AMENDMENT TO AMENDED AND RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT
Exhibit
10.6
AMENDMENT
TO AMENDED AND RESTATED
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
SENIOR PREFERRED STOCK PURCHASE AGREEMENT
AMENDMENT dated as of May 6, 2009, to the AMENDED AND
RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT dated as of
September 26, 2008, between the UNITED STATES DEPARTMENT OF
THE TREASURY (“Purchaser”), and FEDERAL HOME
LOAN MORTGAGE CORPORATION (“Seller”), acting
through the Federal Housing Finance Agency (the
“Agency”) as its duly appointed conservator
(the Agency in such capacity, “Conservator”).
Background
A. Purchaser and Seller have heretofore entered into the
Amended and Restated Senior Preferred Stock Purchase Agreement
dated as of September 26, 2008 (the “Amended and
Restated Agreement”).
B. In the Amended and Restated Agreement, Purchaser
committed itself to provide to Seller, on the terms and
conditions provided in the Amended and Restated Agreement,
immediately available funds in an amount as determined from time
to time as provided in the Amended and Restated Agreement, but
in no event in an aggregate amount exceeding $100,000,000,000.
C. Purchaser and Seller now desire to enter into an
amendment to the Amended and Restated Agreement for the purpose
of increasing to $200,000,000,000 the maximum aggregate amount
permitted to be provided to Seller under the Amended and
Restated Agreement, and for the purpose of amending the terms of
the Amended and Restated Agreement in certain other respects.
D. Purchaser and Seller are each authorized to enter into
this Amendment to the Amended and Restated Agreement
(“this Amendment”) increasing to
$200,000,000,000 the maximum aggregate amount permitted to be
provided to Seller under the Amended and Restated Agreement, and
amending the terms of the Amended and Restated Agreement in
certain other respects.
THEREFORE, for and in consideration of the mutual agreements
herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller agree as follows:
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Terms and
Conditions
| 1. | Definitions. |
Capitalized terms used and not defined in this Amendment shall
have the respective meanings given such terms in the Amended and
Restated Agreement.
| 2. | Amendment to Section 1 (Relating to Definition of New Defined Term “Executive Officer”). |
Section 1 of the Amended and Restated Agreement is hereby
amended to insert the following new defined term and
corresponding definition after the definition of the term
“Exchange Act”:
“Executive Officer” has the meaning given to
such term in Exchange Act
Rule 3b-7,
as in effect on the date hereof.
| 3. | Amendment to Section 1 (Relating to Definition of “Indebtedness”). |
The definition of “Indebtedness” in Section 1 of
the Amended and Restated Agreement is hereby amended to read as
follows:
“Indebtedness” of any Person means, for
purposes of Section 5.5 only, without duplication,
(a) all obligations of such Person for money borrowed by
such Person, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by
such Person, (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services,
other than trade accounts payable, (e) all Capital Lease
Obligations of such Person, (f) obligations, whether
contingent or liquidated, in respect of letters of credit
(including standby and commercial), bankers’ and similar
instruments, and (g) any obligation of such Person,
contingent or otherwise, guaranteeing or having the economic
effect of guaranteeing and Indebtedness of the types set forth
in clauses (a) through (f) payable by another Person
other than Mortgage Guarantee Obligations (and, for the
avoidance of doubt, without giving effect to any change that may
be made hereafter in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting
standard).
| 4. | Amendment to Section 1 (Relating to Definition of “Maximum Amount”). |
The definition of “Maximum Amount” in Section 1
of the Amended and Restated Agreement is hereby amended to read
as follows:
“Maximum Amount” means, as of any date of
determination, $200,000,000,000 (two hundred billion dollars),
less the aggregate amount of funding under the Commitment prior
to such date.
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| 5. | Amendment to Section 2.1 (Relating to the Commitment). |
Section 2.1 of the Amended and Restated Agreement is hereby
amended to read as follows:
2.1 Commitment. Purchaser hereby commits to
provide to Seller, on the terms and conditions set forth herein,
immediately available funds in an amount up to but not in excess
of the Available Amount, as determined from time to time (the
“Commitment”); provided, that in no
event shall the aggregate amount funded under the Commitment
exceed $200,000,000,000 (two hundred billion dollars). The
liquidation preference of Senior Preferred Stock shall increase
in connection with draws on the Commitment, as set forth in
Section 3.3 below.
| 6. | Amendment to Section 2.5 (Relating to Termination of Purchaser’s Obligations). |
Section 2.5 of the Amended and Restated Agreement is hereby
amended to read as follows:
2.5 Termination of Purchaser’s
Obligations. Subject to earlier termination
pursuant to Section 6.7, all of Purchaser’s
obligations under and in respect of the Commitment shall
terminate upon the earliest of: (a) if the Liquidation End
Date shall have occurred, (i) the payment in full of
Purchaser’s obligations with respect to any valid request
for funds pursuant to Section 2.4 or (ii) if there is
no Deficiency Amount on the Liquidation End Date or if no such
request pursuant to Section 2.4 has been made, the close of
business on the 15th Business Day following the
determination of the Deficiency Amount, if any, as of the
Liquidation End Date; (b) the payment in full of,
defeasance of or other reasonable provision for all liabilities
of Seller, whether or not contingent, including payment of any
amounts that may become payable on, or expiry of or other
provision for, all Mortgage Guarantee Obligations and provision
for unmatured debts; and (c) the funding by Purchaser under
the Commitment of an aggregate of $200,000,000,000 (two hundred
billion dollars). For avoidance of doubt, the Commitment shall
not be terminable by Purchaser solely by reason of
(i) the conservatorship, receivership or other insolvency
proceeding of Seller or (ii) the Seller’s financial
condition or any adverse change in Seller’s financial
condition.
| 7. | Amendment to Section 5.5 (Relating to Indebtedness). |
Section 5.5 of the Amended and Restated Agreement is hereby
amended to read as follows:
5.5. Indebtedness. Seller shall not, and shall
not permit any of its subsidiaries to, in each case without the
prior written consent of Purchaser, incur, assume or otherwise
become liable for (a) any Indebtedness if, after giving
effect to the incurrence thereof, the aggregate Indebtedness of
Seller and its subsidiaries on a consolidated basis would exceed
(i) through and including December 30, 2010, 120.0% of
the amount of Mortgage Assets Seller is permitted by
Section 5.7 to own on December 31, 2009; and
(ii) beginning on December 31, 2010, and through and
including December 30, 2011, and each year thereafter,
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120.0% of the amount of Mortgage Assets Seller is permitted by
Section 5.7 to own on December 31 of the immediately
preceding calendar year, or (b) any Indebtedness if such
Indebtedness is subordinated by its terms to any other
Indebtedness of Seller or the applicable subsidiary. For
purposes of this covenant the acquisition of a subsidiary with
Indebtedness will be deemed to be the incurrence of such
Indebtedness at the time of such acquisition.
| 8. | Amendment to Section 5.7 (Relating to Owned Mortgage Assets). |
Section 5.7 of the Amended and Restated Agreement is hereby
amended to read as follows:
5.7. Mortgage Assets. Seller shall not own, as
of any applicable date, Mortgage Assets in excess of (i) on
December 31, 2009, $900 billion, or (ii) on
December 31 of each year thereafter, 90.0% of the aggregate
amount of Mortgage Assets of Seller as of December 31 of
the immediately preceding calendar year; provided, that
in no event shall Seller be required under this Section 5.7
to own less than $250 billion in Mortgage Assets.
| 9. | Amendment to Section 5.10 (Relating to Executive Compensation). |
Section 5.10 of the Amended and Restated Agreement is
hereby amended to read as follows:
5.10. Executive Compensation. Seller shall
not, without the consent of the Director, in consultation with
the Secretary of the Treasury, enter into any new compensation
arrangements with, or increase amounts or benefits payable under
existing compensation arrangements of, any Named Executive
Officer or other Executive Officer of Seller.
| 10. | Amended and Restated Agreement to Continue, as Amended. |
Except as expressly modified by this Amendment, the Amended and
Restated Agreement shall continue in full force and effect.
| 11. | Effective Date. |
This Amendment shall not become effective until it has been
executed by both of Purchaser and Seller. When this Amendment
has been so executed, it shall become effective as of the date
first above written.
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FEDERAL HOME LOAN MORTGAGE
CORPORATION, by
Federal Housing Finance Agency,
its Conservator
/s/ Xxxxx
X. Xxxxxxxx III
Xxxxx X. Xxxxxxxx III
Director
UNITED STATES DEPARTMENT
OF THE TREASURY
/s/ Xxxxxxx
X. Geithner
Xxxxxxx X. Geithner
Secretary of the Treasury
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