Sec. 2. Repayment of liquidation preference

312 words·~1 min read·/bill/114/hr/4913/ih/section-2

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Not later than the expiration of the 60-day period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall modify the Senior Preferred Stock Purchase Agreement for each enterprise to provide as follows: Effective on the date of the date of the enactment of this Act, the liquidation preference on the Variable Liquidation Preference Senior Preferred Stocks of each enterprise is reduced to zero. Pursuant to paragraph (1), the Variable Liquidation Preference Senior Preferred Stock of each enterprise shall be redeemed upon the date of the modification of the Senior Preferred Stock Purchase Agreement required under this subsection and, upon and after such redemption— shares of such Variable Liquidation Preference Senior Preferred Stock of each enterprise shall no longer be deemed to be outstanding and all rights of the holders thereof, as such holders, shall cease; shares of redeemed Variable Liquidation Preference Senior Preferred Stock of each enterprise shall no longer have the status of authorized, issued, or outstanding shares; the Senior Preferred Stock Purchase Agreement for each enterprise shall be terminated, except that sections 2.1 and 2.2 of such Agreement, as modified by the Second Amendment to the Senior Preferred Stock Purchase Agreement for the enterprise (dated December 24, 2009), shall remain in force and effect; and the Department of the Treasury shall retain any dividend payments made by an enterprise to the Department of the Treasury before the date of the enactment of this Act.

The Department of the Treasury shall not require the enterprises to pay a periodic commitment fee, as described in section 3.2 of the Senior Preferred Stock Purchase Agreements. Notwithstanding subsection (a)(2)(C) of this section, upon the enactment of this Act, the Department of the Treasury shall exercise the warrants for the purchase of common stock of the enterprises provided to the Department under the Senior Preferred Stock Purchase Agreements.