Exhibit 10.16
LONG TERM STANDBY COMMITMENT TO PURCHASE
This Long Term Standby Commitment to Purchase No. TM1032 (Full-time Farm)
("Commitment") is made as of the first day of June, 2003 between the Federal
Agricultural Mortgage Corporation ("Farmer Mac"), a corporation organized and
existing under the laws of the United States of America and Farm Credit Bank of
Texas, an institution of the Farm Credit System, organized and existing under
the laws of the United States of America ("Seller").
WHEREAS, the Seller and Farmer Mac each desire to enter into this
Commitment, which permits the Seller, at its option, to sell Qualified Loans
within a defined portfolio of Qualified Loans to Farmer Mac from time to time
during the life of the defined portfolio and obligates Farmer Mac to purchase
such Qualified Loans, all under the terms and conditions set forth in this
Commitment;
WHEREAS, the Seller and Farmer Mac have identified a portfolio of Qualified
Loans that Farmer Mac will commit to purchase under this Commitment; and
WHEREAS, the Seller and Farmer Mac seek to create a procedure by which the
Seller may add additional Qualified Loans to such portfolio from time to time.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
set forth in this Commitment, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Farmer Mac and the
Seller agree as follows:
ARTICLE I
DEFINED TERMS
Whenever used in this Commitment, the following words and phrases have the
following meanings:
AMBS: Agricultural mortgage-backed securities issued by Farmer Mac.
Business Day: Any day other than a Saturday, Sunday or other day Farmer Mac
or the Seller is closed for business.
Charter Act: The Farmer Mac Charter Act in Title VIII of the Farm Credit
Act of 1971 (12 U.S.C. ss.ss.2279aa et. seq.), as amended and in effect from
time to time.
Commitment Term: From the Effective Date of this Commitment through and
including the date on which all Qualified Loans have been purchased or
securitized or deemed paid in full (through scheduled payments, prepayments,
liquidation or otherwise).
Delivery Date: The date on which the Seller sells a Qualified Loan in the
Portfolio to Farmer Mac, which, in the case of Tier I Qualified Loans, shall be
the date that Farmer Mac disburses the purchase proceeds in accordance with
Section 5.01, and, in the case of Tier II and Tier III Qualified Loans, shall be
the date of delivery of a Qualified Loan to Farmer Mac pursuant to Sections 5.02
and 5.03, respectively.
Effective Date: The date this Commitment is executed, except with respect
to Qualified Loans listed on a Qualified Loan Schedule delivered to Farmer Mac
by the Seller pursuant to Section 4.02(b), in which case the Effective Date
shall be the first day of the month following receipt of such Qualified Loan
Schedule by Farmer Mac.
Event of Default: An event described in Article VIII.
Governmental Body: Any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over the parties.
Person: An individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
Portfolio: The group of Qualified Loans, identified on the Qualified Loan
Schedule, delivered to Farmer Mac in connection with this Commitment and
incorporated herein by reference, which are subject to this Commitment and are
eligible to be sold to Farmer Mac under the terms and conditions set forth in
this Commitment.
Qualified Loan: Any mortgage loan (including a Qualified Participation
Interest) secured by agricultural real estate as defined in the Charter Act and
the Seller/Servicer Guide that meets the requirements of this Commitment on its
effective date and which is identified in the Portfolio or which is added to the
Portfolio as provided for herein.
Qualified Loan Schedule: A listing of Qualified Loans in the form of
Exhibit D attached hereto.
Qualified Participation Interest: An undivided interest in a mortgage loan,
including the related mortgage or deed of trust. The related mortgage loan must
be a Qualified Loan. The ratio of the principal balance of the Qualified
Participation Interest to the principal balance of the underlying loan will be
determined at the time the Qualified Participation Interest is placed into the
Portfolio. Prior to the time the initial Qualified Participation Interest
becomes a Tier I, Tier II or Tier III Qualified Loan, the Seller and Farmer Mac
will agree on the documentation to evidence the terms of the transfer to Farmer
Mac of such Qualified Participation Interest.
Seller/Servicer Agreement: The Farmer Mac Seller/Servicer Agreement dated
the same date hereof, between the Seller and Farmer Mac, as amended from time to
time.
Seller/Servicer Guide: The publication entitled "Farmer Mac Seller/Servicer
Guide 2002," release dated December 2002, as modified by any guide update or
bulletin or as replaced by any other publication of Farmer Mac.
Servicing Contract: The Master Central Servicing Agreement dated the same
date hereof between Farmer Mac, as Owner/Master Servicer, and the Seller, as
Central Servicer.
Standby Purchase Commitment Fee: The periodic amount due Farmer Mac from
the Seller for this Commitment. [material omitted pursuant to a request for
confidential treatment and filed separately with the SEC].
Solely for purposes of this definition of Standby Purchase Commitment Fee,
the term "unpaid principal balance of such Qualified Loan" shall mean the unpaid
principal balance of such Qualified Loan less any outstanding borrower stock
that may be retired and applied to the Qualified Loan, to the extent such
outstanding borrower stock is in excess of the minimum amount of such stock
required by federal law or regulation, calculated as of the first day of the
month prior to the month in which the Standby Purchase Commitment Fee is to be
paid."
Termination Event: With respect to either the Seller or Farmer Mac, (i) any
change in law or regulation (or any ruling or interpretation related to any
existing law or regulation) that, in the reasonable judgment of such party and
as supported by a written opinion of such party's retained counsel, renders the
transaction contemplated hereby void, unenforceable or illegal (in whole or in
part) as to such party or (ii) any change in the law, regulations or Financial
Accounting Standards adopted by the Financial Accounting Standards Board (or
other similar accounting rules) that, in the reasonable judgment of such party
and as supported by a written opinion of an independent counsel and/or
accounting firm acceptable to both parties, renders the transaction as
contemplated hereby unsound as to such party, it being understood by the parties
that the treatment of the transaction contemplated hereby as risk management and
the weighting of the Qualified Loans, other than Qualified Participation
Interests, in the 20% category for risk-based capital purposes by the Seller and
as off-balance sheet assets by Farmer Mac for capital requirements represents
the accounting treatment contemplated by the parties.
Tier I Qualified Loan: Any Qualified Loan that is delinquent in payment for
four or more consecutive months or otherwise in material non-monetary default,
except as otherwise provided in Article V herein, and with respect to which any
applicable borrower rights have been exercised or waived by the borrower, except
those related to the borrower's first rights of refusal to purchase/lease
acquired property under the Farm Credit Act of 1971, as amended. A Tier I
Qualified Loan that was a Qualified Loan on the date it was added to the
Portfolio will be a Qualified Loan for purposes of this Commitment unless the
terms of such loan are changed by the Seller without the consent of Farmer Mac.
The Seller's acquiescence or consent to the entry of a bankruptcy or other court
ordered or approved restructuring or a restructuring in accordance with the Farm
Credit Act shall not constitute such a change requiring the consent of Farmer
Mac.
Tier I Qualified Participation Interest: A first right participation
interest in an otherwise Qualified Loan that has a loan-to-value ratio in excess
of Farmer Mac's credit underwriting standards if the first right participation
interest is acceptable to Farmer Mac, in its sole discretion. A Tier I Qualified
Participation Interest, if transferred to Farmer Mac, will have first priority
in payment and liquidation to the interest not transferred to Farmer Mac. The
documentation evidencing the transfer of a Tier I Qualified Participation
Interest will be agreed upon between the Seller and Farmer Mac at the time the
initial Tier I Qualified Participation Interest is transferred to Farmer Mac.
The ratio of the principal balance of the Tier I Qualified Participation
Interest to the Participation Interest that is not a Tier I Qualified
Participation Interest will be determined at the time the Tier I Qualified
Participation Interest is placed into the Portfolio.
Tier II Qualified Loan: Any Qualified Loan that complies, on the date of
its sale to Farmer Mac, with the standards set forth in the Seller/Servicer
Guide, as amended from time to time.
Tier III Qualified Loan: Any Qualified Loan that is less than four months
delinquent but does not comply, on the date of its sale to Farmer Mac, with the
standards set forth in the Seller/Servicer Guide, as amended from time to time.
ARTICLE II
GENERAL COVENANTS OF THE SELLER
Section 2.01. Performance of Obligations. The Seller hereby covenants to
keep and perform faithfully all of the covenants and undertakings contained
herein.
Section 2.02. Good Standing. The Seller hereby covenants to maintain its
current condition of good standing under all applicable laws and regulations and
to commit no act that would alter the status of the Seller as represented in
Section 6.03 hereof.
Section 2.03. Further Assurances. The Seller shall, subject to applicable
confidentiality requirements, execute and deliver or cause to be executed and
delivered to Farmer Mac now, and at any reasonable time or times hereafter at
the request of Farmer Mac, all documents, instruments, letters of direction,
notices, reports, acceptances, receipts, consents, waivers, affidavits and
certificates as Farmer Mac may reasonably request, in form satisfactory to
Farmer Mac in order to consummate fully all of the transactions contemplated
hereunder.
Section 2.04. Sale, Transfer or Pledge of Portfolio or Servicing Rights.
(a) During the Commitment Term, except to the extent provided in the Farm Credit
Act of 1971, as amended, and subject to Section 10.14 hereof, the Seller shall
not pledge or hypothecate all or any portion of the Portfolio or any of the
rights associated with the Portfolio and the Qualified Loans (including rights
to service the Qualified Loans or rights to servicing fee income). The Seller
may sell or transfer the Portfolio or the servicing rights associated with the
Qualified Loans only under the terms set forth below.
(i) Farmer Mac will approve the sale or transfer of the Portfolio
only if all of the Qualified Loans in the Portfolio are sold or
transferred to a purchaser or transferee that is reasonably acceptable
to Farmer Mac and that agrees to assume all of the Seller's
obligations hereunder pursuant to a written agreement among the
Seller, Farmer Mac and such successor party. If the Seller transfers
or sells the Portfolio but retains the right to service the Qualified
Loans, the written agreement among the Seller, Farmer Mac and the
successor party shall also provide that the payment of the Standby
Purchase Commitment Fee shall remain a corporate obligation of the
Seller.
(ii) Farmer Mac will approve the sale of the servicing rights
associated with the Qualified Loans only if such servicing is sold (a)
with respect to all Qualified Loans and (b) to one successor servicer
reasonably acceptable to Farmer Mac that agrees, pursuant to a written
agreement among the Seller, Farmer Mac and such successor servicer, to
the obligations of the Seller set forth herein.
(iii) Any sale or transfer of the Portfolio or the rights
associated with the Portfolio will be subject to a transfer fee of
[material omitted pursuant to a request for confidential treatment and
filed separately with the SEC].
(iv) Upon such transfer, the Seller shall have no further right
to include additional Qualified Loans in the Portfolio.
(b) In the event of a merger, consolidation, formation of service entity,
or other corporate reorganization involving the Seller and any Farm Credit
Institution or other entity with which the Seller shall remain or become part of
or affiliated with, then no servicing transfer fee shall be required and, to the
extent such affiliated entity by written agreement assumes all of Seller's
responsibilities under this Commitment, neither will Farmer Mac's approval of
such transfer be required.
(c) In addition to the provisions in the Servicing Contract concerning the
assignment of the Seller's servicing rights and obligations, the Seller, except
to the extent provided in this Commitment, shall not pledge or hypothecate all
or any portion of the remainder of its Farmer Mac mortgage servicing portfolio
without providing evidence acceptable to Farmer Mac of the acknowledgement of
any third party who will have rights therein of Farmer Mac's entitlement to all
or a portion of the value of such servicing portfolio in an Event of Default
hereunder.
Section 2.05. Indemnification. The Seller shall indemnify and hold Farmer
Mac harmless from and against any and all losses, claims, damages, liabilities
and expenses (collectively, "Losses") to which Farmer Mac may become subject
insofar as such Losses arise out of or are based upon (i) the Seller's
performance of its servicing obligations set forth in this Commitment with
respect to the Qualified Loans in the Portfolio prior to sale of the Qualified
Loans to Farmer Mac or (ii) a final adjudication of, including any settlement
of, any outstanding litigation described in Exhibit C attached hereto. This
covenant to indemnify and hold harmless shall survive the sale of the Qualified
Loans to Farmer Mac.
Section 2.06. Original Principal Balance. Notwithstanding any other
provision of this Commitment, the Seller shall not deliver a Tier II or Tier III
Qualified Loan to Farmer Mac for sale if the original principal balance of such
Qualified Loan does not meet Farmer Mac's maximum dollar purchase limitations,
in effect as of the Delivery Date, for the purchase of similar Qualified Loans,
determined in accordance with the Charter Act.
Section 2.07. Seller/Servicer Status. The Seller shall maintain its status
as a Farmer Mac approved seller and servicer under the Seller/Servicer
Agreement.
ARTICLE III
COVENANTS OF FARMER MAC
Section 3.01. Commitment to Purchase Qualified Loans. Farmer Mac hereby
covenants to purchase the Qualified Loans in the Portfolio in accordance with
the provisions of this Commitment.
Section 3.02. Performance of Obligations. Farmer Mac hereby covenants to
keep and perform faithfully all of the covenants and undertakings contained
herein.
Section 3.03. Good Standing. Farmer Mac hereby covenants to maintain its
current condition of good standing under all applicable laws and regulations and
to commit no act that would alter the status of Farmer Mac as represented in
Section 7.02 hereof.
ARTICLE IV
PRE-DELIVERY OBLIGATIONS OF THE SELLER
Section 4.01. Payment of Standby Purchase Commitment Fee. With respect to
each Qualified Loan, by the seventh calendar day of each month, beginning in
July, 2003 (or the preceding Business Day if the seventh calendar day is not a
Business Day) through and including the month in which the Commitment Term
expires, the Seller shall pay to Farmer Mac in immediately available funds, by
12:00 noon, Eastern time, on such seventh day, an amount sufficient to pay the
Standby Purchase Commitment Fee. If such funds are not received by Farmer Mac by
12:00 noon, Eastern time, on such seventh day, the Seller shall pay interest to
Farmer Mac on such overdue amount at a rate equal to the federal funds rate.
Section 4.02. Delivery of Qualified Loan Information. (a) Not later than
the tenth day of the month following the date of execution of this Commitment,
the Seller shall deliver to Farmer Mac a completed Qualified Loan Schedule for
the Qualified Loans in the Portfolio. Such Qualified Loan Schedule shall be
delivered in magnetic media or electronic format acceptable to Farmer Mac.
(b) At any time prior to December 31, 2006, the Seller may deliver to
Farmer Mac a completed Qualified Loan Schedule for any additional Qualified
Loans that the Seller wishes to add to the Portfolio. The Seller shall follow
the same identification, delivery and fee requirements for Qualified Loans that
are added to the Portfolio that are specified in Section 4.02 of this Commitment
for completion of the initial Qualified Loan Schedule. Such Qualified Loans
shall become part of the Portfolio, effective on the first day of the month
following the month of receipt by Farmer Mac of such additional Qualified Loan
Schedule. Any Standby Purchase Commitment Fee with respect to such additional
Qualified Loan shall be due and payable beginning in the month following the
month in which the Effective Date with respect to such additional Qualified Loan
occurs. The Seller may not remove a Qualified Loan from the Portfolio without
the prior written consent of Farmer Mac which consent shall not be unreasonably
withheld; except, that, if the Seller refinances, restructures or modifies any
Qualified Loan without the written consent of Farmer Mac (which consent shall
not be unreasonably withheld and shall not be required in loan restructurings
provided for under the borrower rights provisions of the Farm Credit Act),
Farmer Mac shall not be obligated to purchase such restructured or modified
Qualified Loan. If a Qualified Loan is removed from the Portfolio through a
refinancing by the Seller (either with or without the inclusion of additional
loan funds), the Seller agrees to add such refinanced Qualified Loan back to the
Portfolio, or include such refinanced Qualified Loan in a portfolio under a
subsequent Long Term Standby Commitment to Purchase, within 3 months of the
closing of the refinanced Qualified Loan, if such addition or inclusion is
permissible under the operative documents.
Section 4.03. Administration and Servicing of Qualified Loans. (a) The
Seller will service the Qualified Loans in the Portfolio using commercially
reasonable practices no less stringent than those applicable to agricultural
mortgage loans serviced under the direction of the Seller other than the
Qualified Loans. The Seller may conduct such servicing through facilities of
agents or independent contractors but shall not thereby be released from any of
its duties or responsibilities hereunder.
(b) The Seller must maintain or provide for the maintenance of an
individual mortgage file for each Qualified Loan in the Portfolio. Each mortgage
file must include any papers or records that are required by the Seller/Servicer
Agreement (except assignments of mortgages to Farmer Mac). The Seller will
provide for the physical segregation of the mortgage notes relating to the
Qualified Loans in the Portfolio and hold such mortgage notes in a secure
environment in accordance with generally accepted industry standards for the
custody of mortgage loan documentation. The Seller will maintain or provide for
the maintenance of each mortgage note in a fire resistant vault, drawer or other
suitable depository. The Seller is responsible for maintaining accurate
accounting and borrower payment records, as required in the Seller/Servicer
Agreement.
(c) Upon reasonable notice and at any reasonable time during the Commitment
Term and subject to applicable confidentiality requirements, Farmer Mac has the
right to examine any and all books and records that pertain to the Qualified
Loans, any and all accounting reports associated with the Qualified Loans and
borrower remittances, and any other reports and documentation that Farmer Mac
considers necessary to assure that (i) the Qualified Loans meet the terms and
conditions set forth herein and (ii) the Seller is servicing the Qualified Loans
in compliance with the Seller/Servicer Agreement and this Commitment. Seller
agrees to forward such books, records or reports (or copies thereof) to Farmer
Mac upon request by Farmer Mac.
(d) The Seller shall service delinquent Qualified Loans using commercially
reasonable practices no less stringent than those it uses in servicing other
delinquent agricultural real estate mortgage loans, including timely initiation
of loss mitigation efforts. However, the Seller must sell the delinquent
Qualified Loan to Farmer Mac prior to completion of the foreclosure process (or
other comparable conversion) in accordance with Section 5.01 hereof. If title to
the underlying mortgaged property has transferred to the Seller and no right of
rescission by the borrower exists, the related Qualified Loan is no longer
eligible for sale to Farmer Mac and should be reported as a "payoff" in
accordance with the requirements of Section 4.04.
Section 4.04 Reporting Requirements. Not later than the last Business Day
of the month in which a Qualified Loan is added to the Portfolio, the Seller
shall provide a loan setup file in a machine-readable format in accordance with
the tape specifications set forth in Exhibit E attached hereto. Thereafter and
until the Qualified Loan is sold to Farmer Mac or otherwise removed from the
Portfolio, the Seller shall provide not later than the seventh calendar day of
each month a monthly loan activity report (based on actual payment activity) in
a machine-readable format in accordance with the tape specifications set forth
in Exhibit F attached hereto.
ARTICLE V
DELIVERY OF AND PAYMENT FOR QUALIFIED LOANS
Section 5.01. Tier I Qualified Loans. (a) Subject to the requirements set
forth in this Commitment, the Seller may elect to sell to Farmer Mac, in
exchange for cash, any Tier I Qualified Loan. Notwithstanding the foregoing,
prior to transfer of ownership of a mortgaged property from the borrower to the
Seller as a result of loss mitigation efforts, a foreclosure proceeding or other
comparable conversion, the Seller shall sell to Farmer Mac the related Tier I
Qualified Loan regardless of the amount of time such Qualified Loan has been
delinquent.
(b) The purchase price for any Tier I Qualified Loan shall equal the
unpaid principal balance of the Qualified Loan less any outstanding
borrower stock that may be retired and applied to the Qualified Loan, as
reported to Farmer Mac in accordance with Section 4.04, in the month in
which the Seller elects to sell such Qualified Loan. The purchase price for
a Tier I Qualified Loan shall not include accrued or delinquent interest or
foreclosure or related costs or expenses. The purchase proceeds, as well as
any reimbursement of a portion of the Standby Purchase Fee, as described in
Section 5.04, will be disbursed by wire transfer to the Seller on the first
Business Day of the month following Farmer Mac's confirmation of receipt of
a completed Purchase Request and as described in subsection (d) below.
(c) Liquidation proceeds or other payments with respect to such Tier I
Qualified Loan shall be applied as follows:
(i) To the Seller, unpaid interest accruing at the note rate on
the Qualified Loan while held by the Seller, but not to
exceed interest accruing through 6 months following the
first delinquency.
(ii) To the party making protective advances and paying
liquidation expenses and REO expenses, reimbursement for
such advances and expenses.
(iii)To Farmer Mac, unpaid interest accruing at the note rate
less the applicable servicing fee rate on the Qualified Loan
from the date purchased by Farmer Mac until the date of
liquidation.
(iv) To Farmer Mac, the outstanding principal amount of the
Qualified Loan.
(v) To the Seller, unpaid interest accruing at the note rate on
the Tier I Qualified Loan from the date through which the
Seller was paid for the interest by Farmer Mac until the
date Farmer Mac purchased the Tier I Qualified Loan.
(vi) To the servicer, unpaid servicing fees accrued during the
period Farmer Mac owned the Tier I Qualified Loan.
(vii)To the Seller, default interest accruing while the Seller
held the Tier I Qualified Loan.
(viii) To the Seller, prepayment penalties required to be paid by
the Seller with respect to such Qualified Loan, but only to
the extent such prepayment penalties exceed default interest
paid to the Seller under clause (vii) above.
(ix) To Farmer Mac, the remainder, if any.
(d) No later than the seventh Business Day of any month in which the
Seller elects to sell Tier I Qualified Loans to Farmer Mac, the Seller will
do the following:
(i) deliver a Purchase Request and Certification electronically
and in hard copy, in the form of Exhibit B attached hereto, listing
the Farmer Mac loan number and unpaid principal balance of the
Qualified Loans that have become Tier I Qualified Loans that the
Seller wishes to sell to Farmer Mac either as whole loans or
participation interests. The Purchase Request and Certification shall
be delivered to Farmer Mac via facsimile transmission (number
202-872-7713).
(ii) prepare and deliver all of the mortgage delivery
documentation required pursuant to Chapter 302 of the Seller/Servicer
Guide to Farmer Mac in accordance with the Seller/Servicer Guide. Only
Farmer Mac's loan records as reflective of the reports submitted by
the Seller under Section 4.04 hereof shall determine the proceeds that
the Seller is entitled to receive for Farmer Mac's purchase of Tier I
Qualified Loans.
(iii) pay directly to the custodian designated by Farmer Mac any
custodial fees to be incurred in connection with the filing and
maintenance of the mortgage documents by such custodian.
(e) As of its Delivery Date, a Tier I Qualified Loan sold to Farmer Mac (or
as to which a participation is sold to Farmer Mac) shall no longer be subject to
the terms of this Commitment and shall be serviced by the Seller in accordance
with the Servicing Contract.
(f) The Seller and Farmer Mac agree that, if a Tier I Qualified Loan sold
to Farmer Mac subsequently becomes current in payments under its original terms
without being restructured, the Seller will repurchase from Farmer Mac and
Farmer Mac will sell to the Seller such Qualified Loan for a price equal to the
unpaid principal balance plus any accrued interest on such Qualified Loan. Such
Qualified Loan will thereafter be listed on the applicable Qualified Loan
Schedule and be a part of the Portfolio subject to this Commitment.
Section 5.02. Tier II Qualified Loans. (a) Subject to the requirements set
forth in this Commitment, the Seller may elect to sell to Farmer Mac, from time
to time, at any time during the Commitment Term, in exchange for cash or AMBS,
some or all Tier II Qualified Loans, subject to Farmer Mac's then-current
requirements for its Cash Window Program for cash purchases or its AMBS Swap
Program, and any other terms mutually agreed between the parties at the time of
sale.
(i) Tier II Qualified Loans sold to Farmer Mac for cash pursuant to
the terms of this section shall be sold at the price agreed by Farmer Mac
and the Seller at the time of sale (less any outstanding borrower stock
that may be retired and applied to the Qualified Loan), based on Farmer
Mac's then-required net yield for cash window purchases of the same product
type as such Qualified Loans, and without adjusting for any changes in the
credit relating to such Qualified Loans.
(ii) Where Tier II Qualified Loans are exchanged with Farmer Mac for
AMBS, the AMBS shall have an initial principal amount equal to the
then-current principal balance of the swapped Tier II Qualified Loans and
shall bear interest initially at a rate equal to the weighted average of
the then-current interest rates of such Qualified Loans, less the sum of
the applicable Guarantee Fee, the Trustee Fee, and the related servicing
fee under the Servicing Contract. The guarantee fee to be charged to the
Seller for any Tier II Qualified Loan sold to Farmer Mac in exchange for
AMBS shall be equal to what had been the Standby Purchase Commitment Fee
with respect to such Qualified Loan, except that the [material omitted
pursuant to a request for confidential treatment and filed separately with
the SEC] fee provided for in the last sentence of the definition of Standby
Purchase Commitment Fee shall not be included in such guarantee fee. If the
Seller requests the AMBS be registered with the Securities and Exchange
Commission (the "SEC"), the Seller shall pay any costs associated with such
registration, including any legal, accounting and SEC fees.
(b) Prior to the removal of a Tier II Qualified Loan from the Portfolio,
the Seller will contact Farmer Mac to enter into a mandatory commitment to sell
such Tier II Qualified Loan to Farmer Mac under the standard mortgage delivery
and sale requirements set forth in the Seller/Servicer Guide. In the month in
which the Seller elects to sell Tier II Qualified Loans to Farmer Mac, the
Seller will report, in accordance with the loan level reporting requirements set
forth in Section 4.04, the removal of the Qualified Loan from this Commitment by
reporting a zero unpaid principal balance.
(c) The Seller shall sell Tier II Qualified Loans pursuant to subparagraph
(a) in the case of a cash purchase, in the month in which the Qualified Loan is
removed from this Commitment and, in the case of an AMBS purchase, in the next
month after the month in which the Qualified Loan is removed from this
Commitment.
(d) No later than the last Business Day of the month of the sale to Farmer
Mac of Tier II Qualified Loans in exchange for AMBS, the Seller shall supply a
Loan Setup File (as defined in the Servicing Contract) including each such Tier
II Qualified Loan.
(e) As of its Delivery Date, a Tier II Qualified Loan sold to Farmer Mac
(or as to which a participation is sold to Farmer Mac) shall no longer be
subject to the terms of this Commitment and shall be serviced by the Seller in
accordance with the standard servicing provisions of the Servicing Contract.
Section 5.03. Tier III Qualified Loans. (a) Subject to the requirements set
forth in this Commitment and those negotiated at the time of sale, the Seller
may make a one-time election to sell to Farmer Mac, in exchange for cash or
AMBS, all of the Tier III Qualified Loans; provided, however, the Seller must
concurrently sell all Tier I and Tier II Qualified Loans to Farmer Mac in
accordance with the terms set forth herein for such sales.
(b) The Seller must contact Farmer Mac if at any time during the Commitment
Term it wishes to enter into a one-time mandatory delivery commitment to sell
all of the Tier III Qualified Loans to Farmer Mac.
(i) Tier III Qualified Loans sold to Farmer Mac for cash pursuant to
the terms of this section shall be sold at the price agreed by Farmer Mac
and the Seller at the time of sale (less any outstanding borrower stock
that may be retired and applied to the Qualified Loan), based on pricing of
AMBS collateralized by such Tier III Qualified Loans, and without adjusting
for any changes in the credit relating to such Qualified Loans.
(ii) Where Tier III Qualified Loans are exchanged with Farmer Mac for
AMBS, the AMBS shall have an initial principal amount equal to the
then-current principal balance of the swapped Tier III Qualified Loans and
shall bear interest initially at a rate equal to the weighted average of
the then-current interest rates of such Qualified Loans, less the sum of
the applicable Guarantee Fee, the Trustee Fee, and the related servicing
fee under the Servicing Contract. The guarantee fee to be charged to the
Seller for any Tier III Qualified Loan sold to Farmer Mac in exchange for
AMBS shall be equal to what had been the Standby Purchase Commitment Fee
with respect to such Qualified Loan, except that the 5 basis point fee
provided for in the last sentence of the definition of Standby Purchase
Commitment Fee shall not be included in such guarantee fee. If the Seller
requests the AMBS be registered with the Securities and Exchange Commission
(the "SEC"), the Seller shall pay any costs associated with such
registration, including any legal, accounting and SEC fees.
(c) In the event the Seller elects to sell all Tier III Qualified Loans to
Farmer Mac, Farmer Mac will provide instructions to the Seller regarding the
required reporting relating to such Qualified Loans prior to their delivery to
Farmer Mac.
(d) As of its Delivery Date, a Tier III Qualified Loan sold to Farmer Mac
(or as to which a participation is sold to Farmer Mac) shall no longer be
subject to the terms of this Commitment and shall be serviced by the Seller in
accordance with the standard servicing provisions of the Servicing Contract.
Section 5.04. Participation Interests. (a) Upon election by the Seller to
deliver a Tier II or Tier III Qualified Loan to Farmer Mac pursuant of this
Commitment, Farmer Mac shall be entitled to perform such due diligence as to
allow it to determine the value of the related mortgaged property at the time of
purchase by Farmer Mac. In the event that (i) Farmer Mac determines that the
outstanding principal balance of such Qualified Loan exceeds the maximum
loan-to-value ratio for eligibility for the appropriate Farmer Mac program at
the time of purchase by Farmer Mac and (ii) if applicable, such Qualified Loan
is not insured or guaranteed by a qualified mortgage insurer approved by Farmer
Mac, Farmer Mac shall so notify the Seller and shall purchase only a pro rata
participation interest in such Qualified Loan. Such pro rata participation
interest shall be calculated to result in the loan-to-value ratio (based on an
appraisal performed in accordance with the Appraisal Standards set forth in the
Seller/Servicer Guide) of Farmer Mac's participation interest being equal to the
maximum loan-to-value ratio for eligibility for the appropriate Farmer Mac loan
product. Upon receipt of such notice, the Seller may represent and warrant in
writing that, notwithstanding Farmer Mac's calculation of the loan-to-value
ratio of such Qualified Loan, the actual loan-to-value ratio of such Qualified
Loan on the date of sale of such Qualified Loan is less than or equal to the
maximum loan-to-value ratio for eligibility for the appropriate Farmer Mac
product. In such event, Farmer Mac will accept delivery of the entire Qualified
Loan, subject to the Seller's liability for any loss resulting from a breach of
the representation and warranty with respect to loan-to value.
(b)(i) In the event that Farmer Mac accepts delivery of only a
participation interest in a Qualified Loan as described in paragraph (a)
above, Farmer Mac shall reimburse the Seller for a portion of the Standby
Purchase Commitment Fee collected with respect to such Qualified Loan,
which portion shall be calculated as described in subparagraph (ii) below.
(ii) The amount of reimbursement due to the Seller in subparagraph (i)
with respect to a Qualified Loan where Farmer Mac purchases a participation
interest shall be the sum of (A) the unpaid principal balance of such
Qualified Loan at the time that such Qualified Loan was made subject to
this Commitment, as such amount was set forth in the related Qualified Loan
Schedule delivered by the Seller to Farmer Mac pursuant to Section 4.02(a)
and (B) the unpaid principal balance of such Qualified Loan at the time
that the Seller elects to deliver such Qualified Loan to Farmer Mac
pursuant to paragraph (a) above, which sum is divided by two and multiplied
by (C) the number of months for which the Seller paid a Standby Purchase
Commitment Fee with respect to such Qualified Loan, (D) the Standby
Purchase Commitment Fee (divided by 12) and (E) the amount by which 1
exceeds the percentage participation interest purchased by Farmer Mac.
ARTICLE VI
Representations AND WARRANTIES OF THE SELLER
The Seller represents and warrants that:
Section 6.01. Compliance with Farmer Mac Standards. As of the Effective
Date with respect to a Qualified Loan, each representation and warranty set
forth in Chapter 304 of the Seller/Servicer Guide is true and correct with
respect to such Qualified Loan.
Section 6.02. Consents and Approvals. (a) No consents or approvals of any
Person are or will be required which have not or will not have been obtained for
the execution and delivery of this Commitment or the performance of any
obligations hereunder.
(b) The execution of this Commitment has been approved by the Board of
Directors of the Seller and the officer of the Seller who has executed this
Commitment is authorized to do so.
Section 6.03. Corporate Existence and Power. The Seller is a Farm Credit
Bank duly organized, validly existing and in good standing under the laws
governing its creation and existence, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business, as now conducted, as required to enter into this
Commitment and to meet its obligations under this Commitment.
Section 6.04. Authorization and Non-Contravention. The execution, delivery
and performance by the Seller of this Commitment are within the Seller's
corporate power and have been duly authorized by all necessary corporate action
on the part of the Seller (no action by its shareholders being required) and
will not: (i) violate or contravene any law, regulation, judgment, injunction,
order, decree or other instrument currently binding on the Seller; or (ii)
violate, contravene or constitute a default under any provision of the articles
of incorporation or by-laws of the Seller or of any agreement, contract,
mortgage or other instrument currently binding on the Seller.
Section 6.05. Binding Effect. This Commitment constitutes a valid and
legally binding agreement of the Seller enforceable against the Seller in
accordance with its terms, except as enforcement may be limited by receivership,
insolvency, moratorium or similar laws, or by legal or equitable principles
relating to or limiting creditors' rights generally.
Section 6.06. Governmental Consents. No consent, approval, authorization or
order of any Governmental Body is required, and no filing need be made with any
Governmental Body, in connection with the execution, delivery and performance by
the Seller of this Commitment or the consummation by the Seller of the
transactions contemplated hereby.
Section 6.07. Litigation. There are no actions, suits, or proceedings
pending or, to the best knowledge of the Seller, threatened, or any judgment or
order entered against the Seller or its assets in any court or before any
Federal, state, municipal or other governmental department or commission, board,
bureau, agency or instrumentality which is likely to be adversely determined and
which if adversely determined will materially, adversely affect its business or
financial condition or the validity and enforceability of this Commitment or its
ability to perform in accordance with this Commitment.
Section 6.08. Showings. The Seller has delivered to Farmer Mac on or prior
to the date of execution of this Commitment: (i) an executed opinion of the
Seller's legal counsel (which may be internal counsel) substantially in the form
set forth in Exhibit A attached hereto; (ii) certified resolutions evidencing
necessary or appropriate corporate action; and (iii) other documents as may
reasonably be requested by Farmer Mac.
Section 6.09. Compliance with Laws. The Seller is not in violation of any
statute, rule or regulation of any Governmental Body or any order of any court
or arbitrator, the violation of which, considered in the aggregate, is likely to
materially adversely affect the business, operations or properties of the
Seller.
Section 6.10. Fraudulent Conveyance. The performance of the Seller's
obligations under this Commitment does not constitute a fraudulent conveyance
within the meaning of any bankruptcy, insolvency, reorganization, moratorium or
other similar law affecting the rights of creditors.
Section 6.11. Portfolio Requirements. As of the Effective Date with respect
to a Qualified Loan, such Qualified Loan has not been purchased or securitized
by Farmer Mac, paid in full (through scheduled payments, prepayments or
otherwise) or otherwise removed from the Portfolio under the terms and
conditions set forth in this Commitment.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF FARMER MAC
Farmer Mac represents and warrants that:
Section 7.01. Consents and Approvals. No consents or approvals of any
Person are or will be required which have not or will not have been obtained for
the execution and delivery of this Commitment or the performance of any
obligations hereunder.
Section 7.02. Corporate Existence and Power. Farmer Mac is an
instrumentality of the United States, created and existing under the laws of the
United States, duly organized, validly existing and in good standing under the
laws governing its creation and existence, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and to enter into this Commitment.
Section 7.03. Authorization and Non-contravention. The execution, delivery
and performance by Farmer Mac of this Commitment are within Farmer Mac's
corporate power and have been duly authorized by all necessary corporate action
on the part of Farmer Mac (no action by its shareholders being required) and
will not: (i) violate or contravene any law, regulation, judgment, injunction,
order, decree or other instrument currently binding on Farmer Mac; or (ii)
violate, contravene or constitute a default under any provision of the Charter
Act or of any agreement, contract, mortgage or other instrument currently
binding on Farmer Mac.
Section 7.04. Binding Effect. This Commitment constitutes a valid and
legally binding agreement of Farmer Mac enforceable against Farmer Mac in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or similar laws, or by legal or equitable principles
relating to or limiting creditors' rights generally.
Section 7.05. Governmental Consents. No consent, approval, authorization or
order of any Governmental Body is required, and no filing need be made with any
Governmental Body, in connection with the execution, delivery and performance by
Farmer Mac of this Commitment or the consummation by Farmer Mac of the
transactions contemplated hereby.
Section 7.06. Compliance with Laws. Farmer Mac is not in violation of any
statute, rule or regulation of any Governmental Body or any order of any court
or arbitrator, the violation of which, considered in the aggregate, could
materially adversely affect the business, operations or properties of Farmer
Mac.
Section 7.07. Litigation. There are no actions, suits, or proceedings
pending or, to the best knowledge of Farmer Mac, threatened, or any judgment or
order entered against Farmer Mac or its assets in any court or before any
Federal, state, municipal or other governmental department or commission, board,
bureau, agency or instrumentality which is likely to be adversely determined and
which if adversely determined will materially, adversely affect its business or
financial condition or the validity and enforceability of this Commitment or its
ability to perform in accordance with this Commitment.
Section 7.08. Due Diligence. Farmer Mac was provided access to the Seller's
servicing procedures, standards and loan portfolio and made an independent
assessment that the Seller's servicing procedures and standards as written meet
the requirements of the Seller/Servicer Guide and that based on the data
provided to Farmer Mac with respect to the Qualified Loans, the Qualified Loans
meet Farmer Mac's requirements. Notwithstanding this representation and
warranty, the Seller remains fully obligated under its representations and
warranties, and subject to the remedies for breach thereof, as set forth in the
Seller/Servicer Guide with respect to each of the Qualified Loans.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. Any one or more of the following acts or
occurrences shall constitute an Event of Default under this Commitment:
(a) failure by the Seller to pay the Standby Purchase Commitment Fee in
accordance with the terms of this Commitment; or
(b) failure by the Seller to observe or perform any covenant or agreement
contained in Sections 2.06, 2.07 or 6.01 herein which continues unremedied for a
period of thirty (30) days after the Seller first acquires knowledge or receives
notice thereof; or
(c) failure by the Seller to observe or perform any other covenants or
agreements set forth in this Commitment which continues unremedied for a period
of thirty (30) days after the Seller first acquires knowledge or receives notice
thereof; or
(d) any other event that constitutes a breach of the Seller/Servicer
Agreement during the Commitment Term which continues unremedied for a period of
thirty (30) days after the Seller first acquires knowledge or receives notice
thereof; or
(e) any covenant, representation, warranty or statement made by the Seller
herein or in any certificate delivered in connection herewith shall prove to
have been incorrect in any material respect when made; provided that if the
incorrect matter as to which such representation or warranty relates is capable
of being cured, it shall not constitute an Event of Default hereunder unless the
Seller fails to correct such matter within thirty (30) days after the Seller
shall first acquire knowledge or receive notice thereof; or
(f) a decree or order of a court or agency or supervisory authority having
jurisdiction on the premises for the appointment of a conservator, 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 Seller; or
(g) the Seller consents to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings relating to the Seller or all or
substantially all of its property; or
(h) the Seller admits in writing its inability to pay its debts generally
as they become due, files a petition to invoke any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations.
Section 8.02. Farmer Mac Events of Default. Any one or more of the
following acts or occurrences by Farmer Mac shall constitute an Event of Default
under this Commitment:
(a) failure to purchase an eligible Qualified Loan or participation
interest pursuant to the terms of this Commitment or reimburse a portion of the
Standby Purchase Commitment Fee pursuant to Section 5.04(b); or
(b) failure by Farmer Mac to observe or perform any other covenants or
agreements set forth in this Commitment which continues unremedied for a period
of thirty (30) days after Farmer Mac first acquires knowledge or receives notice
thereof; or
(c) any covenant, representation, warranty or statement made by Farmer Mac
herein shall prove to have been incorrect in any material respect when made; or
(d) a decree or order of a court or agency or supervisory authority having
jurisdiction on the premises for the appointment of a conservator, 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 Farmer Mac; or
(e) Farmer Mac consents to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings relating to Farmer Mac or all or
substantially all of its property; or
(f) Farmer Mac admits in writing its inability to pay its debts generally
as they become due, files a petition to invoke any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations.
ARTICLE IX
REMEDIES
Section 9.01. Remedies of Farmer Mac. Upon the occurrence of any Event of
Default by the Seller hereunder, unless such Event of Default has been cured,
Farmer Mac may, at its option:
(a) terminate this Commitment and refuse to accept delivery of additional
Tier I Qualified Loans for purchase hereunder; and/or
(b) direct the Seller to repurchase, in accordance with the provisions of
the Seller/Servicer Guide, any Qualified Loan sold to Farmer Mac relating to a
specific Event of Default.
However, Farmer Mac's remedy under this Section for an Event of Default
under Section 8.01 (b), (c), (d) or (e) and related to a Qualified Loan(s) shall
be limited to Section 9.01(b) unless the Event of Default relates to Qualified
Loans with an aggregate unpaid principal balance exceeding 5% of the aggregate
unpaid principal balance outstanding under this Commitment as of the date of an
Event of Default, in which event Farmer Mac may exercise any remedy as provided
in this Article IX; or
If the Seller fails to comply with the provisions of (b) above within 30
days upon demand of Farmer Mac, Farmer Mac may terminate the Seller/Servicer
Agreement and the Servicing Contract, transfer all of the Seller's Farmer Mac
servicing portfolio "with cause" and retain the proceeds from such transfer.
Section 9.02. Remedies of Seller. Upon the occurrence of any Event of
Default by Farmer Mac hereunder, the Seller may, at its option, terminate this
Commitment; provided however, that:
(a) Upon an Event of Default under Section 8.02(b), (c) or (d), the Seller
may terminate this Commitment only if such Event of Default remains uncured for
a period of 30 days following written notice to Farmer Mac by the Seller.
(b) Upon an Event of Default under 8.02(a), the Seller may: (i) elect to
require that the purchase price be paid by the issuance of an AMBS backed by
such Qualified Loan or (ii) terminate this Commitment only if such Event of
Default remains uncured for a period of 30 days following written notice to
Farmer Mac by the Seller.
Section 9.03. Remedies Not Exclusive. Unless otherwise expressly provided,
no remedy conferred herein or reserved to any party is intended to be exclusive
of any other available remedy or remedies, but each and every such remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity; provided, however, that in no
event shall either party have any liability to the other party with respect to
consequential damages.
Section 9.04. Delay or Omission Not Waiver. No delay or omission of either
party to exercise any right or remedy provided hereunder upon an Event of
Default (except a delay or omission pursuant to a written waiver) shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
acquiescence therein. Every right and remedy given by this Article IX or by law
to either party may be exercised from time to time, and as often as may be
deemed expedient by either party. In order to entitle either party to exercise
any remedy reserved to such party in this Article IX, it shall not be necessary
to give any notice unless otherwise provided in Sections 9.01 or 9.02.
ARTICLE X
MISCELLANEOUS
Section 10.01. Termination Event. Farmer Mac and the Seller each must give
the other party written notice of the occurrence of a Termination Event. In the
case of a Termination Event, such notice shall be accompanied by an opinion of
counsel or an opinion of an independent accounting firm, as applicable,
supporting the conclusion that a Termination Event has occurred. Upon the
declaration of the occurrence of a Termination Event; this Commitment shall
terminate only in respect to the Qualified Loans affected by the Termination
Event and be of no further force or effect. A Termination Event will not affect
the repurchase and resale obligations set forth in Section 5.01(f).
Section 10.02. Accounting/Capital Treatment. Neither Farmer Mac nor any of
the directors, officers, employees or agents of Farmer Mac shall be under any
liability for the accuracy, legality or soundness of the Seller's intended
accounting or capital treatment of the transaction contemplated by this
Commitment or for the Seller's interpretation of any accounting rules relating
to its intended accounting or capital treatment of this transaction.
Section 10.03. Servicing. In connection with the servicing of the Qualified
Loans in the Portfolio, although the Seller agrees to comply with the servicing
standards set forth in the Servicing Contract, the parties agree that the Seller
is not servicing the Portfolio for Farmer Mac until the Qualified Loans are
removed from the Portfolio and sold to Farmer Mac.
Section 10.04. Confidentiality. During the term of this Commitment, the
Seller and Farmer Mac shall each maintain the confidentiality of the terms and
conditions set forth in this Commitment. This shall not affect the right of the
Seller or Farmer Mac to discuss generally the existence of the Commitment, the
general impact of the Commitment, the size of the Portfolio and any other
non-fee or non-pricing related information. Each of the Seller and Farmer Mac
shall disclose the terms of this Commitment to others only as may be required in
connection with such party's business or by law, regulation, financial
disclosure and other accounting rules or other legal process and each party
agrees to advise the other party of any such disclosure that is made to any
person who is not a director, officer, or employee of the disclosing party or
the disclosing party's accountants, lawyers or auditors.
Section 10.05. Benefit of Commitment. Any reference to any of the parties
to this Commitment shall be deemed to include the successors and assigns of such
party. All covenants and agreements herein contained are for the benefit of the
parties hereto only, and nothing expressed or implied herein is intended to be
for the benefit of any other Person.
Section 10.06. Amendments and Waivers. No term, covenants, agreement or
condition of this Commitment may be amended, nor any compliance therewith waived
(either generally or in a particular instance and either retrospectively or
prospectively) except by an instrument in writing duly executed and delivered by
the parties hereto.
Section 10.07. Notices. All notices and communications provided for
hereunder shall be in writing and shall be delivered by legible telecopy
(receipt confirmed by telephone) or by a means that guarantees over-night
delivery. All notices and communications shall be addressed as follows.
If to the Seller:
Farm Credit Bank of Texas
Attention: General Counsel
6210 Highway 290 East
Austin, Texas 78723
Telecopy Number: (512 465-0564)
If to Farmer Mac:
Farmer Mac
Attention: General Counsel
1133 Twenty-First Street, N.W.
Suite 600
Washington, DC 20036
Telecopy No: (202) 872-7713
Section 10.08. Attorneys' Fees. If a legal action is commenced in
connection with any dispute under this Commitment, the prevailing party shall be
entitled to reasonable attorney fees, costs, and necessary disbursements
incurred in connection with the related action as determined by the court.
Section 10.09. Severability. If any provision of this Commitment shall be
invalid, illegal or unenforceable, such provision shall be severable from the
remaining provisions of this Commitment, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.10. Multiple Counterparts. This Commitment may be simultaneously
executed in multiple counterparts, all of which shall constitute one and the
same instrument and each of which shall be, and shall be deemed to be, an
original.
Section 10.11. Governing Law. The terms of this Commitment shall be
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 District of
Columbia, without regard to the conflicts of laws provisions thereof.
Section 10.12. Termination. This Commitment shall terminate on the earlier
of (a) the last day of the Commitment Term, (b) the date upon which the actions
required upon the occurrence of a Termination Event, as set forth in Section
10.01, have been fulfilled by the Seller or Farmer Mac, as applicable, (c) at
Farmer Mac's or the Seller's option, the date upon which an Event of Default has
occurred, or (d) a date mutually agreed upon by the parties hereto.
Section 10.13. Time is of the Essence. Time is of the essence for all of
the terms and provisions of this Commitment.
Section 10.14. Farm Credit System Status. Farmer Mac understands that the
Seller is an institution of the Farm Credit System and that, as such, it and all
of its assets are subject to joint and several liability of all Farm Credit
System obligations as well as all other terms, conditions and restrictions set
forth in the Farm Credit Act, as amended. Farmer Mac also understands that the
Seller's access to funds for purposes of ongoing lending activity and operations
is with other Farm Credit System banks in the issuance of joint and several debt
obligations on the agency debt market. This funding relationship is authorized
in the Farm Credit Act of 1971, as amended, which requires Farm Credit System
banks to have on hand collateral, including all eligible loans, proceeds and
other assets of the bank equal to the amount of the outstanding indebtedness for
with the bank is primarily liable. Farmer Mac acknowledges that the funding
relationship between the Seller and the other Farm Credit System banks in no way
violates the restrictions on the Seller's pledging or hypothecating loans in the
Portfolio. In the event of a purchase of a Qualified Loan by Farmer Mac under
the terms of this Commitment, the Seller agrees to apply all of the proceeds of
such purchase against the Seller's indebtedness and to sell such Qualified Loan
to Farmer Mac free of any lien or restriction.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment to be
duly executed by their duly authorized officers or representatives as of the
date above first written.
Federal Agricultural Mortgage Corporation
By: /s/ Nancy E. Corsiglia
---------------------------
Name: Nancy E. Corsiglia
Title: Vice President
Farm Credit Bank of Texas
By: /s/ Dennis L. Raesener
-------------------------------
Name: Dennis L. Raesener
Title: Senior Vice President, Credit Operations
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR SELLER
1. The Seller has been duly organized and is validly existing as a Farm
Credit Bank in good standing under the laws of the United States of America, has
the full corporate power to conduct its business as now being conducted and is
qualified, or need not be qualified, to conduct its business in all of the
states in which it does, or plans to do business.
2. The Seller has full right, power and authority to execute, deliver and
perform its obligations under the Commitment; and the Commitment has been duly
authorized, executed and delivered by the Seller; and the Commitment constitutes
the legal, valid and binding obligation of the Seller, enforceable against the
Seller by Farmer Mac in accordance with its terms except to the extent (i)
enforcement thereof may be limited or affected by any applicable bankruptcy,
insolvency, receivership, reorganization, moratorium or similar laws affecting
creditors' rights generally as such laws may be applied in the event of an
insolvency or similar proceeding affecting the Seller, or (ii) principles of
equity may limit the availability of certain remedies.
3. The individual or individuals who have executed the Commitment on behalf
of the Seller have the legal power, right and actual authority to bind the
Seller to the terms and conditions of the Commitment.
4. Neither the execution and delivery by the Seller of the Commitment, nor
the fulfillment of the terms of the Commitment nor the compliance by the Seller
with any of the provisions of the Commitment violate any provisions of the
articles of incorporation/charter or bylaws of the Seller, or any law or
regulations applicable to the Seller or court decree known to us to be
applicable to the Seller; and, to the best of our knowledge (after having made
inquiry with respect thereto), none of such actions will result in a breach of,
or constitute a default under, any agreement, indenture or other instrument to
which the Seller is a party or by which it is bound.
5. There is not pending or, to the best of our knowledge, threatened any
action, suit, proceeding, inquiry or investigation at law or in equity or before
any court, public board or regulatory agency, against or affecting the Seller or
its assets wherein an unfavorable decision, ruling or finding would adversely
affect the Seller's powers of existence or the validity or enforceability of the
Commitment, or which might result in any material adverse change in the business
condition (financial or otherwise) or operation of the Seller, or which might
adversely affect the Seller's ability to perform its obligations under the
Commitment.
6. There is no litigation or investigation pending or threatened, or any
judgment or order entered, affecting the Qualified Loans (or any other mortgages
that the Seller is servicing, which mortgages have interest rate and adjustment
provisions similar to those contained in the adjustable rate Qualified Loans),
at law or in equity by or before any federal or state court or governmental
instrumentality or agency having jurisdiction over the Seller or the Qualified
Loans.
EXHIBIT B
PURCHASE REQUEST AND CERTIFICATION
TO: [ ]
Farmer Mac
919 18th Street, N.W.
Suite 200
Washington, D.C. 20006
DATE: _________ [No later than the 7th business day of the month]
SELLER PURCHASE REQUEST AND CERTIFICATION
Farmer Mac Seller ID:
The following Qualified Loans have become Tier I Qualified Loans pursuant to the
Long-Term Standby Commitment to Purchase entered into between Farmer Mac and
Farm Credit Bank of Texas (the "Seller") as of [DATE] (the "Commitment").
Accordingly, the Seller certifies that (i) all the information contained in the
Qualified Loan Schedule submitted to the Custodian is correct and (ii) the
Seller has transferred an undivided interest in such Qualified Loans to Farmer
Mac. Capitalized terms used but not defined herein shall have the meanings set
forth in the Commitment.
Farmer Mac Loan # Current whole loan UPB
___________________ ___________________
___________________ ___________________
___________________ ___________________
[Note: Request with more than 25 loans must include a 3.5" floppy diskette in an
ASCII file format with the following information:
Fields O1-9 - Servicer Number
Fields 10-18 - Farmer Mac Loan Number
Fields 19-24 - Current Whole Loan UPB]
Farm Credit Bank of Texas
By:
---------------------------
[Authorized Officer]
Contact Person:
Name:
Phone #:
Address:
EXHIBIT C
Pending Litigation Schedule
NONE
EXHIBIT D
Qualified Loan Schedule
Tape Specifications
EXHIBIT E
Loan Set-up File
EXHIBIT F
Monthly Loan Activity Report
Tape Specifications