exv10w1







 




    Exhibit 10.1
    



 




    EXECUTION
    VERSION
    



 




    AMENDED
    AND RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT



 



    AMENDED AND RESTATED SENIOR PREFERRED STOCK PURCHASE AGREEMENT
    (this “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”).
    Reference is made to Article 1 below for the meaning of
    capitalized terms used herein without definition.



 




    Background



 



    A. The Agency has been duly appointed as Conservator for
    Seller pursuant to
    Section 1367(a)
    of the Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (as amended, the “FHE
    Act”). Conservator has determined that entry into this
    Agreement is (i) necessary to put Seller in a sound and
    solvent condition; (ii) appropriate to carry on the
    business of Seller and preserve and conserve the assets and
    property of Seller; and (iii) otherwise consistent with its
    powers, authorities and responsibilities.



 



    B. Purchaser is authorized to purchase obligations and
    other securities issued by Seller pursuant to
    Section 306(l)
    of the Federal Home Loan Mortgage Corporation Act, as amended
    (the “Charter Act”). The Secretary of the
    Treasury has determined, after taking into consideration the
    matters set forth in
    Section 306(l)(1)(C)
    of the Charter Act, that the purchases contemplated herein are
    necessary to (i) provide stability to the financial
    markets; (ii) prevent disruptions in the availability of
    mortgage finance; and (iii) protect the taxpayer.



 



    C. Purchaser and Seller executed and delivered the Senior
    Preferred Stock Purchase Agreement dated as of September 7,
    2008 (the “Original Agreement”), and the
    parties thereto desire to amend and restate the Original
    Agreement in its entirety as set forth herein.



 



    THEREFORE, the parties hereto agree as follows:



 




    Terms and
    Conditions



 




    1.  DEFINITIONS



 



    As used in this Agreement, the following terms shall have the
    meanings set forth below:



 



    “Affiliate” means, when used with respect to a
    specified Person (i) any direct or indirect holder or group
    (as defined in Sections 13(d) and 14(d) of the Exchange
    Act) of holders of 10.0% or more of any class of capital stock
    of such Person and (ii) any current or former director or
    officer of such Person, or any other current or former employee
    of such Person that currently exercises or formerly exercised a
    material degree of Control over such Person, including without
    limitation each current or former Named Executive Officer of
    such Person.













 






    “Available Amount” means, as of any date of
    determination, the lesser of (a) the Deficiency Amount as
    of such date and (b) the Maximum Amount as of such date.



 



    “Business Day” means any day other than a
    Saturday, Sunday or other day on which commercial banks are
    authorized to close under United States federal law and the law
    of the State of New York.



 



    “Capital Lease Obligations” of any Person shall
    mean the obligations of such Person to pay rent or other amounts
    under any lease of (or other similar arrangement conveying the
    right to use) real or personal property, or a combination
    thereof, which obligations are required to be classified and
    accounted for as capital leases on a balance sheet of such
    Person under GAAP and, for purposes hereof, the amount of such
    obligations at any time shall be the capitalized amount thereof
    at such time determined in accordance with GAAP.



 



    “Control” shall mean the possession, directly
    or indirectly, of the power to direct or cause the direction of
    the management or policies of a Person, whether through the
    ownership of voting securities, by contract or otherwise.



 



    “Deficiency Amount” means, as of any date of
    determination, the amount, if any, by which (a) the total
    liabilities of Seller exceed (b) the total assets of Seller
    (such assets excluding the Commitment and any unfunded amounts
    thereof), in each case as reflected on the balance sheet of
    Seller as of the applicable date set forth in this Agreement,
    prepared in accordance with GAAP; provided,
    however, that:



 



    (i) for the avoidance of doubt, in measuring the Deficiency
    Amount liabilities shall exclude any obligation in respect of
    any capital stock of Seller, including the Senior Preferred
    Stock contemplated herein;



 



    (ii) in the event that Seller becomes subject to
    receivership or other liquidation process or proceeding,
    “Deficiency Amount” shall mean, as of any date of
    determination, the amount, if any, by which (a) the total
    allowed claims against the receivership or other applicable
    estate (excluding any liabilities of or transferred to any LLRE
    (as defined in Section 5.4(a)) created by a receiver)
    exceed (b) the total assets of such receivership or other
    estate (excluding the Commitment, any unfunded amounts thereof
    and any assets of or transferred to any LLRE, but including the
    value of the receiver’s interest in any LLRE);



 



    (iii) to the extent Conservator or a receiver of Seller, or
    any statute, rule, regulation or court of competent
    jurisdiction, specifies or determines that a liability of Seller
    (including without limitation a claim against Seller arising
    from rescission of a purchase or sale of a security issued by
    Seller (or guaranteed by Seller or with respect to which Seller
    is otherwise liable) or for damages arising from the purchase,
    sale or retention of such a security) shall be subordinated
    (other than pursuant to a contract providing for such
    subordination) to all other liabilities of Seller or shall be
    treated on par with any class of equity of Seller, then such
    liability shall be excluded in the calculation of Deficiency
    Amount; and




    

    - 2 -








 






    (iv) the Deficiency Amount may be increased above the
    otherwise applicable amount by the mutual written agreement of
    Purchaser and Seller, each acting in its sole discretion.



 



    “Designated Representative” means Conservator
    or (a) if Conservator has been superseded by a receiver
    pursuant to
    Section 1367(a)
    of the FHE Act, such receiver, or (b) if Seller is not in
    conservatorship or receivership pursuant to
    Section 1367(a)
    of the FHE Act, Seller’s chief financial officer.



 



    “Director” shall mean the Director of the
    Agency.



 



    “Effective Date” means the date on which this
    Agreement shall have been executed and delivered by both of the
    parties hereto.



 



    “Equity Interests” of any Person shall mean any
    and all shares, interests, rights to purchase or otherwise
    acquire, warrants, options, participations or other equivalents
    of or interests in (however designated) equity, ownership or
    profits of such Person, including any preferred stock, any
    limited or general partnership interest and any limited
    liability company membership interest, and any securities or
    other rights or interests convertible into or exchangeable for
    any of the foregoing.



 



    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended, and the rules and regulations of the
    SEC promulgated thereunder.



 



    “GAAP” means generally accepted accounting
    principles in effect in the United States as set forth in the
    opinions and pronouncements of the Accounting Principles Board
    and the American Institute of Certified Public Accountants and
    statements and pronouncements of the Financial Accounting
    Standards Board from time to time.



 



    “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’ acceptances
    and similar instruments and (g) any obligation of such
    Person, contingent or otherwise, guaranteeing or having the
    economic effect of guaranteeing any Indebtedness of the types
    set forth in clauses (a) through (f) payable by
    another Person other than Mortgage Guarantee Obligations.



 



    “Liquidation End Date” means the date of
    completion of the liquidation of Seller’s assets.



 



    “Maximum Amount” means, as of any date of
    determination, $100,000,000,000 (one hundred billion dollars),
    less the aggregate amount of funding under the Commitment prior
    to such date.




    

    - 3 -








 






    “Mortgage Assets” of any Person means assets of
    such Person consisting of mortgages, mortgage loans,
    mortgage-related securities, participation certificates,
    mortgage-backed commercial paper, obligations of real estate
    mortgage investment conduits and similar assets, in each case to
    the extent such assets would appear on the balance sheet of such
    Person in accordance with GAAP as in effect as of the date
    hereof (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).



 



    “Mortgage Guarantee Obligations” means
    guarantees, standby commitments, credit enhancements and other
    similar obligations of Seller, in each case in respect of
    Mortgage Assets.



 



    “Named Executive Officer” has the meaning given
    to such term in
    Item 402(a)(3)
    of
    Regulation S-K
    under the Exchange Act, as in effect on the date hereof.



 



    “Person” shall mean any individual,
    corporation, limited liability company, partnership, joint
    venture, association, joint-stock company, trust, estate,
    unincorporated organization or government or any agency or
    political subdivision thereof, or any other entity whatsoever.



 



    “SEC” means the Securities and Exchange
    Commission.



 



    “Senior Preferred Stock” means the Variable
    Liquidation Preference Senior Preferred Stock of Seller,
    substantially in the form of Exhibit A hereto.



 



    “Warrant” means a warrant for the purchase of
    common stock of Seller representing 79.9% of the common stock of
    Seller on a fully-diluted basis, substantially in the form of
    Exhibit B hereto.



 




    2.  COMMITMENT



 



    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 $100,000,000,000 (one hundred billion dollars). The
    liquidation preference of the Senior Preferred Stock shall
    increase in connection with draws on the Commitment, as set
    forth in Section 3.3 below.



 



    2.2.  Quarterly Draws on Commitment. Within
    fifteen (15) Business Days following the determination of
    the Deficiency Amount, if any, as of the end of each fiscal
    quarter of Seller which ends on or before the Liquidation End
    Date, the Designated Representative may, on behalf of Seller,
    request that Purchaser provide immediately available funds to
    Seller in an amount up to but not in excess of the Available
    Amount as of the end of such quarter. Any such request shall be
    valid only if it is in writing, is timely made, specifies the
    account of Seller to which such funds are to be transferred, and
    contains a certification of the Designated Representative that
    the requested amount does not exceed the Available Amount as of
    the end of the applicable quarter. Purchaser shall provide such
    funds within sixty (60) days of its receipt of such request
    or, following any determination by the Director that the
    Director will be mandated by law to appoint a receiver for
    Seller if such funds are not received sooner, such shorter
    period as may be necessary




    

    - 4 -








 






    to avoid such mandatory appointment of a receiver if reasonably
    practicable taking into consideration Purchaser’s access to
    funds.



 



    2.3.  Accelerated Draws on Commitment.
    Immediately following any determination by the Director that
    the Director will be mandated by law to appoint a receiver for
    Seller prior to the Liquidation End Date unless Seller’s
    capital is increased by an amount (the “Special
    Amount”) up to but not in excess of the then current
    Available Amount (computed based on a balance sheet of Seller
    prepared in accordance with GAAP that differs from the most
    recent balance sheet of Seller delivered in accordance with
    Section 5.9(a) or (b)) on a date that is prior to the date
    that funds will be available to Seller pursuant to
    Section 2.2, Conservator may, on behalf of Seller, request
    that Purchaser provide to Seller the Special Amount in
    immediately available funds. Any such request shall be valid
    only if it is in writing, is timely made, specifies the account
    of Seller to which such funds are to be transferred, and
    contains certifications of Conservator that (i) the
    requested amount does not exceed the Available Amount (including
    computations in reasonable detail and satisfactory to Purchaser
    of the then existing Deficiency Amount) and (ii) the
    requested amount is required to avoid the imminent mandatory
    appointment of a receiver for Seller. Purchaser shall provide
    such funds within thirty (30) days of its receipt of such
    request or, if reasonably practicable taking into consideration
    Purchaser’s access to funds, any shorter period as may be
    necessary to avoid mandatory appointment of a receiver.



 



    2.4.  Final Draw on Commitment. Within fifteen
    (15) Business Days following the determination of the
    Deficiency Amount, if any, as of the Liquidation End Date
    (computed based on a balance sheet of Seller as of the
    Liquidation End Date prepared in accordance with GAAP), the
    Designated Representative may, on behalf of Seller, request that
    Purchaser provide immediately available funds to Seller in an
    amount up to but not in excess of the Available Amount as of the
    Liquidation End Date. Any such request shall be valid only if it
    is in writing, is timely made, specifies the account of Seller
    to which such funds are to be transferred, and contains a
    certification of the Designated Representative that the
    requested amount does not exceed the Available Amount (including
    computations in reasonable detail and satisfactory to Purchaser
    of the Deficiency Amount as of the Liquidation End Date).
    Purchaser shall provide such funds within sixty (60) days
    of its receipt of such request.



 



    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 $100,000,000,000 (one hundred billion dollars). For
    the 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.




    

    - 5 -








 







    3.  PURCHASE
    OF SENIOR PREFERRED STOCK AND WARRANT; FEES



 



    3.1.  Initial Commitment Fee. In consideration
    of the Commitment, and for no additional consideration, on the
    Effective Date (or as soon thereafter as is practicable) Seller
    shall sell and issue to Purchaser, and Purchaser shall purchase
    from Seller, (a) one million (1,000,000) shares of Senior
    Preferred Stock, with an initial liquidation preference equal to
    $1,000 per share ($1,000,000,000 (one billion dollars)
    liquidation preference in the aggregate), and (b) the
    Warrant.



 



    3.2.  Periodic Commitment Fee.
    (a) Commencing March 31, 2010, Seller shall pay to
    Purchaser quarterly, on the last day of March, June, September
    and December of each calendar year (each a “Periodic Fee
    Date”), a periodic commitment fee (the
    “Periodic Commitment Fee”). The Periodic
    Commitment Fee shall accrue from January 1, 2010.



 



    (b) The Periodic Commitment Fee is intended to fully
    compensate Purchaser for the support provided by the ongoing
    Commitment following December 31, 2009. The amount of the
    Periodic Commitment Fee shall be set not later than
    December 31, 2009 with respect to the ensuing five-year
    period, shall be reset every five years thereafter and shall be
    determined with reference to the market value of the Commitment
    as then in effect. The amount of the Periodic Commitment Fee
    shall be mutually agreed by Purchaser and Seller, subject to
    their reasonable discretion and in consultation with the
    Chairman of the Federal Reserve; provided, that Purchaser
    may waive the Periodic Commitment Fee for up to one year at a
    time, in its sole discretion, based on adverse conditions in the
    United States mortgage market.



 



    (c) At the election of Seller, the Periodic Commitment Fee
    may be paid in cash or by adding the amount thereof ratably to
    the liquidation preference of each outstanding share of Senior
    Preferred Stock so that the aggregate liquidation preference of
    all such outstanding shares of Senior Preferred Stock is
    increased by an amount equal to the Periodic Commitment Fee.
    Seller shall deliver notice of such election not later than
    three (3) Business Days prior to each Periodic Fee Date. If
    the Periodic Commitment Fee is not paid in cash by 12:00 pm
    (New York time) on the applicable Periodic Fee Date
    (irrespective of Seller’s election pursuant to this
    subsection), Seller shall be deemed to have elected to pay the
    Periodic Commitment Fee by adding the amount thereof to the
    liquidation preference of the Senior Preferred Stock, and the
    aggregate liquidation preference of the outstanding shares of
    Senior Preferred Stock shall thereupon be automatically
    increased, in the manner contemplated by the first sentence of
    this section, by an aggregate amount equal to the Periodic
    Commitment Fee then due.



 



    3.3.  Increases of Senior Preferred Stock
    Liquidation Preference as a Result of Funding under the
    Commitment. The aggregate liquidation preference of the
    outstanding shares of Senior Preferred Stock shall be
    automatically increased by an amount equal to the amount of each
    draw on the Commitment pursuant to Article 2 that is funded
    by Purchaser to Seller, such increase to occur simultaneously
    with such funding and ratably with respect to each share of
    Senior Preferred Stock.



 



    3.4.  Notation of Increase in Liquidation
    Preference. Seller shall duly mark its records to reflect
    each increase in the liquidation preference of the Senior
    Preferred Stock contemplated




    

    - 6 -








 






    herein (but, for the avoidance of doubt, such increase shall be
    effective regardless of whether Seller has properly marked its
    records).



 




    4.  REPRESENTATIONS



 



    Seller represents and warrants as of the Effective Date, and
    shall be deemed to have represented and warranted as of the date
    of each request for and funding of an advance under the
    Commitment pursuant to Article 2, as follows:



 



    4.1.  Organization and Good Standing. Seller is
    a corporation, chartered by the Congress of the United States,
    duly organized, validly existing and in good standing under the
    laws of the United States and has all corporate power and
    authority to carry on its business as now conducted and as
    proposed to be conducted.



 



    4.2.  Organizational Documents. Seller has made
    available to Purchaser a complete and correct copy of its
    charter and bylaws, each as amended to date (the
    “Organizational Documents”). The Organizational
    Documents are in full force and effect. Seller is not in
    violation of any provision of its Organizational Documents.



 



    4.3.  Authorization and Enforceability. All
    corporate or other action on the part of Seller or Conservator
    necessary for the authorization, execution, delivery and
    performance of this Agreement by Seller and for the
    authorization, issuance and delivery of the Senior Preferred
    Stock and the Warrant being purchased under this Agreement, has
    been taken. This Agreement has been duly and validly executed
    and delivered by Seller and (assuming due authorization,
    execution and delivery by the Purchaser) shall constitute the
    valid and legally binding obligation of Seller, enforceable
    against Seller in accordance with its terms, except to the
    extent the enforceability thereof may be limited by bankruptcy
    laws, insolvency laws, reorganization laws, moratorium laws or
    other laws of general applicability affecting creditors’
    rights generally or by general equitable principles (regardless
    of whether enforcement is sought in a proceeding in equity or at
    law). The Agency is acting as conservator for Seller under
    Section 1367 of the FHE Act. The Board of Directors of
    Seller, by valid action at a duly called meeting of the Board of
    Directors on September 6, 2008, consented to the
    appointment of the Agency as conservator for purposes of
    Section 1367(a)(3)(I)
    of the FHE Act, and the Director of the Agency has appointed the
    Agency as Conservator for Seller pursuant to
    Section 1367(a)(1)
    of the FHE Act, and each such action has not been rescinded,
    revoked or modified in any respect.



 



    4.4.  Valid Issuance. When issued in accordance
    with the terms of this Agreement, the Senior Preferred Stock and
    the Warrant will be duly authorized, validly issued, fully paid
    and non-assessable, free and clear of all liens and preemptive
    rights. The shares of common stock to which the holder of the
    Warrant is entitled have been duly and validly reserved for
    issuance. When issued and delivered in accordance with the terms
    of this Agreement and the Warrant, such shares will be duly
    authorized, validly issued, fully paid and nonassessable, free
    and clear of all liens and preemptive rights.




    

    - 7 -








 






    4.5.  Non-Contravention.



 



    (a) The execution, delivery or performance by Seller of
    this Agreement and the consummation by Seller of the
    transactions contemplated hereby do not and will not
    (i) conflict with or violate any provision of the
    Organizational Documents of Seller; (ii) conflict with or
    violate any law, decree or regulation applicable to Seller or by
    which any property or asset of Seller is bound or affected, or
    (iii) result in any breach of, or constitute a default
    (with or without notice or lapse of time, or both) under, or
    give to others any right of termination, amendment, acceleration
    or cancellation of, or result in the creation of a lien upon any
    of the properties or assets of Seller, pursuant to any note,
    bond, mortgage, indenture or credit agreement, or any other
    contract, agreement, lease, license, permit, franchise or other
    instrument or obligation to which Seller is a party or by which
    Seller is bound or affected, other than, in the case of
    clause (iii), any such breach, default, termination,
    amendment, acceleration, cancellation or lien that would not
    have and would not reasonably be expected to have, individually
    or in the aggregate, a material adverse effect on the business,
    property, operations or condition of the Seller, the authority
    of the Conservator or the validity or enforceability of this
    Agreement (a “Material Adverse Effect”).



 



    (b) The execution and delivery of this Agreement by Seller
    does not, and the consummation by Seller of the transactions
    contemplated by this Agreement will not, require any consent,
    approval, authorization, waiver or permit of, or filing with or
    notification to, any governmental authority or any other person,
    except for such as have already been obtained.



 




    5.  COVENANTS



 



    From the Effective Date until such time as the Senior Preferred
    Stock shall have been repaid or redeemed in full in accordance
    with its terms:



 



    5.1.  Restricted Payments. Seller shall not,
    and shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, declare or pay
    any dividend (preferred or otherwise) or make any other
    distribution (by reduction of capital or otherwise), whether in
    cash, property, securities or a combination thereof, with
    respect to any of Seller’s Equity Interests (other than
    with respect to the Senior Preferred Stock or the Warrant) or
    directly or indirectly redeem, purchase, retire or otherwise
    acquire for value any of Seller’s Equity Interests (other
    than the Senior Preferred Stock or the Warrant), or set aside
    any amount for any such purpose.



 



    5.2.  Issuance of Capital Stock. Seller shall
    not, and shall not permit any of its subsidiaries to, in each
    case without the prior written consent of Purchaser, sell or
    issue Equity Interests of Seller or any of its subsidiaries of
    any kind or nature, in any amount, other than the sale and
    issuance of the Senior Preferred Stock and Warrant on the
    Effective Date and the common stock subject to the Warrant upon
    exercise thereof, and other than as required by (and pursuant
    to) the terms of any binding agreement as in effect on the date
    hereof.



 



    5.3.  Conservatorship. Seller shall not (and
    Conservator, by its signature below, agrees that it shall not),
    without the prior written consent of Purchaser, terminate, seek
    termination of or permit to be terminated the conservatorship of
    Seller pursuant to Section 1367 of the FHE Act, other




    

    - 8 -








 






    than in connection with a receivership pursuant to
    Section 1367 of the FHE Act.



 



    5.4.  Transfer of Assets. Seller shall not, and
    shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, sell, transfer,
    lease or otherwise dispose of (in one transaction or a series of
    related transactions) all or any portion of its assets
    (including Equity Interests in other persons, including
    subsidiaries), whether now owned or hereafter acquired (any such
    sale, transfer, lease or disposition, a
    “Disposition”), other than Dispositions for
    fair market value:



 



    (a) to a limited life regulated entity
    (“LLRE”) pursuant to
    Section 1367(i)
    of the FHE Act;



 



    (b) of assets and properties in the ordinary course of
    business, consistent with past practice;



 



    (c) in connection with a liquidation of Seller by a
    receiver appointed pursuant to
    Section 1367(a)
    of the FHE Act;



 



    (d) of cash or cash equivalents for cash or cash
    equivalents; or



 



    (e) to the extent necessary to comply with the covenant set
    forth in Section 5.7 below.



 



    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
    110.0% of the aggregate Indebtedness of Seller and its
    subsidiaries on a consolidated basis as of June 30, 2008 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.



 



    5.6.  Fundamental Changes. Seller shall not,
    and shall not permit any of its subsidiaries to, in each case
    without the prior written consent of Purchaser, (i) merge
    into or consolidate or amalgamate with any other Person, or
    permit any other Person to merge into or consolidate or
    amalgamate with it, (ii) effect a reorganization or
    recapitalization involving the common stock of Seller, a
    reclassification of the common stock of Seller or similar
    corporate transaction or event or (iii) purchase, lease or
    otherwise acquire (in one transaction or a series of
    transactions) all or substantially all of the assets of any
    other Person or any division, unit or business of any Person.



 



    5.7.  Mortgage Assets. Seller shall not own, as
    of any applicable date, Mortgage Assets in excess of (i) on
    December 31, 2009, $850 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 -








 






    5.8.  Transactions with Affiliates. Seller
    shall not, and shall not permit any of its subsidiaries to,
    without the prior written consent of Purchaser, engage in any
    transaction of any kind or nature with an Affiliate of Seller
    unless such transaction is (i) pursuant to this Agreement,
    the Senior Preferred Stock or the Warrant, (ii) upon terms
    no less favorable to Seller than would be obtained in a
    comparable arm’s-length transaction with a Person that is
    not an Affiliate of Seller or (iii) a transaction
    undertaken in the ordinary course or pursuant to a contractual
    obligation or customary employment arrangement in existence as
    of the date hereof.



 



    5.9.  Reporting. Seller shall provide to
    Purchaser:



 



    (a) not later than the time period specified in the
    SEC’s rules and regulations with respect to issuers as to
    which Section 13 and
    15(d) of the
    Exchange Act apply, annual reports on
    Form 10-K
    (or any successor or comparable form) containing the information
    required to be contained therein (or required in such successor
    or comparable form);



 



    (b) not later than the time period specified in the
    SEC’s rules and regulations with respect to issuers as to
    which Section 13 and
    15(d) of the
    Exchange Act apply, reports on
    Form 10-Q
    (or any successor or comparable form) containing the information
    required to be contained therein (or required in such successor
    or comparable form);



 



    (c) promptly from time to time after the occurrence of an
    event required to be therein reported (and in any event within
    the time period specified in the SEC’s rules and
    regulations), such other reports on
    Form 8-K
    (or any successor or comparable form);



 



    (d) concurrently with any delivery of financial statements
    under paragraphs (a) or (b) above, a certificate of
    the Designated Representative, (i) certifying that Seller
    is (and since the last such certificate has at all times been)
    in compliance with each of the covenants contained herein and
    that no representation made by Seller herein or in any document
    delivered pursuant hereto or in connection herewith was false or
    misleading in any material respect when made, or, if the
    foregoing is not true, specifying the nature and extent of the
    breach of covenant and/or representation and any corrective
    action taken or proposed to be taken with respect thereto, and
    (ii) setting forth computations in reasonable detail and
    satisfactory to the Purchaser of the Deficiency Amount, if any;



 



    (e) promptly, from time to time, such other information
    regarding the operations, business affairs, plans, projections
    and financial condition of Seller, or compliance with the terms
    of this Agreement, as Purchaser may reasonably request; and



 



    (f) as promptly as reasonably practicable, written notice
    of the following:



 



    (i) the occurrence of the Liquidation End Date;



 



    (ii) the filing or commencement of, or any written threat
    or notice of intention of any Person to file or commence, any
    action, suit or proceeding, whether at law or in equity or by or
    before any governmental authority or in arbitration, against
    Conservator, Seller or any other Person which, if adversely
    determined, would reasonably be expected to have a Material
    Adverse Effect;




    

    - 10 -








 






    (iii) any other development that is not a matter of general
    public knowledge and that has had, or would reasonably be
    expected to have, a Material Adverse Effect.



 



    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 of Seller.



 




    6.  MISCELLANEOUS



 



    6.1.  No Third-Party Beneficiaries. Until the
    termination of the Commitment, at any time during the existence
    and continuance of a payment default with respect to debt
    securities issued by Seller
    and/or a
    default by Seller with respect to any Mortgage Guarantee
    Obligations, any holder of such defaulted debt securities or
    beneficiary of such Mortgage Guarantee Obligations
    (collectively, the “Holders”) may
    (a) deliver notice to the Seller and the Designated
    Representative requesting exercise of all rights available to
    them under this Agreement to draw on the Commitment up to the
    lesser of the amount necessary to cure the outstanding payment
    defaults and the Available Amount as of the last day of the
    immediately preceding fiscal quarter (the “Demand
    Amount”), (b) if Seller and the Designated
    Representative fail to act as requested within thirty
    (30) days of such notice, seek judicial relief for failure
    of the Seller to draw on the Commitment, and (c) if
    Purchaser shall fail to perform its obligations in respect of
    any draw on the Commitment, and Seller
    and/or the
    Designated Representative shall not be diligently pursuing
    remedies in respect of such failure, file a claim in the United
    States Court of Federal Claims for relief requiring Purchaser to
    pay Seller the Demand Amount in the form of liquidated damages.
    Any payment of liquidated damages to Seller under the previous
    sentence shall be treated for all purposes, including the
    provisions of the Senior Preferred Stock and Section 3.3 of
    this Agreement, as a draw and funding of the Commitment pursuant
    to Article 2. The Holders shall have no other rights under
    or in respect of this Agreement, and the Commitment shall not
    otherwise be enforceable by any creditor of Seller or by any
    other Person other than the parties hereto, and no such creditor
    or other Person is intended to be, or shall be, a third party
    beneficiary of any provision of this Agreement.



 



    6.2.  Non-Transferable; Successors. The
    Commitment is solely for the benefit of Seller and shall not
    inure to the benefit of any other Person (other than the Holders
    to the extent set forth in Section 6.1), including any
    entity to which the charter of Seller may be transferred, to any
    LLRE or to any other successor to the assets, liabilities or
    operations of Seller. The Commitment may not be assigned or
    otherwise transferred, in whole or in part, to any Person
    (including, for the avoidance of doubt, any LLRE to which a
    receiver has assigned all or a portion of Seller’s assets)
    without the prior written consent of Purchaser (which may be
    withheld in its sole discretion). In no event shall any
    successor to Seller (including such an LLRE) be entitled to the
    benefit of the Commitment without the prior written consent of
    Purchaser. Seller and Conservator, for themselves and on behalf
    of their permitted successors, covenant and agree not to
    transfer or purport to transfer the Commitment in contravention
    of the terms hereof, and any such attempted transfer shall be
    null and void ab initio. It is the expectation of the
    parties that, in the event Seller were placed into receivership
    and an LLRE formed to purchase certain of its assets and assume
    certain of its liabilities, the Commitment would remain with
    Seller for the benefit of the holders of the




    

    - 11 -








 






    debt of Seller not assumed by the LLRE.



 



    6.3.  Amendments; Waivers. This Agreement may
    be waived or amended solely by a writing executed by both of the
    parties hereto, and, with respect to amendments to or waivers of
    the provisions of Sections 5.3, 6.2 and 6.11, the
    Conservator; provided, however, that no such
    waiver or amendment shall decrease the aggregate Commitment or
    add conditions to funding the amounts required to be funded by
    Purchaser under the Commitment if such waiver or amendment
    would, in the reasonable opinion of Seller, adversely affect in
    any material respect the holders of debt securities of Seller
    and/or the
    beneficiaries of Mortgage Guarantee Obligations, in each case in
    their capacities as such, after taking into account any
    alternative arrangements that may be implemented concurrently
    with such waiver or amendment. In no event shall any rights
    granted hereunder prevent the parties hereto from waiving or
    amending in any manner whatsoever the covenants of Seller
    hereunder.



 



    6.4.  Governing Law; Jurisdiction; Venue. This
    Agreement and the Warrant shall be governed by, and construed in
    accordance with, the federal law of the United States of America
    if and to the extent such federal law is applicable, and
    otherwise in accordance with the laws of the State of New York.
    The Senior Preferred Stock shall be governed as set forth in the
    terms thereof. Except as provided in section 6.1 and as
    otherwise required by law, the United States District Court for
    the District of Columbia shall have exclusive jurisdiction over
    all civil actions arising out of this Agreement, the Commitment,
    the Senior Preferred Stock and the Warrant, and venue for any
    such civil action shall lie exclusively in the United States
    District Court for the District of Columbia.



 



    6.5.  Notices. Any notices delivered pursuant
    to or in connection with this Agreement shall be delivered to
    the applicable parties at the addresses set forth below:



 



    If to Seller:



 



    Federal Home Loan Mortgage Corporation




    c/o Federal
    Housing Finance Authority




    1700 G Street, NW




    4th Floor




    Washington, DC 20552




    Attention: General Counsel



 



    If to Purchaser:



 



    United States Department of the Treasury




    1500 Pennsylvania Avenue, NW




    Washington DC 20220




    Attention: Under Secretary for Domestic Finance




    

    - 12 -








 






    with a copy to:



 



    United States Department of the Treasury




    1500 Pennsylvania Avenue, NW




    Washington DC 20220




    Attention: General Counsel



 



    If to Conservator:



 



    Federal Housing Finance Authority




    1700 G Street, NW




    4th Floor




    Washington, DC 20552




    Attention: General Counsel



 



    All notices and other communications provided for herein shall
    be in writing and shall be delivered by hand or overnight
    courier service, mailed by certified or registered mail. All
    notices hereunder shall be effective upon receipt.



 



    6.6.  Disclaimer of Guarantee. This Agreement
    and the Commitment are not intended to and shall not be deemed
    to constitute a guarantee by Purchaser or any other agency or
    instrumentality of the United States of the payment or
    performance of any debt security or any other obligation,
    indebtedness or liability of Seller of any kind or character
    whatsoever.



 



    6.7.  Effect of Order; Injunction; Decree. If
    any order, injunction or decree is issued by any court of
    competent jurisdiction that vacates, modifies, amends,
    conditions, enjoins, stays or otherwise affects the appointment
    of Conservator as conservator of Seller or otherwise curtails
    Conservator’s powers as such conservator (except in each
    case any order converting the conservatorship to a receivership
    under
    Section 1367(a)
    of the FHE Act), Purchaser may by written notice to Conservator
    and Seller declare this Agreement null and void, whereupon all
    transfers hereunder (including the issuance of the Senior
    Preferred Stock and the Warrant and any funding of the
    Commitment) shall be rescinded and unwound and all obligations
    of the parties (other than to effectuate such rescission and
    unwind) shall immediately and automatically terminate.



 



    6.8.  Business Day. To the extent that any
    deadline or date of performance of any right or obligation set
    forth herein shall fall on a day other than a Business Day, then
    such deadline or date of performance shall automatically be
    extended to the next succeeding Business Day.



 



    6.9.  Entire Agreement. This Agreement,
    together with the Senior Preferred Stock and Warrant, contains
    the entire agreement between the parties hereto with respect to
    the transactions contemplated hereby and supersedes and cancels
    all prior agreements, including, but not limited to, all
    proposals, term sheets, statements, letters of intent or
    representations, written or oral, with respect thereto.



 



    6.10.  Remedies. In the event of a breach by
    Seller of any covenant or representation of Seller set forth
    herein, Purchaser shall be entitled to specific performance (in
    the case of a breach of




    

    - 13 -








 






    covenant), damages and such other remedies as may be available
    at law or in equity; provided, that Purchaser shall not
    have the right to terminate the Commitment solely as a result of
    any such breach, and compliance with the covenants and the
    accuracy of the representations set forth in this Agreement
    shall not be conditions to funding the Commitment.



 



    6.11.  Tax Reporting. Neither Seller nor
    Conservator shall take, or shall permit any of their respective
    successors or assigns to take, a position for any tax,
    accounting or other purpose that is inconsistent with Internal
    Revenue Service Notice
    2008-76 (or
    the regulations to be issued pursuant to such Notice) regarding
    the application of Section 382 of the Internal Revenue Code
    of 1986, as amended, a copy of which Notice has been provided to
    Seller in connection with the execution of this Agreement.



 



    6.12.  Non-Severability. Each of the provisions
    of this Agreement is integrated with and integral to the whole
    and shall not be severable from the remainder of the Agreement.
    In the event that any provision of this Agreement, the Senior
    Preferred Stock or the Warrant is determined to be illegal or
    unenforceable, then Purchaser may, in its sole discretion, by
    written notice to Conservator and Seller, declare this Agreement
    null and void, whereupon all transfers hereunder (including the
    issuance of the Senior Preferred Stock and the Warrant and any
    funding of the Commitment) shall be rescinded and unwound and
    all obligations of the parties (other than to effectuate such
    rescission and unwind) shall immediately and automatically
    terminate.




    

    - 14 -








 









    FEDERAL HOME LOAN MORTGAGE




    CORPORATION, by



 



    Federal Housing Finance Agency,




    its Conservator



 



    /s/  
James
    B. Lockhart III







    James B. Lockhart III




    Director



 



    UNITED STATES DEPARTMENT




    OF THE TREASURY



 



    /s/  
Henry
    M. Paulson, Jr.







    Henry M. Paulson, Jr.




    Secretary of the Treasury



 



    Acknowledged and, solely as




    to Sections 5.3, 6.2 and 6.11,




    agreed:



 



    FEDERAL HOUSING




    FINANCE AGENCY,




    as Conservator



 



    /s/  
James
    B. Lockhart III







    James B. Lockhart III




    Director



 



    Signature Page to Amended and Restated Senior Preferred Stock
    Purchase Agreement