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 O:kiYOkiYO08C04.xml 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 36 financial institution, as the SecretaT deter- mines appropriate; or (B) in the case of any financial institution other than one described in subparagraph (A), a senior debt instrument from such financial in- stitution, as described in paragraph (2)(C). (2) TERMS AND CONDITIONS.--The terms and conditions of any warrant or senior debt instrument required under paragraph (1) shall meet the fol- lowing requirements: (A) PURPOSEs.--Sueh terms and condi- tions shall, at a minimum, be designed- (i) to provide for reasonable participa- tion by the SeeretaT, for the benefit of taxpayers, in equity appreciation in the ease of a warrant, or a reasonable interest rate premium, in the ease of a debt instru- ment; and (ii) to provide additional protection for the taxpayer against losses from sale of assets by the SeeretaT under this Act and the administrative expenses of the TARP. (B) AUTHORITY TO SELL, EXERCISE, OR SURRENDER. The SeeretaT may sell, exercise, or surrender a warrant or any senior debt in-

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