Replies to post #441319 on Fannie Mae (FNMA)

[kthomp19]

Warrant document

I can't copy and paste the text, but at the bottom of page 3:

Whenever the holder exercises this Warrant in whole or in part, it may assign its right to receive the Exercise Shares issuable upon such exercise to any other Person.

And earlier on page 3:

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

On page 7:

7. Transfer of Warrant. This Warrant is not transferable; provided, however, that the Holder may assign its rights to receive shares upon exercise of this Warrant pursuant to Section 2.1.

It's definitely worth reading the whole document. By what I understand, Treasury could make an agreement with "any (other) entity whatsoever" to exercise the warrant and assign shares to that entity in exchange for other considerations, most likely cash. Since Treasury would never actually own the shares it wouldn't constitute a purchase of FnF securities which is not allowed past December 31, 2009.

Section 9 is amusing too. I don't know how a contractual obligation can be mutilated or destroyed.