Document:

EXHIBIT 4.2

[FACE OF NOTE]

This Security is a Registered
Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security is exchangeable for Securities registered in the name of a Person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture and, unless and until it is exchanged in whole or in part
for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the nominee
of the Depositary or by a nominee of the Depositary to the Depositary or anOther nominee of the Depositary or by the Depositary
or any such nominee to a successor Depositary or a nominee of such successor Depositary.

the
western union company

 

	3.600% Note due March 15, 2022	
        CUSIP: 959802AU3

        ISIN: US959802AU35

         

	No. R-2	$100,000,000

 

The Western Union Company, a Delaware
corporation (the “Company,” which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000), or such other amount as indicated on the Schedule of Exchanges of Notes attached hereto, on March 15, 2022.

Issue Date: August 22, 2017.

Interest Payment Dates: March 15 and
September 15, commencing September 15, 2017.

Regular Record Dates: March 1 and September
1.

Reference is hereby made to the further
provisions of this Note set forth on the reverse hereof, which shall for all purposes have the same effect as if set forth at this
place.

[Signature page follows]

IN WITNESS WHEREOF, the Company
has caused this Note to be signed manually or by facsimile by its duly authorized officer.

	Date: August 22, 2017	the western union company
	 	By:   	 
	 	 	Name:   	Brad Windbigler
	 	 	Title:	Senior Vice President and Treasurer

 

 

[Corporate Seal]

(Trustee’s Certificate of Authentication)

 

This is one of the Securities authorized
to be issued pursuant to the Indenture referred to in this Note.

 

	WELLS FaRGO BanK, NatIOnaL
ASSOCIATIOn, as Trustee
	By:	 
	 	Authorized Signatory

REVERSE SIDE OF NOTE

THe
western union company

3.600% Note due March 15, 2017

		1.	Definitions.

Terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Indenture dated as of November 17, 2006, as amended by the Supplemental Indenture
dated as of September 6, 2007 (as amended from time to time, the “Indenture”), between the Company and Wells
Fargo Bank, National Association, as trustee (the “Trustee”).

“Comparable Treasury Issue”
means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term
of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate notes of comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price”
means, with respect to any redemption date, (i) the average of three Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such quotations.

“Quotation Agent”
means a Reference Treasury Dealer appointed by the Company.

“Reference Treasury Dealer”
means (i) Barclays Capital Inc., Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and their
respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer
in New York City (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury
Dealer and (ii) any two other Primary Treasury Dealers selected by the Company.

“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such redemption date.

“Treasury Rate” means,
with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to
the Comparable Treasury Price for such redemption date.

1

		2.	Principal and Interest.

The Company promises to pay the principal
of this Note on March 15, 2022. If the maturity date of this Note is not a Business Day, then the principal amount of the Note
plus accrued and unpaid interest thereon shall be paid on the next succeeding Business Day with the same effect as if payment were
made on the maturity date, and no interest shall accrue for the maturity date, or thereafter.

The Company promises to pay interest
on the principal amount of this Note on each interest payment date, as set forth on the face of this Note, at the rate of 3.600%
per annum, subject to adjustment as set forth herein (the per annum rate at which the Notes shall bear interest at any time, the
“Note Interest Rate”).

Interest shall be payable semi-annually
in arrears (to the holders of record of this Note at the close of business on the March 1 or September 1 immediately preceding
the interest payment date) on each interest payment date, commencing September 15, 2017.

Interest on this Note shall accrue from
and including the most recent interest payment date or, if no interest has been paid, from and including March 15, 2017 to and
including the day immediately preceding the next succeeding interest payment date. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

If any interest payment date falls on
a day that is not a Business Day, then such interest payment date shall be the next succeeding Business Day, without additional
interest and with the same effect as if it were made on the originally scheduled date.

Interest not paid when due and any interest
on principal, premium or interest not paid when due shall be paid to the Persons that are Holders on a special record date, which
shall be the 15th day next preceding the date fixed by the Company for the payment of such interest, whether or not such day is
a Business Day. At least 10 days before a special record date, the Company shall send to each Holder and to the Trustee a notice
that sets forth the special record date, the payment date and the amount of interest to be paid.

2

		3.	Interest Rate Adjustment.

The Note Interest Rate will be subject to adjustments
from time to time if Moody’s Investors Service, Inc. (“Moody’s”) (or, if applicable, any Substitute
Rating Agency (as defined below)) or Standard & Poor’s Ratings Services, a division of S&P Global Inc. (“S&P”)
downgrades (or subsequently upgrades) the debt rating assigned to the Notes, as set forth below.

If the rating from Moody’s or S&P
(or, in either case if applicable, any Substitute Rating Agency) with respect to the Notes (each, an “Applicable Rating
Agency,” and collectively, the “Applicable Rating Agencies”) is decreased to a rating set forth in
the immediately following table with respect to that Applicable Rating Agency, the Note Interest Rate will increase from 3.600%
by the percentage set forth opposite that rating:

	Rating			Applicable Rating
      Agency
	Level		      	Moody’s*	      	S&P*	      	Percentage
	1			Ba1		BB+		0.25%
	2			Ba2		BB	 	0.50%
	3			Ba3		BB–		0.75%
	4			B1 or

below		B+ or below		1.00%

 

	*	Including the equivalent ratings of any Substitute Rating Agency

If at any time the Note Interest Rate
has been adjusted upward as a result of a decrease in a rating by an Applicable Rating Agency and that Applicable Rating Agency
subsequently increases its rating with respect to the Notes to any of the threshold ratings set forth above, the Note Interest
Rate will be decreased such that the interest rate per annum equals 3.600% plus the percentage set forth opposite the rating in
effect immediately following the increase in the table above; provided that if Moody’s or any Substitute Rating Agency subsequently
increases its rating of the Notes to “Baa3” (or its equivalent if with respect to any Substitute Rating Agency) or
higher and S&P or any Substitute Rating Agency subsequently increases its rating of the Notes to “BBB-” (or its
equivalent if with respect to any Substitute Rating Agency) or higher, the Note Interest Rate will be decreased to 3.600%.

No adjustment in the Note Interest Rate
shall be made solely as a result of an Applicable Rating Agency ceasing to provide a rating. If at any time less than two Applicable
Rating Agencies provide a rating of the Notes, the Company will use its commercially reasonable efforts to obtain a rating of the
Notes from another nationally recognized statistical rating organization, to the extent one exists, and if another nationally recognized
statistical rating organization rates the Notes (such organization, as certified by a resolution of the Company’s Board of
Directors, a “Substitute Rating Agency”), for purposes of determining any increase or decrease in the Note Interest
Rate pursuant to the table above (a) such Substitute Rating Agency will be substituted for the last Applicable Rating Agency to
provide a rating of the Notes but which has since ceased to provide such rating, (b) the relative ratings scale used by such Substitute
Rating Agency to assign ratings to senior unsecured debt will be determined in good faith by an independent investment banking
institution of national standing appointed by the Company and, for purposes of determining the applicable ratings included in the
table above with respect to such Substitute Rating Agency, such ratings shall be deemed to be the equivalent ratings used by Moody’s
and S&P in such table and (c) the Note Interest Rate will increase or decrease, as the case may be, such that the interest
rate per annum equals 3.600% plus the appropriate percentage, if any, set forth opposite the rating from such Substitute Rating
Agency in the table above (taking into account the provisions of clause (b) above). For so long as (i) only one Applicable Rating
Agency provides a rating of the Notes, any increase or decrease in the Note Interest Rate necessitated by a reduction or increase
in the rating by that Applicable Rating Agency shall be twice the applicable percentage set forth in the table above and (ii) no
Applicable Rating Agency provides a rating of the Notes, the Note Interest Rate will increase to, or remain at, as the case may
be, 5.600%.

3

Each adjustment required by any decrease
or increase in a rating set forth above, whether occasioned by the action of Moody’s, S&P or any Substitute Rating Agency,
shall be made independent of (and in addition to) any and all other adjustments. In no event shall (1) the Note Interest Rate be
reduced below 3.600% or (2) the Note Interest Rate exceed 5.600%.

Any interest rate increase or decrease
described above will take effect from the first interest payment date following the date on which a rating change occurs that requires
an adjustment in the interest rate. If Moody’s or S&P (or any Substitute Rating Agency) changes its rating of the Notes
more than once prior to any particular interest payment date, the last change by such agency prior to such interest payment date
will control for purposes of any interest rate increase or decrease with respect to the Notes described above relating to such
Applicable Rating Agency’s action.

The Note Interest Rate will permanently
cease to be subject to any adjustment described above (notwithstanding any subsequent decrease in the ratings by any Applicable
Rating Agency) if the Notes become rated “A3” (or its equivalent) or higher by Moody’s (or any Substitute Rating
Agency) and “A-” (or its equivalent) or higher by S&P (or any Substitute Rating Agency), or one of those ratings
if only rated by one Applicable Rating Agency, in each case with a stable or positive outlook.

		4.	Indenture.

This is one of the Securities issued
under the Indenture. The terms of this Note include those stated in or otherwise provided in accordance with the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. This Note is subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable
law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of this Note shall
control.

4

This Note is a general unsecured obligation
of the Company. The Indenture does not limit the original aggregate principal amount of the Notes, or any additional Securities
that may be issued pursuant to the Indenture, and the Notes and all such additional Securities vote together for all purposes as
a single class.

		5.	Redemption and Repurchase; Change of Control Repurchase; Discharge Prior to Redemption or Maturity.

The Notes shall be
redeemable at the option of the
Company in whole or in part, at any time and from time
to time prior to February 15, 2022 (the
date that is one month prior to the stated maturity date of the Notes) (the “Par Call Date”), at a redemption
price equal to the greater of (i) 100%
of the principal amount of the Notes to be redeemed,
and (ii) as determined by the Quotation Agent, the sum of the
present values of the remaining scheduled payments
of principal and interest on the Notes being redeemed (not including any portion of
such payments of interest accrued as of the date of redemption),
discounted to the Par Call Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate, plus 25 basis points, plus accrued and unpaid interest
thereon to, but excluding, the date of redemption.
In addition, at any time and from time to time on or after the Par Call Date, the Notes shall be redeemable, in whole or in part,
at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest thereon
to, but excluding, the date of redemption.

If a Change of Control Triggering Event (as
defined below) occurs, unless the Company has exercised its option to redeem the Notes as described above, the Company shall make
an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to
$2,000 and integral multiples of $1,000 in excess thereof) of that holder’s Notes on the terms set forth in this Section
5. In the Change of Control Offer, the Company shall offer payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of repurchase (the
“Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option
of the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute
the Change of Control, a notice shall be mailed (or sent electronically in accordance with applicable DTC procedures) to holders
of the Notes, with a copy to the Trustee, describing the transaction that constitutes or may constitute the Change of Control Triggering
Event and offering to repurchase the Notes on the date specified in the applicable notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”).
The notice shall, if mailed or sent prior to the date of consummation of the Change of Control, state that the Change of Control
Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment
Date.

5

On each Change of Control Payment Date,
the Company shall, to the extent lawful:

		(1)	accept for payment all Notes or portions of Notes properly tendered pursuant to the applicable
Change of Control Offer and not withdrawn; 

		(2)	deposit with the paying agent an amount equal to the Change of Control Payment in respect of
all Notes or portions of Notes properly tendered and not withdrawn; and 

		(3)	deliver or cause to be delivered to the Trustee the Notes properly accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased. 

The Company shall not be required to
make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer
in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party
purchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase any Notes
if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than
a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.

The Company shall comply with the requirements
of Rule 14e-1 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase
of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations
conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and regulations
and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of
any such conflict and compliance.

If holders of not less than 90% in aggregate
principal amount of the outstanding Notes properly tender and do not withdraw the Notes in a Change of Control Offer (or an offer
made by a third party as described above) and the Company, or any third-party making an offer in lieu of the Company, as described
above, purchases all of the Notes properly tendered and not withdrawn by such holders, the Company or the third party making such
offer shall have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following
such purchase pursuant to the Change of Control Offer or offer by such third party described above, to redeem all Notes that remain
outstanding following such purchase at a redemption price in cash equal to the applicable Change of Control Payment.

6

For purposes of the Change of Control
Offer provisions of the Notes, the following definitions shall apply:

“Change of Control”
means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more series of related transactions, of the Company’s assets and
the assets of its subsidiaries substantially as an entirety or as an entirety, taken as a whole, to any person, other than the
Company or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation)
the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the Company’s outstanding Voting Stock or other Voting Stock into which the Company’s
Voting Stock is reclassified, consolidated, exchanged or changed in such transaction, measured by voting power rather than number
of shares; (3) the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with
or into, the Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock
or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than any
such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute,
or are converted into or exchanged for, a majority of the outstanding Voting Stock of the surviving person or any direct or indirect
parent company of the surviving person immediately after giving effect to such transaction; (4) the first day on which a majority
of the members of the Company’s board of directors are not Continuing Directors; or (5) the adoption of a plan relating to
the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change
of Control under clause (2) or (3) above if (i) the Company becomes a direct or indirect wholly owned subsidiary of a holding company
and (ii)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are
substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately
following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial
owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company. The term “person,”
as used in this definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

7

“Change of Control Triggering
Event” means the occurrence of both a Change of Control and a Rating Event.

“Continuing Directors”
means, as of any date of determination, any member of the Company’s board of directors who (1) was a member of such board
of directors on the date the Notes were issued or (2) was nominated for election, elected or appointed to such board of directors
with the approval of a majority of the continuing directors who were members of such board of directors at the time of such nomination,
election or appointment (either by a specific vote or resolution adopted by the Company’s board of directors or by approval
by the Company’s board of directors of the Company’s proxy statement in which such member was named as a nominee for
election as a director).

“Fitch” means Fitch
Inc., and its successors.

“Investment Grade Rating”
means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s, BBB- (or the equivalent) by S&P and BBB-
(or the equivalent) by Fitch, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies
selected by the Company.

“Moody’s” means
Moody’s Investors Service, Inc., and its successors.

“Rating Agencies”
means (1) each of Moody’s, S&P and Fitch; and (2) if any or all of Moody’s, S&P or Fitch ceases to rate the
Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally
recognized statistical rating organization” within the meaning of Section 3(a)(62) under the Exchange Act selected by the
Company (as certified by a resolution of the Company’s board of directors) as a replacement agency for Moody’s, S&P
or Fitch, or all of them, as the case may be.

“Rating Event” means
the rating on the Notes is lowered by all three of the Rating Agencies from an Investment Grade Rating to below an Investment Grade
Rating, in any case on any day during the period (which period will be extended so long as the rating of the Notes is under publicly
announced consideration for a possible downgrade by any of the Rating Agencies) commencing upon the first public notice by the
Company of the occurrence of a Change of Control or the Company’s intention to effect a Change of Control and ending 60 days
following the consummation of the Change of Control; provided, however, that a Rating Event otherwise arising by virtue of a particular
reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed
a Rating Event for purposes of the definition of Change of Control Triggering Event) if any of the Rating Agencies does not announce
or publicly confirm or inform the Company that the reduction in ratings was the result, in whole or in part, of any event or circumstance
comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change
of Control has been consummated at the time of the Rating Event).

8

“S&P” means Standard & Poor’s Ratings Services, a division of S&P Global Inc., and its successors.

“Voting Stock” means,
with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date,
the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such
person.

There is no sinking fund or mandatory
redemption applicable to this Note.

If the Company deposits with the Trustee money
or U.S. Government Obligations sufficient to pay the then outstanding principal of, premium, if any, and accrued interest on this
Note to redemption or maturity, the Company may in certain circumstances be discharged from the Indenture and the Notes or may
be discharged from certain of its obligations under certain provisions of the Indenture.

 

		6.	Covenant Defeasance

The provisions in Article 8 of the Indenture
relating to Discharge and Defeasance (including Sections 8.01, 8.05 and 8.06) shall be applicable to the Notes, including the provisions
relating to Change of Control Offers; provided that, for the purposes of the Section 8.05(e) of the Indenture, the term “Holder”
shall refer to the beneficial owner.

		7.	Other Provisions.

With respect to the Notes, Section 4.08(a)
as set forth in the Indenture shall read as follows: “(a) the sum of the aggregate sale price of property involved in the
Sale and Leaseback Transactions not otherwise permitted plus the aggregate amount of indebtedness secured by Liens referred to
in subsection (11) of the definition of “Permitted Liens” does not exceed the greater of $300 million or 15% of Consolidated
Net Worth;”.

With respect to the Notes, subsection
(11) of the definition of “Permitted Liens” as set forth in the Indenture shall read as follows: “(11) Liens
not otherwise permitted if the aggregate amount of the indebtedness secured by those Liens, plus the aggregate sales price of property
involved in Sale and Leaseback Transactions referred to in Section 4.08(a), does not exceed the greater of $300 million or 15%
of Consolidated Net Worth.”

9

With respect to the Notes, the definition
of “Financing Lease” shall read as follows: “‘Financing Lease’ means any lease of property, real
or personal, the obligations of the lessee in respect of which are required in accordance with GAAP as it exists on March 8, 2017
to be capitalized on a balance sheet of the lessee.”

		8.	Registered Form; Denominations; Transfer; Exchange.

The Notes shall only be in denominations
of $2,000 and in integral multiples of $1,000 in excess of $2,000. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. Pursuant to the Indenture, there shall be certain periods during
which the Trustee may not be required to issue, register the transfer of or exchange any Note or certain portions of a Note.

		9.	Defaults and Remedies.

If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes may declare all the Notes to
be due and payable immediately. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations provided
in the Indenture, Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in its exercise
of remedies.

10

		10.	 Amendment and Waiver.

The Indenture and this Note may be amended,
or default thereunder may be waived, in accordance with provisions set forth in the Indenture.

		11.	 Authentication.

This Note is not valid until the Trustee
(or Authenticating Agent) signs the certificate of authentication on the other side of this Note.

		12.	 Governing Law.

The laws of the State of New York shall
govern this Note, without regard to conflicts of law principles thereof.

		13.	 Abbreviations.

Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

The Company shall furnish a copy of the
Indenture to any Holder upon written request and without charge.

11

[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered
holder hereby sell(s), assign(s) and transfer(s) unto

	Insert Taxpayer Identification No.
	 
	 
	(Please print or typewrite name and address including zip code of assignee)
	 
	the within Note and all rights thereunder, hereby irrevocably constituting and appointing
	 

 

attorney to transfer said Note on the books of the Company with
full power of substitution in the premises.

 

	 	Date:	 
	 
	Seller
	By	 
	 	 	     	 	 

	NOTICE: The signature to this assignment
      must correspond with the name as written upon the face of the
      within-mentioned instrument in every particular, without alteration or any
      change whatsoever.

	Signature		  
    
	Guarantee:1	 	
	 
	 
	 
			By 
    	                                              
			To be executed by
      an executive officer

____________________

1 Signatures must
be guaranteed by an “eligible
guarantor institution” meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Association Medallion Program
(“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended. 

SCHEDULE OF EXCHANGES OF NOTES

The following exchanges of a part of this Registered Global
Security for other Securities or a part of another Registered Global Security have been made:

							Principal amount of	 	
							this Registered		
		 	Amount of decrease		Amount of increase		Global Security		
			in principal amount		in principal amount		following such		Signature of
	 		of this Registered	 	of this Registered	 	decrease (or		authorized officer of
	Date of
      Exchange		Global
      Security		Global
      Security		increase)		TrusteeExhibit 10.1

 

LINE OF CREDIT PROMISSORY NOTE

 

	
$30,000,000.00
    	
 
    	
Indianapolis, Indiana
    

 

August  17, 2017

 

For value received, IMPAC MORTGAGE CORP., a California corporation, having its principal office at 19500 Jamboree Road, Irvine, California  92612, Attention:  Kathy J. Hancock (hereinafter referred to as “Maker”), unconditionally promises to pay to the order of MERCHANTS BANK OF INDIANA having its principal banking office at 11555 N. Meridian Street, Suite 400, Carmel, Indiana 46032, Attention:  Michael J. Dunlap (hereinafter referred to as “Lender”), at Lender’s principal banking office or at such other place or to such other party as the holder hereof may from time to time designate, the principal sum of Thirty Million and 00/100 Dollars ($30,000,000.00), or so much thereof as shall from time to time be advanced by Lender to or for the benefit of Maker hereunder, with interest on the principal balance advanced from time to time remaining unpaid from the date hereof at a rate per annum (based upon a year of 360 days and actual days elapsed) equal to the rate from time to time announced by the Wall Street Journal as the “One Month LIBOR”, plus four hundred (400) basis points with changes in the interest rate hereunder to take effect on the same day as each change in such One Month LIBOR takes effect.

 

TERMS, PROVISIONS AND CONDITIONS

 

1.                                      Advances.                                       Provided that Maker has timely submitted to Lender Maker’s quarterly financial reports, including without limitation a detailed independent appraised valuation indicating in the opinion of value the estimated liquidation value  of the Servicing Contract Rights defined as the indivisible, conditional, non-delegable right of Maker to service mortgage loans (collectively, the “Freddie Mac Loans”) owned or guaranteed by the Federal Home Loan Mortgage Corporation (“Freddie Mac”), pursuant to the Freddie Mac Single-Family Seller/Servicer Guide, as it may be amended from time to time (the “Freddie Mac Guide”) and the Purchase Documents (as such term is defined in the Freddie Mac Guide), in a non-distressed or liquidation sale (together with all additions and accessions thereto, replacements and substitutions therefor, products thereof and proceeds therefrom, herein referred to collectively as the “Pledged Mortgage Servicing Rights”), Lender shall make an advance to Maker of funds available under this line of credit up to the lesser of (i) Thirty Million and 00/100 Dollars ($30,000,000.00), or (ii) fifty-five percent (55%) of the lesser of the reported book or appraised valuation of the

 

 

Pledged Mortgage Servicing Rights as set forth in the quarterly reports of Maker issued immediately preceding the date that Lender makes any such advance of funds to Maker. The independent appraised valuation of the Pledged Mortgage Servicing Rights must be prepared in a manner and by an independent firm engaged in business of the valuation of mortgage servicing rights acceptable to the Lender in its sole reasonable discretion.  For the avoidance of doubt, the Pledged Mortgage Servicing Rights do not include Maker’s rights to servicing advance reimbursements due from Freddie Mac.

 

2.                                      Payments.                                       Principal and interest shall be payable as follows:

 

(i)                                     Commencing on the fifteenth (15th) day of the first calendar month following the calendar month in which the first advance is made hereunder and continuing on the fifteenth (15th) day of each succeeding calendar month thereafter, accrued and unpaid interest shall be due and payable for the immediately preceding calendar month.  In the event that the fifteenth (15th) day of a calendar month is not a business day, the payment shall be due on the immediately succeeding business day;

 

(ii)                                  On or before July 31, 2018, the entire unpaid principal balance and all accrued and unpaid interest shall be due and payable unless otherwise renewed pursuant to paragraph 2(iii) below; and

 

(iii)                               This promissory note shall automatically renew for consecutive one year terms unless Lender provides Maker not less than one hundred fifty (150) days prior notice of its intent not to renew.

 

3.                                      Costs of Collection and Default Rate of Interest. In addition, Maker shall pay to the holder hereof (a) reasonable attorneys’ fees incurred by the holder in the protection of any security for this Note or the collection of any indebtedness evidenced hereby, (b) costs of collection and (c) during any period in which a default exists hereunder and/or any period of delinquency on any amounts not paid when due, interest at a rate per annum equal to four percent (4%) above the rate otherwise in effect.

 

4.                                      Late Charge. Maker shall pay a “late charge” for the purpose of defraying expense incident to handling any monthly installment of interest and/or principal, or portion thereof, referred to above not paid within ten (10) days after the date when first due at the rate of five cents (5¢) for each dollar ($1.00) so overdue with a minimum charge of Twenty-Five and no/100 Dollars ($25.00) and an additional “late charge” for purposes of defraying expense incident to handling on the first day of each successive calendar month thereafter at the rate of five cents (5¢) for each dollar ($1.00) so overdue with a minimum of Twenty-Five and no/100 Dollars ($25.00) per month until any such installment, or portion thereof, has been paid in full. Nothing herein contained shall be

 

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construed as a waiver by the holder of this Note of its option to declare a default if any payment of any installment of interest and/or principal, or portion thereof, is not made when due, and the assessment of a late charge shall not affect the right of the holder of this Note to increase the rate of interest as herein provided on all amounts not paid when due.

 

5.                                      Valuation and Appraisement Laws. All principal, interest and other amounts payable under or with respect to this Note shall be payable without relief from valuation and appraisement laws.

 

6.                                      Application of Payments. Each payment hereunder shall be applied to the payment of accrued and unpaid interest and to the reduction of the principal balance in the order and in the amounts specified herein; provided that in the event that such order and in the applicable of such amounts is not specified herein, then such payment shall be applied as the holder of this Note shall determine, in its sole discretion. Interest shall be computed on the basis of a three hundred sixty (360)-day year applied to the actual number of days in each interest-payment period.

 

7.                                      Security.

 

(a)                                 This Note shall be entitled to the benefits of, and is secured by, that certain Continuing Guaranty executed by Integrated Real Estate Service Corp. (the “Guarantor”) in favor of Lender (the “Guaranty”).

 

(b)                                 This Note shall be entitled to the benefits of, and is secured by a security interest in, Maker’s rights to the Pledged Mortgage Servicing Rights with respect to the Freddie Mac Loans which rights are hereby granted by Maker in favor of Lender and which shall be evidenced by a Uniform Commercial Code financing statement to be filed by Lender with the office of the Secretary of State of California, as hereinafter amended or renewed, and other security agreements or documents, as from time to time amended or modified, executed in favor Lender in connection with this Note (the “Financing Statement”).  Maker and Lender hereby agree that the Financing Statement shall be amended as needed to incorporate Freddie Mac requirements as applicable.  Without limiting the generality of the preceding sentence, each Financing Statement shall contain the following statement: “Notwithstanding anything to the contrary herein, the security interest publicized or perfected by this financing statement is subject and subordinate in each and every respect (a) to all rights, powers and prerogatives of the Federal Home Loan Mortgage Corporation (“Freddie Mac”) under and in connection with the Purchase Documents, as that term is defined in the Freddie Mac Single-Family Seller/Servicer Guide, as it may be amended from time to

 

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time, which rights include, without limitation, the right of Freddie Mac to disqualify (in whole or in part) the debtor named herein as an approved Freddie Mac Seller/Servicer, with or without cause, and the right to terminate (in whole or in part) the unitary, indivisible master servicing contract and to transfer and sell all or any portion of said servicing contract rights, as provided in the Purchase Documents; and (b) to all claims of Freddie Mac arising out of or relating to any and all breaches, defaults and outstanding obligations of the debtor to Freddie Mac.”

 

(c) The foregoing security interests shall be recognized by Freddie Mac in the form of the typical agreements utilized by Freddie Mac (an “Acknowledgement Agreement”). The Acknowledgement Agreement shall be executed by Freddie Mac prior to an advance by the Lender with respect to the Pledged Mortgage Servicing Rights.    Notwithstanding anything to the contrary contained herein, in no event shall this Note be secured by the servicing income or servicing rights with respect to any other mortgage loans that are not the subject of an Acknowledgment Agreement with Freddie Mac.

 

(d)                                 Lender acknowledges and agrees that the foregoing pledge by Maker of the Pledged Mortgage Servicing Rights with respect to the Freddie Mac Loans is subject to the implementing regulations governing the applicable Freddie Mac programs and guidelines (and to the Freddie Mac Guide and the Purchase Documents (as such term is defined in the Freddie Mac Guide).  Lender further acknowledges and agrees that:

 

(i)                                      Maker is entitled to servicing income with respect to a given pool or loan package only so long as it maintains its approved Seller/Servicer status with respect to Freddie Mac;

 

(ii)                                  upon Maker’s loss of its Seller/Servicer status, Lender’s rights to any servicing income derived from the Pledge Mortgage Servicing Rights related to a given Freddie Mac Loan also terminate; and

 

(iii)                               the foregoing pledge of the Pledged Mortgage Servicing Rights conveys no right (such as a right to become a substitute servicer or issuer) that is not specifically provided for in the Freddie Mac guidelines and Acknowledgment Agreement.

 

8.                                      Covenants.

 

(a)                                 Maker shall cooperate with Lender and its representatives in any review or inspection by Lender of Freddie Mac Loans with respect to which the Pledged Mortgage Servicing Rights are pledged hereunder or the property subject to any mortgage, and make available to such person for copying or otherwise, any books and records relating to such Freddie Mac Loans or Pledged Mortgage Servicing Rights as well as the appropriate employees of the Maker for the purpose of discussing the same, all at such times during business hours as may be reasonably requested by Lender.

 

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(b)                                 Maker shall not do anything or permit any action, directly or indirectly, which may result in a negative designation from Freddie Mac or any other governing agency, including without limitation, anything which could result in the Maker being debarred or placed on a watch-list.

 

(c)                                  Maker shall deliver to Lender:

 

(i)                                     within 45 days after the end of each calendar quarter, a balance sheet of Maker as of the end of such quarter and a statement of operations and sources and application of funds of the Maker for that quarter, all such statements to be prepared in accordance with generally accepted accounting principles or other commercially reasonable methods consistently applied and certified by the Maker’s chief financial officer to present fairly in all material respects (but without footnotes and subject to usual year-end adjustments) the financial position, results of operations and changes in financial position of Maker for each of such periods;

 

(ii)                                  within 90 days after the end of each fiscal year a balance sheet of Maker as of the end of such year, setting forth the assets, liabilities, income, expense and contingent liabilities and a statement of operations and sources and application of funds of Maker for such year setting forth in each case in comparative form the figures for the previous fiscal year, which shall be in reasonable detail and prepared in accordance with generally accepted accounting principles consistently applied, shall have been audited by independent certified public accountants of recognized standing in accordance with generally accepted auditing standards and shall be accompanied by a certificate of such accountants stating that their audit has been made in accordance with generally accepted auditing standards and that in their opinion such statements fairly present the financial position, results of operations and changes in financial position of Maker and its subsidiaries in accordance with generally accepted accounting principles consistently applied;

 

(iii)                               within 90 days after the end of each calendar year financial statements for the Guarantor as of the end of such year setting forth assets, liabilities and contingent liabilities all in a form reasonably acceptable to Lender;

 

(iv)                              within 10 days after the filing deadline (taking into account any extensions properly filed), copies of all state income tax returns for Maker;

 

(v)                                 all other information and reports required under the provisions of this Note and such other data and information in such detail as may from time to time be reasonably requested by Lender.

 

(c)                                  Maker covenants and agrees that at all times hereunder Maker shall have an Adjusted Tangible Net Worth of at least Fifty Million and 00/100 Dollars ($50,000,000.00) (“Net Worth Requirement”).

 

(d)                                 Maker covenants and agrees that at all times hereunder Guarantor shall have an Adjusted Tangible Net Worth of at least Thirty Million and 00/100 Dollars ($30,000,000.00) (“Guarantor Net Worth Requirement”).

 

(e)                                  Maker shall not permit Maker’s Leverage Ratio at any time to exceed 15:1. For the purposes hereof, “Leverage Ratio” shall mean the ratio of Maker’s debt for borrowed money to its Adjusted Tangible Net Worth.

 

(f)                                   Maker shall remain in good standing with Freddie Mac.

 

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9.                                      Events of Default. All of the indebtedness evidenced by this Note and remaining unpaid shall, at the option of the holder and without demand or notice, become immediately due and payable upon the occurrence of any of the following (each of which shall constitute an event of default hereunder):

 

(i)            a failure by Maker to make the payments required by this Note when due, which failure is not cured within three (3) business days following notice by Lender to Maker;

 

(ii)           a default under or a failure to comply in any material respect with any of the terms, provisions, conditions, agreements or covenants of this Note which remains uncured for ten (10) business days after written notice from Lender to Maker;

 

(iii)          a default or failure to comply in any material respect with any of the terms, provisions, conditions, agreements or covenants of any other agreement between Lender and Maker or by Maker in favor of Lender, including without limitation under that certain Master Participation Agreement dated April 22, 2015, as amended or restated, which remains uncured beyond any applicable notice requirements and cure periods, if any, contained in such agreement; and

 

(iv)          (1) The Maker files a voluntary petition under any of the provisions of the U.S. bankruptcy code or any similar U.S. bankruptcy law; or (2) Maker is the subject of an involuntary petition under any of the provisions of the U.S. bankruptcy code, or any similar U.S. bankruptcy law, which petition has not been dismissed within one hundred twenty (120) days after the date of its filing; or (3) Maker files a voluntary application for, or for the appointment of, a receiver or custodian for its business.

 

10.                               Waiver and Consent. Presentment, notice of dishonor and demand, protest and diligence in collection and bringing suit are hereby severally waived by Maker and each endorser or guarantor, each of whom consents that the time for the payment of this Note, or of any installment hereunder, may be extended from time to time without notice by the holder.

 

11.                               No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by the holder of this Note shall operate as a waiver of any other default or of the same default in the future or as a waiver of any right or remedy with respect to the same or any other occurrence.

 

12.                               Prepayment. Maker may prepay all or any portion of the principal amount outstanding under this Note at any time and from time to time without penalty.

 

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13.                               Usury Laws. It is the intention of the parties hereto to comply strictly with all applicable usury laws. Accordingly, in no event and upon no contingency shall the holder be entitled to receive, collect or apply as interest any interest, fees, charges or other payments equivalent to interest in excess of the amount which may be charged from time to time under applicable law. In the event that the holder of this Note ever receives, collects or applies as interest any such excess, then immediately upon becoming aware of such receipt, collection or application, the holder shall notify Maker of the usurious overcharge and refund to Maker the amount of any overcharge taken, plus interest on the overcharge taken at the rate in effect under this Note or at the maximum lawful rate, whichever is less, at the time the usurious interest rate was taken, and make whatever adjustments in this Note as are necessary to insure that Maker will not be required to pay any further interest in excess of the amount permitted under applicable law. Maker shall not institute any action or file any defense based upon the charging or collecting of usurious interest hereunder unless (i) Maker shall give the holder written notice of an intent to do so and (ii) the holder shall fail to comply with the terms hereof, by notification and refund to Maker and making necessary adjustments as aforesaid, within fifteen (15) days after receipt by the holder of such written notice from Maker. The provisions of this Section shall be given precedence over any other provision contained herein or in any other agreement between the parties hereto that is in conflict with the provisions of this Section.

 

14.                               Loan Fees. In addition to all of the terms and conditions to be performed by Maker under this Note, Maker shall reimburse Lender upon demand for all costs and expenses, including without limitation reasonable attorneys’ fees, incurred by it in connection with the loan evidenced by this Note (excluding ordinary business overhead and any loss, damage or claim resulting from the Lender’s gross negligence or willful misconduct).

 

15.                               Waiver of Trial by Jury. Maker hereby agrees that any suit, action or proceeding, whether a claim or counterclaim, brought or instituted by any party on or with respect to this Note or any other document executed in connection herewith or which in any way relates, directly or indirectly to any event, transaction or occurrence arising out of or in any way connected with this Note or the dealings of the parties with respect thereto, shall be tried only by a court and not by a jury. MAKER AND LENDER BY ACCEPTANCE HEREOF HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Maker acknowledges that Maker may have a right to a trial by jury in any such suit, action or proceeding and that Maker hereby is knowingly, intentionally and voluntarily waiving any such right. Maker further acknowledges and agrees that this Section is material to this Note and that adequate consideration has been given by Lender and received by Maker in exchange for the waiver made by Maker pursuant to this Section.

 

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16.                               Notices. Any written notice permitted or required hereunder shall be effective when received, certified or registered United States mail, postage prepaid, return receipt requested, at the applicable address specified above or at such other addresses  as may be specified such party by notice hereunder.

 

17.                               Legal Tender. This Note is negotiable and is payable in lawful money of the United States of America which shall be legal tender in payment of all debts and dues, public and private, at the time of payment.

 

18.                               Successors and Assigns. The obligations of Maker hereunder shall be binding upon Maker and its successors, assigns and legal representatives and shall inure to the benefit of Lender and Lender’s participants’ respective successors, assigns, and legal representatives.

 

19.                               Governing Law. This Note is delivered to Lender in the State of Indiana and is executed under and shall be governed by and construed in accordance with the laws of the State of Indiana.

 

20.                               Invalidity of any Provision. If any provision (or portion thereof) of this Note or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Note or the application of such provision (or portion thereof) to any other person or circumstance shall be valid and enforceable to the fullest extent permitted by law.

 

21.                               Captions. The captions or headings herein have been inserted solely for the convenience of reference and in no way define, limit or describe the scope or substance of any provision of this Note.

 

[Remainder of page intentionally blank; signature on following page]

 

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IN WITNESS WHEREOF, Maker has caused this Note to be executed by its duly authorized officers effective as of the day and the year first above written.

 

 

	
 
    	
IMPAC MORTGAGE CORP.,
    
	
 
    	
a California   corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

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