consolidated complaint with prejudice for lack of
subject matter jurisdiction. On January 14, 2010, one of the
plaintiffs in the <i>Luther case</i>, the Maine State Retirement
System, filed a new putative class action complaint in the U.S.
District Court for the Central District of California entitled
<i>Maine State Retirement System v. Countrywide Financial
Corporation, et al</i>. The complaint names CFC, certain other
Countrywide entities, certain former CFC officers and directors, as
well as BAS and MLPF&S as defendants. Plaintiff’s
allegations, claims and remedies sought are substantially similar
and concern the same offerings of MBS at issue in the <i>Luther
case</i> that was dismissed by the Superior Court.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
August 15, 2008, a complaint, entitled <i>New Mexico State
Investment Council, et al. v. Countrywide Financial Corporation, et
al</i>., was filed in the First Judicial Court for the County of
Santa Fe against CFC, certain other CFC entities and certain former
officers and directors of CFC by three New Mexico governmental
entities that allegedly acquired certain of the MBS also at issue
in the <i>Luther case</i>. The complaint initially asserted claims
under the Securities Act of 1933 and New Mexico state law and seeks
unspecified compensatory damages and rescission. On March 25,
2009, the court denied the motion to dismiss the complaint. The
individual defendants were dismissed based on lack of personal
jurisdiction. On November 13, 2009, plaintiffs voluntarily
dismissed the New Mexico state law claims. Trial is scheduled for
October 2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
October 13, 2009, the Federal Home Loan Bank of Pittsburgh
(FHLB Pittsburgh) filed a complaint, entitled <i>Federal Home Loan
Bank of Pittsburgh v. Countrywide Securities Corporation et
al.</i>, in the Court of Common Pleas of Allegheny County
Pennsylvania against CFC, Countrywide Securities Corporation (CSC),
Countrywide Home Loans, Inc., CWALT, Inc. and CWMBS, Inc., among
other defendants, alleging violations of the Securities Act of 1933
and the Pennsylvania Securities Act of 1972, as well as fraud and
negligent misrepresentation under Pennsylvania common law in
connection with various offerings of MBS. The complaint asserts,
among other things, misstatements and omissions concerning the
credit quality of the mortgage loans underlying the securities and
the loan origination practices associated with those loans and
seeks unspecified damages and rescission, among other relief. The
Countrywide defendants moved to dismiss the complaint on February
26, 2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
December 23, 2009, the Federal Home Loan Bank of Seattle (FHLB
Seattle) filed three complaints in the Superior Court of Washington
for King County alleging violations of the Securities Act of
Washington in connection with various offerings of MBS and makes
allegations similar to those in the FHLB Pittsburgh matter. The
complaints seek rescission, interest, costs and attorneys’
fees. The case, entitled <i>Federal Home Loan Bank of Seattle v.
Banc of America Securities LLC, et al</i>., was filed against CFC,
CWALT, Inc., BAS, Banc of America Funding Corporation, and the
Corporation. The case, entitled <i>Federal Home Loan Bank of
Seattle v. Countrywide Securities Corporation, et al</i>., was
filed against CFC, CSC, CWALT, Inc., Merrill Lynch Mortgage
Investors, Inc., and Merrill Lynch Mortgage Capital, Inc. The case,
entitled <i>Federal Home Loan Bank of Seattle v. UBS Securities
LLC, et al</i>., was filed against CFC, CWMBS, Inc., CWALT, Inc.,
and UBS Securities LLC.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Data Treasury
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation and BANA
were named as defendants in two cases filed by Data Treasury
Corporation (Data Treasury) in the U.S. District Court for the
Eastern District of Texas. In one case filed on June 25, 2005
(Ballard), Data Treasury alleged that defendants “provided,
sold, installed, utilized, and assisted others to use and utilize
image-based banking and archival solutions” in a manner that
infringed United States Patent Nos. 5,910,988 and 6,032,137. In the
other case filed on February 24, 2006 (Huntington), Data
Treasury alleged that the Corporation and BANA, along with LaSalle
Bank Corporation and LaSalle Bank, N.A., were “making, using,
selling, offering for sale, and/or importing into the United
States, directly, contributory, and/or by inducement, without
authority, products and services that fall within the scope of the
claims of” United States Patent Nos. 5,265,007; 5,583,759;
5,717,868; and 5,930,778. The Huntington case also claimed
infringement against the LaSalle defendants of the patents at issue
in the Ballard case. The Ballard and Huntington cases are now
consolidated in the <i>Data Treasury Corporation v. Wells Fargo, et
al</i>., action, although the claims related to the Huntington
patents are currently stayed. Data Treasury seeks significant
compensatory damages and equitable relief in the Ballard case and
unspecified compensatory damages and injunctive relief in the
Huntington case. The District Court has scheduled the Ballard case
for trial in October 2010.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Enron Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On April 8, 2002,
Merrill Lynch and MLPF&S were added as defendants in a
consolidated class action, entitled <i>Newby v. Enron Corp. et
al.</i>, filed in the U.S. District Court for the Southern District
of Texas on behalf of certain purchasers of Enron’s publicly
traded equity and debt securities. The complaint alleges, among
other things, that Merrill Lynch and MLPF&S engaged in improper
transactions that helped Enron misrepresent its earnings and
revenues. On March 5, 2009, the District Court granted Merrill
Lynch and MLPF&S’s motion for summary judgment and
dismissed the claims against Merrill Lynch and MLPF&S with
prejudice. Subsequently, the lead plaintiff, Merrill Lynch and
certain other defendants filed a motion to dismiss and for entry of
final judgment. The District Court granted the motion on
December 2, 2009 and dismissed all claims against Merrill
Lynch and MLPF&S with prejudice.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Heilig-Meyers
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">In <i>AIG Global
Securities Lending Corp., et al. v. Banc of America Securities
LLC</i>, filed on December 7, 2001 and formerly pending in the
U.S. District Court for the Southern District of New York, the
plaintiffs purchased ABS issued by a trust formed by Heilig-Meyers
Co., and allege that BAS, as underwriter, made misrepresentations
in connection with the sale of those securities in violation of the
federal securities laws and New York common law. The case was tried
and a jury rendered a verdict against BAS in favor of the
plaintiffs for violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 and for common law fraud. The
jury awarded aggregate compensatory damages of $84.9 million plus
prejudgment interest totaling approximately $59 million. On
May 14, 2009, the District Court denied BAS’s post trial
motions to set aside the verdict. BAS has filed an appeal in the
U.S. Court of Appeals for the Second Circuit.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">IndyMac Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On January 20, 2009,
BAS and MLPF&S, in their capacity as underwriters, along with
IndyMac MBS, IndyMac ABS, and other underwriters and individuals,
were named as defendants in a putative class action complaint,
entitled <i>IBEW Local 103 v. Indymac MBS et al</i>., filed in the
Superior Court of the State of California, County of Los Angeles,
by purchasers of IndyMac mortgage pass-through
certificates. The complaint</font> <font style="FONT-FAMILY: ARIAL" size="1">alleges, among other things, that the
mortgage loans underlying these securities were improperly
underwritten and failed to comply with the guidelines and processes
described in the applicable registration statements and prospectus
supplements, in violation of Sections 11 and 12 of the Securities
Act of 1933, and seeks unspecified compensatory damages and
rescission, among other relief.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
May 14, 2009, the Corporation (as the alleged
successor-in-interest to MLPF&S), CSC, IndyMac MBS, IndyMac
ABS, and other underwriters and individuals, were named as
defendants in a putative class action complaint, entitled
<i>Police & Fire Retirement System of the City of Detroit
v. IndyMac MBS, Inc., et al</i>., filed in the U.S. District Court
for the Southern District of New York. On June 29,
2009, the Corporation (as the alleged successor-in-interest to
CSC and MLPF&S) and other underwriters and individuals were
named as defendants in another putative class action complaint,
entitled <i>Wyoming State Treasurer, et al. v. John Olinski, et
al</i>., also filed in the U.S. District Court for the Southern
District of New York. The allegations, claims, and remedies sought
in these cases are substantially similar to those in the
<i>IBEW Local 103</i> case. On July 29, 2009,
<i>Police & Fire Retirement System</i> and <i>Wyoming
State Treasurer</i> were consolidated by the U.S. District Court
for the Southern District of New York and a consolidated amended
complaint was filed on October 9, 2009. The consolidated
complaint named the Corporation as a defendant based on
allegations that the Corporation is the
“successor-in-interest” to CSC and MLPF&S.
BAS and CSC were not named as defendants. Prior to the
consolidation of these matters, the <i>IBEW Local 103</i> case was
voluntarily dismissed by plaintiffs and its allegations and claims
were incorporated into the consolidated amended complaint. A motion
to dismiss the consolidated amended complaint was filed on
November 23, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">In re Initial Public Offering Securities
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Beginning in 2001, BAS,
Merrill Lynch, MLPF&S, other underwriters, and various issuers
and others, were named as defendants in certain putative class
action lawsuits that have been consolidated in the U.S. District
Court for the Southern District of New York as <i>In re Initial
Public Offering Securities Litigation</i>. Plaintiffs contend that
the defendants failed to make certain required disclosures and
manipulated prices of securities sold in initial public offerings
through, among other things, alleged agreements with institutional
investors receiving allocations to purchase additional shares in
the aftermarket and seek unspecified damages. On December 5,
2006, the U.S. Court of Appeals for the Second Circuit reversed the
District Court’s order certifying the proposed classes. On
September 27, 2007, plaintiffs filed a motion to certify
modified classes, which defendants opposed. On October 10,
2008, the District Court granted plaintiffs’ request to
withdraw without prejudice their class certification motion. The
parties agreed to settle the matter in an amount that is not
material to the Corporation’s Consolidated Financial
Statements and, on October 5, 2009, the District Court granted
final approval of the settlement. Certain objectors to the
settlement have filed an appeal of the District Court’s
certification of the settlement class to the U.S. Court of Appeals
for the Second Circuit.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Interchange and Related
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation, BANA, BA
Merchant Services LLC (f/k/a National Processing, Inc.) and MBNA
America Bank, N.A. are defendants in putative class actions filed
on behalf of retail merchants that accept Visa and MasterCard
payment cards. Additional defendants include Visa, MasterCard, and
other financial institutions. Plaintiffs seeking unspecified treble
damages and injunctive relief, allege that the defendants conspired
to fix the level of interchange and merchant discount fees and that
certain other practices, including various Visa and MasterCard
rules, violate federal and California antitrust laws. The class
actions, the first of which was filed on June 22, 2005, are
coordinated for pre-trial proceedings in the U.S. District Court
for the Eastern District of New York, together with individual
actions brought only against Visa and MasterCard, under the caption
<i>In Re Payment Card Interchange Fee and Merchant Discount
Anti-Trust Litigation</i>. On January 8, 2008, the District
Court dismissed all claims for pre-2004 damages. On May 8,
2008, plaintiffs filed a motion for class certification, which the
defendants opposed. On January 29, 2009, the class plaintiffs
filed a second amended consolidated complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The class
plaintiffs have also filed two supplemental complaints against
certain defendants, including the Corporation, BANA, BA Merchant
Services LLC (f/k/a National Processing, Inc.) and MBNA America
Bank, N.A., relating to MasterCard’s 2006 initial public
offering (MasterCard IPO) and Visa’s 2008 initial public
offering (Visa IPO). The supplemental complaints, which seek
unspecified treble damages and injunctive relief, assert, among
other things, claims under federal antitrust laws. On
November 25, 2008, the District Court granted
defendants’ motion to dismiss the supplemental complaint
relating to the MasterCard IPO, with leave to amend. On
January 29, 2009, plaintiffs amended the MasterCard IPO
supplemental complaint and also filed a supplemental complaint
relating to the Visa IPO.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Defendants have filed motions to dismiss the second amended
consolidated complaint and the MasterCard IPO and Visa supplemental
complaints.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">The
Corporation and certain of its affiliates have entered into
agreements with Visa and other financial institutions that provide
for sharing liabilities in connection with certain antitrust
litigation against Visa, including the Interchange case (the
Visa-Related Litigation). Under these agreements, the
Corporation’s obligations to Visa in the Visa-Related
Litigation are capped at the Corporation’s membership
interest in Visa USA, which currently is 12.9 percent. Under
these agreements, Visa Inc. placed a portion of the proceeds from
the Visa IPO into an escrow to fund liabilities arising from the
Visa-Related Litigation, including the 2008 settlement of
<i>Discover Financial Services v. Visa USA, et al</i>. and the 2007
settlement of <i>American Express Travel Related Services Company
v. Visa USA, et al</i>. Since the Visa IPO, Visa Inc. has added
funds to the escrow, which has the effect of repurchasing Visa Inc.
Class A common stock equivalents from the Visa USA members,
including the Corporation.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Lehman Brothers Holdings, Inc.
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Beginning in September
2008, BAS, MLPF&S, CSC and LaSalle Financial Services Inc.,
along with other underwriters and individuals, were named as
defendants in several putative class action complaints filed in the
U.S. District Court for the Southern District of New York and state
courts in Arkansas, California, New York and Texas. Plaintiffs
allege that the underwriter defendants violated Sections 11
and 12 of the Securities Act of 1933 by making false or misleading
disclosures in connection with various debt and convertible stock
offerings of Lehman Brothers Holdings, Inc. and seek unspecified
damages. All cases against the defendants have now been transferred
or conditionally transferred to the multi-district litigation
captioned <i>In re Lehman Brothers Securities and ERISA
Litigation</i> pending in the U.S. District Court for the Southern
District of New York. BAS, MLPF&S and other defendants moved to
dismiss the consolidated amended complaint.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Lehman Set-off
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On November 26,
2008, BANA commenced an adversary proceeding against Lehman
Brothers Holdings, Inc. (LBHI) and Lehman Brothers Special
Financing, Inc. (LBSF) in LBHI’s and LBSF’s Chapter 11
bankruptcy proceedings in the U.S. Bankruptcy Court for the
Southern District of New York. In the adversary proceeding, BANA is
seeking a declaration that it properly set-off funds held in Lehman
deposit accounts against monies owed to BANA by LBSF and LBHI under
various derivatives and guarantee agreements. LBSF and LBHI
answered the complaint, and LBHI filed counterclaims against BANA
and Bank of America Trust and Banking Corporation (Cayman) Limited
(BofA Cayman) on January 2, 2009, alleging that BANA’s
set-off was improper and violated the automatic stay in bankruptcy.
LBHI’s counterclaims sought among other relief, the return of
the set-off funds. BANA and BofA Cayman filed their answer to
LBHI’s counterclaims, which denied the material allegations
of the counterclaims, on February 9, 2009. On July 23,
2009, LBHI voluntarily dismissed its counterclaims against BofA
Cayman, but BANA remains a defendant. On September 14, 2009,
LBHI, LBSF and BANA submitted cross-motions for summary
judgment.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Lyondell Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On July 23, 2009, an
adversary proceeding, entitled <i>Official Committee of Unsecured
Creditors v. Citibank, N.A., et al</i>., was filed in the U.S.
Bankruptcy Court for the Southern District of New York. This
adversary proceeding, in which MLPF&S, Merrill Lynch Capital
Corporation and more than 50 other individuals and entities were
named as defendants, relates to ongoing Chapter 11 bankruptcy
proceedings in <i>In re Lyondell Chemical Company, et al</i>. The
plaintiff in the adversary proceeding, the Official Committee of
Unsecured Creditors of Lyondell Chemical Company (the Committee),
alleged in its complaint that certain loans made and liens granted
in connection with the December 20, 2007 merger between
Lyondell Chemical Company and Basell AF S.C.A. were avoidable
fraudulent transfers under state and federal fraudulent transfer
laws. MLPF&S is named as a defendant in its capacity as:
(i) a joint lead arranger under a senior credit facility and
individually as lender thereunder; and (ii) a joint lead
arranger under a bridge loan facility and individually as lender
thereunder. Merrill Capital Corporation is named as a defendant in
its capacity as: (i) a joint lead arranger under the senior
credit facility and individually as lender thereunder; and
(ii) administrative agent under the bridge loan facility. The
Committee sought both to avoid the obligations under the loans made
under the facilities and to recover fees and interest paid in
connection therewith. The Committee also sought unspecified damages
from MLPF&S for allegedly aiding and abetting a breach of
fiduciary duty in connection with its role as advisor to
Basell’s parent company, Access Industries.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
October 1, 2009, a second adversary proceeding, entitled
<i>The Wilmington Trust Co. v. LyondellBasell Industries AF S.C.A.,
et al</i>., was filed in the U.S. Bankruptcy Court for the Southern
District of New York. This adversary proceeding, in which
MLPF&S, Merrill Lynch Capital Corporation and Merrill Lynch
International Bank Limited (MLIB) along with more than 70 other
entities are named defendants, was filed by the successor trustee
for holders of certain Lyondell senior notes, and asserts causes of
action for declaratory judgment, breach of contract, and equitable
subordination. The complaint alleges that the 2007 leveraged buyout
of Lyondell violated a 2005 intercreditor agreement executed in
connection with the August 2005 issuance of the Lyondell senior
notes and therefore asks the Bankruptcy Court to declare the 2007
intercreditor agreement, and specifically the debt priority
provisions contained therein, null and void. The breach of contract
action, brought against Merrill Lynch Capital Corporation and one
other entity as signatories to the 2005 intercreditor agreement,
seeks unspecified damages. The equitable subordination action is
brought against all defendants and seeks to subordinate the
bankruptcy claims of those defendants to the claims of the holders
of the Lyondell senior notes. A motion to dismiss this complaint
was filed.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 16, 2010, certain defendants, including MLPF&S,
Merrill Lynch Capital Corporation and MLIB, advised the Bankruptcy
Court that they have reached a settlement in principal with the
Lyondell debtors in bankruptcy, the Committee and Wilmington Trust
that would dispose of all claims asserted against MLPF&S,
Merrill Lynch Capital Corporation and MLIB in these adversary
proceedings. This settlement is not material to the
Corporation’s Consolidated Financial Statements and is
subject to Bankruptcy Court approval.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">MBIA Insurance Corporation CDO
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On April 30, 2009,
MBIA and LaCrosse Financial Products, LLC filed a complaint against
MLPF&S and Merrill Lynch International, entitled <i>MBIA
Insurance Corporation and LaCrosse Financial Products LLC, v.
Merrill Lynch Pierce Fenner & Smith, Inc., et al</i>., in
New York Supreme Court, New York County. The complaint relates to
certain credit default swap (CDS) agreements and insurance
agreements by which plaintiffs provided credit protection to the
Merrill Lynch entities and other parties on certain CDO securities
held by them. Plaintiffs claim that the Merrill Lynch entities did
not adequately disclose the credit quality and other risks of the
CDO securities and underlying collateral. The complaint alleges
claims for fraud, negligent misrepresentation and breach of
contract, among other claims, and seeks rescission and unspecified
compensatory and punitive damages, among other relief. Defendants
filed a motion to dismiss on July 1, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Mediafiction
Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Approximately a decade
ago, MLIB acted as manager for a $284 million issuance of notes for
an Italian library of movies, backed by the future flow of
receivables to such movie rights. Mediafiction S.p.A (Mediafiction)
was responsible for collecting payments in connection with the
rights to the movies and forwarding the payments to MLIB for
distribution to note holders. Mediafiction failed to make the
required payments to MLIB and a declaration of bankruptcy under
Italian law was made with respect to Mediafiction on March 9,
2006. On July 18, 2006, MLIB filed an opposition to have its
claims recognized in the Mediafiction bankruptcy proceeding for
amounts that Mediafiction failed to pay on the notes. Thereafter,
Mediafiction filed a counterclaim alleging that the agreement
between MLIB and Mediafiction was null and void and seeking return
of the payments previously made by Mediafiction to MLIB. In October
2008, the Court of Rome granted Mediafiction’s counter claim
against MLIB in the amount of $137 million. MLIB has appealed
the ruling to the Court of Appeals of the Court of Rome.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Merrill Lynch Acquisition-related
Matters</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Since January 2009, the
Corporation and certain of its current and former officers and
directors, among others, have been named as defendants in putative
class actions, referred to as the securities actions, brought by
shareholders alleging violations of federal securities laws in
connection with certain public statements and the proxy statement
with respect to the Corporation’s acquisition of Merrill
Lynch (the Acquisition). Several of these actions have been
consolidated and a consolidated amended class action complaint has
been filed in the U.S. District Court for the Southern District of
New York, as described below.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">In
addition, several derivative actions, referred to as the derivative
actions, have been filed against certain current and former
directors and officers of the Corporation, and certain other
parties, and the Corporation as nominal defendant, in the federal
and state courts, as described below.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Other
putative class actions, referred to as the ERISA actions, have been
filed in the U.S. District Court for the Southern District of New
York against the Corporation and certain of its current and former
officers and directors seeking recovery for losses from the Bank of
America 401(k) Plan pursuant to ERISA and a consolidated amended
class action com plaint in these ERISA actions has been filed, as
described below.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>In Re Bank of
America Securities, Derivative & ERISA
Litigation</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On June 10, 2009,
the MDL Panel issued an order transferring the actions related to
the Acquisition pending in federal courts outside the U.S. District
Court for the Southern District of New York for coordinated or
consolidated pretrial proceedings with the securities actions,
ERISA actions, and derivative actions pending in the U.S. District
Court for the Southern District of New York. The securities
actions, ERISA actions and derivative actions have been separately
consolidated and are now pending under the caption <i>In re Bank of
America Securities, Derivative, and Employment Retirement Income
Security Act (ERISA) Litigation</i>.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
September 25, 2009, plaintiffs in the securities actions in
the <i>In re Bank of America Securities, Derivative and Employment
Retirement Income Security Act (ERISA) Litigation</i> filed a
consolidated amended class action complaint. The amended complaint
is brought on behalf of a purported class, which consists of
purchasers of the Corporation’s common and preferred
securities between September 15, 2008 and January 21,
2009, holders of the Corporation’s common stock or Series B
Preferred Stock as of October 10, 2008 and purchasers of the
Corporation’s common stock issued in the offering that
occurred on or about October 7, 2008, and names as defendants
the Corporation, Merrill Lynch and certain of their current and
former directors, officers and affiliates. The amended complaint
alleges violations of Sections 10(b), 14(a) and 20(a) of the
Securities Exchange Act of 1934, and SEC rules promulgated
thereunder, based on, among other things, alleged false statements
and omissions related to: (i) the financial condition and 2008
fourth quarter losses experienced by the Corporation and Merrill
Lynch; (ii) due diligence conducted in connection with the
Acquisition; (iii) bonus payments to Merrill Lynch employees;
and (iv) the Corporation’s contacts with government
officials regarding the Corporation’s consideration of
invoking the material adverse change clause in the merger agreement
and the possibility of obtaining government assistance in
completing the Acquisition. The amended complaint also alleges
violations of Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 related to an offering of the Corporation’s common stock
announced on or about October 6, 2008, and based on, among other
things, alleged false statements and omissions related to bonus
payments to Merrill Lynch employees and the benefits and impact of
the Acquisition on the Corporation, and names BAS and MLPF&S,
among others, as defendants on the Section 11 and 12(a)(2) claims.
The amended complaint seeks unspecified damages and other relief.
On November 24, 2009, the Corporation, BAS, Merrill Lynch,
MLPF&S and the officer and director defendants moved to dismiss
the consolidated amended class action complaint.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
October 9, 2009, plaintiffs in the derivative actions in the
<i>In re Bank of America Securities, Derivative and Employment
Retirement Income Security Act (ERISA) Litigation</i> filed a
consolidated amended derivative and class action complaint. The
amended complaint names as defendants certain of the
Corporation’s current and former directors, officers and
financial advisors, and certain of Merrill Lynch’s current
and former directors and officers. The amended complaint alleges,
among other things, that: (i) certain of the
Corporation’s officers breached fiduciary duties by
conducting an inadequate due diligence process surrounding the
Acquisition, failing to make adequate disclosures regarding Merrill
Lynch’s 2008 fourth quarter losses and an alleged agreement
to permit Merrill Lynch to pay bonuses, and failing to invoke the
material adverse change clause or otherwise renegotiate the
Acquisition; (ii) certain of the Corporation’s officers
and certain Merrill Lynch officers received incentive compensation
that was inappropriate in view of the work performed and the
results achieved and, therefore, that such person should return
unearned compensation; (iii) certain of the
Corporation’s officers and directors exposed the Corporation
to significant liability under state and federal law and should be
held responsible to the Corporation for contribution;
(iv) certain Merrill Lynch officers and directors and certain
financial advisors to the Corporation aided and abetted breaches of
fiduciary duties by causing and/or assisting with the consummation
of the Acquisition; and (v) certain of the Corporation’s
officers and directors, certain of the Merrill Lynch officers and
directors and certain of the Corporation’s financial advisors
violated Section 14(a) of the Securities Exchange Act of 1934
and Rule 14a-9 promulgated thereunder by allegedly making material
misrepresentations and/or material omissions in the proxy statement
for the Acquisition and related materials and failing to update
those materials to reflect, among other things, Merrill
Lynch’s 2008 fourth quarter losses and Merrill Lynch’s
ability and intention to pay bonuses to its employees in 2008. The
amended complaint also purports to bring a direct class action
claim for breach of a duty of full disclosure and complete candor
by failing to correct or update disclosures made in the proxy
statement for the Acquisition and for concealing an alleged
agreement authorizing Merrill Lynch to pay bonuses. The direct
claim is brought on behalf of a purported class of all persons who
owned shares of the Corporation’s common stock as of
October 10, 2008 and is brought against certain of the
Corporation’s current and former officers and directors. The
Corporation is named as a nominal defendant with respect to the
derivative claims and is not named as a defendant in the direct
class action claim. The amended complaint seeks an unspecified
amount of monetary damages, equitable remedies, and other relief.
On December 8, 2009, the Corporation, the officer and director
defendants and the financial advisors moved to dismiss the
consolidated amended derivative and class complaint. On February 8,
2010, the plaintiffs voluntarily dismissed their claims against
each of the former Merrill Lynch officers and directors without
prejudice.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
October 9, 2009, plaintiffs in the ERISA actions in the <i>In
re Bank of America Securities, Derivative and Employment Retirement
Income Security Act (ERISA) Litigation</i> filed a consolidated
amended complaint for breaches of duty under ERISA. The amended
complaint is brought on behalf of a purported class that consists
of participants in the Corporation’s 401(k) Plan, the
Corporation’s 401(k) Plan for Legacy Companies, the
Countrywide Financial Corporation 401(k) Plan (collectively the
401(k) Plans), and the Corporation’s Pension Plan. The
amended complaint names as defendants the Corporation, members of
the Corporation’s Corporate Benefits Committee, members of
the Compensation and Benefits Committee of the Corporation’s
Board of Directors and certain of the Corporation’s current
and former directors and officers. The amended complaint alleges
violations of ERISA, based on, among other things: (i) an
alleged failure to prudently and loyally manage the 401(k) Plans
and Pension Plan by continuing to offer the Corporation’s
common stock as an investment option or measure for participant
contributions; (ii) an alleged failure to monitor the
fiduciaries of the 401(k) Plans and Pension Plan; (iii) an
alleged failure to provide complete and accurate information to the
401(k) Plans and Pension Plan participants with respect to the
Merrill Lynch and Countrywide acquisitions and related matters; and
(iv) alleged co-fiduciary liability for these purported
fiduciary breaches. The amended complaint seeks an unspecified
amount of monetary damages, equitable remedies, and other relief.
On December 8, 2009, the Corporation and the officer and
director defendants moved to dismiss the consolidated amended
complaint.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Other
Acquisition-related Litigation</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Since January 21,
2009, the Corporation and certain of its current and former
directors have been named as defendants in several putative class
and derivative actions, including <i>Rothbaum v. Lewis,
Southeastern Pennsylvania Transportation Authority v. Lewis,
Tremont Partners LLC v.</i> <i>Lewis, Kovacs v. Lewis, Stern v.
Lewis,</i> and <i>Houx v. Lewis</i>, brought by shareholders in the
Delaware Court of Chancery alleging breaches of fiduciary duties in
connection with the Acquisition. On April 27, 2009, the
Delaware Court of Chancery consolidated the derivative actions
under the caption <i>In re Bank of America Corporation Stockholder
Derivative Litigation.</i> On April 30, 2009, the putative
class claims in the actions, entitled <i>Stern v. Lewis</i> and
<i>Houx v. Lewis</i>, were voluntarily dismissed without prejudice
by order of the Chancery Court. On May 8, 2009, plaintiffs
filed an amended consolidated complaint in the Chancery Court,
asserting claims derivatively on behalf of the Corporation that the
defendants breached their fiduciary duty of loyalty by, among other
things, failing to make adequate disclosures regarding Merrill
Lynch’s 2008 fourth quarter losses and bonuses paid to
Merrill Lynch employees in 2008 and breached their fiduciary duty
of loyalty and committed waste by failing to invoke the material
adverse change clause in the merger agreement or otherwise
renegotiate the Acquisition. The amended consolidated complaint
seeks damages sustained as a result of the alleged wrongdoing,
disgorgement of bonuses paid to the defendants and to the
Corporation’s management team or to former Merrill Lynch
executives, as well as attorneys’ fees and costs and other
equitable relief. On June 19, 2009, the Corporation and the
individual defendants filed motions to dismiss. On October 12,
2009, the Chancery Court denied defendants’ motions to
dismiss.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 17, 2009, an additional derivative action, entitled
<i>Cunniff v. Lewis, et al.</i>, was filed in North Carolina
Superior Court. The complaint, which names certain of the
Corporation’s current and former officers and directors as
defendants and names the Corporation as a nominal defendant,
alleges that defendants violated fiduciary duties in connection
with the Acquisition by, among other things, failing to disclose:
(i) the financial condition and 2008 fourth quarter losses
experienced by Merrill Lynch and (ii) the extent of the due
diligence conducted in connection with the Acquisition. The
complaint also brings a cause of action for waste of corporate
assets for, among other things, allegedly subjecting the
Corporation to potential material liability for securities fraud.
The complaint seeks unspecified damages and other relief. On
October 6, 2009, the Superior Court granted defendants’
motion to stay the action in favor of derivative actions pending in
the Delaware Court of Chancery.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
September 25, 2009, an alleged shareholder of the Corporation
filed an action against the Corporation, and its then Chief
Executive Officer in Superior Court of the State of California, San
Francisco County. The complaint alleges state law causes of action
for breach of fiduciary duty, misrepresentation and fraud in
connection with plaintiff’s purchase of the
Corporation’s common stock, based on alleged failures to
disclose information regarding Merrill Lynch’s value. The
action, entitled <i>Catalano v. Bank of America</i>, seeks
unspecified damages and other relief. Defendants have removed the
action to the U. S. District Court for the Northern District of
California, and have requested that the MDL Panel transfer the
action to the U.S. District Court for the Southern District of New
York for coordinated or consolidated pre-trial proceedings with the
related litigation pending in that Court. On December 11,
2009, defendants removed the action to the U.S. District Court for
the Northern District of California. On February 5, 2010, the
MDL Panel transferred the action to the U.S. District Court for the
Southern District of New York for coordinated or consolidated
pre-trial proceedings with the related litigation pending in that
Court.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
December 22, 2009, the Corporation and certain of its officers
were named in a purported class action filed in the U.S. District
Court for the Southern District of New York, entitled <i>Iron
Workers of Western Pennsylvania Pension Plan v. Bank of America
Corp., et al</i>. The action is purportedly brought on behalf of
all persons who purchased or acquired certain Corporation debt
securities between September 15, 2008 and January 21,
2009 and alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and SEC rules promulgated
thereunder, based on, among other things, alleged false statements
and omissions related to: (i) the financial condition and 2008
fourth quarter losses experienced by the Corporation and Merrill
Lynch; (ii) due diligence conducted in connection with the
Acquisition; (iii) bonus payments to Merrill Lynch employees;
and (iv) certain defendants’ contacts with government
officials regarding the Corporation’s consideration of
invoking the material adverse change clause in the merger agreement
and the possibility of obtaining additional government assistance
in completing the Acquisition. The complaint seeks unspecified
damages and other relief. The parties in the securities actions in
the <i>In re Bank of America Securities, Derivative and Employment
Retirement Income Security Act (ERISA) Litigation</i> have
requested that the District Court consolidate this action with
their actions.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
January 13, 2010, the Corporation, Merrill Lynch and certain
of the Corporation’s current and former officers and
directors were named in a purported class action filed in the U.S.
District Court for the Southern District of New York entitled
<i>Dornfest v. Bank of America Corp., et al.</i> The action is
purportedly brought on behalf of investors in Corporation option
contracts between September 15, 2008 and January 22, 2009
and alleges that during the class period approximately
9.5 million Corporation call option contracts and
approximately eight million Corporation put option contracts were
already traded on seven of the Options Clearing Corporation
exchanges. The complaint alleges that defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC
rules promulgated thereunder, based on, among other things, alleged
false statements and omissions related to: (i) the financial
condition and 2008 fourth quarter losses experienced by the
Corporation and Merrill Lynch; (ii) due diligence conducted in
connection with the Acquisition; (iii) bonus payments to
Merrill Lynch employees; and (iv) certain defendants’
contacts with government officials regarding the
Corporation’s consideration of invoking the material adverse
change clause in the merger agreement and the possibility of
obtaining additional government assistance in completing the
Acquisition. The plaintiff class allegedly suffered damages
because they invested in Corporation option contracts at allegedly
artificially inflated prices and were adversely affected as the
artificial inflation was removed from the market price of the
securities. The complaint seeks unspecified damages and other
relief. Plaintiffs in the securities actions in the <i>In re Bank
of America Securities, Derivative and Employment Retirement Income
Security Act (ERISA) Litigation</i> have requested that the
District Court consolidate this action with their
actions.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 17, 2010, an alleged shareholder of the Corporation filed
a purported derivative action, entitled <i>Bahnmeier v. Lewis, et
al</i>., in the U.S. District Court for the Southern District of
New York. The complaint names as defendants certain of the
Corporation’s current and former directors and officers, and
one of Merrill Lynch’s former officers. The complaint
alleges, among other things, that the individual defendants
breached their fiduciary duties by failing to provide accurate and
complete information to shareholders regarding, among other things:
(i) the potential for litigation resulting from Countrywide’s
lending practices and the risk posed to the Corporation’s
capital levels as a result of Countrywide’s loan losses; (ii)
the deterioration of Merrill Lynch’s financial condition
during the fourth quarter of 2008, which was allegedly sufficient
to trigger the material adverse change clause in the merger
agreement with Merrill Lynch; (iii) the agreement to permit Merrill
Lynch to pay up to $5.8 billion in bonuses to its employees; and
(iv) the discussions with regulators in December 2008 concerning
possibly receiving additional government assistance in completing
the Acquisition. The complaint also asserts claims against the
individual defendants for breach of fiduciary duty by failing to
maintain adequate internal controls, unjust enrichment, abuse of
control and gross mismanagement in connection with the supervision
and management of the operations, business and disclosure controls
of the Corporation. The Corporation is named as a nominal defendant
only and no monetary relief is sought against it. The complaint
seeks, among other things, an unspecified amount of monetary
damages, equitable remedies and other relief.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Regulatory
Matters</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation and
Merrill Lynch have also received and are responding to inquiries
from a variety of regulators and governmental authorities relating
to among other things: (i) the payment by Merrill Lynch of
bonuses for 2008 and disclosures related thereto;
(ii) disclosures relating to Merrill Lynch’s losses in
the fourth quarter of 2008; (iii) disclosures relating to the
Corporation’s consideration of whether there had been a
material adverse change relating to Merrill Lynch and discussions
with U.S. government officials in late December 2008; and
(iv) the Acquisition and related proxy statement.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
August 3, 2009, the SEC filed a complaint against the
Corporation, entitled <i>SEC v. Bank of America</i>, in the U.S.
District Court for the Southern District of New York, alleging that
the Corporation’s proxy statement filed on November 3,
2008 failed to disclose the discretionary incentive compensation
that Merrill Lynch could award to its employees prior to completion
of the Acquisition. On September 14, 2009, the District Court
declined to approve a proposed consent judgment agreed to by the
Corporation and the SEC. On October 9, 2009, the
Corporation’s Board of Directors approved a limited waiver of
the Corporation’s attorney-client and attorney work product
privileges as to certain subject matters under investigation by the
U.S. Congress, and federal and state regulatory
authorities.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
January 12, 2010, the SEC filed a second complaint against the
Corporation, entitled <i>SEC v. Bank of America Corp.</i>, in the
U.S. District Court for the Southern District of New York alleging
that the Corporation violated the federal proxy rules for failing
to disclose information concerning Merrill Lynch’s known and
estimated losses prior to the shareholder vote on December 5,
2008, to approve the Acquisition. The SEC alleges that the
Corporation was required to describe in its proxy and registration
statement any material changes in Merrill Lynch’s affairs
that were not already reflected in Merrill Lynch’s quarterly
reports or certain other public filings, and to update shareholders
on any “fundamental change” arising after the effective
date of the registration statement. The SEC alleges that the
Corporation’s failure to provide such an update violated
Section 14(a) of the Securities Exchange Act of 1934 and Rule
14a-9 thereunder. The SEC is seeking an injunction against the
Corporation to prohibit any future violations of Section 14(a)
and Rule 14a-9, as well as an unspecified civil monetary
penalty.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 1, 2010, the Corporation entered into a proposed
settlement with the SEC to resolve all cases filed by the SEC
relating to the Acquisition. Also, on February 4, 2010, the
Corporation entered into an agreement with the Office of the
Attorney General for the State of North Carolina (NC AG) to resolve
all matters that are the subject of an investigation by that Office
relating to the Acquisition. Under the terms of the proposed
settlements, the Corporation agreed, without admitting or denying
any wrongdoing, to pay $150 million as a civil penalty to be
distributed to former Bank of America shareholders as part of the
SEC’s Fair Fund program and a payment of $1 million to be
made to the NC AG for its consumer protection purposes. The payment
to the NC AG is not a penalty or a fine. As part of the
settlements, the Corporation also agreed to implement a number of
additional undertakings for a period of three years, including:
engaging an independent auditor to perform an assessment and
provide an attestation report on the effectiveness of the
Corporation’s disclosure controls and procedures; furnishing
management certifications signed by the CEO and CFO with respect to
proxy statements; retaining disclosure counsel to the Audit
Committee of the Corporation’s Board; adopting independence
requirements beyond those already applicable for all members of the
Compensation and Benefits Committee of the Board; continuing to
retain an independent compensation consultant to the Compensation
and Benefits Committee; implementing and disclosing written
incentive compensation principles on the Corporation’s
website and providing the Corporation’s shareholders with an
advisory vote concerning any proposed changes to such principles;
and providing the Corporation’s shareholders with an annual
“say on pay” advisory vote regarding the compensation
of senior executives. These proposed undertakings may be amended or
modified in light of any new regulation or requirement that comes
into effect during the three-year period and is applicable to the
Corporation with respect to the same subject matter. On February
22, 2010, the District Court approved the settlement subject to the
Corporation and the SEC making certain modifications to the
settlement to require agreement between the SEC and the Corporation
on the selection of the independent auditor and disclosure counsel
and to clarify certain issues regarding the distribution of the
civil penalty. The parties made the modifications and on February
24, 2010, the District Court entered the Consent Judgment
encompassing the settlement terms.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 4, 2010, the Office of the New York State Attorney
General (NY AG) filed a civil complaint in the Supreme Court of New
York State, entitled <i>People of the State of New York v. Bank of
America, et al</i>. The complaint names as defendants the
Corporation and the Corporation’s former chief executive and
chief financial officers, Kenneth D. Lewis, and Joseph L. Price,
and alleges violations of Sections 352, 352-c(1)(a), 352-c(1)(c),
and 353 of the New York General Business Law, commonly known as the
Martin Act, and Section 63(12) of the New York Executive Law.
The complaint is based on, among other things, alleged false
statements and omissions and fraudulent practices related to:
(i) the disclosure of Merrill Lynch’s financial
condition and its interim and projected losses during the fourth
quarter of 2008; (ii) the Corporation’s contacts with
federal government officials regarding the Corporation’s
consideration of invoking the material adverse effect clause in the
merger agreement and the possibility of obtaining additional
government assistance; (iii) the disclosure of the payment and
timing of year-end incentive compensation to Merrill Lynch
employees; and (iv) public statements regarding the due
diligence conducted in connection with the Acquisition and positive
statements regarding the Acquisition. The complaint seeks an
unspecified amount in disgorgement, penalties, restitution, and
damages and other equitable relief.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Merrill Lynch Subprime-related
Matters</font></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Louisiana
Sheriffs’ Pension & Relief Fund v. Conway, et
al.</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On October 3, 2008,
a putative class action was filed against Merrill Lynch, Merrill
Lynch Capital Trust I, Merrill Lynch Capital Trust II, Merrill
Lynch Capital Trust III, MLPF&S (collectively the Merrill Lynch
entities), and certain present and former Merrill Lynch officers
and directors, and underwriters, including BAS, in New York Supreme
Court, New York County. The complaint seeks relief on behalf of all
persons who purchased or otherwise acquired debt securities issued
by the Merrill Lynch entities pursuant to a shelf registration
statement dated March 31, 2006. The complaint alleged that
prospectuses misstated the financial condition of the Merrill Lynch
entities and failed to disclose their exposure to losses from
investments tied to subprime and other mortgages, as well as their
liability arising from its participation in the ARS market. On
October 22, 2008, the action was removed to the U.S. District
Court for the Southern District of New York and on November 5,
2008 it was accepted as a related case to <i>In re Merrill
Lynch & Co., Inc. Securities, Derivative, and ERISA
Litigation</i>. On April 21, 2009, the parties reached an
agreement in principle to settle the Louisiana Sheriff’s
matter in an amount that is not material to the Corporation’s
Consolidated Financial Statements and dismiss all claims with
prejudice. On November 30, 2009, the U.S. District Court for
the Southern District of New York granted final approval of the
settlement.</font></p>
<p style="MARGIN-TOP: 5px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Connecticut
Carpenters Pension Fund, et al. v. Merrill Lynch & Co.,
Inc., et al.; Iron Workers Local No. 25 Pension Fund v.
Credit-Based Asset Servicing and Securitization LLC, et al.; Public
Employees’ Ret. System of Mississippi v. Merrill
Lynch & Co. Inc. et al.; Wyoming State Treasurer v.
Merrill Lynch & Co. Inc.</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">Beginning in December
2008, Merrill Lynch affiliated entities, including Merrill Lynch
Mortgage Investors, Inc., and officers and directors of Merrill
Lynch Mortgage Investors, Inc., and others were named in four
putative class actions arising out of the underwriting and sale of
more than $55 billion of MBS. The complaints alleged, among other
things, that the relevant registration statements and accompanying
prospectuses or prospectus supplements misrepresented or omitted
material facts regarding the underwriting standards used to
originate the mortgages in the mortgage pools underlying the MBS,
the process by which the mortgage pools were acquired, and the
appraisals of the homes secured by the mortgages. Plaintiffs seek
to recover alleged losses in the market value of the MBS allegedly
caused by the performance of the underlying mortgages or to rescind
their purchases of the MBS. These cases were consolidated under the
caption <i>Public Employees’ Ret. System of Mississippi v.
Merrill Lynch & Co. Inc</i>. and, on May 20, 2009, a
consolidated amended complaint was filed. On June 17, 2009,
all defendants filed a motion to dismiss the consolidated amended
complaint.</font></p>
<p style="MARGIN-TOP: 5px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Federal Home Loan
Bank of Seattle Litigation</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On December 23,
2009, FHLB Seattle filed a complaint, entitled <i>Federal Home Loan
Bank of Seattle v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., et al</i>., in the Superior Court of Washington for King
County against MLPF&S, Merrill Lynch Mortgage Investors, Inc.,
and Merrill Lynch Mortgage Capital, Inc. The complaint alleges
violations of the Securities Act of Washington in connection with
the offering of various MBS and asserts, among other things,
misstatements and omissions concerning the credit quality of the
mortgage loans underlying the MBS and the loan origination
practices associated with those loans. The complaint seeks
rescission, interest, costs and attorneys’ fees.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Merrill
Lynch & Co., Inc. is cooperating with the SEC and other
governmental authorities investigating subprime mortgage-related
activities.</font></p>
<p style="MARGIN-TOP: 5px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Montgomery</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On January 19, 2010,
a putative class action entitled <i>Montgomery v. Bank of America,
et al.</i>, was filed in the U.S. District Court for the Southern
District of New York against the Corporation, BAS, MLPF&S and a
number of its current and former officers and directors on behalf
of all persons who acquired certain preferred stock offered
pursuant to a shelf registration statement dated May 5, 2006,
specifically two offerings dated January 24, 2008 and another
dated May 20, 2008. The <i>Montgomery</i> complaint asserts
claims under Sections 11, 12(a)(2), and 15 of the Securities Act of
1933, and alleges that the prospectus supplements associated with
the offerings: (i) failed to disclose that the
Corporation’s loans, leases, CDOs, and commercial MBS were
impaired to a greater extent than disclosed;
(ii) misrepresented the extent of the impaired assets by
failing to establish adequate reserves or properly record losses
for its impaired assets; and (iii) misrepresented the adequacy
of the Corporation’s internal controls, and the
Corporation’s capital base in light of the alleged impairment
of its assets.</font></p>
<p style="MARGIN-TOP: 5px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Municipal Derivatives
Matters</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Antitrust Division of
the DOJ, the SEC, and the Internal Revenue Service (IRS) are
investigating possible anticompetitive bidding practices in the
municipal derivatives industry involving various parties, including
BANA, dating back to the early 1990s. The activities at issue in
these industry-wide government investigations concern the bidding
process for municipal derivatives that are offered to states,
municipalities and other issuers of tax-exempt bonds. The
Corporation has cooperated, and continues to cooperate, with the
DOJ, the SEC and the IRS. On January 11, 2007, the Corporation
entered into a Corporate Conditional Leniency Letter (the Letter)
with DOJ. Under the Letter and subject to the Corporation’s
continuing cooperation, the DOJ will not bring any criminal
antitrust prosecution against the Corporation in connection with
the matters that the Corporation reported to DOJ. Subject to
satisfying the DOJ and the court presiding over any civil
litigation of the Corporation’s cooperation, the Corporation
is eligible for: (i) a limit on liability to single, rather
than treble, damages in certain types of related civil antitrust
actions; and (ii) relief from joint and several antitrust
liability with other civil defendants.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
February 4, 2008, BANA received a Wells notice advising that
the SEC staff is considering recommending that the SEC bring a
civil injunctive action and/or an administrative proceeding against
BANA “in connection with the bidding of various financial
instruments associated with municipal securities.” An SEC
action or proceeding could seek a permanent injunction,
disgorgement plus prejudgment interest, civil penalties and other
remedial relief. Merrill Lynch is also being investigated by
the SEC and the DOJ concerning bidding practices in the municipal
derivatives industry.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Beginning
in March 2008, the Corporation, BANA and other financial
institutions, including Merrill Lynch, have been named as
defendants in complaints filed in federal courts in the District of
Columbia, New York and elsewhere. Plaintiffs in those cases
purport to represent classes of government and private entities
that purchased municipal derivatives from defendants. The
complaints allege that defendants conspired to allocate customers
and fix or stabilize the prices of certain municipal derivatives
from 1992 through the present. The plaintiffs’ complaints
seek unspecified damages, including treble damages. These
lawsuits were consolidated for pre-trial proceedings in the <i>In
re Municipal Derivatives Antitrust Litigation</i>, pending in the
U.S. District Court for the Southern District of New
York. BANA, BAS, Merrill Lynch and other financial
institutions have also been named in several related individual
suits originally filed in California state courts on behalf of a
number of cities and counties in California and asserting state law
causes of action. All of these cases have been removed to the
U.S. District Court for the Southern District of New York and are
now part of <i>In re Municipal Derivatives Antitrust
Litigation</i>. The amended complaints filed in these actions
continue to allege a substantially similar conspiracy and now
assert violations of the Sherman Act and California’s
Cartwright Act. Six individual actions have been filed in the U.S.
District Courts for the Eastern and Central Districts of
California. All of these cases allege a substantially similar
conspiracy and violations of the Sherman and Cartwright Acts, and
seek unspecified damages, and in some cases, treble damages. All
six cases are in the process of being transferred for consolidation
in the <i>In re Municipal Derivatives Antitrust
Litigation.</i></font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
September 3, 2009, BANA was sued by the West Virginia Attorney
General on behalf of the State of West Virginia for the same
conspiracy alleged in the <i>In re Municipal Derivatives Antitrust
Litigation</i>. The suit was originally filed in the Circuit Court
of Mason County, West Virginia. BANA removed the case to the U.S.
District Court for the Southern District of West Virginia
(Huntington Division). The State’s motion to remand is fully
briefed. Upon removal, BANA noticed the State’s case as a
tag-along action subject to transfer by the MDL Panel. The MDL
Panel has issued a Conditional Transfer Order transferring the
action to the U.S. District Court for the Southern District of New
York. The State objected and filed a motion to vacate. That motion
was denied on February 2, 2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Beginning
in April 2008, the Corporation and BANA received subpoenas,
interrogatories and/or civil investigative demands from a number of
state attorneys general requesting documents and information
regarding municipal derivatives transactions from 1992 through the
present. The Corporation and BANA are cooperating with the state
attorneys general.</font></p>
<p style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Ocala Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On November 25,
2009, BANA was named as a defendant in two related lawsuits filed
in the U.S. District Court for the Southern District of New York.
In <i>BNP Paribas Mortgage Corporation v. Bank of America, N.A.</i>
and <i>Deutsche Bank, AG v. Bank of America, N.A., plaintiffs
assert breach of contract, negligence and indemnification claims in
connection with BANA’s roles as, among other things,
collateral agent, custodian and indenture trustee of Ocala Funding,
LLC (Ocala). Ocala was a mortgage warehousing facility that
provided funding to Taylor, Bean & Whitaker Mortgage Corp.
(TBW) by issuing commercial paper and term securities backed by
mortgage loans originated by TBW. Plaintiffs claim that they
purchased in excess of $1.6 billion in securities issued by Ocala
and that BANA allegedly failed, among other things, to protect the
collateral backing plaintiffs’ securities. Plaintiffs seek
unspecified compensatory damages, among other relief. On
February 4, 2010, BANA moved to dismiss the
complaints.</i></font></p>
<p style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Parmalat Finanziaria S.p.A.
Matters</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On December 24,
2003, Parmalat Finanziaria S.p.A. (Parmalat) was admitted into
insolvency proceedings in Italy, known as “extraordinary
administration.” The Corporation, through certain of its
subsidiaries, including BANA, provided financial services and
extended credit to Parmalat and its related entities. On
June 21, 2004, Extraordinary Commissioner Dr. Enrico
Bondi filed with the Italian Ministry of Production Activities a
plan of reorganization for the restructuring of the companies of
the Parmalat group that are included in the Italian extraordinary
administration proceeding. In July 2004, the Italian Ministry of
Production Activities approved the Extraordinary
Commissioner’s restructuring plan, as amended, for the
Parmalat group companies that are included in the Italian
extraordinary administration proceeding. This plan was approved by
the voting creditors and the Court of Parma, Italy in October of
2005.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Litigation and investigations relating to Parmalat are pending
in both Italy and the United States.</font></p>
<p style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Proceedings in
Italy</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">On May 26, 2004, the
Public Prosecutor’s Office for the Court of Milan, Italy
filed criminal charges against Luca Sala, Luis Moncada, and Antonio
Luzi, three former employees of the Corporation, alleging the crime
of market manipulation in connection with a press release issued by
Parmalat. On December 18, 2008, the Court of Milan, Italy
fully acquitted each of the former employees of all charges. On
June 17, 2009, the Public Prosecutor’s Office for the
Court of Milan, Italy filed an appeal of the decision. The initial
hearing date for the appeal is set for January 26, 2010. The
Public Prosecutor’s Office also filed a related charge in May
2004 against the Corporation asserting administrative liability
based on an alleged failure to maintain an organizational model
sufficient to prevent the alleged criminal activities of its former
employees. The trial on this administrative charge is ongoing, with
hearing dates scheduled in 2010.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
July 31, 2009, the Public Prosecutor’s Office for the
Court of Parma, Italy filed formal charges against 10 former
employees and one current employee of the Corporation, alleging the
commission of crimes of fraudulent bankruptcy, fraud, usury and
embezzlement in connection with the insolvency of Parmalat. The
first preliminary hearing was held on November 16, 2009, with
further hearings in 2010.</font></p>
<p style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Arial" color="#4C4C4C" size="1"><b>Proceedings in the
United States</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">All cases listed herein
have been transferred to the U.S. District Court for the Southern
District of New York for coordinated pre-trial purposes under the
caption <i>In re Securities Litigation Parmalat.</i></font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">Since
December 2003, certain purchasers of Parmalat-related private
placement offerings have filed complaints against the Corporation
and various related entities in the following actions: <i>Principal
Global Investors,</i> <i>LLC, et al. v. Bank of America
Corporation, et al</i>. in the U.S. District Court for the Southern
District of Iowa; <i>Monumental Life Insurance Company,
et</i></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1"><i>al. v. Bank of America
Corporation, et al.</i> in the U.S. District Court for the Northern
District of Iowa; <i>Prudential Insurance Company of America
and</i> <i>Hartford Life Insurance Company v. Bank of America
Corporation, et al</i>. in the U.S. District Court for the Northern
District of Illinois; <i>Allstate Life Insurance Company v. Bank of
America Corporation, et al</i>. in the U.S. District Court for the
Northern District of Illinois; <i>Hartford Life Insurance v. Bank
of America Corporation, et al.</i> in the U.S. District Court for
the Southern District of New York; and <i>John Hancock Life
Insurance Company, et al. v. Bank of America Corporation et al.</i>
in the U.S. District Court for the District of Massachusetts. The
actions variously allege violations of federal and state securities
laws and state common law, and seek rescission and unspecified
damages based upon the Corporation’s and related
entities’ alleged roles in certain private placement
offerings issued by Parmalat-related companies. The plaintiffs seek
rescission and unspecified damages resulting from alleged purchases
of approximately $305 million in private placement
instruments.</font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 2%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: ARIAL" size="1">On
November 23, 2005, the Official Liquidators of Food Holdings
Limited and Dairy Holdings Limited, two entities in liquidation
proceedings in the Cayman Islands, filed a complaint, entitled
<i>Food Holdings Ltd, et al. v. Bank of America Corp., et al.</i>
(the Food Holdings Action), in the U.S. District Court for the
Southern District of New York against the Corporation and several
related entities. The complaint in the Food Holdings Action alleges
that the Corporation and other defendants conspired with Parmalat
in carrying out transactions involving the plaintiffs in connection
with the funding of Parmalat’s Brazilian entities, and
asserts claims for fraud, negligent misrepresentation, breach of
fiduciary duty and other related claims. The complaint seeks in
excess of $400 million in compensatory damages and interest, among
other relief. A bench trial was held the week of September 14,
2009. On February 17, 2010, the District Court issued an
Opinion and Order dismissing all of the claims.</font></p>
<p style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: ARIAL" size="2"><b><font style="FONT-FAMILY: ARIAL" color="#4C4C4C" size="1">Pender Litigation</font></b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="justify">
<font style="FONT-FAMILY: ARIAL" size="1">The Corporation is a
defendant in a putative class action entitled <i>William L. Pender,
et al. v. Bank of America Corporation, et al.</i> (formerly
captioned <i>Anita Pothier, et al. v. Bank of America Corporation,
et al.</i>), which is pending in the U.S. District Court for the
Western District of North Carolina. The action, filed on
June 30, 2004, is brought on behalf of participants in or
beneficiaries of The Bank of America Pension Plan (formerly known
as the NationsBank Cash Balance Plan) and The Bank of America
401(k) Plan (formerly known as the NationsBank 401(k) Plan). The
Corporation, BANA, The Bank of America Pension Plan, The Bank of
America 401(k) Plan, the Bank of America Corporation Corporate
Benefits Committee and various members thereof, and
PricewaterhouseCoopers LLP are defendants. The complaint alleges
violations of ERISA, including that the design of The Bank of
America Pension Plan violated ERISA’s defined benefit pension
plan standards and that such plan’s definition of normal
retirement age is invalid. In addition, the complaint alleges age
discrimination by The Bank of America Pension Plan, unlawful lump
sum benefit calculation, violation of ERISA’s
“anti-backloading” rule, that certain voluntary
transfers of assets by participants in The Bank of America 401(k)
Plan to The Bank of America Pension Plan violated ERISA, and other
related claims. The complaint alleges that plan participants are
entitled to greater benefits and seeks declaratory relief, monetary
relief in an unspecified amount, equitable relief, including an
order reforming The Bank of America Pension Plan, attorneys’
fees and interest. On September 26, 2005, the bank defendants
filed a motion to dismiss. On December 1, 2005, the plaintiffs
moved to certify classes consisting of, among others, (i) all
persons who accrued or who are currently accruing benefits under
The Bank of America Pension Plan and (ii) all persons who
elected to have amounts representing their account balances under
The Bank of America 401(k) Plan transferred to The Bank of America
Pension Plan.</font></p>
</div>NOTE 14 –
Commitments and Contingencies
In the normal course of
business, the Corporation enters into a number of off-balance sheet
commitments. ThesefalsefalseNo definition available.No authoritative reference available.falsefalse11falseUnKnownUnKnownUnKnownfalsetrue
