Document:

Exhibit 10.1

 

UNITED STATES DEPARTMENT OF THE
TREASURY

LENDING AGREEMENT

 

CREDIT AND SECURITY TERMS

 

1.0 SCOPE

 

1.1 This
Agreement sets forth the terms under which an entity may, in accordance with
the Housing and Economic Recovery Act of 2008, borrow from and pledge
Collateral to the United States Department of the Treasury (Treasury).

 

2.0 DEFINED TERMS

 

Account means the account described in section 3.2 of this Agreement.  

 

Adverse Claim has the meaning set forth in Section 9.1(d).

 

Application Package means the Application Package, substantially in the form of Appendix I,
which the Borrower submitted in connection with its agreement to this
Agreement.

 

Borrower means an entity that incurs an Obligation to the Treasury.

 

Borrower-in-Custody or BIC Arrangement means an arrangement whereby the Treasury
authorizes a Borrower, or an affiliate of the Borrower, to retain possession of
the Collateral, as described in Section 7 of this Agreement.

 

Business Day means any day the Federal Reserve Bank of New York is open for
conducting all or substantially all its banking functions.

 

Certificate means the certificate, substantially in the form set forth in the
appropriate Application Package, provided to the Treasury by the Borrower.

 

Collateral means:

 

(i)
all the Borrower’s rights, title, and interest in property as described in
section 7.0 (and any other property agreed to by Treasury) that is (a) identified
on a Collateral Schedule, (b) identified on the books or records of a
Reserve Bank as pledged to, or subject to a security interest in favor of, the
Treasury or (c) in the possession or control of, or maintained with, the
Treasury including;

 

(ii)
all documents, books and records, including programs, tapes, and related
electronic data processing software, evidencing or relating to any or all of
the foregoing; and

 

(iii)
to the extent not otherwise included, all proceeds and products of any and all
of the foregoing and all supporting obligations given by any person with
respect to any of the foregoing, including but not limited to interest,
dividends, insurance, rents and refunds.

 

Collateral Schedule means the written, electronic or other statement(s) listing
Collateral in effect at any time. Each statement of Collateral shall be in the
form required by the Treasury and shall identify the items of Collateral with
the specificity required by the Treasury. The removal of an item from a
statement of Collateral will not be effective and will not affect the Treasury’s
security interest in the item unless such removal is made in

 

 

accordance
with this Agreement and the Treasury’s procedures, including prior Treasury
approval or authorization.

 

Event of Default means any of the following:

 

(i)
the Borrower fails to repay or satisfy any Obligation when due;

 

(ii)
the Borrower fails to perform or observe any of its obligations or agreements
under the Lending Agreement or under any other instrument or agreement
delivered or executed in connection with the Lending Agreement;

 

(iii)
any representation or warranty made or deemed to be made by the Borrower under
or in connection with the Lending Agreement, or that is contained in any
certificate, document, or financial or other statement delivered by it or in
connection with the Lending Agreement, is inaccurate in any material respect on
or as of the date made or deemed made;

 

(iv)
the Insolvency of the Borrower;

 

(v)
the Lending Agreement or any other agreement delivered or executed in
connection with the Lending Agreement ceases, for any reason, to be in full
force and effect, or the Borrower so asserts or any security interest or lien
created hereby ceases to be enforceable or have the same effect and priority
purported to be created hereby;

 

(vi)
the creation of an encumbrance upon Collateral, or placement of a levy,
judicial seizure of, or an attachment upon Collateral;

 

(vii)
whenever the Secretary of the Treasury determines that Treasury’s position is
insecure with respect to the financial condition of the Borrower or the
Borrower’s ability to perform its Obligations.

 

Federal Reserve Bank means any one of the Federal Reserve Banks.

 

Insolvency means:

 

(i)
the condition of insolvency;

 

(ii)
that a proceeding relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to adjudicate an entity bankrupt or insolvent or seeking
reorganization, adjustment, dissolution, liquidation or other relief with
respect to the Borrower or the Borrower’s debt is commenced;

 

(iii)
that an assignment for the benefit of the Borrower’s creditors occurs;

 

(iv)
that a receiver, custodian, conservator, or the like is appointed for the
Borrower or for any of its United States or foreign branches or agencies;

 

(v)
that the Borrower has been closed by order of its supervisory authorities, or a
public officer has been appointed to take over such entity;

 

(vi)
that the Borrower ceases or refuses to make payments in the ordinary course of
business, or admits in a record its inability to pay its debt as they become
due;

 

(vii)
the Borrower’s business is suspended, or any party has presented or filed a
petition for winding-up or liquidating the Borrower; or

 

(viii)
any other circumstances that evince the Borrower’s inability to pay its debts
when due.

 

Lending Agreement means this Agreement, any Collateral Schedule, each document in the
Application Package executed or furnished to the Treasury by the Borrower, and
any other agreement or document executed by the Borrower in connection with
this Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time.

 

Lending Documents has the meaning set forth in Section 8 of this Agreement

 

 

Letter of Agreement means the Letter of Agreement, substantially in the form found in
Appendix I pursuant to which the Borrower agrees to be bound by the terms of
this Agreement.

 

Loan
means an extension of credit to the Borrower.

 

Loan Repayment Amount means the amount of a Loan, plus all accrued
and unpaid interest thereon.

 

Obligation, whether now existing or hereafter incurred, means:

 

(i)
Loan Repayment Amounts;

 

(ii)
any other liabilities of the Borrower to the Treasury; and

 

(iv)
any expense the Treasury or its designee(s) may incur to:

 

a.
obtain, preserve and/or enforce the Lending Agreement or the Treasury’s
security interest in Collateral and the Borrower’s Obligations under the
Lending Agreement,

 

b.
collect any or all of the foregoing, or

 

c.
assemble, transport, maintain or preserve Collateral (including, without
limitation, taxes, assessments, insurance premiums, repairs, reasonable
attorneys’ fees, rent, transportation, storage costs, and expenses of sale).

 

Treasury means the United States Department of the Treasury. For operational
purposes, the term “Treasury” includes a Federal Reserve Bank acting as fiscal
agent to the Treasury.

 

UCC means
the Uniform Commercial Code.

 

3.0 LOANS

 

3.1 A
request for a Loan shall be made to the Treasury in a form and time acceptable
to the Treasury. A Loan must be secured by Collateral acceptable to the
Treasury. Upon Treasury’s request, the Borrower shall submit a written application
for a Loan.

 

3.2 The
Treasury’s approval of a request for a Loan shall be evidenced by, and the Loan
shall be deemed made at the time of, the Treasury’s record of the credit of the
amount of the Loan to an Account agreed upon by the Borrower and the Treasury.

 

3.3
Loans to the Federal Home Loan Banks (FHLBs) or any FHLB under this Agreement
shall be joint and several obligations of all the FHLBs, issued under Section 11(a) of
the Federal Home Loan Bank Act, 12 U.S.C. § 1431(a), through the Office of
Finance as agent of the FHLBs, and therefore are consolidated obligations
issued pursuant to part 966 of the rules of the Federal Housing Finance
Board, in continuing force and effect under Section 1312 of the Housing
and Economic Recovery Act of 2008, and any successor rule of the Federal
Housing Finance Agency.

 

4.0 INTEREST

 

4.1 The
interest rate applicable to a Loan shall be the rate, as from time to time
established by the Treasury. Interest on a Loan shall accrue from the day the
Loan is credited to the Account and shall be payable at the applicable rate in
effect on that day, except that if the interest rate changes while a Loan is
outstanding, the new rate shall apply as of the day on which the rate change is
effective. Interest shall be computed on the basis of 365 days in a year.

 

 

4.2 If all or any portion of a Loan Repayment
Amount is not paid when due (whether by acceleration or otherwise), interest on
the unpaid portion of the Loan Repayment Amount shall be calculated at a rate
500 basis points higher than the applicable rate then in effect until the
unpaid Loan Repayment Amount is paid in full.

 

5.0 REPAYMENT OF LOAN

 

5.1 The Borrower promises to pay a Loan Repayment
Amount when due in actually and finally collected funds. A Loan Repayment Amount
is immediately due and payable

 

(a)
on demand;

 

(b)
without any demand, notice or other action on the due date and time specified
by the Treasury in writing (provided that if such date falls on a day that is
not a Business Day, the due date shall be extended to the next Business Day) or
upon the occurrence of any Event of Default described in clause (iv), (v) or
(vii) of the definition of such term.

 

5.2 The Borrower waives any right to presentment,
notice of dishonor, protest, and any other notice of any kind except as
expressly provided for herein.

 

5.3 Upon notice to the Treasury at least 2 days
in advance, the Borrower may prepay a Loan Repayment Amount, in whole or in
part, without penalty.

 

5.4 The appropriate Federal Reserve Bank, acting
on behalf of the Treasury, will debit the Borrower’s Account for the Loan
Repayment Amount and all other Obligations when due.

 

6.0 GRANT OF SECURITY INTEREST

 

For
value received and in consideration of the Treasury permitting the Borrower to
obtain Loans, the Borrower hereby transfers and assigns to the Treasury and
grants to the Treasury a continuing security interest in and lien on the
Collateral as collateral security for the timely and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all Obligations.

 

7.0 COLLATERAL

 

7.1 The Borrower shall ensure that the Collateral
meets the requirements set forth in this section or as the Treasury may
otherwise from time to time prescribe.

 

7.2 Acceptable Collateral consists of Federal
Home Loan Bank advances to member financial institutions that have been
collateralized in accordance with Federal Home Loan Bank standards (FHLB
advances) and mortgage backed securities issued by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation.

 

7.3 Acceptable FHLB advances shall be valued
with a 13% haircut applied to the outstanding principal amount of the asset on
the balance sheet of the Federal Home Loan Bank. Haircuts may also be applied
to the value of mortgage backed securities as determined by Treasury.

 

7.4 FHLB advances pledged as Collateral under
this Agreement may be held under a BIC Arrangement subject to section 7.10
herein. FHLB advances must be pre- positioned, in an amount acceptable to the
Treasury, before a Federal Home Loan Bank is eligible to receive a Loan under
this Agreement. MBS pledged as Collateral under this

 

 

Agreement
must be held in a custodial National Book Entry System account established
though the Federal Reserve Bank of New York. MBS pledged hereunder may be
repositioned from an investment account into the custodial account on a
same-day basis.

 

7.5 On a weekly basis, Borrower must submit to
the Federal Reserve Bank of New York acting as fiscal agent of the Treasury, a
Collateral Schedule listing the Collateral pledged to Treasury under this
Agreement, including the outstanding principal amount of any FHLB advances.

 

7.6 The Treasury may at any time request the
Borrower to replace any item of Collateral or to grant a lien and security
interest in additional assets of a type and in an amount acceptable to the
Treasury, and the Borrower shall promptly do so.

 

7.7 Unless otherwise specified by the Treasury in
writing, the Borrower shall promptly withdraw from the Collateral Schedule:

 

(a)
any Collateral that has a payment of principal or interest past due, in whole
or in part, for more than 30 days;

 

(b)
any Collateral that has been paid in full by the obligor; or

 

(c)
any Collateral if the obligor on such Collateral becomes insolvent, or if a
receiver, custodian, or the like is appointed for the obligor.

 

Prior
to such withdrawal, however, the Borrower shall update any relevant Collateral
Schedule and pledge substitute Collateral acceptable to the Treasury by
submitting an updated Collateral Schedule or otherwise pledging such Collateral
to the Treasury.

 

7.8 The Treasury has no duty to collect any
income accruing on Collateral or to preserve any rights relating to Collateral.

 

7.9 The Borrower hereby:

 

(a)
authorizes the Treasury at any time to file or record in any filing office in
any jurisdiction which the Treasury determines appropriate to perfect the
security interests set forth hereunder, financing statements, and any
amendments or continuation statements related thereto without the signature of
the Borrower therein that describes the Collateral and the Borrower shall,
promptly at the Treasury’s request, provide any additional information required
by Article 9 of the UCC, as in effect in any relevant jurisdiction, for the
sufficiency or acceptability of any financing statement;

 

(b)
ratifies its authorization for the Treasury to have filed any financing
statement, including any amendment or continuation statement related thereto,
in any jurisdiction, where the same has been filed prior to the date on which
the Letter of Agreement is signed by the Borrower;

 

(c)
authorizes the Treasury at any time, to take any and all other actions that may
be necessary or, in the Treasury’s sole discretion, desirable to obtain,
preserve, perfect or enforce the Treasury’s security interest in the
Collateral;

 

(d)
authorizes the Treasury to endorse or assign as the Borrower’s agent any item
of Collateral, to inspect Collateral held by the Borrower, and copy any
relevant records and/or documents.

 

7.10 Treasury will keep all information regarding
the identity of borrowers identified in any collateral documentation
confidential and such information will not be disclosed except to as authorized
or necessary to effectuate the terms of this Agreement.

 

 

7.11 If the Treasury approves, the Borrower may
hold certain Collateral in a BIC Arrangement (“BIC-held Collateral”) subject to
the following:

 

(a)
BIC-held Collateral shall be prominently identified as Pledged to the Treasury
and subject exclusively to the Treasury’s written instructions. At the Treasury’s
request, the Borrower shall, without delay, prominently and conspicuously affix
a legend to items of BIC-held Collateral indicating that such items are subject
to a security interest in favor of the Treasury.

 

(b)
The Borrower shall mark its records to show that BIC-held Collateral has been
pledged to the Treasury and is subject exclusively to the Treasury’s written
instructions. Any computer generated list or report containing BIC-held
Collateral must incorporate a legend indicating that such Collateral is pledged
to the Treasury.

 

(c)
Upon the Treasury’s request, the Borrower shall at all times segregate BIC-held
Collateral from its own assets or the assets of any other party and shall hold
Collateral in such location(s) approved by the Treasury. BIC-held
Collateral shall not be removed from such location(s) without the prior
written approval of the Treasury.

 

(d)
The Borrower may withdraw or replace BIC-held Collateral only with the approval
of the Treasury and on terms acceptable to the Treasury.

 

(e)
The Treasury may from time to time notify Borrower of additional requirements
on BIC-held Collateral. The Borrower’s failure to comply with such requirements
may disqualify the Borrower from participation in the BIC Arrangement.

 

7.12 With respect to any item of Collateral not
delivered or transferred to the Treasury or its agent or custodian, including
BIC-held Collateral, the Borrower shall hold such item of Collateral in trust
for the Treasury until the Collateral is delivered or transferred in accordance
with the Treasury’s instructions. The Borrower bears the risk of loss for any
Collateral held in the Borrower’s possession, at any custodian, maintained in
an account at a securities intermediary other than a Reserve Bank, or in
transit to or from the Reserve Bank. The Borrower also bears the risk of any
accidental loss or damage to Collateral in the possession of the Treasury or
its agent to the extent the Treasury exercised reasonable care.

 

7.13 Unless an Event of Default occurs or the
Treasury expressly directs otherwise, any proceeds, dividend, interest, rent,
proceeds of redemption, and/or any other payment received by the Borrower
regarding any Collateral may be retained by the Borrower. If the Treasury
directs that any of the foregoing be paid to the Treasury, the Borrower shall
remit those payments, or cause such payments to be remitted, promptly to the
Treasury and, until receipt by the Treasury, such payments are deemed to be
held in trust for the Treasury.

 

7.14 The Treasury is under no obligation to allow
for the withdrawal of any item of Collateral from the pledge to the Treasury,
or to allow the removal of any item of Collateral from the Collateral Schedule
or otherwise release its security interest in any item of Collateral unless:

 

(a)
the Borrower has provided substitute Collateral acceptable to the Treasury; or

 

(b)
the Treasury has verified, in accordance with its normal customs and
procedures, that all Obligations have been unconditionally repaid in full and
that the Borrower is not currently in default under another agreement with the
Treasury.

 

7.15 Borrower shall submit a written certification
to Treasury including the following information and attestations: (i) the
location of all supporting documentation or records; (ii) a statement that
all supporting documentation or records are complete, controlled,

 

 

and
protected; (iii) a description of the Borrower’s asset valuation criteria;
(iv) a description of the Borrower’s internal loan-rating system; (v) a
description of how Collateral is marked as pledged to the Treasury; and (vi) where
applicable, a statement that Borrower’s Financial Statement including its
portfolio of FHLB advances is audited in accordance with applicable auditing
standards. This certification is only required on a one-time basis, however,
Borrower shall notify Treasury if any of the information contained in the
certification changes or is no longer accurate.

 

8.0 MAINTENANCE OF LENDING DOCUMENTS

 

The
documents specified below must be maintained continuously as official records
of the Borrower. The documents listed in subparagraph (a) shall at all
times be kept together in one place, while the document listed in subparagraph (b) may
be kept in any accessible and secure location on the Borrower’s premises.

 

(a)
a copy of the Lending Agreement; and

 

(b)
a current statement of outstanding Loans.

 

9.0 REPRESENTATIONS AND WARRANTIES

 

9.1 The Borrower represents and warrants that:

 

(a)
(i) the Borrower has the power and authority, and the legal right, to
make, deliver and perform the Lending Agreement and to obtain a Loan; (ii) the
Borrower has taken all necessary organizational action to authorize the
execution, delivery and performance of the Lending Agreement and to authorize
the obtaining of a Loan on the terms and conditions of the Lending Agreement; (iii) no
consent or authorization of, filing with, notice to or other act by or in
respect of, any governmental authority or any other person is required in
connection with the obtaining of Loans hereunder or with the execution,
delivery, performance, validity or enforceability of the Lending Agreement; and
(iv) the Lending Agreement has been duly executed and delivered on behalf
of the Borrower;

 

(b)
the Borrower is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and is not in violation of any
laws or regulations in any respect which could have any adverse effect
whatsoever upon the validity, performance or enforceability of any of the terms
of the Lending Agreement;

 

(c)
the Lending Agreement constitutes a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms;

 

(d)
the Borrower has rights in Collateral sufficient to grant an enforceable
security interest to the Treasury and its rights in Collateral are free of any
assertion of a property right that would adversely affect the Treasury’s right
to Collateral, including but not limited to any claim, lien, security interest,
encumbrance, preference or priority arrangement or restriction on the transfer
or pledge of Collateral (an “Adverse Claim”), except as created by, or
otherwise permitted under, the Lending Agreement or by the Treasury;

 

(e)
all information set forth on the Certificate is accurate and complete and there
has been no change in such information since the date of the Certificate;

 

(f)
(i) the Lending Agreement is effective to create in favor of the Treasury
a legal, valid, and enforceable security interest in the Collateral described
in the Lending Agreement and proceeds thereof; (ii) when financing
statements are filed in the state filing offices located in the jurisdictions
specified on the Certificate, those security interests shall constitute a fully
and validly perfected lien on, and security interest in, all rights, title and
interest of the Borrower in such Collateral as to which perfection can be
obtained by filing, as security for the Obligations, in each case prior and
superior in right to any other person (except for liens that arise by operation
of law); and (iii) no financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in

 

 

any
public office, except such as have been filed in favor of the Treasury pursuant
to the Lending Agreement, are permitted by the Lending Agreement, or are
otherwise permitted by the Treasury;

 

9.2 Each time the Borrower requests a Loan or
grants a security interest in any Collateral to Treasury, the Borrower is
deemed to make all of the foregoing representations and warranties on and as of
the date such Loan is incurred or security granted. Such representations and
warranties shall be true on and as of such date and shall remain true and
correct so long as the Lending Agreement remains in effect, any Obligation
remains outstanding, or any other amount is owing to the Treasury.

 

10.0 COVENANTS

 

The
Borrower covenants that so long as the Lending Agreement remains in effect or
any Obligation remains outstanding or any other amount is owing to the
Treasury:

 

(a)
except for the security interest herein granted or otherwise permitted
hereunder or by the Treasury, the Borrower shall have rights in the Collateral
free from any Adverse Claim, and shall maintain the security interest created
hereby with the priority set forth in Section 9.1(f) and shall take
all actions necessary or prudent to defend against Adverse Claims;

 

(b)
except as otherwise permitted hereunder or by the Treasury, the Borrower shall
not (i) sell or otherwise dispose of, or offer to sell or otherwise
dispose of, the Collateral or any interest therein, or (ii) pledge,
mortgage, or create, or permit the existence of any right of any person in or
claim to, the Collateral other than the security interest granted herein;

 

(c)
the Borrower shall not perform any act with respect to any Collateral that
would impair the Treasury’s rights or interests therein, nor will the Borrower
fail to perform any act that would reasonably be expected to prevent such
impairment or that is necessary to preserve the Treasury’s rights;

 

(d)
the Borrower shall promptly notify the Treasury if the Borrower fails or is
about to fail to meet the capital requirements required by regulations
applicable to the Borrower.

 

(e)
the Borrower shall renew or keep in full force and effect its organizational
existence or take all reasonable action to maintain all rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of its
business;

 

(f)
in any BIC Arrangement, the Borrower shall provide for periodic audits of
BIC-held Collateral pledged to the Treasury, shall notify the Treasury
immediately of any irregularities discovered during any audits, and shall
certify periodically, as determined by the Treasury, that it is complying with
the requirements of the BIC Arrangement;

 

(g)
without providing at least 30 days’ prior written notice to the Treasury and
submitting an updated Certificate to the Treasury, the Borrower shall not cause
or permit any of the information provided in the Certificate, including its
jurisdiction of organization, to become untrue;

 

(h)
the Borrower shall promptly notify the Treasury of the occurrence or impending
occurrence of any Event of Default; and

 

(i)
the Borrower shall promptly notify the Treasury of any change in applicable
law, the regulations or policies of its chartering and/or licensing authority,
or its charter, bylaws, or other governing documents, or any legal or
regulatory process asserted against the Borrower, that materially affects or
may materially affect the Borrower’s authority or ability to lawfully perform
its obligations under the Lending Agreement.

 

 

11.0 WAIVER OF IMMUNITY; SUBMISSION TO JURISDICTION

 

11.1 If the Borrower or its property is now, or in
the future becomes, entitled to any immunity, whether characterized as
sovereign or otherwise (including, without limitation, immunity from set-off,
from service of process, from jurisdiction of any court or tribunal, from
attachment in aid of execution, from attachment prior to the entry of a
judgment, or from execution upon a judgment) in any legal proceeding in Federal
or State court then the Borrower expressly and irrevocably waives, to the
maximum extent permitted by law, any such immunity. To the extent the Borrower
receives any such entitlement in the future, the Borrower shall promptly notify
the Treasury of such entitlement.

 

11.2 The Borrower submits in any legal action or
proceeding relating to or arising out of the Lending Agreement, or the conduct
of any party with respect therefor or for recognition and enforcement of any
judgment in respect thereof, to the nonexclusive general jurisdiction of the
Federal District Court for the District of Columbia and any appellate court
thereof. The Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
address provided in the Letter of Agreement; and agrees that nothing herein
shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the venue of any such suit,
action, or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower also agrees that a final judgment in any such
suit, action, or proceeding brought in such court shall be conclusive and
binding upon the Borrower. The foregoing does not diminish or otherwise affect
any rights the Treasury may have under law.

 

12.0 REMEDIES UPON DEFAULT

 

12.1 Upon the occurrence of, and at any time
during the continuance of, an Event of Default, the Treasury may pursue any of
the following remedies, separately, successively, or concurrently:

 

(a)
cause the Borrower’s Account to be debited in an amount up to the Borrower’s
unpaid Obligations;

 

(b)
set off any Obligation against any amount owed by the Treasury to the Borrower,
whether or not such amount owed is then due and payable;

 

(c)
exercise any right of set-off or banker’s lien provided by applicable law
against the Borrower’s property in the possession or control of, or maintained
with, the Treasury, including but not limited to items in process of collection
and their proceeds and any balance to the credit of the Borrower with the
Treasury;

 

(d)
take possession of any Collateral not already in Treasury’s possession, without
demand and without legal process. Upon the Treasury’s demand, the Borrower
shall assemble and make Collateral available to the Treasury as the Treasury
directs. The Borrower grants to the Treasury the right, for this purpose to
enter into or on any premises where Collateral may be located; and

 

(e)
pursue any other remedy available to collect, enforce, or satisfy any
Obligation, including exercising its rights as a secured creditor to collect
income on the Collateral, or to sell, assign, transfer, lease or otherwise
dispose of Collateral whether or not Collateral is in the Treasury’s
possession, or to take action against any other property or assets of the
Borrower whether or not pledged to Treasury as Collateral.

 

Where
the Borrower is a FHLB, pursue any and all remedies available to collect,
enforce, or satisfy any Loan Repayment Amount against any other FHLB on the
basis that the Loan Repayment Amount is a consolidated obligation as described
in section

 

 

3.3..
In the event that a FHLB other than the Borrower satisfies a Loan Repayment
Amount owed by the Borrower pursuant to this subsection, Treasury will release
any collateral remaining upon satisfaction of all Obligations of the Borrower
in accordance with instructions provided by the Office of Finance.

 

12.2 If the Treasury exercises its rights in
Collateral upon an Event of Default:

 

(a)
the Treasury may sell, assign, transfer, and deliver, at the Treasury’s option,
all or any part of Collateral at private or public sale, at such prices as the
Treasury may, in good faith, deem best, without advertisement, and the Borrower
waives notice of the time and place of the sale, except any notice that is
required by law and may not be waived;

 

(b)
the Treasury has no obligation to prepare Collateral for sale, and the Treasury
may sell Collateral and disclaim any warranties without adversely affecting the
commercial reasonableness of the sale;

 

(c)
the Treasury has no obligation to collect from any third party or to marshal
any assets in favor of the Borrower to satisfy any Obligation; and

 

(d)
the Treasury may purchase any or all of Collateral and pay for it by applying
the purchase price to reduce amounts owed by the Borrower to the Treasury.

 

12.3 The Borrower appoints the Treasury with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Borrower, to
endorse, assign, transfer, and deliver Collateral to any party, and to take any
action deemed necessary or advisable by the Treasury either to protect the
Treasury’s interests or exercise its rights under the Lending Agreement,
including taking any action to perfect or maintain the Treasury’s security
interest (including but not limited to recording an assignment of a mortgage or
filing a financing statement). This power of attorney is coupled with an
interest and as such is irrevocable and full power of substitution is granted
to the assignee or holder. As attorney-in-fact, the Treasury may take any
lawful action to collect all sums due in connection with Collateral, the
Treasury may release any Collateral, instruments or agreements securing or
evidencing the Obligations as fully as the Borrower could do if acting for
itself, and the Treasury may take any action set forth in Section 7.9, but
the Treasury has no obligation to take any such actions or any other action in
respect of the Collateral.

 

12.4 The proceeds realized by the Treasury upon
selling or disposing of Collateral, to the extent actually received in cash by
the Treasury will be applied toward satisfaction of the Obligations. The
Treasury shall apply such proceeds first to any fees, other charges, penalties,
indemnities, and costs and expenses of, collection, or realizing on interests
in Collateral (including reasonable attorneys’ fees), next to accrued but
unpaid interest, and last to the unpaid principal balance. The Treasury will
account to the Borrower for any surplus amount realized upon such sale or other
disposition, and the Borrower shall remain liable for any deficiency.

 

12.5 No delay or failure by the Treasury to
exercise any right or remedy accruing upon an Event of Default shall impair any
right or remedy, waive any default or operate as an acquiescence to the Event
of Default, or affect any subsequent Event of Default of the same or of a
different nature.

 

12.6 On complying with the provisions of the
Lending Agreement and applicable law, the Treasury is fully discharged from any
liability or responsibility to any person regarding Collateral.

 

 

13.0 INDEMNIFICATION

 

13.1 The Borrower shall indemnify the Treasury and
its officers, directors, employees and agents (each, an “Indemnified Party”)
for any loss, claim, damage, liability, and expense (including, without
limitation, reasonable attorneys’ fees, court costs and expenses of litigation)
incurred by an Indemnified Party in the course of or arising out of the
performance of the Lending Agreement, any action related to Collateral, or any
action to which an Indemnified Party may become subject in connection with the
Treasury’s exercise, enforcement or preservation of any right or remedy granted
to it under the Lending Agreement, except to the extent that such loss, claim,
damage, liability, or expense results, as determined by a court, from the
Treasury’s gross negligence or willful misconduct.

 

13.2 The Treasury will give the Borrower written
notice of any claim that the Treasury or any other person may have under this
indemnity. The Borrower is not liable for any claim that is compromised or
settled by the Treasury or such persons without the Borrower’s prior written
consent, provided that the Borrower responded promptly and in the Treasury’s
judgment, adequately, to the Treasury’s notice of such claim. This indemnity
remains an obligation of the Borrower notwithstanding termination of the
Lending Agreement, and is binding on the Borrower’s successors and assigns.
Upon written demand from the Treasury, the Borrower shall pay promptly amounts
owed under this indemnity, free and clear of any right of offset, counterclaim
or other deduction, and the Treasury’s reasonable determination of amounts
owing hereunder is binding. If not promptly paid by the Borrower, such
obligation becomes an Obligation secured under the Lending Agreement.

 

14.0 MISCELLANEOUS

 

14.1 The Treasury is not obligated by the Lending
Agreement or otherwise to make, increase, renew, or extend any Loan to the
Borrower.

 

14.2 The Borrower’s obligations under the Lending Agreement
shall be performed by it at its own cost and expense.

 

14.3 Unless expressly agreed otherwise by the
Treasury, Eastern Time shall be used to determine any deadline hereunder,
including the time a Loan Repayment Amount is due and payable.

 

14.4 The Treasury or a Federal Reserve Bank acting
on behalf of the Treasury may record telephone communications with the Borrower
and such recordings may be submitted in evidence to any court or in any
proceeding for the purpose of establishing any matters pertinent to the Lending
Agreement.

 

14.5 The Treasury’s rights and remedies under the
Lending Agreement are in addition to any others agreed to by the Borrower or
that may exist at law or in equity.

 

14.6 Any provision of the Lending Agreement that
is unenforceable or invalid under any law in any jurisdiction is ineffective to
the extent of such unenforceability or invalidity without affecting the
enforceability or validity of any other provision, and any such
unenforceability or invalidity shall not invalidate or render unenforceable
such provision in any other jurisdiction.

 

 

14.7 The Lending Agreement is binding on the
receivers, administrators, permitted assignees and successors, and legal
representatives of the Borrower and inures to the benefit of the Treasury, its
assignees and successors.

 

14.8 The Borrower may not assign its rights or
obligations hereunder.

 

14.9 The Treasury is not required to provide a
written advice to the Borrower for any Loan or Loan Repayment Amount.

 

14.10 The Treasury has no liability for acting in
reliance upon any communication (including a fax, telex, electronic
communication, or similar communication) reasonably believed by the Treasury to
be genuine or to be sent by an individual acting on behalf of the Borrower.

 

14.11 The Section headings used herein are for
convenience only and are not to affect the construction hereof or be taken into
consideration in the construction hereof.

 

15.0 AMENDMENT

 

The
Treasury, in its sole discretion, may amend the Lending Agreement without prior
notice at any time. The Treasury shall notify the Borrower of any such
amendment and, thereafter, any pledge of Collateral, request for any Loan or
incurrence of any other Obligation shall constitute the Borrower’s agreement to
such amendment as of the effective date of such amendment. An amendment does
not modify the terms of an outstanding Loan.

 

16.0 NOTICE

 

16.1 Any and all notices, statements, demands or
other communications hereunder may be given by a party to the other by mail,
facsimile, telegraph, messenger or otherwise to the address specified in
Appendix I hereto, or so sent to such party at any other place specified in a
notice of change of address hereafter received by the other. All notices,
demands and requests hereunder may be made orally, to be confirmed promptly in
writing, or by other communication as specified in the preceding sentence.

 

16.2 If sent to the Treasury, the notice must be
addressed as specified by the Treasury.

 

17.0 TERMINATION

 

17.1 The Lending Agreement shall terminate on December 31,
2009 but shall remain in effect as to any Loan outstanding on that date.
Notwithstanding any other provision of this Agreement, the Borrower may
terminate its consent to be bound by the Lending Agreement prior to that time
by giving written notice to the Treasury in the manner specified by Treasury,
so long as no Loan is then outstanding. Termination does not release the
Borrower or affect the Treasury’s rights, remedies, powers, security interests
or liens against Collateral in existence prior to the termination or to
Treasury’s receipt of the notice of termination, nor does termination affect
any provision of the Lending Agreement which by its terms survives termination
of the Lending Agreement.

 

17.2 Upon termination, the Treasury may retain
Collateral until the Treasury has had a reasonable opportunity to verify, in
accordance with its normal customs and procedures, that all of the Borrower’s
Obligations, contingent or otherwise, to the Treasury have been fully satisfied
and discharged.

 

 

18.0 GOVERNING LAW

 

The
Lending Agreement, including any Loan or any other transaction entered into
pursuant thereto, is governed by federal law or to the extent no applicable
federal law exists by the laws of the State of New York. The Lending Agreement
is a security agreement for purposes of the UCC, as in effect in any relevant
jurisdiction, and other applicable law.

 

19.0 WAIVER OF JURY TRIAL

 

THE
BORROWER AND THE TREASURY EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM, OR CROSS
CLAIM ARISING IN CONNECTION WITH, OUT OF, OR OTHERWISE RELATING TO THE LENDING
AGREEMENT, THE COLLATERAL, OR ANY TRANSACTION OR AGREEMENT ARISING THEREFROM OR
RELATED THERETO.Exhibit 10.1

 

HEALTHAXIS /
TAK TERMINATION AGREEMENT

 

This HealthAxis / Tak Termination Agreement (this “Agreement”), dated
as of the 3rd day of September, 2008, is entered into by and between HealthAxis
Inc., a Pennsylvania corporation (“Company”), and Tak Investments, Inc., a
Delaware corporation (“Tak Investments”).

 

Recitals

 

WHEREAS, Company and Tak Investments entered into that certain Stock
and Warrant Purchase Agreement dated as of February 23, 2005 (the “Stock
and Warrant Purchase Agreement”), pursuant to which Company issued certain
shares of its common stock and warrants to Tak Investments;

 

WHEREAS, on May 13, 2005, Company and Tak Investments closed the
transactions contemplated by the Stock and Warrant Purchase Agreement, and
Company issued to Tak Investments shares of its common stock, and also issued
to Tak Investments warrants to purchase shares of the Company’s common stock
pursuant to Warrant Number 2005-01, Warrant Number 2005-02, and Warrant Number
2005-03, and on May 13, 2008 Warrant Number 2005-02 expired, with the
result that Warrant Number 2005-01 and Warrant Number 2005-03 currently remain outstanding
(such currently outstanding warrants, the “Warrants”);

 

WHEREAS, on May 13, 2005, Company and Tak Investments entered into
that certain Investor Rights Agreement (the “Investor Rights Agreement”) and
that certain Registration Rights Agreement (collectively with the Stock and
Warrant Purchase Agreement and the Investor Rights Agreement, the “Tak Investment
Agreements”);

 

WHEREAS, on May 13, 2005, HealthAxis, Ltd., a subsidiary of HealthAxis,
and Healthcare BPO Partners, L.P., an affiliate of Tak Investments, also
entered into that certain Remote Resourcing Agreement (the “Remote Resourcing
Agreement”);

 

WHEREAS, Company, BPO Management Services, Inc., a Delaware
corporation (“BPOMS”), and Outsourcing Merger Sub, Inc., a Delaware
corporation (“Merger Sub”), are parties to that certain Agreement and Plan of
Merger dated of even date herewith (the “Merger Agreement”), pursuant to which
it is expected that BPOMS and Merger Sub will merge, BPOMS will become a
wholly-owned subsidiary of Company, and Company will issue shares of its capital
stock to the stockholders of BPOMS, all as more particularly described in the
Merger Agreement (the “Merger”);

 

WHEREAS, it is a condition to BPOMS’ execution of the Merger Agreement
that Company and Tak Investments enter into this Agreement; and

 

WHEREAS, subject to and in the event of the consummation of the Merger,
Company and Tak Investments desire to provide for the cancellation and
termination of the Warrants and the Tak Investment Agreements in consideration
of the anticipated benefits to be received by Company and Tak Investments as a
result of the consummation of the Merger.

 

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto do
hereby agree as follows:

 

1.     Cancellation and Termination of Warrants and
Related Agreements.  Tak
Investments and Company do hereby agree that, effective as of the date of
consummation of the Merger, the Warrants and the Tak Investment Agreements
shall automatically be cancelled and terminated without any further action by
any party thereto.  This Agreement shall
not in any way affect the terms and duration of the Remote Resourcing
Agreement, it being understood and agreed that Tak Investments and Company have
separately addressed the disposition of the Remote Resourcing Agreement through
that certain Amendment to Remote Resourcing Agreement dated of even date
herewith.

 

2.     Consent.  In accordance with the terms of Section 3.1
of the Investor Rights Agreement, Tak Investments does hereby consent to
Company’s acquisition of all or part of the business or assets of NextProcess,
LP and the Company’s operation of its accounts payable business.

 

3.     Representations and Agreements.

 

(a)           Each of Company and Tak
Investments represents and warrants to the other that (i) it is an entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (ii) it has all requisite power and
authority to enter into this Agreement and to perform its obligations
hereunder, (iii) the execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary actions on its part, and (iv) this Agreement has been duly
executed and delivered by it, and assuming due authorization, execution and
delivery by the other, constitutes a valid and binding agreement of it, enforceable
against it in accordance with the terms of this Agreement, except as
enforcement may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect affecting
creditors’ rights generally and the effect of general principles of equity.

 

(b)           Each of Company and Tak
Investments represents and warrants to the other that (i) neither the
execution and delivery of this Agreement nor the performance by it of its
obligations hereunder will result in a violation of, or a default under, or
conflict with, its governing documents or any contract, trust, commitment,
agreement, understanding, arrangement or restriction of any kind to which it is
a party or by which it is bound, except as would not prevent, delay or
otherwise materially impair its ability to perform its obligations hereunder.

 

(c)           Tak Investments
hereby represents and warrants to Company that it has complete ownership and
good title to the Warrants, free and clear of all liens or any encumbrances, and
that it has not transferred or attempted to transfer the Warrants to any other
party.  Each of Company and Tak
Investments represents and warrants to the other that it retains its respective
rights and obligations under the Tak Investment Agreements, and that it has not
transferred or attempted to transfer any of such rights and obligations to
another party.

 

2

 

(d)           Tak Investments represents and
warrants to Company that it has reviewed and evaluated all statements, reports
and other documents filed by Company with the Securities and Exchange
Commission, that it has reviewed and evaluated the terms of the Merger
Agreement and all documents, agreements, schedules and exhibits contemplated
thereby, and that it has had the opportunity to request and has received any
and all further information relating to Company, the Merger and any other
relevant matters that it has requested.

 

(d)           Tak Investments agrees that during
the term of this Agreement it shall not sell, pledge, assign or otherwise
transfer or attempt to transfer the Warrants or its rights or obligations under
the Tak Investment Agreements to any other party.

 

4.     Release of Claims. For the purposes
and consideration set forth herein, and subject to and effective with the
cancellation and termination of the Warrants and the Tak Investment Agreements,
each of Tak Investments and Company hereby releases and discharges the other
and its respective affiliates, shareholders, subsidiaries, owners, directors,
officers, agents, attorneys, employees, trustees, independent contractors,
successors and assigns of and from any and all charges, complaints,
liabilities, obligations, restrictions, debts, promises, agreements,
controversies, damages, actions, losses, expenses (including attorneys’ fees
and costs), claims, rights, demands, causes of action or suits in equity, of
any and every kind or character, in contract or tort, whether known or unknown,
arising under, relating to or in connection with the Warrants and the Tak
Investment Agreements.

 

5.     Agreement Subject to Consummation of Merger.
Notwithstanding anything contained herein, this Agreement shall terminate and shall
be null and void and of no further legal effect upon the termination of the
Merger Agreement in accordance with its terms.

 

6.     Governing Law. This Agreement shall
be governed, construed and interpreted in accordance with the internal
substantive laws of the State of Pennsylvania, without giving effect to the
principles of conflicts of law of such jurisdiction.

 

7.     Binding Effect. This Agreement
shall be binding on and inure to the benefit of the parties and their
respective successors and assigns.

 

8.     Entire Agreement. The Warrants, the
Tak Investment Agreements and this Agreement represent the entire agreement
between the parties with respect to the subject matter thereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten agreements between the
parties as to the subject matter hereof.

 

9.     Modification.  This Agreement may be
modified only by a written agreement signed by both parties hereto.

 

10.   Multiple Counterparts. This
Agreement may be executed in any number of counterparts, each of which for all
purposes is to be deemed an original, but all of which shall constitute,
collectively, one agreement.

 

[signature page is attached]

 

3

 

IN WITNESS WHEREOF, the undersigned have executed this HealthAxis / Tak
Termination Agreement as of the date written above.

 

	
   

  	
  Tak Investments, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sharad K. Tak

  
	
   

  	
  Name: Sharad K. Tak

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HealthAxis
  Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John M.
  Carradine

  
	
   

  	
  Name: John
  M. Carradine

  
	
   

  	
  Title: CEO

  
	
   

  	
  Dated:
  September 5, 2008

  
				

 

4

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