Fannie Mae-No Politics (FNMA)

[Rodney5]

THE CONTRACT WITH THE SHAREHOLDERS

3. Optional Pay Down of Liquidation Preference

(a) Following termination of the Commitment (as defined in the Preferred Stock Purchase Agreement referred
to in Section 8 below), and subject to any limitations which may be imposed by law and the provisions below, the
Company may pay down the Liquidation Preference of all outstanding shares of the Senior Preferred Stock pro rata,
at any time, in whole or in part, out of funds legally available therefor, with such payment first being used to reduce
any accrued and unpaid dividends previously added to the Liquidation Preference pursuant to Section 8 below and,
to the extent all such accrued and unpaid dividends have been paid, next being used to reduce any Periodic
Commitment Fees (as defined in the Preferred Stock Purchase Agreement referred to in Section 8 below) previously
added to the Liquidation Preference pursuant to Section 8 below. Prior to termination of the Commitment, and
subject to any limitations which may be imposed by law and the provisions below, the Company may pay down the
Liquidation Preference of all outstanding shares of the Senior Preferred Stock pro rata, at any time, out of funds
legally available therefor, but only to the extent of (i) accrued and unpaid dividends previously added to the
Liquidation Preference pursuant to Section 8 below and not repaid by any prior pay down of Liquidation Preference
and (ii) Periodic Commitment Fees previously added to the Liquidation Preference pursuant to Section 8 below and
not repaid by any prior pay down of Liquidation Preference. Any pay down of Liquidation Preference permitted by
this Section 3 shall be paid by making a payment in cash to the holders of record of outstanding shares of the Senior
Preferred Stock as they appear in the books and records of the Company on such record date as shall be fixed in
advance by the Board of Directors, not to be earlier than 45 days nor later than 10 days preceding the date fixed for
the payment.
(b) In the event the Company shall pay down of the Liquidation Preference of the Senior Preferred Stock as
aforesaid, notice of such pay down shall be given by the Company by first class mail, postage prepaid, mailed
neither less than 10 nor more than 45 days preceding the date fixed for the payment, to each holder of record of the
shares of the Senior Preferred Stock, at such holder’s address as the same appears in the books and records of the
Company. Each such notice shall state the amount by which the Liquidation Preference of each share shall be
reduced and the pay down date.
(c) If after termination of the Commitment the Company pays down the Liquidation Preference of each
outstanding share of Senior Preferred Stock in full, such shares shall be deemed to have been redeemed as of the
date of such payment, and the dividend that would otherwise be payable for the Dividend Period ending on the pay
down date will be paid on such date. Following such deemed redemption, the shares of the Senior Preferred Stock
shall no longer be deemed to be outstanding, and all rights of the holders thereof as holders of the Senior Preferred
Stock shall cease, with respect to shares so redeemed, other than the right to receive the pay down amount (which
shall include the final dividend for such shares). Any shares of the Senior Preferred Stock which shall have been so
redeemed, after such redemption, shall no longer have the status of authorized, issued or outstanding shares.

4. Mandatory Pay Down of Liquidation Preference Upon Issuance of Capital Stock
(a) If the Company shall issue any shares of capital stock (including without limitation common stock or any
series of preferred stock) other than issuances of common stock with aggregate gross proceeds of up to $70 billion in
exchange for cash at any time while the Senior Preferred Stock is outstanding, then the Company shall, within 10
Business Days, use the proceeds of such issuance net of the direct costs relating to the issuance of such securities
(including, without limitation, legal, accounting and investment banking fees) to pay down the Liquidation
Preference of all outstanding shares of Senior Preferred Stock pro rata, out of funds legally available therefor, by
making a payment in cash to the holders of record of outstanding shares of the Senior Preferred Stock as they appear
in the books and records of the Company on such record date as shall be fixed in advance by the Board of Directors,
not to be earlier than 45 days nor later than 10 days preceding the date fixed for the payment, with such payment
first being used to reduce any accrued and unpaid dividends previously added to the Liquidation Preference pursuant
to Section 8 below and, to the extent all such accrued and unpaid dividends have been paid, next being used to
reduce any Periodic Commitment Fees (as defined in the Preferred Stock Purchase Agreement referred to in Section
8 below) previously added to the Liquidation Preference pursuant to Section 8 below; provided that, prior to the
termination of the Commitment (as defined in the Preferred Stock Purchase Agreement referred to in Section 8
below), the Liquidation Preference of each share of Senior Preferred Stock shall not be paid down below $1,000 per
share.
(b) If the Company shall not have sufficient assets legally available for the pay down of the Liquidation
Preference of the shares of Senior Preferred Stock required under Section 4(a) , the Company shall pay down the
Liquidation Preference per share to the extent permitted by law, and shall pay down any Liquidation Preference not
so paid down because of the unavailability of legally available assets or other prohibition as soon as practicable to
the extent it is thereafter able to make such pay down legally. The inability of the Company to make such payment
for any reason shall not relieve the Company from its obligation to effect any required pay down of the Liquidation
Preference when, as and if permitted by law.
(c) If after the termination of the Commitment the Company pays down the Liquidation Preference of each
outstanding share of Senior Preferred Stock in full, such shares shall be deemed to have been redeemed as of the
date of such payment, and the dividend that would otherwise be payable for the Dividend Period ending on the pay
down date will be paid on such date. Following such deemed redemption, the shares of the Senior Preferred Stock
shall no longer be deemed to be outstanding, and all rights of the holders thereof as holders of the Senior Preferred
Stock shall cease, with respect to shares so redeemed, other than the right to receive the pay down amount (which
shall include the final dividend for such redeemed shares). Any shares of the Senior Preferred Stock which shall
have been so redeemed, after such redemption, shall no longer have the status of authorized, issued or outstanding
shares.

https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/FNM/SPSPA-amends/FNM-Fourth-Amended-Restated-Certificate-04-13-21.pdf