exv10w83











 




    Exhibit 10.83



 




    AGREEMENT
    TO PURCHASE PARTICIPATION



 




    (Temporary
    Credit and Liquidity Facility Program)



 



    THIS AGREEMENT TO PURCHASE PARTICIPATION
    (“Participation Agreement”) is dated as of
    [Date], and is by and among U.S. DEPARTMENT OF THE
    TREASURY (“Treasury”), FANNIE MAE
    (“Fannie Mae”) and FEDERAL HOME LOAN
    MORTGAGE CORPORATION (“Freddie Mac”)
    (together, the “GSEs”).



 




    The meaning
    of capitalized terms not otherwise defined can be determined by
    reference

    to Section 1.1 of this Purchase.
    



 




    RECITALS



 



    A. The disruptions in housing markets, housing finance and
    capital markets over the past several years have constricted the
    general availability of credit to many different credit markets,
    particularly those related to housing;



 



    B. The United States Congress, in enacting the Housing and
    Economic Recovery Act of 2008, the Emergency and Economic
    Stabilization Act of 2008, the American Recovery and
    Reinvestment Act of 2009 and other legislation provided Treasury
    and other agencies of government with the authority, funding,
    and direction to undertake credit support programs, with many of
    these programs directed specifically at supporting housing
    markets and housing finance;



 



    C. State and local housing finance agencies
    (“HFAs”) have a core mission of providing
    (i) affordable mortgage financing for low and moderate
    income households, especially first-time homebuyers, and
    (ii) financing for affordable multifamily rental properties;



 



    D. The National Council of State Housing Finance Agencies
    and the National Association of Local Housing Finance Agencies
    requested assistance from Treasury to meet their funding needs
    to continue support of their affordable housing mission during
    this period of disruption in housing finance and that request
    has been supported by market developments;



 



    E. Treasury, Federal Housing Finance Agency
    (“FHFA”), Fannie Mae and Freddie Mac entered
    into a Memorandum of Understanding, dated October 19, 2009,
    that sets forth the mutual understandings and intentions of the
    parties with respect to the proposal for Treasury to purchase
    certain GSE obligations and other securities pursuant














 







    to Section 304(g) of the Federal National Mortgage
    Association Charter Act and Section 306(l) of the Federal
    Home Loan Mortgage Corporation Act;



 



    F. Treasury requested FHFA and the GSEs to help Treasury to
    design and implement certain programs to facilitate financing
    for the HFAs to serve homebuyers and low and moderate income
    renters, including the Temporary Credit and Liquidity Facility
    Program (as defined in this Participation Agreement)
    contemplated in this Participation Agreement;



 



    G. The HFA described in the Participation Certificate
    issued pursuant to this Participation Agreement
    (“HFA”) has issued the bonds described in
    Exhibit I attached to the Participation Certificate
    (“Bonds”);



 



    H. The HFA has requested the GSEs to issue their Standby
    Irrevocable Temporary Credit Enhancement and Liquidity Facility
    providing credit enhancement and liquidity support for the Bonds
    (“Temporary Credit and Liquidity Facility”);



 



    I. On the terms and subject to the conditions set forth in
    this Participation Agreement, Treasury desires to purchase from
    the GSEs and each of the GSEs separately desires to sell to
    Treasury, a Participation interest in the GSE’s portion of
    the Temporary Credit and Liquidity Facility; and



 



    J. Each GSE and Treasury desire to set forth the terms and
    conditions under which Treasury purchases and the GSEs sell, the
    Participations.



 



    In consideration of these premises and for other good and
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, the Parties, intending to be legally bound,
    agree as follows:



 




    ARTICLE I.

    DEFINITIONS



 



    SECTION 1.1  Definitions.  Capitalized
    terms used in this Participation Agreement (including in the
    exhibits to this Participation Agreement) shall have the
    meanings given to those terms in this Section 1.1 unless
    the context clearly requires a different meaning.



 



    “Advances” means amounts drawn on the Temporary
    Credit and Liquidity Facility as Credit Advances or as Liquidity
    Advances.



 



    “Amount Available” means the aggregate amount
    available to be drawn under the Temporary Credit and Liquidity
    Facility as Advances from time to time. The maximum Amount
    Available, as of the Effective Date, is set out in the
    Participation Certificate.





    

    2








 







    “Bank Bonds” means any of the Bonds that are
    tendered for purchase by a bondholder and are the subject of a
    Liquidity Advance under the Temporary Credit and Liquidity
    Facility and have not yet been remarketed to a new bondholder.



 



    “Bond Default” means the occurrence of a
    default that may give rise to an acceleration of some or all of
    the Bonds, or any event that may give rise to a mandatory or
    special redemption or tender of some or all of the Bonds, under
    any Transaction Document.



 



    “Bond Documents” means the Bonds, the Indenture
    and all other documents, instruments and agreements executed and
    delivered in connection with the issuance, sale, delivery
    and/or
    remarketing of such Bonds, as each such agreement or instrument
    may be amended, supplemented or restated from time to time. If
    there is more than one issue and series of Bonds described in
    the Participation Certificate, the Bond Documents means such
    documents as are related to any one or more of such issues or
    series.



 



    “Business Day” means any day other than:



 



    (a) a Saturday or a Sunday;



 



    (b) any day on which banking institutions located in the
    City of New York, New York are required or authorized by law or
    executive order to close;



 



    (c) any day on which banking institutions located in the
    city or cities in which the principal office of the bond trustee
    is located are required or authorized by law or executive order
    to close;



 



    (d) a day on which the New York Stock Exchange is closed or
    on which banking institutions located in the city in which the
    Remarketing Agent is located are required or authorized by law
    or executive order to close; or



 



    (e) any day on which either of the GSEs is closed.



 



    “Credit Advance” means a “Credit
    Enhancement Advance” as such term defined in the Temporary
    Credit and Liquidity Facility to pay debt service due on the
    Bonds for which there are insufficient funds available under the
    related indenture.



 



    “Credit Facility Documents” means the
    Reimbursement Agreement, the Temporary Credit and Liquidity
    Facility and those other documents required by the GSEs that
    evidence and secure the Temporary Credit and Liquidity Facility.



 



    “Crossover Date” means the first date on which
    “Program Losses” equal or exceed 25/35ths of the
    “First Loss Limit” as those terms are defined and used
    in the Uniform Loss Sharing Attachment.



 



    “Decision Control” means the right of Treasury,
    on the one hand, or the GSEs, on the other hand, to decide upon
    a course of action with respect to a default that gives






    

    3








 







    rise to an acceleration of the Bonds or the exercise by the GSEs
    of remedies available to them under the Reimbursement Agreement
    or any of the other related Transaction Documents.



 



    “Effective Date” means the date the
    Participation Certificate is executed and delivered.



 



    “Expiration Date” means the date the Temporary
    Credit and Liquidity Facility expires by its terms with respect
    to a series of Bonds. The scheduled Expiration Date relative to
    each series of Bonds is set out in the Participation Certificate.



 



    “Facility Fee” means the Facility Fee payable
    by the HFA to the GSEs pursuant to the Reimbursement Agreement.



 



    “First Loss Limit” has the meaning given to
    that term in the Uniform Loss Sharing Attachment.



 



    “Funding Notice” means a written notice, in the
    form of the attached Exhibit B, given by a GSE or the
    Program Administrator on behalf of the GSEs to Treasury’s
    Financial Agent requesting the funding of Treasury’s
    participation in an Advance made under the Temporary Credit and
    Liquidity Facility.



 



    “Funding Payment” means the amount payable by
    Treasury to a GSE pursuant to Section 3.2 on account of an
    Advance.



 



    “GSE Rights” means all right, title and
    interest of the GSEs in and to:



 



    (a) the Transaction Documents;



 



    (b) all the real and personal property securing the
    obligations of the HFA under any of the Transaction
    Documents; and



 



    (c) all proceeds, products, substitutions, additions and
    replacements of any collateral now or hereafter mortgaged,
    assigned or pledged under any of the Transaction Documents, in
    all cases whether now existing or arising in the future.



 



    “GSE Security” means a security backed by one
    or more Bank Bonds issued by a Trust and purchased by Treasury
    under the terms of this Participation Agreement.



 



    “Liquidity Advance” means an advance under a
    Temporary Credit and Liquidity Facility to pay for bond purchase
    tenders relating to the Bonds, which shall include, without
    limitation, both a “Liquidity Advance” and a
    “Mandatory Tender Advance” as such terms are defined
    in the Temporary Credit and Liquidity Facility.



 



    “Loss Calculation Date” has the meaning given
    to that term in the Uniform Loss Sharing Attachment.





    

    4








 







    “New Issue Bond Program” has the meaning given
    to that term in the Uniform Loss Sharing Attachment.



 



    “New Issue Bond Program Agreement” means an
    agreement relating to or entered into under the New Issue Bond
    Program.



 



    “Partial Guarantee” has the meaning given to
    that term in the Uniform Loss Sharing Attachment.



 



    “Participation” means a participation in the
    Temporary Credit and Liquidity Facility purchased by Treasury
    pursuant to this Participation Agreement.



 



    “Participation Amount” means the product of the
    Amount Available on the date of issuance of the Temporary Credit
    and Liquidity Facility and the Participation Percentage.



 



    “Participation Certificate” means a certificate
    evidencing the participation interests purchased by Treasury
    pursuant to this Participation Agreement and issued by the GSEs
    to Treasury, and acknowledged by Treasury, which shall be in
    substantially the form of Exhibit C hereto.



 



    “Participation Fee” means the Participation Fee
    payable to Treasury pursuant to Section 2.4 of this
    Participation Agreement.



 



    “Participation Fee Rate” means the rate per
    annum set out in the Participation Certificates.



 



    “Participation Percentage” means the percentage
    interest of Treasury in the Temporary Credit and Liquidity
    Facility which is 100% as specified in the Participation
    Certificate.



 



    “Party” and “Parties” means
    any party to this Participation Agreement.



 



    “Program Administrator” means U.S. Bank
    National Association or such other party as the GSEs may appoint
    from time to time as custodian, collection agent, paying agent
    and administrator for the Temporary Credit and Liquidity
    Facility Program.



 



    “Program Bonds” has the meaning given to that
    term in the Uniform Loss Sharing Attachment.



 



    “Program Losses” has the meaning given to that
    term in the Uniform Loss Sharing Attachment.



 



    “Participation Agreement” means this Agreement
    to Purchase Participation, including, without limitation, the
    Exhibits to this Participation Agreement, as it may be amended,
    restated or otherwise modified from time to time in writing by
    the Parties.





    

    5








 







    “Recovery” has the meaning given to that term
    in the Uniform Loss Sharing Attachment.



 



    “Reimbursement Agreement” means the
    Reimbursement Agreement among the GSEs, the HFA and the bond
    trustee with respect to the Temporary Credit and Liquidity
    Facility, as it may be amended, restated or otherwise modified
    from time to time in writing in accordance with its terms.



 



    “Stated Amount” means, with respect to each GSE
    separately, the stated amount of such Temporary Credit and
    Liquidity Facility on the Effective Date as specified in the
    Participation Certificate.



 



    “Temporary Credit and Liquidity Facility” has
    the meaning given to such term in the Recitals, together with
    any amendments, restatements or modifications thereto.



 



    “Temporary Credit and Liquidity Facility
    Program” means the Program of the GSEs’ and
    Treasury providing temporary credit and liquidity for certain
    variable rate demand obligations of housing finance agencies, of
    which this Participation Agreement and the related Temporary
    Credit and Liquidity Facility are a part.



 



    “Transaction Documents” means the Bond
    Documents and the Credit Facility Documents.



 



    “Treasury’s Financial Agent” means
    JPMorgan Chase or such other party as Treasury may appoint from
    time to time by notice to the GSEs and the Program Administrator
    as its financial agent.



 



    “Trust” means a trust established by a GSE
    which issues a GSE Security backed by one or more Bank Bonds and
    a Partial Guarantee.



 



    “Uniform Loss Sharing Attachment” means the
    Uniform Loss Sharing Attachment set forth in Exhibit A
    attached to this Participation Agreement.



 




    ARTICLE II.

    PURCHASE OF PARTICIPATION IN CREDIT FACILITY



 



    SECTION 2.1  Agreement to Purchase;
    Agreement to Sell.  Treasury agrees to
    purchase from each of Fannie Mae and Freddie Mac and each of
    Fannie Mae and Freddie Mac agrees, for and on behalf of itself
    only, to sell a participation in such GSE’s portion of the
    Temporary Credit and Liquidity Facility (each a
    “Participation”) as follows:



 



    (a) Description of Participations.  The
    obligations of Fannie Mae and Freddie Mac under the Temporary
    Credit and Liquidity Facility are several and not joint. Each
    GSE is severally liable to the bond trustee for 50 percent,
    on a pro rata basis, of each Credit Advance and each Liquidity
    Advance requested by the bond trustee. The participation
    purchased by Treasury under this Participation Agreement from
    Fannie Mae






    

    6








 







    is a participation in Fannie Mae’s portion of the Temporary
    Credit and Liquidity Facility. The participation purchased by
    Treasury under this Participation Agreement from Freddie Mac is
    a participation in Freddie Mac’s portion of the Temporary
    Credit and Liquidity Facility.



 



    (b) Participation Percentages.  Fannie
    Mae’s portion of each Credit Advance or Liquidity Advance
    is 50% and Freddie Mac’s portion of each Credit Advance or
    Liquidity Advance is 50% as set forth in the Participation
    Certificate.



 



    (c) Participation Certificate.  The
    purchase of the Participations shall be evidenced by this
    Participation Agreement and the Participation Certificate.
    Treasury’s purchase of the Participations takes effect
    fully upon the execution of the Participation Certificate.



 



    (d) Advances.  Treasury’s purchase of
    Participations includes the purchase of a participation in each
    Credit Advance and each Liquidity Advance arising from time to
    time under the Temporary Credit and Liquidity Facility.
    Treasury’s participation shall attach immediately upon a
    GSE making its portion of the related Advance.



 



    (e) General Matters.  The Participations
    include an interest in the GSE Rights of Fannie Mae and Freddie
    Mac, including, without limitation, the rights of the GSE to be
    reimbursed by the HFA on account of such Advances, the right to
    be paid interest, fees (but the Participation Fee shall be
    payable in the amount set out in Section 2.4) and other
    amounts payable by the HFA from time to time on account of such
    Advances and all remedies and other rights securing the
    HFA’s obligations to make such payments.



 



    SECTION 2.2  Nature of
    Purchases.  Treasury and each GSE, for and on
    behalf of itself only, intend and agree that:



 



    (a) the transactions contemplated by this Participation
    Agreement are, subject to the terms of this Participation
    Agreement, purchases and sales of interests in the Temporary
    Credit and Liquidity Facility;



 



    (b) such purchases and sales shall not constitute a loan by
    Treasury to either or both of the GSEs; and



 



    (c) such purchases and sales shall not result in the
    creation of any joint venture relationship between the GSEs and
    Treasury or between the GSEs.



 



    With the Participations, Treasury shall have purchased a
    corresponding interest in all rights, pledges, security
    interests and guaranties now or hereafter granted to the GSEs
    with respect to the Temporary Credit and Liquidity Facility
    under the Transaction Documents.



 



    SECTION 2.3  Delivery of Participation
    Certificate.  Treasury will receive original
    counterparts of this Participation Agreement and the
    Participation Certificate executed by the GSEs as evidence of
    Treasury’s purchase of the Participations, and






    

    7








 







    Treasury will execute and deliver original executed counterparts
    of this Participation Agreement and the Participation
    Certificate.



 



    SECTION 2.4  Participation
    Fee.  Each GSE shall be obliged to pay to
    Treasury, on a several and not on a joint basis, the
    Participation Fee from and including the Effective Date to and
    including the Expiration Date. The Participation Fee shall be
    paid solely from the proceeds of the Facility Fee received from
    time to time by such GSE from the HFA and shall not be a direct
    recourse obligation of either GSE to pay from any other
    resources of such GSE. The Participation Fee shall be payable by
    each GSE at the Participation Fee Rate per annum on the daily
    average of the Amount Available for which such GSE is obligated.
    The Participation Fee will be payable in arrears by each GSE on
    the 25th day of the month, or if such day is not a Business
    Day, then on the next following Business Day thereafter (the
    “Payment Date”), commencing on first such date
    after the Effective Date and ending on the Payment Date next
    following the Expiration Date. The Participation Fee shall be
    calculated on the basis of the actual number of days elapsed
    over a year of 365 or 366 day, as applicable.



 



    SECTION 2.5  Facility
    Administration.  Each GSE shall administer its
    obligations under its portion of the Temporary Credit and
    Liquidity Facility with the same care, skill, prudence and
    diligence with which such GSE administers similar credit and
    liquidity facilities for its own account, giving due
    consideration to customary and usual standards of practice of
    prudent institutional commercial lenders administering their own
    credit facilities, in each case acting in accordance with
    applicable law, the terms of this Participation Agreement and
    the applicable Transaction Documents.



 



    SECTION 2.6  Notices of
    Default.  As soon as practicable, but in no
    event later than seven Business Days following the day a GSE
    obtains actual knowledge of the occurrence of any Event of
    Default under the Reimbursement Agreement, such GSE shall
    provide, or cause to be provided, written notice to the other
    GSE and Treasury’s Financial Agent of such event.



 



    SECTION 2.7  Decision
    Control.  Treasury shall be entitled to
    exercise Decision Control so long as the Crossover Date has not
    occurred and the GSEs shall be entitled to exercise Decision
    Control on and after the Crossover Date. The identity of the
    party having Decision Control shall not affect the obligations
    of Treasury under this or any other Participation Agreement or
    under any New Issue Bond Program Agreement. Treasury agrees to
    consult with the GSEs, and the GSEs agree to make
    recommendations to Treasury with respect to the issues for which
    Decision Control by Treasury is to be exercised. Conversely, the
    GSEs agree to consult with Treasury, and Treasury agrees to make
    recommendations to the GSEs with respect to the issues for which
    Decision Control by the GSEs is to be exercised. Notwithstanding
    the foregoing, the party having Decision Control shall have the
    unilateral right to make decisions regarding the exercise of
    bondholder rights in respect of the Program Bonds.



 



    SECTION 2.8  Savings
    Provision.  Notwithstanding anything in this
    Participation Agreement to the contrary, (i) no GSE shall
    have any duties or obligations except those






    

    8








 







    expressly set forth in this Participation Agreement and in the
    applicable Transaction Documents, and (ii) no GSE shall be
    subject to any fiduciary or implied duties.



 



    SECTION 2.9  Bank Bonds.



 



    (a) Holding of Bank Bonds.  The making of
    a Liquidity Advance results in the acquisition by the GSEs of
    one or more Bank Bonds. The GSEs currently intend to instruct
    the Program Administrator to hold all Bank Bonds in custody and
    issue custody receipts to each GSE representing such GSEs pro
    rata portion of the Bank Bonds.



 



    (b) Securitization of Bank Bonds.  Each
    GSE will supplement the Participation Certificate by delivering
    one or more GSE Securities to Treasury backed by one or more or
    all of any Bank Bonds then outstanding upon the written request
    of Treasury. Treasury may not require the GSEs to securitize
    Bank Bonds more than once in any calendar month. In responding
    to a request to securitize Bank Bonds, the GSEs shall be allowed
    a period of not less than three weeks to effect the
    securitization; provided, however, that neither
    GSE may be required to issue its GSE Security on any day other
    than the last Business Day of a calendar month. In the absence
    of a request by Treasury for a securitization of Bank Bonds,
    each GSE may, at such time or times as it deems convenient,
    deliver one or more GSE Securities to Treasury backed by one or
    more or all of any outstanding Bank Bonds.



 



    (c) Allocations.  Each GSE holding one or
    more Bank Bonds pursuant to this Section or issuing a GSE
    Security backed by one or more Bank Bonds will be entitled to an
    allocation of the interest payments received on the related Bank
    Bonds. The GSE’s allocation will be an amount
    (“Allocation Amount”) equal to the rate, per
    annum, of the Facility Fee payable by the HFA to the GSE on
    Bonds which are not Bank Bonds (less the Participation Fee
    payable to Treasury pursuant to Section 2.4) multiplied by
    the outstanding and unpaid principal of the Bank Bonds for the
    number of days in the period of such calculation over a year of
    365 or 366 days, as applicable. Should the available
    amounts of interest received on a Bank Bond at any time be less
    than the Allocation Amount payable to a GSE, the GSE may charge
    such shortfall to payments of the Participation Fee payable to
    Treasury under this Participation Agreement, payments of
    interest received on all other Bank Bonds, payments received on
    any of the Program Bonds under the New Issue Bond Program and to
    any Recovery under the Temporary Credit and Liquidity Facility
    Program and the New Issue Bond Program.



 




    ARTICLE III.

    PAYMENT OBLIGATIONS



 



    SECTION 3.1  Duplicate Tender and Draw
    Notices for Treasury.  The Transaction
    Documents require the bond trustee to send to Treasury’s
    Financial Agent a copy of each notice it sends to the GSEs with
    respect to any bondholder tender of Bonds, any remarketing of
    such Bonds and any drawing on the GSEs of a Liquidity Advance or
    a Credit Advance. Such notices will enable Treasury to receive
    advance warning that it may be required to make a Funding
    Payment under Section 3.2 should the tendered Bonds not be
    remarketed or a Credit Advance be required.





    

    9








 







    SECTION 3.2  Funding
    Notices.  Each time a GSE is required to make
    a Credit Advance or a Liquidity Advance, such GSE shall deliver
    or cause the Program Administrator to deliver a Funding Notice
    to Treasury’s Financial Agent to request a Funding Payment
    from Treasury on account of such Advance. Any Funding Notice may
    be jointly provided by or on behalf of the GSEs. Funding Notices
    shall be delivered in accordance with Section 5.6 of this
    Participation Agreement. Treasury shall make, or cause to be
    made, each Funding Payment in immediately available funds to the
    Program Administrator for the account of the GSEs to such
    account as the Program Administrator shall require. The Funding
    Payment shall be due and payable not later than
    2:00 p.m. Eastern time on the Business Day the GSEs
    are required to make the related Advance; provided,
    however, that if the Funding Notice is not received by
    Treasury’s Financial Agent at or prior to 12:00 noon
    Eastern time on such day, payment shall be made to the Program
    Administrator no later than 11:00 a.m. Eastern time on
    the next following Business Day. The Funding Payment shall be in
    an amount equal to Treasury’s Participation Percentage in
    the GSE’s Advance.



 



    SECTION 3.3  Reduction of Amount or
    Withdrawal of Notice.  If, after giving a
    Funding Notice to Treasury pursuant to Section 3.2 but
    before receiving a Funding Payment, a GSE receives any
    reimbursement or payment from any other source for the Advance,
    then the GSE shall promptly reduce or withdraw, as applicable,
    the amount demanded in the Funding Notice or, if funds have been
    received from Treasury with respect to such Funding Payment, the
    GSE shall return to Treasury’s Financial Agent the
    applicable portion of such Funding Payment.



 



    SECTION 3.4  Other Amounts Payable to
    GSEs.  Each GSE (or the Program Administrator
    on behalf of the GSEs) shall be entitled to withhold from any
    funds received by the GSE pursuant to the Reimbursement
    Agreement, and shall not be required to pay to Treasury, amounts
    required to reimburse such GSE for costs and expenses of such
    GSE incurred in connection with the Temporary Credit and
    Liquidity Facility, the Reimbursement Agreement or the Bonds.



 



    SECTION 3.5  Payments by GSEs to
    Treasury.



 



    (a) Payments Made with Respect to
    Advances.  Each GSE shall pay, or cause to be
    paid, to Treasury its Participation Percentage of any amounts
    received from, or on behalf of, the HFA or otherwise from any
    other source with respect to or allocated to a Credit Advance or
    to a Liquidity Advance for which the GSE has received payment
    from Treasury pursuant to Section 3.2. Each GSE may deduct,
    or cause to be deducted, from such payments any amounts then
    owing to the GSE pursuant to this Participation Agreement
    including, without limitation, its accrued and unpaid Allocation
    Amounts. Such payments will be due on the 25th day of the
    month, or if such day is not a Business Day, then on the next
    following Business Day thereafter. Each GSE shall pay, or cause
    to be paid, all amounts due under this subsection in immediately
    available funds to Treasury’s Financial Agent.



 



    (b) Payments Made with Respect to GSE
    Securities.  All distributions made with respect
    to any GSE Securities issued by a GSE with respect to one or
    more






    

    10








 







    Bank Bonds shall be made in accordance with the GSE’s
    policies and procedures with respect to securities of that
    class. Each GSE may deduct its accrued and unpaid Allocation
    Amounts and all other amounts due and payable to the GSE
    hereunder prior to making such distributions.



 




    ARTICLE IV.

    LOSS SHARING



 



    The Temporary Credit and Liquidity Facility which is the subject
    of this Participation Agreement is a Temporary Credit and
    Liquidity Facility issued under the Temporary Credit and
    Liquidity Facility Program. This Participation Agreement is one
    of several Participation Agreements and Partial Guarantees (as
    that term is defined in Exhibit A) subject to loss
    sharing as described in the Uniform Loss Sharing Attachment,
    which is incorporated into this Participation Agreement as if
    fully stated herein. The provisions of the Uniform Loss Sharing
    Attachment apply fully to the Temporary Credit and Liquidity
    Facility which is the subject of this Participation Agreement.



 




    ARTICLE V.

    MISCELLANEOUS



 



    SECTION 5.1  Entire
    Agreement.  This Agreement sets forth the
    entire agreement between the parties with respect to the subject
    matter of this Participation Agreement. No statements,
    agreements or representations, oral or written, which may have
    been made to the parties or any one or more of them, by any
    other party or by any employee or agent of such other party on
    behalf of such party, with respect to this Participation
    Agreement shall be of any force or effect except to the extent
    stated in this Participation Agreement.



 



    SECTION 5.2  Assignment
    Prohibited.  The identity of each of the
    Parties being of material importance to each other Party, this
    Participation Agreement is made on the condition that, except as
    otherwise expressly provided in this Participation Agreement, no
    Party’s rights or obligations under this Participation
    Agreement shall be assignable without the prior written consent
    of the other Parties.



 



    SECTION 5.3  Exclusivity.  This
    Agreement is intended for the sole and exclusive benefit of the
    Parties to this Participation Agreement and not for the benefit
    of, nor for the purpose of being relied upon by, any other
    person.



 



    SECTION 5.4  No Joint
    Venture.  The execution of this Participation
    Agreement is not intended to be, nor shall it be construed to
    be, the formation of a joint venture or partnership between the
    parties; nor shall it be deemed to create any relationship
    between the parties other than as expressly stated.



 



    SECTION 5.5  Invalidity;
    Severability.  If any term, covenant or
    condition of this Participation Agreement shall be held to be
    invalid, illegal or unenforceable in any respect, this
    Participation Agreement shall continue in full force and effect
    and shall be construed without the invalid, illegal or
    unenforceable provision unless to so construe the






    

    11








 







    Agreement would frustrate the intention of the parties in
    entering into this Participation Agreement.



 



    SECTION 5.6  Notices.



 



    (a) Notices to the Parties.  All notices,
    directions, certificates or other communications hereunder shall
    be sent by certified or registered mail, return receipt
    requested, or by overnight courier addressed to the appropriate
    notice address set forth below. Any such notice, certificate or
    communication shall be deemed to have been given as of the date
    of actual delivery or the date of failure to deliver by reason
    of refusal to accept delivery or changed address of which no
    notice was given pursuant to this Section. Any of the parties
    hereto may, by such notice described above, designate any
    further or different address to which subsequent notices,
    certificates or other communications shall be sent without any
    requirement of execution of any amendment to this Participation
    Agreement. The notice addresses are as follows:



 


	 	 	 	 	 
	

    To Treasury:


	
 
	
    Department of the Treasury

    1500 Pennsylvania Avenue, N.W.

    Washington, D.C. 20220

     

	
 
	
 
	
    Attention:
	
 
	
    Fiscal Assistant Secretary

    re:  Housing Finance Agencies Initiative

     

    and

     

	
 
	
 
	
    Attention:
	
 
	
    Assistant General Counsel

    (Banking and Finance)

    re: Housing Finance Agencies Initiative

     

	

    To Fannie Mae:


	
 
	
    Fannie Mae

    3900 Wisconsin Avenue, N.W.

    Washington, D.C. 20016

     

	
 
	
 
	
    Attention:
	
 
	
    Carl W. Riedy, Jr.

    Vice President for Public Entities Channel,

    Housing and Community Development

     

              and

     

	
 
	
 
	
    Attention:
	
 
	
    Barbara Ann Frouman

    Vice President and

    Deputy General Counsel, Housing and

    Community Development








    

    12








 







	 	 	 	 	 
	

    To Freddie Mac:


	
 
	
    Freddie Mac

    1551 Park Run Drive

    Mail Stop D4F

    McLean, Virginia 22102


	
 
	
 
	
    Attention:
	
 
	
    Mark D. Hanson

    Vice President Mortgage Funding

     

    and

     

	
 
	
 
	
    Freddie Mac

    8200 Jones Branch Drive

    Mail Stop 210

    McLean, Virginia 22102


	
 
	
 
	
    Attention:
	
 
	
    Joshua L. Schonfeld

    Associate General Counsel











 



    (b) Notices to Treasury’s Financial
    Agent.  Funding Notices may be sent to
    Treasury’s Financial Agent by email to
    [          ].
    Any other notices to Treasury’s Financial Agent may be sent
    as follows:



 



    (c) Notices to Program
    Administrator.  Notices may be sent to the Program
    Administrator as follows:



 



    In a notice to the Parties specifically captioned “Notice
    of Change of Address:”



 



    (i) any Party may change its address;



 



    (ii) Treasury or Treasury’s Financial Agent may change
    the address or other contact information for Treasury’s
    Financial Agent; and



 



    (iii) either GSE or the Program Administrator may change
    the address or other contact information for the Program
    Administrator.



 



    SECTION 5.7  Governing
    Law.  This Participation Agreement shall be
    governed by, and interpreted in accordance with, Federal law not
    the law of any state or locality. To the extent that a court
    looks to the laws of any state to determine or define the
    Federal law, it is the intention of the parties to this
    Participation Agreement that such court shall look only to the
    laws of the State of New York without regard to the rules of
    conflicts of laws.





    13








 







    SECTION 5.8  Binding
    Effect.  This Participation Agreement shall be
    binding upon, and shall inure to the benefit of, the parties and
    their respective successors and permitted assigns.



 



    SECTION 5.9  Counterparts.  This
    Participation Agreement may be executed in one or more
    counterparts, each of which shall be deemed to be an original of
    this Participation Agreement.



 



    SECTION 5.10  Amendments, Changes and
    Modifications.  This Participation Agreement
    may be amended, changed, modified, altered or terminated only by
    a written instrument or written instruments signed by the
    parties to this Participation Agreement. Neither any course of
    dealing between Treasury and the GSE nor any delay in exercising
    any rights under this Participation Agreement, shall operate as
    a waiver of any rights of any of the parties under this
    Participation Agreement. A waiver or consent given under this
    Participation Agreement shall be effective only in the specific
    instance and for the specific purpose for which given.



 




    [The
    remainder of this page is intentionally left blank]
    





    

    14








 







    IN WITNESS WHEREOF, the parties have executed this
    Participation Agreement as of the dates hereinafter set forth.



 


	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    FANNIE MAE

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    Date:


	
 
	
 
	
 
	
    By:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Name:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Title:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 






    

    S-1








 







	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    FEDERAL HOME LOAN MORTGAGE CORPORATION

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    Date:


	
 
	
 
	
 
	
    By:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Name:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Title:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 






    S-2








 







	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    DEPARTMENT OF THE TREASURY

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    Date:


	
 
	
 
	
 
	
    By:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Name:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Title:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 











    S-3








 








    EXHIBIT A



 




    UNIFORM
    LOSS SHARING ATTACHMENT



 



    The following is the Uniform Loss Sharing Attachment for the New
    Issue Bond Program and the Temporary Credit and Liquidity
    Facility Program. This attachment contains the provisions
    applicable to (i) Partial Guarantees relating to GSE
    Securities issued from time to time under the New Issue Bond
    Program and (ii) Participation Agreements entered into from
    time to time and Partial Guarantees relating to GSE Securities
    issued from time to time under the Temporary Credit and
    Liquidity Facility Program.



 



    This Uniform Loss Sharing Attachment is attached to each Partial
    Guarantee and each Participation Agreement.



 



    Section 1  Definitions.  In this
    Attachment and in any agreement or other document to which this
    Attachment is attached, all capitalized terms have the meanings
    given to those terms in this Section 1 unless the context
    or use clearly indicates a different meaning. Any capitalized
    term used in this Attachment but not defined in this Exhibit
    shall be used as defined in the agreement or other document to
    which this Exhibit is attached. The following terms have the
    following meanings:



 



    “Amount Available” has the meaning given to
    that term in each Temporary Credit and Liquidity Facility.



 



    “Bank Bonds” means any VRDOs that were tendered
    for purchase by a bondholder and were put to the GSEs under a
    TCLF and have not yet been remarketed to a new bondholder,
    whether or not the GSEs have issued GSE Securities backed by
    such Bank Bonds.



 



    “Bonds” means, as the case may be, VRDOs, Bank
    Bonds and New Issue Bonds.



 



    “Credit Advance” means an advance under a TCLF
    to pay debt service due on VRDOs for which there are
    insufficient funds available under the related indenture.



 



    “Event of Default” means an “event of
    default” as such term is defined in the related bond
    indenture for the underlying bonds.



 



    “Fannie Mae” means the Federal National
    Mortgage Association, a federally-chartered and
    stockholder-owned corporation organized and existing under the
    Federal National Mortgage Association Charter Act,
    12 U.S.C. § 1716 et seq.



 



    “First Loss Limit” has the meaning given to
    that term in Section 5.



 



    “First Position Loss” means the amount of
    Program Loss to be borne by Treasury under the Program. The
    First Position Loss is that portion of the Program Loss that
    does not exceed the First Loss Limit.





    

    A-1








 







    “Freddie Mac” means the Federal Home Loan
    Mortgage Corporation, a shareholder-owned government-sponsored
    enterprise organized and existing under the laws of the United
    States.



 



    “Government-sponsored enterprise” or
    “GSE” means either or both Fannie Mae and
    Freddie Mac.



 



    “GSE Obligations” or “GSE
    Securities” are obligations and securities issued or
    guaranteed, in whole or in part, by Fannie Mae or Freddie Mac
    including, without limitation, Bank Bonds and New Issue Bonds
    and, with respect to the Temporary Credit and Liquidity Facility
    Program, Participation Agreements.



 



    “HFA” means a housing finance agency created by
    any of the States of the United States or any possession,
    territory or commonwealth of the United States, or any political
    subdivision thereof.



 



    “Liquidity Advance” means an advance under a
    TCLF to pay for bond purchase tenders relating to VRDOs.



 



    “Loss Calculation Date” means the date as of
    which a Loss is calculated as provided in Paragraph 6.



 



    “MOU” means the Memorandum of Understanding
    among Treasury, Federal Housing Finance Agency, Fannie Mae and
    Freddie Mac.



 



    “Multifamily Credit Enhancement Program” means
    the Treasury program, distinct and separate from the Programs,
    to purchase HFA bonds which are guaranteed by the Credit
    Enhancement Agreement by either of the GSEs.



 



    “New Issue Bond Program” means the program
    described in the New Issue Bond Program Agreement.



 



    “New Issue Bond Program Agreement” means one or
    more New Issue Bond Program Agreements by and among Treasury and
    the GSEs, concerning the program for the acquisition of GSE
    Securities backed by New Issue Bonds.



 



    “New Issue Bonds” means, collectively, the
    single family bonds and multifamily bonds which back GSE
    Securities purchased under the New Issue Bond Program Agreement.



 



    “Partial Guarantee” means a partial guarantee
    provided by a GSE (a) pursuant to a GSE Security issued
    with respect to the Temporary Credit and Liquidity Facility
    Program or (b) pursuant to a GSE Security issued with
    respect to the New Issue Bond Program.



 



    “Participation Agreement” means each
    Participation Agreement by and between Treasury and the GSEs
    whereby the rights, duties and obligations of the Treasury and
    the GSEs with respect to the Temporary Credit and Liquidity
    Facility Program (including the terms of the Partial Guarantee)
    are set forth, as such agreements are amended and supplemented.





    

    A-2








 







    “Program” means either of the New Issue Bond
    Program or the Temporary Credit and Liquidity Facility Program.



 



    “Program Bonds” means New Issue Bonds and Bank
    Bonds.



 



    “Program Losses” mean the aggregate of all
    Transaction Losses incurred under the Temporary Credit and
    Liquidity Facility Program and the New Issue Bond Program.



 



    “Recovery” means any payment or other amount
    received or recovered with respect to a Transaction Loss. A
    Recovery excludes any amounts paid by a GSE to Treasury with
    respect to a Second Position Loss or any amounts payable by
    Treasury to the GSEs under any purchase agreement or
    participation agreement.



 



    “Reimbursement Agreement” means each
    Reimbursement Agreement entered into among an HFA, a bond
    trustee and the GSEs relative to a TCLF, as such Reimbursement
    Agreements are amended and supplemented.



 



    “Risk Rating” means the risk rating of an
    indenture under a Program.



 



    “Second Position Loss” means that portion of
    Program Losses, if any, that is not allocated to the First Loss
    Position. Any Second Position Loss will be allocated to the
    Participation Agreements and Partial Guarantees in accordance
    with the Uniform Loss Sharing Attachment.



 



    “Secured Multifamily Loans” means loans that
    are secured by multifamily properties.



 



    “Temporary Credit and Liquidity Facility” or
    “TCLF” has the meaning given to that term in
    the Participation Agreement.



 



    “Temporary Credit and Liquidity Facility
    Program” means the Program described in the
    Participation Agreement.



 



    “Transaction Documents” means, collectively,
    the TCLF, the Reimbursement Agreement and related Bond documents
    with respect to any series included in the Temporary Credit and
    Liquidity Facility Program, as such documents are amended from
    time to time in accordance with their terms.



 



    “Transaction Loss” means an amount calculated
    pursuant to Section 7 as the loss realized on a Program
    Bond or a Temporary Credit and Liquidity Facility.



 



    “Trust” means a trust established by a GSE as a
    pass-through entity which holds one or more issues of Bonds and,
    where appropriate, a Partial Guarantee.



 



    “VRDO” means a variable rate demand obligation
    bond issued by an HFA



 



    Section 2  General
    Statement.  Treasury and the GSEs will share
    Program Losses, if any, realized on:





    

    A-3








 







    (a) the principal of the New Issue Bonds backing GSE
    Securities issued from time to time under the New Issue Bond
    Program; and



 



    (b) the principal portion of all Credit Advances and
    Liquidity Advances made from time to time under the Temporary
    Credit and Liquidity Facilities issued under the Temporary
    Credit and Liquidity Facility Program.



 



    Any losses incurred with respect to accrued but unpaid interest
    on any of the New Issue Bonds backing the GSE Securities issued
    from time to time under the New Issue Bond Program and on any
    Credit Advance or Liquidity Advance made from time to time under
    the Temporary Credit and Liquidity Facilities issued under the
    Temporary Credit and Liquidity Facility Program are not subject
    to sharing with the GSEs and will be entirely borne by Treasury.
    No loss sharing shall occur with respect to the Multifamily
    Credit Enhancement Program as a GSE will have provided credit
    enhancement for such Bonds separately.



 



    Section 3  GSE Only Shares in Losses for its
    Activities in Programs.  The sharing of Program
    Losses will be structured between Treasury and each GSE
    separately. A GSE will only share in Program Losses realized on
    the New Issue Bonds backing the GSE Securities issued by that
    GSE and on losses realized on that GSE’s portion of the
    Temporary Credit and Liquidity Facilities. Neither GSE will
    share in Program Losses allocable to the other GSE.



 



    Section 4  Allocation of Losses between
    Treasury and GSE.  Treasury will bear all Program
    Losses realized on the New Issue Bond Program and the Temporary
    Credit and Liquidity Facility Program up to the First Loss Limit
    (“First Position Losses”). Each GSE will bear Program
    Losses, if any, realized on the New Issue Bond Program and the
    Temporary Credit and Liquidity Facility Program once the Program
    Losses, if any, realized by Treasury equal the First Loss Limit
    (“Second Position Losses”).



 



    Section 5  First Loss
    Limit.  With respect to a GSE, the First Loss
    Limit will be 35% of the sum of:



 



    (a) the aggregate original principal amount of all New
    Issue Bonds backing the GSE Securities issued from time to time
    under the New Issue Bond Program by that GSE; and



 



    (b) the aggregate original principal portion of the Amount
    Available obligated to be paid by each GSE in each Temporary
    Credit and Liquidity Facility issued under the Temporary Credit
    and Liquidity Facility Program.



 



    Such First Loss Limit may be adjusted by the GSEs and Treasury
    if the aggregate amount under either (a) or (b) above
    is less than $10 billion, or upon the obtaining or
    processing of information impacting the applicable Risk Ratings,
    or such other material new information that affects risk,
    commercial reasonableness, or safety and soundness under either
    the New Issue Bond Program or the Temporary Credit and Liquidity
    Facility Program. Any such adjustment shall be made in good
    faith by the GSEs and Treasury






    

    A-4








 







    based upon objective thresholds factoring into, among other
    things, the applicable Risk Ratings and the aggregate amounts
    set forth in (a) and (b) above.



 



    Section 6  When Transaction Loss is
    Calculated.



 



    (a) New Issue Bond Program. Under the New Issue Bond
    Program, Transaction Loss will be calculated separately with
    respect to each Program Bond upon twelve (12) months after
    the first to occur of:



 



    (1) the stated maturity date of the New Issue Bond;



 



    (2) the date the New Issue Bond is fully redeemed;



 



    (3) the date of acceleration of the New Issue Bond; or



 



    (4) the date of mandatory tender in lieu of redemption of
    the New Issue Bond.



 



    (b) Temporary Credit and Liquidity Facility Program.
    Under the Temporary Credit and Liquidity Facility Program,
    Transaction Loss will be calculated for each Temporary Credit
    and Liquidity Facility upon the last to occur of:



 



    (1) the date the GSE has no further obligation under the
    Temporary Credit and Liquidity Facility;



 



    (2) the date all Bank Bonds, if any, are paid in full,
    remarketed or redeemed; or



 



    (3) twelve (12) months after the first to occur of:



 



    (A) a Credit Advance remains unreimbursed;



 



    (B) a Bank Bond is not paid or redeemed when due; or



 



    (C) the GSE causes the acceleration, redemption or
    mandatory tender of the Bonds upon the occurrence of an Event of
    Default under any of the Transaction Documents.



 



    Section 7  How Losses are Determined.



 



    Transaction Losses will be calculated for a New Issue Bond or a
    Temporary Credit and Liquidity Facility as follows:



 



    (a) New Issue Bond Program. Under the New Issue Bond
    Program, a Transaction Loss under a New Issue Bond is the amount
    of principal of such New Issue Bond then due and unpaid as of
    the date that Transaction Loss is calculated. Any accrued and
    unpaid interest and any interest on interest or interest on
    other unpaid sums will not be included in Transaction Losses and
    will be borne solely by Treasury.





    

    A-5








 







    (b) Temporary Credit and Liquidity Facility Program.
    Under the Temporary Credit and Liquidity Facility Program, a
    Transaction Loss under a Temporary Credit and Liquidity Facility
    is:



 



    (1) all amounts owing and unpaid by the HFA under the
    related Reimbursement Agreement (relating to the principal
    portion of unreimbursed Credit Advances and unreimbursed
    Liquidity Advances); less



 



    (2) the sum of all amounts reimbursed, received or
    recovered on account of the amounts owing under paragraph
    (1) above prior to the Loss Calculation Date.



 



    The amount of any Transaction Loss will be allocated between
    unreimbursed Credit Advances and unreimbursed Liquidity Advances
    (and the related Bank Bonds) on the basis of the ratio of
    aggregate unreimbursed principal of the Credit Advances to the
    aggregate unreimbursed principal of the Liquidity Advances.



 



    Transaction Losses will be adjusted pursuant to the provisions
    of Sections 11 and 12.



 



    (c) Calculation Rules. For purposes of determining
    Transaction Loss under the New Issue Bond Program:



 



    (1) Transaction Loss will be calculated only with respect
    to the Bonds actually held by the related Trust. Any Bonds that
    were not acquired by the Trust shall be excluded from the
    calculation of Transaction Loss.



 



    (2) For purposes of calculating Transaction Loss, all
    payments made by the trustee for the Bonds shall be applied as
    principal or interest as characterized by the trustee for the
    Bonds in making such payment. Should the trustee for the Bonds
    not characterize a payment as either principal or interest, then
    that payment shall be characterized as required by the indenture
    or bond resolution for the Bonds. If the trustee for the Bonds
    does not characterize the payment as principal or interest and
    the related indenture or resolution contains no relevant terms,
    then the payment shall be applied first to outstanding and
    unpaid principal of the Bonds in the order of their stated
    maturity dates and then to accrued and unpaid interest on the
    Bonds in the order of their stated maturity dates.



 



    Section 8  Procedure for Reporting a
    Transaction Loss.  Pursuant to the timeframes set
    forth in Paragraph 6 above, the GSE will calculate, or
    cause to be calculated, the amount of Transaction Loss, if any,
    realized on a New Issue Bond or Temporary Credit and Liquidity
    Facility as provided in Paragraph 7 above.



 



    Section 9  Reporting if No Transaction Loss
    Calculated.  If the calculation prepared in
    accordance with Paragraph 7 above shows that no Transaction
    Loss was realized, the GSE will provide or cause to be provided
    a statement to that effect to Treasury within 90 days of
    the Loss Calculation Date.





    

    A-6








 







    Section 10  Reporting if Transaction Loss
    Calculated; Payment of Second Position Loss.



 



    (a) Reconciliation. If the calculation shows that a
    Transaction Loss was realized, the GSE will send a written
    reconciliation calculation to Treasury within 90 days of
    the Loss Calculation Date which specifies:



 



    (1) Transaction Identification: The New Issue Bond
    or Temporary Credit and Liquidity Facility for which the
    reconciliation is made.



 



    (2) Transaction Loss: The Transaction Loss realized
    on the New Issue Bond or Temporary Credit and Liquidity Facility
    as of the Loss Calculation Date.



 



    (3) Program Losses:



 



    (A) Aggregate Program Losses (excluding only the
    Transaction Loss then just calculated for the New Issue Bond or
    Temporary Credit and Liquidity Facility for which the
    reconciliation is made); and



 



    (B) Aggregate Program Losses realized as of the Loss
    Calculation Date (including the Transaction Loss then just
    calculated for the New Issue Bond or Temporary Credit and
    Liquidity Facility for which the reconciliation is made).



 



    (4) The First Loss Limit.



 



    (5) The amount of the First Loss Limit still to be borne by
    Treasury.



 



    (b) First Position Losses. If the amount calculated
    in (a)(3)(B) is not more than the First Loss Limit, then the
    Transaction Loss for the New Issue Bond or Temporary Credit and
    Liquidity Facility for such reconciliation calculation is fully
    First Position Losses.



 



    (c) Partial First Position Losses; Partial Second
    Position Losses. If the amount appearing in (a)(3)(A) is
    less than the First Loss Limit but the amount calculated in
    (a)(3)(B) exceeds the First Loss Limit, then:



 



    (1) the portion of the Transaction Loss equal to the
    difference between the amount appearing in (a)(3)(A) and the
    First Loss Limit constitutes First Position Losses; and



 



    (2) the remaining portion of the Transaction Loss not
    allocated to the First Position Losses constitutes Second
    Position Losses.



 



    (d) Second Position Losses. If the amount appearing
    in (a)(3)(A) is more than the First Loss Limit, then the entire
    Transaction Loss constitutes Second Position Losses.





    

    A-7








 







    (e) Loss Sharing Payment. The GSE will pay the
    amount of any Second Position Losses (less all amounts
    previously paid by the GSE to Treasury as Second Position
    Losses) to Treasury or its order not later than 90 days
    after the Loss Calculation Date. Loss sharing payments made with
    respect to GSE Securities will be made as a distribution under
    the GSE Security and all other loss sharing payments will be
    paid to Treasury to such account as Treasury may require.



 



    Section 11  Recoveries; Losses are Incurred
    But Not In Excess of the First Loss Limit. This Section
    applies if a GSE has calculated that a Transaction Loss has been
    realized with respect to one or more New Issue Bonds or
    Temporary Credit and Liquidity Facilities but the amount of the
    aggregate Program Losses has not exceeded the First Loss Limit.
    If one or more payments are received or other amounts are
    received or recovered with respect to any New Issue Bond or
    Temporary Credit and Liquidity Facility in respect of a
    Transaction Loss, then all such amounts will be paid to Treasury
    and the related Transaction Loss and, consequently, the
    aggregate Program Losses will be reduced by the amount of such
    Recovery.



 



    Section 12  Recoveries; Losses are Incurred
    Which Exceed the First Loss Limit. This Section applies if a
    GSE has calculated that a Transaction Loss has been realized
    with respect to one or more New Issue Bonds or Temporary Credit
    and Liquidity Facilities, aggregate Program Losses exceed the
    First Loss Limit and the GSE has paid any Second Position Losses
    to Treasury. If one or more payments are received or other
    amounts are received or recovered with respect to any New Issue
    Bond or Temporary Credit and Liquidity Facility in respect of a
    Transaction Loss, then:



 



    (a) the related Transaction Losses and, consequently, the
    aggregate Program Losses will be reduced by the amount of such
    Recovery;



 



    (b) the GSE shall be entitled to such payments and other
    amounts, but not in excess of the amount of the Second Position
    Losses previously paid to Treasury; and



 



    (c) any excess available after the payment made in
    subparagraph (b) above shall be paid to Treasury.



 



    Section 13  Partial Guarantees of GSE
    Securities.  In order to evidence a GSE’s
    loss sharing obligations with respect to the GSE Securities it
    issues, the GSE will issue a partial guarantee to the related
    Trust (“Partial Guarantee”) for Program Losses
    allocable to such GSE Securities. The GSE will make a payment
    under a Partial Guarantee only under the circumstances set out
    in this Exhibit.



 



    Section 14  Termination of Loss Sharing Upon
    Unwinding of GSE Security.  A GSE’s loss
    sharing obligations and any related Partial Guarantee will
    automatically terminate with respect to any New Issue Bonds or
    Bank Bonds and the related GSE Security if Treasury causes a GSE
    Security to be unwound in exchange for the underlying New Issue
    Bonds or Bank Bonds.





    

    A-8








 








    EXHIBIT B



 




    FUNDING
    NOTICE



 



    U.S. Department of the Treasury

    c/o JP
    Morgan Chase, as Treasury’s Financial Agent



 


			
	 	    Re:      
	
    Temporary Credit and Liquidity Facility (“Credit and
    Liquidity Facility”) relating to the Series of Bonds
    identified below (“Bonds”)




 



    Agreement to Purchase Participation (“Participation
    Agreement”) by and among U.S. Department of the
    Treasury (“Treasury”), Fannie Mae
    (“Fannie Mae”) and Federal Home Loan Mortgage
    Corporation (“Freddie Mac”) (together, the
    “GSEs”).



 



    Participation Certificate






    Date:






    Certificate No.:



 



    Issuer:



 



    Bond Series:  [Enter Title of Bonds, Including Series
    Designation]

    Bond Series CUSIP No.:



 



    Ladies and Gentlemen:



 



    The undersigned, a duly authorized signatory of [insert name of
    Program Administrator] (“Program
    Administrator”), certifies to Treasury, with reference
    to the Participation Agreement and the Participation
    Certificate, that:



 



    (1) Demand for Advance Received from Bond Trustee.
    The bond trustee for the Bonds has demanded an Advance from the
    GSEs under the Credit and Liquidity Facility. A copy of the
    related Certificate is attached with this Funding Notice. The
    Advance demanded by the Trustee:



 



    (a) is a:



 



    [Program Administrator: check applicable box or boxes]



 



    o
         Credit Advance (Debt Service
    Advance)



 



    o
         Liquidity Advance (Liquidity
    Advance or Mandatory Tender Advance



 



    (b) must be paid by no later than
    2:00 p.m. Eastern time on *[date].





    

    B-1








 







    *[Program Administrator: Please insert the same date as you
    inserted in Paragraph 1(b) above]



 



    (2) Request for Funding. The Program Administrator,
    on behalf of the GSEs, requests Treasury to make a Funding
    Payment to the GSEs on account of such Advance in the total
    amount of
    $          .
    For your information, of the amount requested:



 



    (a) Fannie Mae: one-half or
    $      is for Fannie
    Mae; and



 



    (b) Freddie Mac: one-half or
    $      is for Freddie Mac.



 



    (3) When the Funding Payment Must be Made. The
    Funding Payment requested by this Funding Notice must be made in
    immediately available funds not later than
    3:00 p.m. Eastern time on [date].



 



    (4) Where the Funding Payment Must be Made. Please
    pay the Funding Amount to the Program Administrator by wire
    transfer of immediately available funds to:



 



    [wire instructions]



 


 



    Any capitalized, but undefined, term used in this Certificate is
    used as defined in the Participation Agreement.



 



    IN WITNESS WHEREOF, the Program Administrator has
    executed and delivered this Funding Notice as of the
              
    day of
                   ,
              .



 



    [Name of Program Administrator], as




    Program Administrator



 



    By: ____________________________________




    Authorized Signatory





    

    B-2








 








    EXHIBIT C



 




    FORM OF

    PARTICIPATION CERTIFICATE



 



    THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
    SECURITIES OF ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
    LAWS OF ANY STATE. ANY RESALE OR TRANSFER OF THIS CERTIFICATE
    MAY NOT BE MADE.



 



    THIS CERTIFICATE IS NOT GUARANTEED BY THE UNITED STATES AND DOES
    NOT CONSTITUTE A DEBT OR OBLIGATION OF THE UNITED STATES OR ANY
    AGENCY OR INSTRUMENTALITY THEREOF OTHER THAN, TO THE LIMITED
    EXTENT PROVIDED IN THE PARTICIPATION AGREEMENT, FANNIE MAE AND
    FREDDIE MAC.



 




    PARTICIPATION
    CERTIFICATE



 



    Date:



 



    Certificate No.:



 



    A. General:



 



    1. This Participation Certificate is issued in connection
    with the following Temporary Credit and Liquidity Facility
    (“Temporary Credit and Liquidity Facility”)
    issued by Fannie Mae and Freddie Mac:



 


	 	 	 	 
	
 
	
 
	
 
	
 

	
    HFA
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
    Temporary Credit and

    Liquidity Facility Number
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
    Temporary Credit and

    Liquidity Facility Date
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
    Stated Amount
	
 
	
 
	
    $

	
 
	
 
	
 
	
 

	
    Maximum Amount Available

    (specify principal and

    interest component)
	
 
	
 
	
    Principal: $ 

     

    Interest: $

	
 
	
 
	
 
	
 











 



    The Temporary Credit and Liquidity Facility was issued with
    respect to the bonds described in the attached Exhibit I.





    

    C-1








 







    2. This Participation Certificate is issued pursuant to the
    Agreement to Purchase Participation by and among Fannie Mae,
    Freddie Mac and Treasury dated as of [Date]
    (“Participation Agreement”) and evidences the
    purchase by Treasury:



 



    (a) of a Participation from Fannie Mae (“Fannie
    Mae”) in Fannie Mae’s portion of the Temporary
    Credit and Liquidity Facility; and



 



    (b) of a Participation from Federal Home Loan Mortgage
    Corporation (“Freddie Mac”) in Freddie
    Mac’s portion of the Temporary Credit and Liquidity
    Facility.



 



    B. Fannie Mae Portion of Temporary Credit and Liquidity
    Facility



 



    1. Fannie Mae No.:



 



    2. Treasury’s No.:



 



    3. Treasury purchases from Fannie Mae and Fannie Mae sells
    to Treasury a participation in Fannie Mae’s portion of the
    Temporary Credit and Liquidity Facility as follows:



 


	 	 	 	 
	
 
	
 
	
 
	
 

	
    Fannie Mae’s Stated Amount
	
 
	
 
	
    $

	
 
	
 
	
 
	
 

	
    Fannie Mae’s Amount

    Available (specify principal

    and interest component)
	
 
	
 
	
    Principal: $ 

     

    Interest: $

	
 
	
 
	
 
	
 

	
    Portion Participation Amount
	
 
	
 
	
    50%

	
 
	
 
	
 
	
 

	
    Participation Percentage
	
 
	
 
	
    100%

	
 
	
 
	
 
	
 

	
    Effective Date
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
    Expiration Date
	
 
	
 
	
 

	
 
	
 
	
 
	
 











 



    4. Fees:



 


	 	 	 	 
	
 
	
 
	
 
	
 

	
    Participation Fee Rate
	
 
	
 
	
 

	
 
	
 
	
 
	
 











 



    C. Freddie Mac Portion of Temporary Credit and Liquidity
    Facility



 



    1. Freddie Mac No.:



 



    2. Treasury’s No.:





    

    C-2








 







    3. Treasury purchases from Freddie Mac and Freddie Mac
    sells to Treasury a participation in Freddie Mac’s portion
    of the Temporary Credit and Liquidity Facility as follows:



 


	 	 	 	 
	
 
	
 
	
 
	
 

	
    Freddie Mac’s Stated Amount
	
 
	
 
	
    $

	
 
	
 
	
 
	
 

	
    Freddie Mac’s Amount

    Available (specify principal

    and interest component)
	
 
	
 
	
    Principal: $

     

    Interest: $

	
 
	
 
	
 
	
 

	
    Portion Participation Amount
	
 
	
 
	
    50%

	
 
	
 
	
 
	
 

	
    Participation Percentage
	
 
	
 
	
    100%

	
 
	
 
	
 
	
 

	
    Effective Date
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
    Expiration Date
	
 
	
 
	
 

	
 
	
 
	
 
	
 











 



    4. Fees:



 


	 	 	 	 
	
 
	
 
	
 
	
 

	
    Participation Fee Rate
	
 
	
 
	
 

	
 
	
 
	
 
	
 











 



    D. Miscellaneous



 



    1. Capitalized terms used in this Participation Certificate
    and not otherwise defined have the meaning given those terms in
    the Participation Agreement.



 



    2. This Participation Certificate is not effective or valid
    for any purpose until receipt by Fannie Mae, Freddie Mac and
    Treasury of a counterpart executed by Fannie Mae, Freddie Mac
    and Treasury.



 


 


	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    FANNIE MAE

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    By:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Name:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Title:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 











    

    C-3








 






 


	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    FEDERAL HOME LOAN MORTGAGE CORPORATION

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    By:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Name:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Title:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
    Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 









 


 



    Acknowledged and Accepted:



 


	 	 	 	 	 	 	 
	

    DEPARTMENT OF THE TREASURY


	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    By:


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Name:


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    Title:


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    Date:


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 











    

    C-4








 








    EXHIBIT I

    to

    PARTICIPATION CERTIFICATE



 




    Description
    of Bonds





    

    Ex. I-1