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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 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 prepositioned, 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
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