Exhibit 10.17
CENTRAL SERVICER DELINQUENT LOAN SERVICING TRANSFER AGREEMENT
This Central Servicer Delinquent Loan Servicing Transfer Agreement (the
"Transfer Agreement") dated as of July 1, 2004, is by and between AgFirst Farm
Credit Bank, a federally chartered institution of the Farm Credit System with
offices located at 1401 Hampton Street, Columbia, South Carolina (hereinafter
referred to as "AgFirst") and the Federal Agricultural Mortgage Corporation, a
federally chartered instrumentality of the United States with offices located at
1133 21st Street, NW, Suite 600, Washington, D.C. (hereinafter referred to as
"Farmer Mac").
WITNESSETH:
WHEREAS, AgFirst is the Central Servicer of and owns the right to service a
portfolio of agricultural real estate mortgage loans and REO Properties
representing liquidated loan collateral identified in Exhibit A attached hereto
(collectively referred to as the "Loans"), having an aggregate outstanding
principal balance of approximately ninety-seven million five hundred thousand
dollars ($97,500,000), which Loans are serviced for Farmer Mac as beneficial
owner or Master Servicer of the Loans; and
WHEREAS, the rights and obligations of AgFirst with respect to servicing the
Loans are set out in (1) the Master Central Servicing Agreement (Full-Time
Agriculture) between Farmer Mac and AgFirst dated as of July 1, 1998; (2) the
Master Central Servicing Agreement between Farmer Mac and Western Farm Credit
Bank dated as of June 1, 1996, as amended and supplemented; and (3) the Master
Central Servicing Agreement between Farmer Mac and HarvestOne Funding, LLC dated
as of July 1, 1999, as amended (the three agreements being referred to
collectively as the "Servicing Agreements"); and
WHEREAS, effective July 1, 2004 (the "Transfer Date"), AgFirst desires to
transfer to Farmer Mac, and Farmer Mac desires to assume, certain central
servicing rights and obligations with respect to the Loans; and
WHEREAS, capitalized terms used in this Transfer Agreement and not otherwise
defined herein shall have the meanings given them in the Servicing Agreements;
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties to this Transfer Agreement hereby agree as
follows:
ARTICLE I.
TRANSFER OF SERVICING OBLIGATIONS.
1.1 Transfer of Certain Servicing Rights and Obligations. On the Transfer Date,
AgFirst shall transfer and assign, and Farmer Mac shall assume, those
central servicing rights and obligations with respect to the Loans marked
with an "X" under "Farmer Mac" in the servicing responsibility matrix in
Exhibit B attached hereto, in accordance with the terms and conditions of
this Transfer Agreement.
1.2 Delivery and Custody of Servicer Loan Files. AgFirst agrees to cooperate
with Farmer Mac and to perform any and all acts and execute and deliver any
and all documents as may be required, necessary, proper or appropriate to
effect the transfer to Farmer Mac of the specified servicing rights and
obligations related to the Loans. Specifically, AgFirst agrees to send
promptly to Farmer Mac all records and files maintained by AgFirst with
respect to the Loans (the "Servicer Loan Files").
1.3 Representations as to the Servicer Loan Files. AgFirst represents and
warrants that the Servicer Loan Files transferred to Farmer Mac are
complete and accurate and that, as of the Transfer Date, AgFirst has
performed all of its servicing obligations required by the Servicing
Agreements with respect to the Loans.
1.4 Release of Custody and Delinquent Loan Servicing Obligations. Subsequent to
the transfer of the Servicer Loan Files, Farmer Mac releases and discharges
AgFirst from those obligations with respect to the Loans transferred to
Farmer Mac as set forth in Exhibit B that otherwise arise as obligations of
AgFirst under the Servicing Agreements, the Farmer Mac Seller/Servicer
Guide and/or the Farmer Mac Minimum Servicing Standards Attestation Program
"Agreed Upon Procedures" as may be applicable, including those obligations
related to the maintenance, custody, control and safekeeping of such files.
1.5 Access to Servicer Loan Files. Farmer Mac agrees to cooperate with AgFirst
and perform any and all necessary acts related to the access and/or
duplication of any Servicer Loan File content as may be required by AgFirst
from time to time in the fulfillment of any servicing obligations,
regulatory inquiry or examination or as may otherwise may be needed.
1.6 Survival of Certain Obligations. AgFirst acknowledges and agrees that,
notwithstanding the transfer of certain servicing rights and obligations
with respect to the Loans pursuant to this Transfer Agreement, AgFirst
shall continue to be bound by any representations and warranties made with
respect the Loans pursuant to the Seller/Servicer Agreement between Farmer
Mac and AgFirst dated as of December 16, 1996. Neither will the transfer of
the specified servicing rights and obligations relieve AgFirst of any
liabilities it may have under: (1) the Servicing Agreements with respect to
AgFirst's servicing actions, or failure to act, prior to the Transfer Date;
or (2) the Loan File Review and Underwriting Agreement dated as of April 8,
1998 between AgFirst and Farmer Mac, as amended. Farmer Mac acknowledges
and agrees that it shall be liable for all actions taken by it on and after
the Transfer Date as transferee of the servicing rights and obligations
specified in Exhibit B.
ARTICLE II.
COMPENSATION, REIMBURSEMENT AND ADVANCES.
2.1 Modification of Compensation. AgFirst acknowledges and agrees that its
compensation under the Servicing Agreements for its reduced central
servicing obligations with respect to each Loan shall be calculated at the
applicable Servicing Fee Rate set forth in the applicable Servicing
Agreement less [material omitted pursuant to a request for confidential
treatment and filed separately with the SEC]. In consideration of Farmer
Mac's performance of the servicing obligations transferred by this Transfer
Agreement, Farmer Mac shall receive a Servicing Fee with respect to each
Loan calculated at a Servicing Fee Rate of [material omitted pursuant to a
request for confidential treatment and filed separately with the SEC].
AgFirst acknowledges and agrees that any such Servicing Fee payable to
Farmer Mac does not include any transfer fees separately payable by AgFirst
to Farmer Mac with respect to a Loan in connection with the transfer of
central servicing rights and obligations from HarvestOne Funding, LLC and
Western Farm Credit Bank to AgFirst.
AgFirst further acknowledges and agrees that, except for: (1) a $500 fee
with respect to each partial release for which AgFirst prepares the
documentation or other servicing action for which AgFirst performs legal
work; and (2) any field servicer fees payable to AgFirst under the
Servicing Agreements, AgFirst shall not be entitled to any other servicing
compensation under the Servicing Agreements, including any compensation in
the form of assumption fees, late payment charges, interest calculated at a
penalty rate, or other service charges imposed upon borrowers in connection
with servicing the Loans. AgFirst shall deposit that portion of the
Servicing Fee and other servicing compensation due to Farmer Mac in the
Collection Account with the related Installment Payment and report that
amount to Farmer Mac in the Central Servicer Report for the related
Collection Period.
2.2 Reimbursement for Outstanding Advances. Farmer Mac agrees to reimburse
AgFirst for any Central Servicer Delinquency Advances or any other
servicing advances made pursuant to Sections 3.03 or 3.07 of the Servicing
Agreements ("Servicing Advances") made by AgFirst under the Servicing
Agreements and outstanding as of the Transfer Date within a reasonable time
after receiving an invoice from AgFirst for such reimbursement.
2.3 Delinquency Advances. Subsequent to the execution of this Transfer
Agreement, AgFirst shall no longer be obligated to make Central Servicer
Delinquency Advances with respect to the Loans. AgFirst will continue to
report such information as may be required to the bond administrator for
Farmer Mac, currently American Southwest Financial, or such other
administrator as may be later designated by Farmer Mac.
2.4 Servicing Advances. Subsequent to the execution of this Transfer Agreement,
AgFirst shall continue to make Servicing Advances on the Loans as may be
approved by Farmer Mac from time to time. Farmer Mac agrees to reimburse
AgFirst for any such approved Servicing Advances within a reasonable time
after receiving an invoice from AgFirst for such reimbursement.
2.5 Expenses Related to Transfer. AgFirst shall insure and ship to Farmer Mac,
at Farmer Mac's sole cost and expense, the Servicer Loan Files and
collection records that are reasonably necessary to service the Loans. Any
such other costs that may arise during the cost of the transfer shall be
apportioned as shall be agreed upon by the parties.
ARTICLE III.
MISCELLANEOUS.
3.1 Confidentiality of Information. AgFirst and Farmer Mac, including their
respective affiliates, directors, officers, employees and authorized
representatives, shall hold in strict confidence and, except as otherwise
required by law, shall not use or disclose to any other party without the
prior written consent of the other party hereto all information received
from the other party concerning customers, proprietary business procedures,
servicing fees or prices, or policies or plans of the other party or any of
its affiliates.
3.2 Termination Upon Sale of Servicing. Nothing in this Transfer Agreement
shall be construed as prohibiting the sale to a third party of the
servicing rights and obligations with respect to the Loans retained by
AgFirst, subject to the following: (1) any such sale shall be subject to a
right of first refusal in favor of Farmer Mac; and (2) any such sale shall
be conditioned upon the approval of Farmer Mac in accordance with the
Servicing Agreements. In the event of such an approved sale to a third
party, Farmer Mac agrees to cooperate fully in the transfer and assignment
of AgFirst's remaining servicing obligations with respect to the Loans to
the third party upon the later of ninety (90) days notice of the intent to
sell or thirty (30) days from the date of approval by Farmer Mac. All
expenses related to the sale and transfer of AgFirst's remaining servicing
rights and obligations with respect to the Loans shall be the sole
responsibility of AgFirst.
3.3 Survival of Representations and Warranties. Each party hereto covenants and
agrees that any representations and warranties in this Transfer Agreement,
and in any document delivered or to be delivered pursuant hereto, shall
survive the Transfer Date.
3.4 Notices. All notices, requests, demands and other communications which are
required or permitted to be given under this Transfer Agreement shall be in
writing and shall be deemed to have been duly given upon the delivery or
mailing thereof, as the case may be, sent by registered or certified mail,
return receipt requested, postage prepaid:
If to the AgFirst, to: William L. Melton, Vice President
AgFirst Farm Credit Bank
1401 Hampton Street
Columbia, SC 29201
If to the Farmer Mac, to: Michael P. Morris, Vice President
Federal Agricultural Mortgage Corporation
1133 21st Street, NW, Suite 600
Washington, DC 20036
or to such other address as Farmer Mac or AgFirst shall have specified in
writing to the other.
3.5 Applicable Laws. This Transfer Agreement shall be construed in accordance
with federal law. To the extent that federal law incorporates state law,
that law shall be the laws of the District of Columbia.
3.6 Incorporation of Exhibits. All of the exhibits attached hereto shall be
incorporated herein and shall be understood to be a part hereof as though
included in the body of this Transfer Agreement.
3.7 Severability of Provisions. If any one or more of the covenants,
agreements, provision, or terms of this Agreement shall be for any reason
whatsoever held invalid, such covenants, agreements, provisions, or terms
shall be deemed severable form the remaining covenants, agreements,
provisions, or terms of this Transfer Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Transfer
Agreement or of the rights of the parties hereto.
3.8 Counterparts. This Transfer Agreement may be executed in counterparts, each
of which, when so executed and delivered, shall be deemed to be an original
and all of which, taken together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, each of the undersigned parties to this Transfer Agreement
has caused the same to be duly executed in its corporate name by one of its duly
authorized officers, all as of the date first written above.
AGFIRST FARM CREDIT BANK FEDERAL AGRICULTURAL MORTGAGE CORPORATION
By: /s/ William L. Melton By: /s/ Michael P. Morris
------------------------------------ -----------------------------
Name: William L. Melton Name: Michael P. Morris
Title: Vice President Title: Vice President -
Agricultural Credit
EXHIBIT A
|------------|----------|---------|------------|------------|-----------------|
| | AgFirst | AgFirst | Farmer Mac | Farmer Mac | |
|AgFirst Name| Balance | Loan# | Loan# | Balance | Farmer Mac Name |
|------------|----------|---------|------------|------------|-----------------|
[information for 278 agricultural mortgage loans omitted pursuant to a request
for confidential treatment and filed separately with the SEC]
EXHIBIT B
Servicing Responsibility Matrix
Responsibility
Description of Central Servicer Rights and Obligations AgFirst Farmer Mac
- -----------------------------------------------------------------|-----------|-----------|
Billings | X | |
- -----------------------------------------------------------------|-----------|-----------|
Payment Processing and Process Returned Items | X | |
- -----------------------------------------------------------------|-----------|-----------|
Investor Accounting and Remitting | X | |
- -----------------------------------------------------------------|-----------|-----------|
Field Servicer Payments | X | |
- -----------------------------------------------------------------|-----------|-----------|
ARM Changes | X | |
- -----------------------------------------------------------------|-----------|-----------|
ARM Notifications | X | |
- -----------------------------------------------------------------|-----------|-----------|
Payment of Taxes* | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Ensure payment of insurance premiums; if premiums not paid, | | |
force place insurance* | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Annual Statements | X | |
- -----------------------------------------------------------------|-----------|-----------|
Credit Bureau Reporting X | |
- -----------------------------------------------------------------|-----------|-----------|
IRS Reporting | X | |
- -----------------------------------------------------------------|-----------|-----------|
Loan Level Detail | X | |
- -----------------------------------------------------------------|-----------|-----------|
Late Notices after Grace Day | X | |
- -----------------------------------------------------------------|-----------|-----------|
Loss Drafts (Farmer Mac makes decision; AgFirst processes) | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Loan Inquiries through remote access to web (loan overview only; | | |
no payoffs by Farmer Mac) | X | |
- -----------------------------------------------------------------|-----------|-----------|
UCC Continuations (AgFirst prepares and files UCC continuation | | |
statements for HarvestOne Loans; field servicer prepares and | | |
files all other UCC continuation statements) | X | |
- -----------------------------------------------------------------|-----------|-----------|
UCC Continuations (Monitor filing of UCC continuation statements | | |
by field servicers) | X | |
- -----------------------------------------------------------------|-----------|-----------|
Financial Statements (including requesting statements) | | X |
- -----------------------------------------------------------------|-----------|-----------|
Collateral Inspections (including requesting inspections) | | X |
- -----------------------------------------------------------------|-----------|-----------|
Collateral Assessment Reports (CARs) | | X |
- -----------------------------------------------------------------|-----------|-----------|
Appraisals and Appraisal Ordering | | X |
- -----------------------------------------------------------------|-----------|-----------|
Payoffs (AgFirst prepares payoff letters; Farmer Mac fields | | |
payoff requests and sends out letters) | X | |
- -----------------------------------------------------------------|-----------|-----------|
Satisfactions (UCC Terminations; Reconveyances) | X | |
- -----------------------------------------------------------------|-----------|-----------|
Partial Releases (Farmer Mac gathers information and makes | | |
decision; AgFirst prepares documentation for a $500 fee) | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Mortgage Verifications (Farmer Mac receives; AgFirst processes) | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Borrower Requests on Servicing Actions (Farmer Mac makes | | |
decisions; AgFirst processes any system changes and legal | | |
documentation required, with a $500 fee for all legal work) | X | X |
- -----------------------------------------------------------------|-----------|-----------|
Delinquent List and Notifications to Field Servicer (copy to | | |
Farmer Mac) | X | |
- -----------------------------------------------------------------|-----------|-----------|
Delinquency Letters (AgFirst sends Billing Letter, After Grace | | |
Date Notice Letter, and Demand Letter on day 35; Farmer Mac will | | |
be the contact at 1-866-552-4909) | X | |
- -----------------------------------------------------------------|-----------|-----------|
Collection Calls | | X |
- -----------------------------------------------------------------|-----------|-----------|
Special Borrower Letter Bulk Mailings | X | |
- -----------------------------------------------------------------|-----------|-----------|
Monthly Delinquent Reporting with Action Codes (Distressed Loan | | |
Reporting Module) | | X |
- -----------------------------------------------------------------|-----------|-----------|
Regulatory Reporting and Other Reporting other than Monthly | | |
Delinquency Reporting | X | |
- -----------------------------------------------------------------|-----------|-----------|
Foreclosures, including Advance Approval and Tracking* | | X |
- -----------------------------------------------------------------|-----------|-----------|
Bankruptcy Processing, including Advance Approval and Tracking* | | X |
- -----------------------------------------------------------------|-----------|-----------|
REO Processing, including Advance Approval and Tracking* | | X |
- -----------------------------------------------------------------|-----------|-----------|
Farmer Mac will obtain and maintain all servicing files. | | |
AgFirst will retain a copy of portions of the servicing files | | |
for UCC, taxes and insurance monitoring. Upon request, Farmer Mac| | |
will send a copy of necessary documents from the servicing | | |
file to AgFirst. | X | |
- -----------------------------------------------------------------|-----------|-----------|
Daily reports detailing all payments received on the Loans | X | |
- -----------------------------------------------------------------|-----------|-----------|
* AgFirst will notify Farmer Mac of the tax, insurance or other advance
amount required to be paid; AgFirst will pay any such amount approved by
Farmer Mac; Farmer Mac will reimburse AgFirst the month following the
payment.