LONG TERM STANDBY COMMITMENT TO PURCHASE
Exhibit
10.20
Execution
Copy
This
Long Term Standby Commitmentto Purchase
No. TM1047 (Full-timeFarm)
(“Commitment”) is made as of the first day of August 2007 between
the Federal Agricultural Mortgage Corporation (“Xxxxxx 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 Xxxxxx Mac each desire to enter into this Commitment, which
permits the Seller, at its option, to sell to, or exchange with, Xxxxxx Mac
Qualified Loans within a defined portfolio of Qualified Loans from time to
time
during the life of the defined portfolio and obligates Xxxxxx Mac to purchase
such Qualified Loans or deliver securities backed by such Qualified Loans,
all
under the terms and conditions set forth in this Commitment; and
WHEREAS,
the Seller and Xxxxxx Mac have identified a portfolio of Qualified Loans that
the parties desire to make subject to the terms and conditions of this
Commitment.
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, Xxxxxx 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:
XXXX: Agricultural
mortgage-backed securities guaranteed by Xxxxxx Mac.
Business
Day: Any day other than a Saturday, Sunday or other day Xxxxxx
Mac or the Seller is closed for business.
Charter
Act: The Xxxxxx Mac Charter Act in Title VIII of the Farm Credit
Act of 1971 (12 U.S.C. §§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 Xxxxxx Mac, which, in the case of Tier I Qualified Loans, shall
be
the date that Xxxxxx 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 Xxxxxx Mac pursuant to Sections
5.02
and 5.03, respectively.
Effective
Date: August 1, 2007.
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.
Liquidated
Qualified Loan: As defined in the Servicing
Contract.
Liquidation
Expenses: As defined in the Servicing Contract.
Liquidation
Proceeds: As defined in the Servicing Contract.
Loss: With
respect to any Tier I Qualified Loan, the amount, if any, by which (a) the
sum
of the amounts described in paragraphs 5.01(c)(iii) and (iv) hereof exceeds
(b) (x) Liquidation Proceeds less (y) Liquidation Expenses not
theretofore reimbursed to either Xxxxxx Mac or the Seller, as appropriate)
less
(z) the sum of the amounts described in paragraphs 5.01(c)(i) and (ii)
hereof. Liquidation Proceeds and Liquidation Expenses shall be
allocated among all then outstanding loans from Seller to the borrower,
including such Tier I Qualified Loan.
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 Xxxxxx Mac in connection with this Commitment and incorporated herein by
reference, which are subject to this Commitment and are eligible to be sold
to,
or exchanged with, Xxxxxx Mac under the terms and conditions set forth in this
Commitment. Any Qualified Loans identified as in Pool TM1032 shall
not be subject to the terms and conditions of this Commitment and shall continue
to be governed by the Long Term Standby Commitment to Purchase between Xxxxxx
Mac and the Seller dated as of June 1, 2003, as amended.
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.
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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 Xxxxxx Mac will agree on the documentation to evidence the terms
of
the transfer to Xxxxxx Mac of such Qualified Participation
Interest.
Reserve
Amount Annual Limit: The maximum amount of Reserve Payments to be
paid by Seller to Xxxxxx Mac in any one calendar year. [material
omitted pursuant to a request for confidential treatment and
filed separately with the SEC].
Reserve
Amount Total Limit: The maximum aggregate amount of Reserve
Payments to be paid by Seller to Xxxxxx Mac during the term of this
Commitment. [material omitted pursuant to a request for confidential
treatment and filed separately with the SEC].
Reserve
Payment: An amount to be paid by Seller to Xxxxxx Mac to mitigate
a Loss that Xxxxxx Mac would otherwise incur with respect to a Tier I Qualified
Loan. Such amount shall equal the lesser of (a) the Loss; and
(b) the Reserve Amount Annual Limit. The amount of a Reserve
Payment shall be reduced by the amount that the aggregate of all Reserve
Payments made over the term of this Commitment exceeds the Reserve Amount Total
Limit.
Seller/Servicer
Agreement: The Xxxxxx Mac Seller/Servicer Agreement dated as of
June 1, 2003 between the Seller and Xxxxxx Mac, as amended from time to
time.
Seller/Servicer
Guide: The publication entitled “Xxxxxx Mac Seller/Servicer
Guide,” release dated 2007, as modified by any guide update or bulletin or as
replaced by any other publication of Xxxxxx Mac.
Servicing
Contract: The Master Central Servicing Agreement dated as of
June 1, 2003 between Xxxxxx Mac, as Owner/Master Servicer, and the Seller,
as Central Servicer.
Standby
Purchase Commitment Fee: The periodic amount due Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac for capital requirements represents
the accounting treatment contemplated by the parties.
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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 Xxxxxx
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 Xxxxxx
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 Xxxxxx Mac’s credit underwriting standards if the first right participation
interest is acceptable to Xxxxxx Mac, in its sole discretion. A Tier
I Qualified Participation Interest, if transferred to Xxxxxx Mac, will have
first priority in payment and liquidation to the interest not transferred to
Xxxxxx Mac. The documentation evidencing the transfer of a
Tier I Qualified Participation Interest will be agreed upon between the
Seller and Xxxxxx Mac at the time the initial Tier I Qualified Participation
Interest is transferred to Xxxxxx 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 Xxxxxx 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
Xxxxxx 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.
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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 Xxxxxx Mac now, and at any reasonable time or times
hereafter at the request of Xxxxxx Mac, all documents, instruments, letters
of
direction, notices, reports, acceptances, receipts, consents, waivers,
affidavits and certificates as Xxxxxx Mac may reasonably request, in form
satisfactory to Xxxxxx 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) Xxxxxx
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 Xxxxxx Mac and that agrees to assume
all of the Seller’s obligations hereunder pursuant to a written agreement among
the Seller, Xxxxxx 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, Xxxxxx 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) Xxxxxx
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 Xxxxxx Mac that agrees,
pursuant to a written agreement among the Seller, Xxxxxx 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 Xxxxxx Mac’s approval of such transfer be
required.
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(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 Xxxxxx Mac mortgage servicing portfolio without
providing evidence acceptable to Xxxxxx Mac of the acknowledgement of any third
party who will have rights therein of Xxxxxx 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 Xxxxxx Mac harmless from and against any and all losses,
claims, damages, liabilities and expenses (collectively, “Losses”) to which
Xxxxxx 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 Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac for sale if the original principal
balance of such Qualified Loan does not meet Xxxxxx 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 Xxxxxx Mac approved seller and servicer under the
Seller/Servicer Agreement.
ARTICLE
III
COVENANTS
OF XXXXXX MAC
Section
3.01. Commitment to Purchase Qualified
Loans. Xxxxxx 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. Xxxxxx Mac hereby covenants to keep and
perform faithfully all of the covenants and undertakings contained
herein.
Section
3.03. Good Standing. Xxxxxx 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 Xxxxxx Mac as represented in
Section 7.02 hereof.
ARTICLE
IV
PRE-DELIVERY
OBLIGATIONS OF THE SELLER
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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 September 2007 (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 Xxxxxx 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 Xxxxxx Mac by 12:00 noon,
Eastern time, on such seventh day, the Seller shall pay interest to Xxxxxx
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 Xxxxxx 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 Xxxxxx Mac.
(b) The
Portfolio shall be a fixed pool consisting of only the Qualified Loans
identified in the Qualified Loan Schedule. Any additional Qualified
Loans not included in the Portfolio with respect to which Seller wishes to
obtain credit enhancement from Xxxxxx Mac shall be governed by the terms and
conditions of a separate Long Term Standby Commitment to Purchase between the
parties. The Seller may not remove a Qualified Loan from the
Portfolio without the prior written consent of Xxxxxx 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 Xxxxxx 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), Xxxxxx Mac shall not be obligated
to
purchase such restructured or modified Qualified Loan or to deliver XXXX backed
by 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 separate 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 and in substantial compliance with the applicable servicing
standards set forth in the sections of Article III of the Servicing
Contract pertaining to the servicing of loans and administration of proceeds,
except as modified by this Commitment. 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 Servicing Contract
(except assignments of mortgages to Xxxxxx 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
Servicing Contract.
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(c) Upon
reasonable notice and at any reasonable time during the Commitment Term and
subject to applicable confidentiality requirements, Xxxxxx 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 Xxxxxx 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 Servicing Contract and this Commitment. Seller
agrees to forward such books, records or reports (or copies thereof) to Xxxxxx
Mac upon request by Xxxxxx Mac.
(d) The
Seller shall service delinquent Qualified Loans using commercially reasonable
practices in substantial compliance with the provisions of Article III of the
Servicing Contract and the Seller/Servicer Guide relating to the servicing
of
delinquent loans, including timely initiation of loss mitigation
efforts. However, the Seller must sell the delinquent Qualified Loan
to Xxxxxx 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 Xxxxxx Mac and should be reported as a “payoff” in
accordance with the requirements of Section 4.04.
(e) The
Seller shall service all Qualified Loans, and all other loans to borrowers
of
Qualified Loans (“Related Loans”), in a manner that protects Xxxxxx Mac’s
financial interests. In that regard, without Xxxxxx Mac’s prior
concurrence, which concurrence shall not be unreasonably withheld, the Seller
shall not, without limitation, apply funds received, take or defer taking any
servicing action (including restructuring or reamortizing), or waive a
substantive default with respect to any Related Loan if so doing materially
increases the amount of Xxxxxx Mac’s risk of or actual loss with respect to the
relationship (i.e., the Qualified Loan plus all Related Loans).
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 Xxxxxx 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
Xxxxxx Mac, in exchange for cash, any Tier I Qualified
Loan. Notwithstanding the requirement that a Tier I Qualified Loan be
delinquent in payment for four or more consecutive months or otherwise in
material non-monetary default, 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 Xxxxxx Mac the related Tier I Qualified Loan regardless of the amount of
time
such Qualified Loan has been delinquent.
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(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 Xxxxxx 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
Xxxxxx 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
Xxxxxx Mac, unpaid interest accruing at the note rate less the applicable
servicing fee rate on the Qualified Loan from the date purchased
by Xxxxxx
Mac until the date of liquidation.
|
|
(iv)
|
To
Xxxxxx 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 Xxxxxx Mac until the date Xxxxxx Mac purchased the Tier
I
Qualified Loan.
|
|
(vi)
|
To
the servicer, unpaid servicing fees accrued during the period Xxxxxx
Mac
owned the Tier I Qualified Loan.
|
|
(vii)
|
To
the Seller, default interest accruing while the Seller held the Tier
I
Qualified Loan.
|
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|
(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
Xxxxxx Mac, the remainder, if any.
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(d)
No later than the seventh Business Day of any month in which the Seller elects
to sell Tier I Qualified Loans to Xxxxxx 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
Xxxxxx 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 Xxxxxx
Mac
either as whole loans or participation interests. The Purchase
Request and Certification shall be delivered to Xxxxxx 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 Xxxxxx Mac in accordance with the
Seller/Servicer Guide. Only Xxxxxx 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 Xxxxxx Mac’s purchase of
Tier I Qualified Loans.
(iii) pay
directly to the custodian designated by Xxxxxx 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 Xxxxxx Mac (or as to
which
a participation is sold to Xxxxxx 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 Xxxxxx Mac agree that, if a Tier I Qualified Loan sold to Xxxxxx
Mac
subsequently becomes current in payments under its original terms without being
restructured, the Seller will repurchase from Xxxxxx Mac and Xxxxxx 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.
(g) No
later than the fifth Business Day following the date that a Tier I Qualified
Loan sold to Xxxxxx Mac becomes a Liquidated Qualified Loan, Seller will pay
to
Xxxxxx Mac any related Reserve Payment.
Section
5.02. Tier II Qualified
Loans. (a) Subject to the requirements set forth in
this Commitment, the Seller may elect to sell to Xxxxxx Mac, from time to time,
at any time during the Commitment Term, in exchange for cash or XXXX, some
or
all Tier II Qualified Loans, subject to Xxxxxx Mac’s then-current requirements
for its Cash Window Program for cash purchases or its XXXX Swap Program, and
any
other terms mutually agreed between the parties at the time of
sale.
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(i) Tier
II Qualified Loans sold to Xxxxxx Mac for cash pursuant to the terms of this
section shall be sold at the price agreed by Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac for XXXX, the XXXX shall
have an initial principal amount equal to the then-current principal balance
of
the swapped Tier II Qualified Loans less the then-current Reserve Amount Annual
Limit. Such XXXX 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 Xxxxxx Mac in
exchange for XXXX shall be equal to what had been the Standby Purchase
Commitment Fee with respect to such Qualified Loan, and the Seller shall retain
an unguaranteed first loss subordinated interest in the pool of loans underlying
the XXXX in the amount of the then-current Reserve Amount Annual
Limit. If the Seller requests the XXXX 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 Xxxxxx Mac to enter into a mandatory commitment to
sell such Tier II Qualified Loan to Xxxxxx 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 Xxxxxx 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 XXXX 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 Xxxxxx Mac of
Tier
II Qualified Loans in exchange for XXXX, 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 Xxxxxx Mac (or as to
which a participation is sold to Xxxxxx 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.
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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 Xxxxxx Mac, in exchange for cash or XXXX, all
of
the Tier III Qualified Loans; provided, however, the Seller must concurrently
sell all Tier I and Tier II Qualified Loans to Xxxxxx Mac in accordance with
the
terms set forth herein for such sales.
(b) The
Seller must contact Xxxxxx 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 Xxxxxx Mac.
(i) Tier
III Qualified Loans sold to Xxxxxx Mac for cash pursuant to the terms of this
section shall be sold at the price agreed by Xxxxxx 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 XXXX 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 Xxxxxx Mac for XXXX, the XXXX shall
have an initial principal amount equal to the then-current principal balance
of
the swapped Tier III Qualified Loans less the then-current Reserve Amount Annual
Limit. Such XXXX 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 Xxxxxx Mac in
exchange for XXXX shall be equal to what had been the Standby Purchase
Commitment Fee with respect to such Qualified Loan, and the Seller shall retain
an unguaranteed first loss subordinated interest in the pool of loans underlying
the XXXX in the amount of the then-current Reserve Amount Annual
Limit. If the Seller requests the XXXX be registered with 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 Xxxxxx
Mac,
Xxxxxx Mac will provide instructions to the Seller regarding the required
reporting relating to such Qualified Loans prior to their delivery to Xxxxxx
Mac.
(d) As
of its Delivery Date, a Tier III Qualified Loan sold to Xxxxxx Mac (or as to
which a participation is sold to Xxxxxx 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 Xxxxxx Mac pursuant of this Commitment, Xxxxxx 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 Xxxxxx Mac. In the
event that (i) Xxxxxx Mac determines that the outstanding principal balance
of
such Qualified Loan exceeds the maximum loan-to-value ratio for eligibility
for
the appropriate Xxxxxx Mac program at the time of purchase by Xxxxxx Mac and
(ii) if applicable, such Qualified Loan is not insured or guaranteed by a
qualified mortgage insurer approved by Xxxxxx Mac, Xxxxxx 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 Xxxxxx Mac’s participation interest being equal to the maximum
loan-to-value ratio for eligibility for the appropriate Xxxxxx Mac loan
product. Upon receipt of such notice, the Seller may represent and
warrant in writing that, notwithstanding Xxxxxx 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
Xxxxxx Mac product. In such event, Xxxxxx 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.
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(b)(i) In
the event that Xxxxxx Mac accepts delivery of only a participation interest
in a
Qualified Loan as described in paragraph (a) above, Xxxxxx 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 Xxxxxx 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 Xxxxxx
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 Xxxxxx 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
Xxxxxx Mac.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
The
Seller represents and warrants that:
Section
6.01. Compliance with Xxxxxx 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, except that some of the Qualified
Loans may have loan-to-value ratios between 75% and 80%, as specified in the
Qualified Loan Schedule.
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.
-13-
(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 Xxxxxx
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 Xxxxxx 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.
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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 Xxxxxx 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 XXXXXX XXX
Xxxxxx
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. Xxxxxx 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 Xxxxxx Mac of this Commitment are within
Xxxxxx Mac’s corporate power and have been duly authorized by all necessary
corporate action on the part of Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac.
Section
7.04. Binding Effect. This Commitment constitutes a
valid and legally binding agreement of Xxxxxx Mac enforceable against Xxxxxx
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 Xxxxxx Mac of this Commitment or the
consummation by Xxxxxx Mac of the transactions contemplated
hereby.
-15-
Section
7.06. Compliance with Laws. Xxxxxx 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 Xxxxxx Mac.
Section
7.07. Litigation. There are no actions, suits, or
proceedings pending or, to the best knowledge of Xxxxxx Mac, threatened, or
any
judgment or order entered against Xxxxxx 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. Xxxxxx 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 Xxxxxx Mac with respect to the Qualified Loans, the Qualified
Loans meet Xxxxxx 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 or any required Reserve
Payment 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
-16-
(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. Xxxxxx Mac Events of Default. Any one or more
of the following acts or occurrences by Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac first acquires knowledge or receives notice thereof;
or
(c) any
covenant, representation, warranty or statement made by Xxxxxx 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 Xxxxxx Mac; or
(e) Xxxxxx
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 Xxxxxx Mac or all or substantially all of its
property; or
(f) Xxxxxx
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.
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ARTICLE
IX
REMEDIES
Section
9.01. Remedies of Xxxxxx Mac. Upon the occurrence
of any Event of Default by the Seller hereunder, unless such Event of Default
has been cured, Xxxxxx 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 Xxxxxx Mac relating to a
specific Event of Default.
However,
Xxxxxx 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 Xxxxxx 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 Xxxxxx Mac, Xxxxxx Mac may terminate the Seller/Servicer Agreement
and
the Servicing Contract, transfer all of the Seller’s Xxxxxx 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 Xxxxxx 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 Xxxxxx 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 XXXX 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 Xxxxxx 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.
-18-
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. Xxxxxx 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 Xxxxxx
Mac nor any of the directors, officers, employees or agents of Xxxxxx 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 Xxxxxx Mac until the
Qualified Loans are removed from the Portfolio and sold to Xxxxxx
Mac.
Section
10.04. Confidentiality. During the term of this
Commitment, the Seller and Xxxxxx 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 Xxxxxx 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 Xxxxxx 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.
-19-
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
0000
Xxxxxxx 000 Xxxx
Xxxxxx,
Xxxxx 00000
Telecopy
Number: (512
465-0564)
If
to Xxxxxx Mac:
Xxxxxx
Mac
Attention: General
Counsel
0000
Xxxxxx-Xxxxx Xxxxxx, X.X.
Xxxxx
000
Xxxxxxxxxx,
XX 00000
Telecopy
No: (000)
000-0000
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.
-20-
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 Xxxxxx Mac, as
applicable, (c) at Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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 Xxxxxx
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 Xxxxxx Mac free of any lien or restriction.
Section
10.15. Authorized Association. The Seller agrees
that it shall enter into a Field Servicing Agreement with one of the
Associations in its district, Texas AgFinance, Farm Credit Services (the
“Authorized Association”), that shall authorize the Authorized Association to
service the Qualified Loans in the Portfolio on behalf of the Seller and to
communicate directly with Xxxxxx Mac with respect to the servicing of such
Qualified Loans subject to the Authorized Association providing prior written
notice of such servicing actions and communications to Seller and subject
further to the Seller not revoking or suspending such
authorization. To the extent that Seller has not given Xxxxxx Mac
written notice of the revocation or suspension of any such authorization granted
to the Authorized Association, the Authorized Association will be considered
to
be a seller/servicer in the Xxxxxx Mac program. The Seller hereby
agrees to notify Xxxxxx Mac prior to revoking or suspending the authorization
of
the Authorized Association to take servicing actions on behalf of the Seller
with respect to any Qualified Loan in the Portfolio subject to this Commitment
and acknowledges that, to the extent that it has not provided Xxxxxx Mac with
such written notice, Seller shall be bound by servicing actions and
communications to Xxxxxx Mac made by a duly authorized representative of the
Authorized Association.
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.
-21-
|
By:
|
|
/s/
Xxx Xxxxxxx
|
|
|
Name:
|
Xxx
Xxxxxxx
|
||
|
Title:
|
Executive
Vice President
|
Farm
Credit Bank of Texas
|
By:
|
|
/s/
Xxxx Xxxxxx
|
|
|
Name:
|
Xxxx
Xxxxxx
|
||
|
Title:
|
Vice
President/Unit Manager,
|
||
|
Association
Direct Lending Unit
|
-22-
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
Xxxxxx 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:
|
[
|
]
|
|
|
Xxxxxx
Mac
|
0000
00xx Xxxxxx,
X.X.
Xxxxx
000
Xxxxxxxxxx,
X.X. 00000
DATE:_________
[No later than the 7th business
day of
the month]
SELLER
PURCHASE REQUEST AND CERTIFICATION
Xxxxxx
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 Xxxxxx
Mac and Farm Credit Bank of Texas (the “Seller”) as of August 1,
2007 (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 Xxxxxx Mac.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Commitment.
|
Xxxxxx
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 - Xxxxxx 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
E IS NOT APPLICABLE BECAUSE NO QUALIFIED LOANS WILL BE ADDED TO THE PORTFOLIO
AFTER THE EFFECTIVE DATE.
EXHIBIT
F
Monthly
Loan Activity Report
Tape
Specifications
