NOTICE TO ALL CITY NATIONAL CLIENTS
STATE OF CALIFORNIA REGISTERED WARRANTS

The California State Controller has announced that the State may issue Registered Warrants to pay some of the debts and obligations of the State beginning on or after July 2, 2009.

Registered Warrants are the equivalent of "IOUs" and will NOT be paid by the State Treasurer until there is money in the State's General Fund to pay them and then only after they are "called" for payment by the State Treasurer and presented to the State Treasurer for payment.

To assist our clients through this difficult period, City National Bank will, in most instances, accept Registered Warrants from our clients who receive them in payment of obligations owed to them by the State. Established clients may deposit Registered Warrants to their accounts and we will credit the account and established clients may cash Registered Warrants upon proper identification at our discretion. City National will not cash Registered Warrants for non-clients nor will we accept Registered Warrants to open a new deposit account relationship. City National will hold the Registered Warrants it accepts from our clients until called for payment by the State Treasurer at which time we will present the Registered Warrants for payment.

By depositing or cashing your Registered Warrant with us, you agree as follows:

• We may place a hold on the funds credited to your account for a Registered Warrant you deposit to your account to us or, if a Registered Warrant is cashed for you by us, we may place a hold on an equivalent amount of funds in any account of yours until we are able to determine if the warrant is valid;
• We may hold any Registered Warrants deposited or cashed by you for our account and present the Registered Warrant when called for payment by the State Treasurer;
• We may retain all interest paid by the State on all Registered Warrants deposited with or cashed by us and you understand that when a Registered Warrant is deposited with or cashed by us any interest payable on the Registered Warrant is transferred to us and you have no right to the interest;
• We may provide you with any notice of non-payment of a Registered Warrant deposited to your account or cashed by you after presentment of the Registered Warrant to the State Treasurer by us following the call for payment;
• You will immediately repay to us upon demand the amount of any Registered Warrant accepted by us from you for deposit or for cash on which notice of non-payment is given or which is returned to us unpaid or returned to us for any other reason at any time by the State Treasurer. We may charge any account of yours the amount of any such unpaid or returned Registered Warrant without demand. To the extent your account is closed or has insufficient funds at the time your account is to be charged, you are responsible to us for any amount we are unable to recover from your account for unpaid or returned Registered Warrants and you will repay such amount to us upon demand or we may create an overdraft in your account for the amount we are unable to recover and any applicable overdraft fee. You will repay any overdraft at once.

We reserve the right at any time to refuse to cash or otherwise negotiate or accept California Registered Warrants for deposit or in payment of any obligation owed to us and to change these terms, with or without cause and without prior notice.

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