Exhibit 10.11.2
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AMENDED AND RESTATED
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MASTER CENTRAL SERVICING AGREEMENT
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between
FEDERAL AGRICULTURAL MORTGAGE CORPORATION,
as Owner/Master Servicer
and
ZIONS FIRST NATIONAL BANK
as Central Servicer
dated as of
May 1, 2004
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AMENDED AND RESTATED MASTER CENTRAL SERVICING AGREEMENT
THIS AMENDED AND RESTATED MASTER CENTRAL SERVICING AGREEMENT (this
"Agreement") entered into as of May 1, 2004, between the Federal Agricultural
Mortgage Corporation, a federally chartered instrumentality of the United States
and an institution of the Farm Credit System ("Farmer Mac") and Zions First
National Bank, a national bank (the "Central Servicer").
WITNESSETH
WHEREAS, Farmer Mac is the beneficial owner of certain agricultural real
estate mortgage loans and Master Servicer with respect to certain other
agricultural real estate mortgage loans; and
WHEREAS, Farmer Mac and the Central Servicer have agreed that the Central
Servicer is to service on behalf of Farmer Mac certain of such agricultural real
estate mortgage loans (the "Qualified Loans") to be identified on the Schedule
of Qualified Loans (as hereinafter defined).
NOW, THEREFORE, in consideration of these premises, the parties agree as
follows:
ARTICLE I
DEFINED TERMS
Section 1.01 Defined Terms. All capitalized terms used but not defined
herein have the meanings assigned to them in the Seller/Servicer Guide and the
following terms shall have the following meanings:
"Amount Held for Future Distribution": As to any Remittance Date, the total
of all amounts held in the Collection Account at the close of business on such
Remittance Date on account of (i) Installment Payments due after the preceding
Due Date and (ii) prepayments received after the preceding Due Date.
"Appraisal Standards": The appraisal standards established by Farmer Mac
and set forth in the Seller/Servicer Guide.
"Appraised Value": The appraised value of a Mortgaged Property based upon
the appraisal conducted in accordance with the Appraisal Standards less than one
year prior to Farmer Mac's acquisition of the Qualified Loan.
"Borrower": The obligor under a Qualified Loan.
"Business Day": Any other day than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in the States of Minnesota, New York or Utah are
required or authorized by law to be closed or (iii) a day on which Farmer Mac is
closed.
"Central Servicer": Zions First National Bank, and its permitted successors
and assigns.
"Central Servicer's Report": A report (which shall be in electronic machine
readable form) of the Central Servicer to Farmer Mac and Farmer Mac's designee,
if any, conforming to Section 4.01.
"Closing Date": The date that Central Servicer commences servicing a
Qualified Loan.
"Collection Account": The Eligible Account or Accounts created and
maintained pursuant to Section 3.02. Funds required to be deposited in the
Collection Account shall be held in trust for Farmer Mac.
"Collection Period": The Collection Period with respect to any Remittance
Date includes the second Business Day of the month preceding the Remittance
Date, through the first Business Day of the month of the Remittance Date.
"Delinquency Advance": As to any Remittance Date, the amounts specified in
the definition of Delinquency Advance Requirement.
"Delinquency Advance Requirement": The amount, if any, equal to the total
of all Installment Payments (with each interest component thereof being adjusted
to interest at the applicable Net Mortgage Rate) on the Qualified Loans
(including, for this purpose, REO Qualified Loans) that were due on or prior to
the preceding Due Date, and such Installment Payments were not the subject of
any previous unreimbursed Delinquency Advance and were known by the Central
Servicer to be past due (irrespective of any moratorium, waiver or other
postponement) as of the close of business on the related Remittance Date.
"Due Date": As to any Qualified Loan, any date upon which a scheduled
installment of principal and interest on such Qualified Loan is due in
accordance with the terms of the related Mortgage Note.
"Eligible Account": An account that is either (i) maintained with a
depository institution the obligations of which would qualify as Permitted
Investments pursuant to clause (iii) of the definition thereof, (ii) an account
or accounts the deposits in which are fully insured by the Federal Deposit
Insurance Corporation or (iii) an account or accounts in a depository
institution acting in its fiduciary capacity in which the deposits in such
accounts are held in trust and are invested in an account as described in (i) or
(ii) above or in Permitted Investments. Funds deposited in each Eligible Account
shall be held in trust pending application in accordance with the provisions of
this Agreement.
"Eligible Substitute Mortgaged Property": A Mortgaged Property that is
substituted for an Existing Mortgaged Property pursuant to Section 3.02(a)
which, as evidenced by a Servicing Officer's certificate delivered to Farmer
Mac, shall:
(i) secure the same Qualified Loan that such Existing Mortgaged
Property secures; and
(ii) on the date of substitution, have a current appraised value
at least equal to the Appraised Value of such Existing Mortgaged
Property.
"Environmental Review Report": The report required to be prepared pursuant
to the Seller/Servicer Guide prior to the foreclosure or other conversion of any
defaulted Qualified Loan.
"Environmental Statute": Any Federal, state or local law, ordinance, rule
or regulation including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended; the Hazardous
Materials Transportation Act, as amended; the Resource Conservation and Recovery
Act, as amended; and any regulations adopted and publications promulgated
pursuant to each of the foregoing.
"Existing Mortgaged Property": A Mortgaged Property that is replaced by an
Eligible Substitute Mortgaged Property pursuant to Section 3.02(a).
"Farmer Mac": The Federal Agricultural Mortgage Corporation, a federally
chartered institution of the Farm Credit System and instrumentality of the
United States, or any successor corporation or entity or Farmer Mac's designee.
The term Farmer Mac, when used to refer to the entity owning the Qualified
Loans, shall also include any entity designated by Farmer Mac to be the holder
of the Qualified Loans.
"Field Servicer": Any Person acting as a Field Servicer pursuant to the
Seller/Servicer Guide.
"Field Servicing Fee Rate": As to any Qualified Loan, the per annum rate
identified as the Field Servicing Fee Rate in the Schedule of Qualified Loans.
"Hazardous Materials": Any flammable explosives, radioactive materials or
any other materials, wastes or substances defined as hazardous materials,
hazardous wastes or hazardous or toxic substances by any Environmental Statute
or by any Federal, state or local governmental authority having or claiming
jurisdiction over the Mortgaged Property.
"Independent": When used with respect to any specified Person, such a
Person who (i) is in fact independent of the Seller and the Central Servicer,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Seller or the Central Servicer or in an affiliate
thereof, and (iii) is not connected with the Seller or the Central Servicer as
an officer, employee, promoter, underwriter, partner, director or person
performing similar functions.
"Installment Payment": As to any Qualified Loan and any Due Date, any
payment of principal and/or interest thereon in accordance with the amortization
schedule of such Qualified Loan (after adjustment for any curtailments occurring
prior to the Due Date but before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period).
"Insurance Proceeds": Proceeds paid to Farmer Mac or the Central Servicer
(including any Field Servicer) by any insurer pursuant to any insurance policy
covering a Qualified Loan or Mortgaged Property, reduced by any expenses
incurred by Farmer Mac or the Central Servicer (including any Field Servicer) in
connection with the collection of such Insurance Proceeds and not otherwise
reimbursed to Farmer Mac or the Central Servicer, such expenses including,
without limitation, legal fees and expenses.
"Insured Expenses": Expenses covered by any insurance policy covering a
Qualified Loan or Mortgaged Property that are paid by or on behalf of Farmer Mac
or the Central Servicer.
"Liquidated Qualified Loan": Any defaulted Qualified Loan (including any
REO Qualified Loan) as to which the Central Servicer has determined that all
amounts it expects to recover from or on account of such Qualified Loan have
been recovered and have been deposited into the Collection Account or REO
Account or otherwise appropriately distributed.
"Liquidation Expenses": Expenses incurred by or on behalf of Farmer Mac or
the Central Servicer in connection with the liquidation of any defaulted
Qualified Loan, including, without limitation, legal fees and expenses,
brokerage commissions paid to third parties, any unreimbursed amounts expended
pursuant to Sections 3.05(a) (for hazard insurance), 3.07(a) (for environmental
reports) and 3.07(e)(REO expenses) (to the extent such amounts are reimbursable
under the terms of such Sections) respecting the related Qualified Loan and any
related and unreimbursed expenditures for real estate and conveyance taxes or
for property restoration or preservation.
"Liquidation Proceeds": Cash (including Insurance Proceeds) received in
connection with the liquidation of defaulted Qualified Loans (excluding REO
Qualified Loans).
"Loan-to-Value Ratio": As of any date, the fraction, expressed as a
percentage, the numerator of which is the principal balance of the related
Qualified Loan at the date of determination and the denominator of which is the
Appraised Value of the related Mortgaged Property as of the date of the
appraisal performed in accordance with the Appraisal Standards.
"Mortgage": A mortgage, deed of trust or other instrument that constitutes
a first lien on an interest in real property securing a Mortgage Note.
"Mortgage File": The legal documents (including the Mortgage Note,
Mortgage, assignment of the Mortgage, evidence of title to the Mortgaged
Property and any additional security documents) relating to a Qualified Loan.
"Mortgage Note": The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Borrower under a Qualified Loan.
"Mortgage Rate": As to any Qualified Loan, the rate of interest borne by
the related Mortgage Note.
"Mortgage Servicing Documents": Originals or copies of the custodial
documents, servicing documents, escrow documents, if any, the original
appraisal, including any updates thereto, which was the basis for the Appraised
Value, and all other documents, records, and tapes necessary for prudent
servicing in accordance with the Central Servicer's standards for mortgage loan
servicing, and such other papers and documents, tax receipts, insurance
policies, insurance premium receipts, water stock certificates, ledger sheets,
payment records, insurance claim files and correspondence, foreclosure files and
correspondence, current and historical computerized data files and other papers
and records of whatever kind or description.
"Mortgaged Property": The property securing a Qualified Loan.
"Net Liquidation Proceeds": As to any Liquidated Qualified Loan,
Liquidation Proceeds net of Liquidation Expenses.
"Net Mortgage Rate": As to each Qualified Loan, the Mortgage Rate less the
sum of (a) the Servicing Fee Rate and (b) the Field Servicing Fee Rate.
"Permitted Investments": One or more of the following, but only to the
extent permitted by applicable regulations:
(i) obligations of, or guaranteed as to principal and interest
by, Farmer Mac or the United States or any agency or instrumentality
thereof;
(ii) repurchase agreements on obligations specified in clause
(i), which repurchase agreements will mature not later than the day
preceding the immediately following Remittance Date, provided that (a)
the unsecured short-term obligations of the party agreeing to
repurchase such obligations are at the time rated not less than A-1 by
Standard & Poor's and not less than Prime-1 by Moody's, (b) such
repurchase agreements are effected with a primary dealer recognized by
a Federal Reserve Bank or (c) such repurchase agreements are secured
by obligations specified in clause (i) above at not less than 102% of
market value determined on a daily basis;
(iii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances maturing in not more than 60 days and issued by,
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject
to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution that is the
principal subsidiary of a holding company, the commercial paper or
other short-term obligations of such holding company) have a rating of
not less than A-1 from Standard & Poor's and a rating of not less than
Prime-1 from Moody's;
(iv) commercial paper (having remaining maturities of not more
than 60 days) of any corporation incorporated under the laws of the
United States or any state thereof, which on the date of acquisition
has been rated not less than A-1 from Standard & Poor's and not less
than Prime-1 by Moody's; and
(v) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof if such securities are rated in the
highest long-term unsecured rating categories at the time of
investment or the contractual commitment providing for such investment
by Standard & Poor's and Moody's; provided, however, that securities
issued by any particular corporation will not be Permitted Investments
to the extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
part of the Collection Account to exceed 10% of the outstanding
principal balance of the Qualified Loans being serviced under this
Agreement (it being understood that the entity directing the
investment shall be responsible for compliance with the foregoing
restriction on investments);
(vi) units of a taxable money-market portfolio rated "P-1" by
Moody's and "AAAm" by Standard & Poor's and restricted to investments
in obligations issued or guaranteed by the United States of America or
entities whose obligations are backed by the full faith and credit of
the United States of America and repurchase agreements collateralized
by such obligations;
(vii) units of a taxable money-market portfolio restricted to
investments which would be `Permitted Investments' under paragraphs
(i) through (vi) of this definition of `Permitted Investments'; and
(viii) other obligations or securities that are acceptable to
(and specified in writing by) Farmer Mac.
The foregoing is qualified to the extent that no instrument described above
shall be a Permitted Investment if such instrument evidences either (x) a right
to receive only interest payments with respect to the obligations underlying
such instrument or (y) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal Prepayment": Any payment (other than an Installment Payment) or
other recovery of principal on a Qualified Loan that is received in advance of
its scheduled Due Date.
"Principal Prepayment in Full": Any payment received on a Qualified Loan
that is in excess of the installment of principal and interest due thereon in an
amount sufficient to pay the entire principal balance of such Qualified Loan.
"Purchase Price": With respect to any Qualified Loan to be purchased on any
date pursuant to Section 3.07(g), an amount equal to the sum of (i) 100% of the
unpaid principal balance thereof as shown on the Schedule of Qualified Loans
less any principal payments made in respect of such Qualified Loan; (ii) the
unpaid accrued interest at the Net Mortgage Rate on the unpaid principal balance
thereof from the Due Date to which interest was last paid by the Borrower to the
next Due Date for such Qualified Loan; and (iii) if the date of purchase by the
Central Servicer occurs after the Qualified Loan has been securitized, any Yield
Maintenance Amount that would be payable under the terms of the related Mortgage
Note as if a Principal Prepayment in Full were made on the date of purchase by
the Central Servicer and such Yield Maintenance Amount were calculated based on
interest accruing at the Net Mortgage Rate less the sum of (x) the Guarantee Fee
Rate and (y) the Trustee Fee Rate (each of the Guarantee Fee Rate and the
Trustee Fee Rate having the meaning given such term in the applicable
securitization documents).
"Qualified Loan Receipts": With respect to any Collection Period, an amount
equal to (a) the sum of (i) the amount attributable to the Qualified Loans that
is on deposit in the Collection Account as of the close of business on the
following Remittance Date, including Borrower payments, and Liquidation Proceeds
and any amount deposited in the Collection Account after the preceding
Remittance Date in respect of defaulted Qualified Loans purchased by the Central
Servicer pursuant to Section 3.07(g) and (ii) any amount on deposit in the
Collection Account on the Due Date(s) in such Collection Period in respect of
the repurchase of any Qualified Loan repurchased by the seller thereof, reduced
by (b) the sum of (i) any Amount Held for Future Distribution and (ii) all
amounts permitted to be retained by the Central Servicer pursuant to Section
3.02 or withdrawn by the Central Servicer from the Collection Account in respect
of the Qualified Loans pursuant to clauses (ii) and (iii) of Section 3.04(a).
"Qualified Loans": As defined in the recitals.
"Recourse Obligation": A Mortgage Note that permits the mortgagee
thereunder to seek a deficiency judgment that is enforceable under applicable
state law.
"Remittance Account": The account or accounts established by Farmer Mac
into which the Central Servicer will make deposits on each Remittance Date.
"Remittance Date": As to any Collection Period, the 15th day (or if such
15th day is not a Business Day, the next succeeding Business Day) of the month
in which such Collection Period ends.
"REO Account": The account established by the Central Servicer in which it
shall segregate all funds collected and received (including REO Proceeds) and
record all funds paid through advances of the Central Servicer in connection
with the operation or sale of any REO Qualified Loans separate and apart from
its own funds and general assets and held in trust for the benefit of Farmer
Mac, which shall be an eligible account and may be located in the same account
as the Collection Account, but for which separate records (or entries) shall be
maintained. Except that, so long as Zions First National Bank is the Central
Servicer and maintains a financial strength rating of at least a D according to
Moody's Investor Service, the REO Account may be an account maintained on the
books and records of the Central Servicer. The balance of this account is to be
remitted to Farmer Mac by the Central Servicer or reimbursed by Farmer Mac to
the Central Servicer on a monthly basis.
"REO Proceeds": Proceeds received in respect of any REO Qualified Loan
(including, without limitation, proceeds from the rental and sale of the related
Mortgaged Property).
"REO Property": Any Mortgaged Property that has been acquired by Farmer Mac
(or an assignee of Farmer Mac and as to which Farmer Mac is the master servicer)
by foreclosure, deed-in-lieu of foreclosure or otherwise.
"REO Qualified Loan": Any Qualified Loan that is not a Liquidated Qualified
Loan and as to which the related Mortgaged Property is held by Farmer Mac (or an
assignee of Farmer Mac and as to which Farmer Mac is the master servicer).
"Schedule of Qualified Loans": The list of Qualified Loans the servicing of
which has been assigned by Farmer Mac to the Central Servicer on the applicable
Closing Date.
"Seller/Servicer Guide": The publication entitled "Federal Agricultural
Mortgage Corporation Seller/Servicer Guide," release dated 2004, as modified by
any guide update or bulletin or as replaced by any other publication of Farmer
Mac identified by Farmer Mac as a "Servicing Guide."
"Servicing Advance Account": The account established on the Central
Servicer's books and records by the Central Servicer in which it shall record
all funds paid through advances of the Central Servicer in connection with the
Qualified Loans. All recoveries of such advances from the Borrower or
reimbursements of such advances by Farmer Mac shall also be recorded to this
account. The account may be located in the same account as the Collection
Account, but as to which separate records (or entries) shall be maintained. The
balance of this account is to be remitted to Farmer Mac by the Central Servicer
or reimbursed by Farmer Mac to the Central Servicer on a monthly basis.
"Servicing Agreement": Any agreement directly between the Central Servicer
and a Subservicer for such Subservicer to provide services required to be
performed by Central Servicer. A Servicing Agreement does not relieve the
Central Servicer of any of its duties or obligations under this Agreement.
* "Servicing Fee Rate": [material omitted pursuant to a request for
confidential treatment and filed separately with the SEC]
"Servicing Officer": Any officer of the Central Servicer involved in, or
responsible for, the administration and servicing of the Qualified Loans whose
name and specimen signature appears on a list of servicing officers furnished to
Farmer Mac by the Central Servicer on the Closing Date, as such list may from
time to time be amended by delivery of written notice by an existing Servicing
Officer.
"Subservicers": Any person or entity with whom Central Servicer has a
contract to provide services or responsibilities on behalf of Central Servicer.
"Standard Hazard Insurance Policy": A standard fire insurance policy with
extended coverage, which shall provide standard coverage against loss by fire,
lightning, windstorm, hail, explosion, riot not attending a strike, civil
commotion, aircraft, vehicles, smoke, vandalism or malicious mischief.
"Yield Maintenance Amount": As to any Qualified Loan, the amount payable by
the Borrower thereunder in connection with a Principal Prepayment thereof
(whether voluntary or involuntary) or other acceleration by the legal holder
thereof upon a default by such Borrower thereunder, as specified in the Mortgage
Note.
ARTICLE II
MORTGAGE SERVICING DOCUMENTS
Section 2.01 Mortgage Servicing Documents. Not later than a reasonable time
after each Closing Date, the Central Servicer shall be in possession of the
Mortgage Servicing Documents with respect to each Qualified Loan. To the extent
such Mortgage Servicing Documents are not in the possession of the Central
Servicer, the Central Servicer will immediately notify Farmer Mac or its
designee in writing of the missing documents.
ARTICLE III
CENTRAL SERVICING OF QUALIFIED LOANS
Section 3.01. Central Servicer to Act as Servicer.
(a) Commencing with each Closing Date, the Central Servicer, acting alone
and/or through Field Servicers shall service the Qualified Loans (including REO
Qualified Loans) identified in the related Schedule of Qualified Loans in
conformity with this Agreement and the Seller/Servicer Guide as applied and
shall have full power and authority to do any and all things which it may deem
necessary or desirable in connection with such servicing.
(b) Without limiting the generality of the foregoing, the Central Servicer
is hereby authorized and empowered by Farmer Mac when the Central Servicer
believes it appropriate, in its best judgment, but consistent with and subject
to the terms of this Agreement, to execute and deliver on behalf of Farmer Mac,
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Qualified Loans and with respect to the Mortgaged Properties. Farmer Mac shall
cause the Central Servicer to be furnished from time to time with such Powers of
Attorney and other documents necessary or appropriate to enable the Central
Servicer to service and administer the Qualified Loans upon the request of the
Central Servicer. The Central Servicer shall provide Farmer Mac or its designee
with the form of any such Power(s) of Attorney or other document(s) (reasonably
acceptable to Farmer Mac) and Farmer Mac agrees to cause such Power(s) of
Attorney or other documents to be executed and returned promptly after hard copy
receipt thereof by Farmer Mac or its designee. Farmer Mac acknowledges and
understands that the Central Servicer may submit Power(s) of Attorney to Farmer
Mac or its designee on an annual basis for recording each year in accordance
with local law requirements, and Farmer Mac agrees to cause such Power(s) of
Attorney to be executed and returned as provided in the preceding sentence.
Section 3.02. Collection of Certain Qualified Loan Payments; Collection
Account.
(a) The Central Servicer shall, consistent with this Agreement and, to the
extent not inconsistent with the Seller/Servicer Guide, in accordance with
customary industry standards for agricultural mortgage loan servicing, make
reasonable efforts to collect all payments called for under the terms and
provisions of the Qualified Loans. The Central Servicer may in its discretion
waive, postpone, reschedule, modify or otherwise compromise the terms of payment
of any Qualified Loan so long as any such waiver, postponement, rescheduling,
modification or compromise shall not be inconsistent with this Agreement, or be
consented to in advance in writing by Farmer Mac. Except as provided in Section
3.14, no such arrangement shall alter or modify the amortization schedule of
such Qualified Loan for purposes of calculating any Delinquency Advance
Requirement in respect thereof without the prior written consent of Farmer Mac,
unless otherwise provided in the Seller/Servicer Guide or unless such
modification is required in the related promissory note. In addition, the
Central Servicer may in its discretion permit the substitution of an Eligible
Substitute Mortgaged Property for an Existing Mortgaged Property so long as the
Mortgage Note relating to the Qualified Loan that the Existing Mortgaged
Property secures is a Recourse Obligation. The Central Servicer may waive, in
whole or in part, the obligation of a Borrower to pay a Yield Maintenance Amount
only with the prior written consent of Farmer Mac.
(b) The Central Servicer shall establish and maintain a Collection Account
in its name for the benefit of Farmer Mac (and for which Farmer Mac shall bear
any costs and expenses incurred with respect to withdrawals with respect to
Remittance Date) in which the Central Servicer shall deposit as promptly as
practicable following receipt (but in no event later than one (1) Business Day
following receipt) except as otherwise specifically provided herein, the
following payments and collections received by it subsequent to the Closing Date
(other than in respect of principal and interest on the Qualified Loans due on
or before the Closing Date):
(i) All payments on account of principal on the Qualified Loans;
(ii) All payments on account of interest on the Qualified Loans
adjusted, in each case, to interest at the applicable Net Mortgage
Rate;
(iii) Net Liquidation Proceeds and Insurance Proceeds (other than
Insurance Proceeds to be applied to the restoration or repair of the
related Mortgaged Property or released to the Borrower in accordance
with the Central Servicer's normal servicing procedures) net of any
amounts permitted to be withheld by the Central Servicer as servicing
compensation;
(iv) All proceeds of any Qualified Loans purchased by the Central
Servicer or repurchased by the seller of such Qualified Loan;
(v) All Yield Maintenance Amounts paid by Borrowers;
(vi) Any deposit required by the second paragraph of Section
3.05(a); and
(vii) Any late charge or interest on the Qualified Loans accruing
at a default rate related to delinquent Installment Payments.
The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments or collections in the nature of assumption fees or
other service charges imposed upon Borrowers in connection with servicing the
Qualified Loans need not be deposited by the Central Servicer in the Collection
Account. In the event the Central Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.
(c) The Central Servicer shall cause the institution with which the
Collection Account is maintained to invest the funds in the Collection Account
attributable to the Qualified Loans in those Permitted Investments specified in
writing by Farmer Mac which shall mature in immediately available funds not
later than the day preceding the next Remittance Date and shall not be sold or
disposed of prior to maturity. All earnings and gains realized from any such
investments in the Collection Account shall be for the benefit of Farmer Mac.
The amount of any losses or expenses incurred in connection with the investment
of amounts in the Collection Account shall be deducted from the amount to be
distributed to Farmer Mac.
(d) The Central Servicer shall give notice to Farmer Mac of the location of
the Collection Account, and of any change in the location thereof, prior to the
use thereof.
Section 3.03. Payment of Taxes, Assessments and Other Items; Advances by
Central Servicer.
(a) The Central Servicer in accordance with the Seller/Servicer Guide shall
use its best efforts to cause the Borrowers to pay any taxes, assessments,
Standard Hazard Insurance Policy premiums, or other charges with respect to
which the failure to pay would result in a lien on the related Mortgaged
Property by operation of law or comparable items relating to the Mortgaged
Properties. In the event Borrowers have not paid such amounts and collecting
such payments is the responsibility of Field Servicers not under contract with
Central Servicer, Central Servicer shall notify Farmer Mac of such delinquency
and Farmer Mac shall then take any reasonable actions with respect to such Field
Servicers. Central Servicer will cooperate with Farmer Mac in resolving the
issues.
(b) The Central Servicer shall advance the payments referred to in
subsection (a) that are not timely paid by the Borrowers on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Central Servicer shall be required so to advance only (x) to the extent
necessary, in the good faith judgment of the Central Servicer, to protect Farmer
Mac against any loss and (y) so long as in the good faith judgment of the
Central Servicer, such advances ultimately would be recoverable from payments
(other than Installment Payments) made by the Borrower or from Liquidation
Proceeds. Farmer Mac agrees to reimburse the Central Servicer in the amount of
such advances promptly on a monthly basis, within 15 days of receipt of a
statement of such advances from the Central Servicer.
Section 3.04. Permitted Withdrawals from the Collection Account;
Maintenance of Accounting Records.
(a) The Central Servicer may, from time to time as provided herein, make
withdrawals from the Collection Account for the following purposes:
(i) to make distributions to Farmer Mac on each Remittance Date;
and
(ii) at any time to withdraw any amount deposited in the
Collection Account that was not required to be deposited therein;
(b) (i) The Central Servicer shall keep and maintain or cause to
be kept and maintained separate accounting, on a Qualified
Loan-by-Qualified Loan basis, for the purpose of providing Farmer Mac
or its designee with the information necessary for the preparation of
such reports as may be requested by Farmer Mac.
(ii) Unless Farmer Mac shall otherwise accept possession of the
records with respect to any Qualified Loan, the Central Servicer shall
maintain the records with respect to such Qualified Loan for five
years after the earliest of the date such loan: (x) is paid in full;
(y) becomes a Liquidated Qualified Loan, and (z) is no longer serviced
by the Central Servicer; except that, if at the time the Qualified
Loan is no longer serviced by the Central Servicer, Farmer Mac either
owns such Qualified Loan or is the guarantor of securities
representing interests in or which are backed by such Qualified Loan,
the Central Servicer shall deliver the related records to the
appropriate successor central servicer.
Section 3.05. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.
(a) The Central Servicer, in accordance with the Seller/Servicer Guide,
shall cause to be maintained for each Qualified Loan a Standard Hazard Insurance
Policy insuring against loss or damage to the insurable improvements included in
the Appraised Value in an amount not less than the value assigned to such
improvements in the related appraisal. The Central Servicer shall also cause to
be maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Qualified Loan, a Standard Hazard Insurance Policy in an
amount at least equal to the amount necessary to avoid the application of any
co-insurance clause contained in the related hazard insurance policy. Pursuant
to Section 3.02, any amounts collected by the Central Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or property thus acquired or amounts released to the
Borrower in accordance with the Central Servicer's normal servicing procedures)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.04. Farmer Mac shall reimburse the Central Services on a monthly
basis, within 15 days of receipt of an invoice for such costs, any direct
premium cost incurred by the Central Servicer in maintaining any such insurance.
No earthquake or other additional insurance is to be required of any Borrower or
maintained on property acquired in respect of a Qualified Loan other than
pursuant to such laws and regulations applicable to such Borrower as shall at
any time be in force and as shall require such additional insurance.
If the Central Servicer shall maintain a blanket policy issued by an
insurer having a Moody's financial strength rating of A3 or higher and insuring
against hazard losses on all of the Qualified Loans, it shall conclusively be
deemed to have satisfied its obligation as set forth in this Section 3.05(a).
Such policy may contain a deductible clause, in which case, if there shall not
have been maintained on the related Mortgaged Property or acquired property an
insurance policy complying with the first sentence of the first paragraph of
this Section 3.05(a), and there shall have been a loss that would have been
covered by such a policy had it been maintained, the Central Servicer shall be
required to deposit from its own funds into the Collection Account the amount
not otherwise payable under the blanket policy because of such deductible
clause.
(b) The Central Servicer shall obtain and maintain at its own
(non-reimbursable) expense and keep in full force and effect throughout the term
of this Agreement a blanket fidelity bond and an errors and omissions insurance
policy (which errors and omissions insurance policy shall provide coverage in
accordance with the Seller/Servicer Guide) covering the Central Servicer's
officers and employees and other persons acting on behalf of the Central
Servicer in connection with its activities under this Agreement, except that
such policies need not specifically insure against the acts of Field Servicers,
except to the extent the Field Servicer is receiving payments on Qualified
Loans, or executing documents under a power of attorney granted by the Central
Servicer. In the event that any such required bond or policy ceases to be in
effect, the Central Servicer shall obtain a comparable replacement bond or
policy from an issuer or insurer, as the case may be, providing such coverage as
shall satisfy the requirements set forth in the Seller/Servicer Guide. Coverage
of the Central Servicer under a policy or bond obtained by an Affiliate of the
Central Servicer and providing the coverage required by this Section 3.05(b)
shall satisfy the requirements of this Section 3.05(b).
Section 3.06. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
(a) When any Mortgaged Property is conveyed by the Borrower, the Central
Servicer may, but shall not be required to, enforce any due-on-sale or
due-on-encumbrance clause contained in any Mortgage Note or Mortgage,
in accordance with the provisions of such Mortgage Note or Mortgage
and in the best interests of Farmer Mac, and may approve the
assumption of the Mortgage Note by the transferee of the Mortgaged
Property; provided, however, that after giving due effect to any such
additional encumbrance, the loan-to-value ratio of the related
Qualified Loan is not in excess of the Loan-to-Value Ratio thereof as
of the Closing Date.
(b) Unless the Central Servicer has a Power of Attorney pursuant to which
the Central Servicer may execute the documents, in any case in which a
Mortgaged Property is to be conveyed to a Person by a Borrower, and
such Person is to enter into an assumption agreement or substitution
agreement or supplement to the Mortgage Note or Mortgage, which
requires the signature of Farmer Mac (or its designee), or if an
instrument of release to be signed by Farmer Mac (or its designee) is
required releasing the Borrower from liability on the Qualified Loan,
the Central Servicer shall deliver or cause to be delivered to Farmer
Mac (or its designee) for signature the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such
substitution agreement or supplement to the Mortgage Note or Mortgage
or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. If the Central Servicer has a relevant Power
of Attorney, the Central Servicer shall execute any required documents
in the event a Borrower is to convey a Mortgaged Property to a third
party which requires an assumption agreement, a substitution of
liability agreement, an instrument releasing the Borrower from
liability on the Qualified Loan, or a supplement to the Mortgage Note
or Mortgage, or any other instruments that are reasonable or necessary
to carry out the terms of the Mortgage Note or Mortgage or otherwise
to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such third party provided that:
(i) a Servicing Officer has examined and approved such documents as
to form and substance,
(ii) the execution and delivery thereof will not conflict with or
violate any terms of this Agreement;
(iii)subsequent to the closing of the transaction involving the
assumption or transfer (i) the Qualified Loan will continue to be
secured by a first mortgage lien pursuant to the terms of the
Mortgage and (ii) no material term (including, but not limited
to, the Mortgage Rate, the amount of any Installment Payment and
any term affecting the amount or timing of payment) of the
Qualified Loan will be altered and the term of the Qualified Loan
will not be increased; and
(iv) if the seller/transferor of the Mortgaged Property is to be
released from liability on the Qualified Loan, the Central
Servicer has evaluated the creditworthiness of the
buyer/transferee and has determined that if the buyer/transferee
were applying for the Qualified Loan being assumed, such loan
would be a Qualified Loan, and such release will not adversely
affect the collectibility of the Qualified Loan (based on the
Central Servicer's good faith determination).
If Farmer Mac (or its designee) is executing the documents, the Central Servicer
shall also deliver or cause to be delivered to Farmer Mac with the required
documents a letter explaining the nature of such documents and the reason or
reasons why Farmer Mac's (or its designee's) signature is required. With such
letter, the Central Servicer shall deliver to Farmer Mac a certificate of a
Servicing Officer in form reasonably satisfactory to Farmer Mac certifying to
items (i) through (iv) above. Upon receipt of and in reliance upon such
certificate, Farmer Mac (or its designee) shall execute any necessary
instruments for such assumption or substitution of liability.
Upon the closing of the transactions contemplated by such documents, the Central
Servicer shall cause the originals of the assumption agreement, the release (if
any), or the modification or supplement to the Mortgage Note or Mortgage to be
delivered to Farmer Mac or its assigns, designees or agents.
(c) The Central Servicer shall be entitled to approve a request from a
Borrower for the granting of an easement on the related Mortgaged Property in
favor of another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters if (A) it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Qualified Loan, that (i) the security for such Qualified Loan would
not be materially adversely affected thereby; (ii) the timely and full
collectibility of such Qualified Loan would not be adversely affected thereby;
and (iii) as a result of such easement, alteration, demolition or other similar
matter, the loan-to-value ratio would not be in excess of the Loan-to-Value
Ratio with respect to such Qualified Loan as of the Closing Date; and (B) it
follows the requirements and procedures therefor as set forth in the
Seller/Servicer Guide, if applicable.
Section 3.07. Realization Upon Defaulted Qualified Loans.
(a)
(i) Notwithstanding anything to the contrary in this Agreement,
the Central Servicer shall not, on behalf of Farmer Mac, obtain
title to a Mortgaged Property as a result of foreclosure or
otherwise, and shall not otherwise acquire possession of, or take
any other action with respect to, any Mortgaged Property, if, as
a result of any such action, Farmer Mac would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of, such Mortgaged Property within the
meaning of any Environmental Statute or a "discharger" or
"responsible party" thereunder, unless the Central Servicer has
prepared or caused to be prepared an Environmental Review Report
and obtained any consents in connection therewith as shall be
required by the Seller/Servicer Guide.
(ii) If the Environmental Review Report discloses any adverse
information with respect to any Mortgaged Property or if any
questions required to be answered in the Environmental Review
Report cannot be answered, the Central Servicer shall either (a)
recommend to Farmer Mac in writing that foreclosure, trustee's
sale or a deed-in-lieu of foreclosure should be delayed or
abandoned, stating the reasons for the Central Servicer's
conclusions and attaching a copy of Part I of the Environmental
Review Report or (b) recommend to Farmer Mac that a further
Environmental Review be conducted and, at the express written
request of Farmer Mac, conduct such further Environmental
Review(as such terms are defined in the Seller/Servicer Guide).
(iii)If the Environmental Review Report or Phase II of the
Environmental Review discloses the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Materials on, from or
affecting the Mortgaged Property and if the cost of eliminating
such Hazardous Materials exceeds the potential recovery upon
liquidation of the related Qualified Loan the Central Servicer
shall not allow such Qualified Loan to become an REO Qualified
Loan and shall take such action as it deems to be in the best
interest of Farmer Mac, including, if the Central Servicer deems
it so appropriate, and after making reasonable efforts to locate
a purchaser, the release of all or a portion of the lien of the
related Mortgage.
(b) The Central Servicer shall foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Qualified
Loans as come into and continue in default and as to which no arrangements
consistent with this Agreement and the Seller/Servicer Guide have been made for
collection of delinquent payments pursuant to Section 3.02. In connection with
such foreclosure or other conversion, and in connection with any restoration of
any Mortgaged Property after foreclosure or conversion and before disposal
thereof, the Central Servicer shall follow such practices and procedures as it
shall deem, in its best judgment, necessary or advisable in accordance with
applicable law and as shall be required or permitted by this Agreement and the
Seller/Servicer Guide. The foregoing is subject to the proviso that the Central
Servicer shall not be authorized to incur expenses in connection with any
foreclosure or conversion, or towards the restoration of any property, unless it
shall determine in good faith that such conversion, foreclosure and/or
restoration will increase the proceeds of liquidation of the Qualified Loan to
Farmer Mac after reimbursement for the expenses therefor. In the event that the
Central Servicer makes such a determination, it shall advance any Liquidation
Expenses from its own funds. Any Liquidation Expenses incurred by the Central
Servicer in accordance with the foregoing shall be reimbursable to the Central
Servicer promptly by Farmer Mac on a monthly basis.
(c) In the event that title to any Mortgaged Property is acquired for the
benefit of Farmer Mac (or Farmer Mac's assignee or designee) in foreclosure, by
delivery of a deed-in-lieu of foreclosure or otherwise, the named grantee of the
deed or certificate of sale shall be "US Bank National Association as
Custodian/Trustee" or such successor custodian/trustee as identified by Farmer
Mac. The Central Servicer, on behalf of Farmer Mac, shall use its best efforts
to dispose of any REO Property in a reasonably expeditious manner and otherwise
in accordance with any applicable Environmental Statute.
(d) The Central Servicer shall separately account for all funds collected
and received in connection with the operation of any REO Property.
(e) The Central Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with typical
industry standards, or as otherwise described in the Seller/Servicer Guide, and
for such period as the Central Servicer deems to be in the best interests of
Farmer Mac. In connection therewith, the Central Servicer shall remit to Farmer
Mac on a monthly basis, all revenues received by it with respect to the related
REO Property minus any amounts advanced by the Central Servicer for the proper
operation, management and maintenance of the related REO Property including:
(i) all insurance premiums due and payable in respect of any REO
Property;
(ii) all real estate taxes and assessments in respect of any REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs, expenses and management fees necessary to
maintain and operate or cause to be sold such REO Property.
To the extent that the amount advanced by the Central Servicer on a monthly
basis exceeds the amount of revenues received by the Central Servicer with
respect to the related REO properties on a monthly basis, Farmer Mac will
reimburse the Central Servicer for such outstanding advances on a monthly basis
within 15 days of receipt of a invoice for such advances from the Central
Servicer.
(f) The Central Servicer on behalf of Farmer Mac may contract with any
Independent contractor for the operation and management of any REO Property,
provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent with the terms of this Agreement;
(ii) any such contract shall require, or shall be administered to
require, that the Independent contractor remit all related revenues
(net of such costs and expenses) to the Central Servicer as soon as
practicable.
(iii) none of the provisions of this Section 3.07(e) relating to
any such contract or to actions taken through any such Independent
contractor shall be deemed to relieve the Central Servicer of any of
its duties and obligations to Farmer Mac with respect to the operation
and management of any such REO Property; and
(iv) the Central Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such
REO Property.
The Central Servicer shall be entitled to enter into any agreement with any
Independent contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Central Servicer by such
Independent contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Central Servicer (provided it acts as an
independent contractor with respect to properties held by other entities) or any
Independent contractor shall be entitled to a fee, based on the prevailing
market rate (determined after consultation with Farmer Mac), for the operation
and management of any REO Property. If such fee is not covered by gross revenues
from the related REO Property, the Central Servicer or other Independent
contractor shall be paid by Farmer Mac for all fees owed it. If Central Servicer
is acting as an Independent contractor as described in the paragraph, any fees
payable to Central Servicer as set forth in this paragraph shall be in addition
to those set forth in Section 3.09 herein.
(g) Notwithstanding anything in this Agreement to the contrary, the Central
Servicer shall have the right but not the obligation to purchase any Qualified
Loan from Farmer Mac at such time as such Qualified Loan comes into and
continues in default for a period of at least 90 days. If the Central Servicer
exercises its right so to purchase, the Central Servicer shall deposit the
Purchase Price with respect to such defaulted Qualified Loan into the Collection
Account not later than the Remittance Date next succeeding the Collection Period
during which the Central Servicer notifies Farmer Mac of its intention to
purchase such defaulted Qualified Loan.
(h) If applicable state law permits an action for a deficiency judgment,
the Central Servicer shall, exercising its good faith business judgment in the
same manner as it would if it were the owner of the related Qualified Loan, make
a recommendation to Farmer Mac as to whether to seek a deficiency judgment or
enforce any applicable additional security documents following foreclosure, and
shall follow Farmer Mac's direction in such matter.
(i) The Central Servicer shall neither be required to take nor to omit to
take any action in any case where such action or omission, in its good faith
business judgment, would cause it to be liable under an Environmental Statute.
If the Central Servicer determines that any action or omission would so subject
it to such liability, it shall promptly notify Farmer Mac.
Section 3.08. Farmer Mac to Cooperate; Release of Mortgage Files.
(a) Upon receipt of the payment in full of any Qualified Loan, or upon the
receipt by the Central Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Central Servicer shall
immediately notify Farmer Mac (or its designee) by a certification of a
Servicing Officer in form reasonably acceptable to Farmer Mac (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment required to be deposited in
the Collection Account pursuant to Section 3.02 have been or will be so
deposited) and shall request delivery to it of the Mortgage File. Upon receipt
of such certification and request, Farmer Mac shall cause the related Mortgage
File to be released to the Central Servicer. Farmer Mac shall cause the Mortgage
File to be released and such other documents or instruments in accordance with
this Section 3.08 to be delivered promptly (generally within 2 Business Days)
after receipt by Farmer Mac, or its designee, of the foregoing request. The
Central Servicer, acting pursuant to a Power of Attorney, shall prepare and
deliver any reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing or reassigning the lien of the Mortgage
prepared by the Central Servicer, together with the Mortgage Note and written
evidence of cancellation thereon. No expenses incurred in connection with
recording any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account.
(b) From time to time as is appropriate for the servicing or foreclosure of
any Qualified Loan, Farmer Mac or its designees, agents or assigns, shall cause
the related Mortgage File or any document therein to be delivered to the Central
Servicer upon Farmer Mac's receipt of a request for release (in form
satisfactory to Farmer Mac) from the Central Servicer requesting delivery of
such file or document. Farmer Mac shall cause such release promptly (generally
within 2 Business Days after receipt by Farmer Mac of the foregoing request for
release. The Central Servicer shall return each Mortgage File or any document
therein so released to Farmer Mac when the need therefor by the Central Servicer
no longer exists, unless (i) the Qualified Loan has been liquidated and the
Liquidation Proceeds relating to the Qualified Loan have been deposited in the
Collection Account or (ii) the Mortgage File or such document has been delivered
to any attorney, or to a public trustee or other public official as required by
law, for purposes of initiating or pursuing legal action or other proceedings
for the foreclosure of the Mortgaged Property either judicially or
nonjudicially, and the Central Servicer has delivered to Farmer Mac the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. In the event of the liquidation of
a Qualified Loan, Farmer Mac shall cause the appropriate request for release to
be delivered to the Central Servicer upon deposit of the related Liquidation
Proceeds in the Collection Account and the Central Servicer's request for
delivery of the request for release.
(c) If the Central Servicer is not executing such documents pursuant to a
Power of attorney, Farmer Mac or its designee shall execute and delivery to the
Central Servicer any court pleadings, requests for trustee's sale or other
documents prepared by the Central Servicer and necessary to the foreclosure or
Farmer Mac's sale, bankruptcy sale or work out settlement in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Borrower on the Mortgage Note, Mortgage or Additional Collateral Documents or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note, Mortgage or Additional Collateral Documents or
otherwise available at law or in equity. Together with such documents or
pleadings, the Central Servicer shall deliver to Farmer Mac, or its designee, a
certificate of a Servicing Officer requesting that such pleadings or documents
be caused to be executed by Farmer Mac or its designee and certifying as to the
reason such documents or pleadings are required and that the execution and
delivery thereof will not invalidate any insurance coverage under any required
insurance policy or invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.09. Servicing and Other Compensation.
(a) The Central Servicer, as compensation for its activities and
obligations hereunder, shall be entitled to withhold from each payment on
account of interest on a Qualified Loan the amount of interest calculated at the
Servicing Fee Rate to the extent, if any, that the interest component of the
payment received is in excess of interest calculated at the Net Mortgage Rate.
(b) The Central Servicer shall also be entitled to additional servicing
compensation in the form of assumption fees and other service charges (exclusive
of late charges and default interest) imposed upon Borrowers and collected from
Borrowers or recovered from related Liquidation Proceeds in connection with
servicing the Qualified Loans.
(c) In the event Farmer Mac imposes additional requirements on Central
Servicer, and the Central Servicer's costs of servicing the Qualified Loans
increase materially as a result of such additional requirements, the parties
agree to negotiate in good faith, an appropriate adjustment to the servicing
compensation to be received by the Central Servicer.
(d) The Central Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided in this
Agreement.
(ii) REO BASE FEES
(a) The following provisions regarding fees shall be effective as of
January 1, 2003.
(i) REO Servicing Fee. The amount payable to the Central Servicer
for REO servicing fees shall be 40 basis points per annum. The basis
for the REO servicing fee is the outstanding principal balance of the
related Qualified Loan at the time it becomes an REO Qualified Loan.
(ii) REO Disposition Fee. In the event that Central Servicer
disposes of the REO Property without a real estate agent, broker or
other third party commissioned salesperson, the amount payable to the
Central Servicer for REO disposition fees shall be 5 percent of the
actual sales price.
(iii) REO Disposition Broker's Fees. The REO Disposition Broker's
Fee is defined as the amount of the broker's fee for disposition of
REO properties sold. The amount payable for an REO Disposition
Broker's Fee shall be up to six percent (6%) of the sales price,
provided that Central Servicer may negotiate a fee to an outside
broker of less than six percent (6%) and retain the difference between
the fee actually paid and five percent (5%). The basis for the REO
Disposition Broker's Fees is the gross sales price for such REO
Property.
Section 3.10. Access to Certain Documentation Regarding the Qualified
Loans.
(a) Upon the prior written request of Farmer Mac received reasonably in
advance, the Central Servicer shall provide reasonable access to representatives
of Farmer Mac (including its assignee or designee) to documentation regarding
the Qualified Loans during normal business hours at the offices of the Central
Servicer designated by it. The Central Servicer shall permit such
representatives to photocopy any such documentation and shall provide equipment
for that purpose. The Central Servicer shall forward to Farmer Mac such reports
as may be reasonably required by Farmer Mac with respect to delinquent Qualified
Loans, which reports shall include information broken down by aging of
delinquency, specifying the Qualified Loans included in each category.
(b) The Central Servicer shall maintain or cause to be maintained adequate
books and records pertaining to each Qualified Loan serviced hereunder
including, but not limited to, copies of all Mortgage Servicing Documents and
any additional documentation customarily contained in an agricultural loan
servicing file. The Central Servicer agrees that such documents shall be
maintained until the earlier of (a) seven years after the maturity of the
Qualified Loan; and (b) the date such documentation is transferred to a
successor servicer that shall have assumed the Central Servicer's
responsibilities and obligations in accordance with this Agreement. Such
documentation may be in the form of microfilm, microfiche, ledger cards,
magnetic media or other "machine readable" records, or any combination thereof.
Section 3.11. Compliance Statements. The Central Servicer will timely
provide such assertion letters on compliance with Farmer Mac's servicing
requirements and such attestation reports as Farmer Mac may require to
reasonably complying with applicable laws and regulations.
Section 3.12. Submission of Independent Public Accountants' Reports.
(a) Within 120 days after the close of each fiscal year of the Central
Servicer, beginning with the fiscal year ending in 1996, the Central Servicer
shall deliver to Farmer Mac a copy of the report of Independent accountants
respecting the Central Servicer's, or the Central Servicer's parent
corporation's, consolidated financial statements for the preceding fiscal year.
Section 3.13. Inspection of the Mortgaged Properties. The Central Servicer
shall cause each Mortgaged Property to be physically inspected as required in
the Seller/Servicer Guide.
Section 3.14. Partial Releases. At the request of a Borrower, the Central
Servicer, to the extent not inconsistent with the provisions of the
Seller/Servicer Guide, may release a portion of any Mortgaged Property from the
lien of the related Mortgage. At the Borrower's request, the Central Servicer
will then reschedule the repayment of the remaining payments on the Qualified
Loan to provide for the amortization of the remaining principal balance of the
Qualified Loan, after taking into account the prepayment related to the partial
release, over the remaining term of the Qualified Loan. Any prepayments (and any
applicable Yield Maintenance Amounts) received by the Central Servicer pursuant
to a partial release shall be deposited in the Collection Account and the
prepayments shall be treated for all purposes of this Agreement as partial
prepayments on the Qualified Loans.
Section 3.15. Servicing Agreements. The Central Servicer in its sole
discretion may enter into or terminate Servicing Agreements with Subservicers or
Field Servicers who satisfy the requirements set forth in the Securities Guide
for a portion of the servicing of some or all of the Qualified Loans. References
in this Agreement to actions taken or to be taken by the Central Servicer in
servicing the Qualified Loans include actions taken or to be taken by a
Subservicer or Field Servicer with whom the Central Servicer has directly
contracted. A Servicing Agreement does not relieve the Central Servicer of any
of its duties or obligations under this Agreement. Nothing herein shall be
deemed to limit in any respect the discretion of the Central Servicer to modify
or enter into different Servicing Agreements; provided, however, that any such
amendments or different forms shall not violate the provisions of this Agreement
or the Securities Guide.
Section 3.16. No Contractual Relationship Between Field Servicer and Farmer
Mac.
(a) Any Servicing Agreement that may be entered into between a Field
Servicer or a Subservicer and the Central Servicer shall be deemed to be between
the Field Servicer or Subservicer and the Central Servicer alone. Farmer Mac
shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Central Servicer or any
Field Servicer or Subservicer under such Servicing Agreements except as set
forth in Section 3.19.
(b) If no Servicing Agreement is entered into with a Field Servicer, the
Central Servicer shall:
(i) direct and monitor the actions of the Field Servicer in
accordance with the provisions of this Agreement and the
Seller/Servicer Guide;
(ii) perform reasonable due diligence reviews of the Field
Service to ensure that the Field Servicer is performing all Field
Servicing obligations; and
(iii) shall report any deficiencies in Field Servicer performance
to Farmer Mac and cooperate with Farmer Mac in resolving such
deficiencies.
Section 3.17. Assumption or Termination of Field Servicing Agreements by
Farmer Mac.
(a) In the event that the Central Servicer shall for any reason no longer
be acting as such hereunder (including by reason of an Event of Default) and
Farmer Mac or its designee shall have assumed the duties of the Central
Servicer, Farmer Mac or such designee may, at Farmer Mac's sole discretion,
thereupon assume all of the rights and obligations of the Central Servicer under
each Servicing Agreement that may have been entered into. Each Servicing
Agreement shall contain provisions allowing Farmer Mac to rescind such agreement
without penalty in the event the Central Servicer shall no longer be acting as
such. Farmer Mac, its designee or the successor servicer for Farmer Mac shall be
deemed to have assumed all of the Central Servicer's interest therein and to
have replaced the Central Servicer as a party to each Servicing Agreement to the
same extent as if such agreement had been assigned to the assuming party, except
that the Central Servicer shall not thereby be relieved of any liability or
obligations under any Servicing Agreement which arose prior to the date each
Servicing Agreement is deemed so assigned and assumed.
(b) In the event that the Central Servicer is no longer acting as such, the
Central Servicer shall, upon request of Farmer Mac but at the expense of the
Central Servicer: (i) deliver to the assuming party all documents and records
held by the Central Servicer relating to each Servicing Agreement and the
Qualified Loans then being serviced and an accounting of amounts collected and
held by it; (ii) prepare, execute and deliver all documents and instruments and
take all actions reasonably requested by Farmer Mac or its designee to effect
the succession by Farmer Mac or its designee hereunder and the transfer of each
Servicing Agreement to the assuming party; and (iii) and otherwise use its best
efforts to effect the orderly and efficient succession hereunder and transfer of
each Servicing Agreement to the assuming party.
(c) Notwithstanding anything set forth herein to the contrary, if the
Central Servicer is also the Seller or Field Servicer of a Qualified Loan,
Central Servicer shall continue to act as the Field Servicer of such Qualified
Loan unless Farmer Mac has cause under the applicable agreements to terminate
such status, even if Central Servicer is no longer acting as Central Servicer.
ARTICLE IV
PAYMENTS TO FARMER MAC AND REPORTS
Section 4.01. Central Servicer's Report; Remittance Reconciliation Report;
Loan Servicing Report.
(a) Not later than the third Business Day of each calendar month, the
Central Servicer shall deliver to Farmer Mac and Farmer Mac's designee, a
Central Servicer's Report. Such Central Servicer's Report shall be in a
machine-readable format in accordance with the tape specifications and other
requirements set forth in Exhibit C hereto or in such other format or conform to
such other specifications or requirements as Farmer Mac and the Central Servicer
may agree.
(b) In addition to the information required under Section 4.01(a), the
Central Servicer's Report shall contain such information as is reasonably
requested by Farmer Mac, including, but not limited to the information described
below.
(i) a listing of all Installment Payments (with the interest
components thereof adjusted to interest at the applicable Net Mortgage
Rates) on the Qualified Loans due on or prior to the preceding Due
Date that were delinquent on the preceding Remittance Date;
(ii) Servicing Advances and REO Advances made by the Central
Servicer on behalf of Farmer Mac during the preceding month ;
(iii) the amount of late charges and penalty interest deposited
into the Collection Account during the preceding Collection Period;
(iv) an itemization of Delinquency Advances which were paid
(whether as the result of a payment by the related Borrower or of the
related Qualified Loan becoming a Liquidated Qualified Loan) during
the preceding Collection Period;
(v) an itemization of Servicing Advances and REO Advances which
were paid (whether as the result of a payment by the related Borrower
or of the related Qualified Loan becoming a Liquidated Qualified Loan)
during the preceding month;
(vi) a reconciliation of each custodial account (e.g., the
Collection Account, as requested and REO Account and Servicing Advance
Account);
(vii) a reconciliation of Scheduled Principal Balances to actual
balances of the Qualified Loans as requested; and
(viii) such other information as Farmer Mac may from time to time
request.
(c) On or before the tenth day of each calendar month (or if such tenth day
is not a Business Day, the next succeeding Business Day), the Central Servicer
will provide to Farmer Mac and its designee a Loan Servicing Report in form
reasonably prescribed by Farmer Mac, which Loan Servicing Report will provide
information (including proposed remedial action to be taken by the Central
Servicer) with respect to: Qualified Loans which have been identified by Farmer
Mac as "watch-listed" loans; delinquent Qualified Loans; Qualified Loans in
foreclosure; REO Qualified Loans; and bankruptcy proceedings involving
Borrowers.
(d) On a timely basis each month, the Central Servicer shall prepare, and
make available to Farmer Mac or its designee upon request, a remittance
reconciliation report.
Section 4.02. Remittance Account.
(a) On or before the Closing Date, Farmer Mac shall establish the
Remittance Account and provide the Central Servicer with information concerning
its location. The Central Servicer, on or before 10:00 A.M. Central Servicer's
local time on each Remittance Date, shall deposit in same day funds an amount
equal to the Qualified Loan Receipts for the preceding Collection Period.
Section 4.03. Reports of Foreclosures and Abandonment of Mortgaged
Property.
(a) Each year, beginning in 1997, the Central Servicer shall make the
reports of foreclosures and abandonments of any Mortgaged Property required by
Section 6050J of the Internal Revenue Code and provide copies of such reports to
Farmer Mac. In order to facilitate this reporting process, the Central Servicer,
on or before the date required by law, shall provide to the Internal Revenue
Service and Farmer Mac reports relating to each instance occurring during the
previous calendar year in which the Central Servicer (i) on behalf of Farmer Mac
acquires an interest in a Mortgaged Property through foreclosure or other
comparable conversion in full or partial satisfaction of a Qualified Loan, or
(ii) knows or has reason to believe that a Mortgaged Property has been
abandoned. The reports from the Central Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by such Section 6050J.
(b) Within 30 days after disposition of any REO Property, the Central
Servicer shall provide to Farmer Mac a statement of accounting for the related
Mortgaged Property and REO Accounts; including without limitation (i) each
category of deposit to, withdrawal from and investment earnings within such REO
Account, (ii) the loan number of the related Qualified Loan, (iii) the date such
Qualified Loan became a REO Qualified Loan by foreclosure, or by deed in lieu of
foreclosure or otherwise, (iv) the date of such disposition, (v) the gross sales
price and the related selling and other expenses, (vi) accrued interest,
calculated from the date of acquisition to the disposition date, and (vii) such
other information as Farmer Mac may reasonably request.
ARTICLE V
DEFAULT
Section 5.01. Events of Default. Event of Default, wherever used herein,
means one of the following events:
(i) the Central Servicer shall fail to make any deposit (A) to
the Remittance Account required by Section 4.02 or (B) to the
Collection Account required by Section 3.02(a) and such failure shall
continue unremedied for a period of one Business Day after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Central Servicer by Farmer Mac
(or Farmer Mac's designee); or
(ii) the Central Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Central Servicer contained in this Agreement and such failure
shall continue unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Central Servicer by Farmer Mac;
or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Central Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 90 days; or
(iv) the Central Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities, or similar proceedings
of, or relating to, the Central Servicer or of, or relating to, all or
substantially all of the property of the Central Servicer; or
(v) the Central Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Central Servicer shall fail at any time to meet Farmer
Mac's standards for eligible agricultural real estate mortgage central
servicers so that, in Farmer Mac's sole discretion, the Central
Servicer's ability to comply with this Agreement, or the
Seller/Servicer Guide within a reasonable period of time is adversely
affected; or
(vii) a court of competent jurisdiction shall have found that the
Central Servicer or any of its principal officers has committed an act
of civil fraud or the Central Servicer or any of its principal
officers shall have been convicted of any criminal act related to the
Central Servicer's lending or mortgage selling or servicing activities
or that, in Farmer Mac's sole discretion, adversely affects the
Central Servicer's reputation or Farmer Mac's reputation or interests.
If an Event of Default shall occur, then, and in each and every case, so
long as such Event of Default shall not have been remedied, Farmer Mac may, by
notice in writing to the Central Servicer, terminate all of the rights and
obligations of the Central Servicer under this Agreement and in and to the
Qualified Loans and the proceeds thereof; provided, that any liability of the
Central Servicer under this Agreement arising prior to such termination shall
survive such termination. On or after the receipt by the Central Servicer of
such written notice, all authority and power of the Central Servicer under this
Agreement shall pass to and be vested in Farmer Mac; and, without limitation,
Farmer Mac is hereby authorized and empowered to execute and deliver, on behalf
of the Central Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Qualified
Loans and related documents, or otherwise. If an Event of Default shall occur
and be continuing, the Central Servicer agrees to cooperate with Farmer Mac in
effecting the termination of the Central Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to Farmer Mac (or its
designee) for administration by it of all cash amounts which shall at the time
be on deposit in the Collection Account, the Servicing Advance Account and the
REO Account or thereafter be received with respect to the Qualified Loans, the
delivery to Farmer Mac (or its designee) of all documents and records requested
by it to enable it to assume the Central Servicer's obligations hereunder and
the reconciliation of all of the Qualified Loans, the Collection Account and the
REO Account and the Servicing Advance Account, all at the cost of the Central
Servicer. Farmer Mac or its designee shall pay over to the Central Servicer that
portion of any future proceeds of the Qualified Loans, which, if the Central
Servicer were at the time acting hereunder, it would be permitted to receive in
consideration of, or in reimbursement for, previous services performed, or
advances made, by it, net of any amounts owing from the Central Servicer to
Farmer Mac.
ARTICLE VI
MISCELLANEOUS
Section 6.01 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of Farmer Mac, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive or any rights, remedies, powers or privileges
provided by law.
Section 6.02 Counterparts. This Agreement may be executed in any number of
separate counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
Section 6.03 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, FEDERAL LAW. TO THE EXTENT FEDERAL LAW INCORPORATES STATE LAW,
THAT STATE LAW SHALL BE THE LAWS OF THE STATE OF NEW YORK.
Section 6.04 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given (a) when delivered by
hand, (b) two business days after it is mailed, certified or registered, return
receipt requested, with postage prepaid, (c) when sent by telex, telegram or
telecopy (with receipt confirmed) or (d) one business day after it is sent by
Express Mail, FedEx or other express delivery service, as follows:
(a) if to the Central Servicer, to it at:
Zions First National Bank
Zions Agricultural Finance
10 East South Temple, Ste. 1300
Salt Lake City, UT 84111-1923
Attention: Patrick Floyd 277-K
Telephone Number: (801) 524-8997
Facsimile Number (801) 594-8229
(b) if to Farmer Mac, to it at:
Federal Agricultural Mortgage Corporation
1133 Twenty-First St., N.W.
Suite 600
Washington, DC 20036
Attention: Vice President - General Counsel
Telecopy Number: 202-872-7713
or to such other persons, addresses and telecopier numbers as a party shall
specify as to itself by notice in writing to the other party.
Section 6.05 Survival and Termination of Agreement. All covenants,
agreements, representations and warranties made herein and in any certificate,
document or statement delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement until the later of the
receipt by Farmer Mac or its assignee of payment in full in respect of all
Qualified Loans and the satisfaction of all of the Mortgages.
Section 6.06 Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto with respect to its subject matter, and
supersedes all previous understandings, written or oral, with respect thereto.
This Agreement may only be amended by a written agreement between the parties.
Section 6.07 Waiver of Jury Trial. The Central Servicer and Farmer Mac
hereby irrevocably and unconditionally waive trial by jury in any legal action
or preceding relating to this Agreement.
Section 6.08 Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or thereof or affecting the validity, enforceability or
legality of any such provision in any other jurisdiction.
Section 6.09 Assignability.
(a) Except as herein contemplated, this Agreement shall not be assigned by
either of the parties hereto without the prior written consent of the other
party; provided, however, that Farmer Mac may assign this Agreement to any
affiliate of Farmer Mac or the holder of the Qualified Loans without prior
notice or consent of the Central Servicer.
(b) For purposes of this Section 6.09 only, it is agreed that a "Change in
Control" of a party shall be deemed an attempted assignment or transfer
prohibited by this Section. Change in Control shall mean
(i) consummation of a reorganization, merger, or consolidation
unless immediately after such reorganization, merger, or consolidation
more than 75 percent of outstanding shares of common stock of that
party or 75 percent of the combined voting power of the then
outstanding securities of that party is beneficially owned by the same
persons who owned such stock or securities immediately prior to the
reorganization, merger, or consolidation; or
(ii) the sale or other disposition of all or substantially all of
the assets of either party
(c) Except as stated in (a) above, any attempted assignment or transfer
contrary to the provisions of this Section 6.09 shall be null, void, and of no
force nor effect.
Section 6.10 Third Party Beneficiaries. Any assignee or designee of Farmer
Mac, including an assignee holding the Qualified Loans for the benefit of
holders of securities guaranteed by Farmer Mac, is a third party beneficiary to
this Agreement entitled to enforce any representations and warranties,
indemnities and obligations of the parties. Except as otherwise provided, the
parties to this Agreement hereby manifest their intent that no third party other
than such assignee or designee, including an assignee for the benefit of such
holders of securities, shall be deemed a third party beneficiary of this
Agreement, and specifically that the Borrowers are not third party beneficiaries
of this Agreement.
Section 6.11 Arbitration.
Arbitration Disclosures.
1. ARBITRATION IS FINAL AND BINDING ON THE PARTIES AND SUBJECT TO ONLY VERY
LIMITED REVIEW BY A COURT.
2. IN ARBITRATION THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.
3. DISCOVERY IN ARBITRATION IS MORE LIMITED THAN DISCOVERY IN COURT.
4. ARBITRATORS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING
IN THEIR AWARDS. THE RIGHT TO APPEAL OR SEEK MODIFICATION OF ARBITRATORS'
RULINGS IS VERY LIMITED.
5. A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS AFFILIATED
WITH THE BANKING INDUSTRY.
6. ARBITRATION WILL APPLY TO ALL DISPUTES BETWEEN THE PARTIES, NOT JUST THOSE
CONCERNING THIS AGREEMENT.
7. IF YOU HAVE QUESTIONS ABOUT ARBITRATION, CONSULT YOUR ATTORNEY OR THE
AMERICAN ARBITRATION ASSOCIATION.
(a) Any claim or controversy ("Dispute") between or among the parties and their
employees, agents, affiliates, and assigns, including, but not limited to,
Disputes arising out of or relating to this agreement, this arbitration
provision ("arbitration clause"), or any related agreements or instruments
relating hereto or delivered in connection herewith ("Related Agreements"),
and including, but not limited to, a Dispute based on or arising from an
alleged tort, shall at the request of any party be resolved by binding
arbitration in accordance with the applicable arbitration rules of the
American Arbitration Association (the "Administrator"). The provisions of
this arbitration clause shall survive any termination, amendment, or
expiration of this agreement or Related Agreements. The provisions of this
arbitration clause shall supersede any prior arbitration agreement between
or among the parties.
(b) The arbitration proceedings shall be conducted in a city mutually agreed by
the parties. Absent such an agreement, arbitration will be conducted in
Salt Lake City, Utah or such other place as may be determined by the
Administrator. The Administrator and the arbitrator(s) shall have the
authority to the extent practicable to take any action to require the
arbitration proceeding to be completed and the arbitrator(s)' award issued
within 150 days of the filing of the Dispute with the Administrator. The
arbitrator(s) shall have the authority to impose sanctions on any party
that fails to comply with time periods imposed by the Administrator or the
arbitrator(s), including the sanction of summarily dismissing any Dispute
or defense with prejudice. The arbitrator(s) shall have the authority to
resolve any Dispute regarding the terms of this agreement, this arbitration
clause, or Related Agreements, including any claim or controversy regarding
the arbitrability of any Dispute. All limitations periods applicable to any
Dispute or defense, whether by statute or agreement, shall apply to any
arbitration proceeding hereunder and the arbitrator(s) shall have the
authority to decide whether any Dispute or defense is barred by a
limitations period and, if so, to summarily enter an award dismissing any
Dispute or defense on that basis. The doctrines of compulsory counterclaim,
res judicata, and collateral estoppel shall apply to any arbitration
proceeding hereunder so that a party must state as a counterclaim in the
arbitration proceeding any claim or controversy which arises out of the
transaction or occurrence that is the subject matter of the Dispute. The
arbitrator(s) may in the arbitrator(s)' discretion and at the request of
any party: (1) consolidate in a single arbitration proceeding any other
claim arising out of the same transaction involving another party to that
transaction that is bound by an arbitration clause with Lender, such as
borrowers, guarantors, sureties, and owners of collateral; and (2)
consolidate or administer multiple arbitration claims or controversies as a
class action in accordance with the provisions of Rule 23 of the Federal
Rules of Civil Procedure.
(c) The arbitrator(s) shall be selected in accordance with the rules of the
Administrator from panels maintained by the Administrator. A single
arbitrator shall have expertise in the subject matter of the Dispute. Where
three arbitrators conduct an arbitration proceeding, the Dispute shall be
decided by a majority vote of the three arbitrators, at least one of whom
must have expertise in the subject matter of the Dispute and at least one
of whom must be a practicing attorney. The arbitrator(s) shall award to the
prevailing party recovery of all costs and fees (including attorneys' fees
and costs, arbitration administration fees and costs, and arbitrator(s)'
fees). The arbitrator(s), either during the pendency of the arbitration
proceeding or as part of the arbitration award, also may grant provisional
or ancillary remedies including but not limited to an award of injunctive
relief, foreclosure, sequestration, attachment, replevin, garnishment, or
the appointment of a receiver.
(d) Judgement upon an arbitration award may be entered in any court having
jurisdiction, subject to the following limitation: the arbitration award is
binding upon the parties only if the amount does not exceed Four Million
Dollars ($4,000,000.00); if the award exceeds that limit, either party may
demand the right to a court trial. Such a demand must be filed with the
Administrator within 30 days following the date of the arbitration award;
if such a demand is not made within that time period, the amount of the
arbitration award shall be binding. The computation of the total amount of
an arbitration award shall include amounts awarded for attorneys' fees and
costs, arbitration administration fees and costs, and arbitrator(s)' fees.
(e) No provision of this arbitration clause, nor the exercise of any rights
hereunder, shall limit the right of any party to: (1) judicially or
non-judicially foreclose against any real or personal property collateral
or other security; (2) exercise self-help remedies, including but not
limited to repossession and setoff rights; or (3) obtain from a court
having jurisdiction thereover any provisional or ancillary remedies
including but not limited to injunctive relief, foreclosure, sequestration,
attachment, replevin, garnishment, or the appointment of a receiver. Such
rights can be exercised at any time, before or after initiation of an
arbitration proceeding, except to the extent such action is contrary to the
arbitration award. The exercise of such rights shall not constitute a
waiver of the right to submit any Dispute to arbitration, and any claim or
controversy related to the exercise of such rights shall be a Dispute to be
resolved under the provisions of this arbitration clause. Any party may
initiate arbitration with the Administrator. If any party desires to
arbitrate a Dispute asserted against such party in a complaint,
counterclaim, cross-claim, or third-party complaint thereto, or in an
answer or other reply to any such pleading, such party must make an
appropriate motion to the trial court seeking to compel arbitration, which
motion must be filed with the court within 45 days of service of the
pleading, or amendment thereto, setting forth such Dispute. If arbitration
is compelled after commencement of litigation of a Dispute, the party
obtaining an order compelling arbitration shall commence arbitration and
pay the Administrator's filing fees and costs within 45 days of entry of
such order. Failure to do so shall constitute an agreement to proceed with
litigation and waiver of the right to arbitrate. In any arbitration
commenced by a consumer regarding a consumer Dispute, Lender shall pay one
half of the Administrator's filing fee, up to $250.
(f) Notwithstanding the applicability of any other law to this agreement, the
arbitration clause, or Related Agreements between or among the parties, the
Federal Arbitration Act, 9 U.S.C. Section 1 et seq., shall apply to the
construction and interpretation of this arbitration clause. If any
provision of this arbitration clause should be determined to be
unenforceable, all other provisions of this arbitration clause shall remain
in full force and effect.
IN WITNESS WHEREOF, FarmerMac and the Central Servicer have caused their
names to be signed hereto by their respective officers, duly authorized and
their respective corporate seals, duly attested, to be hereunto affixed, all as
of the first day of May, 2004.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
By: /s/ Michael P. Morris
----------------------------------------------
Name: Michael P. Morris
Title: Vice President - Agricultural Credit
ZIONS FIRST NATIONAL BANK,
Central Servicer
By: /s/ Patrick M. Floyd
-----------------------------
Name: Patrick M. Floyd
Title: Senior Vice President