EXHIBIT 10.37.1

AMENDMENT NO. 1
TO
MASTER SALE AND SERVICING AGREEMENT

AMENDMENT NO. 1 TO MASTER SALE AND SERVICING AGREEMENT (this “Amendment”) is
made and entered into as of February 1, 2010 by and between NATIONAL RURAL
UTILITIES COOPERATIVE FINANCE CORPORATION, a cooperative association organized
and existing under the laws of the District of Columbia (referred to herein as
“CFC,” “Master Servicer” or the “Seller”), and FEDERAL AGRICULTURAL MORTGAGE
CORPORATION, a federally chartered instrumentality of the United States
(referred to herein as “Farmer Mac” or the “Purchaser”).
 
WHEREAS, CFC and Farmer Mac are parties to that certain MASTER SALE AND
SERVICING AGREEMENT (the “Master Agreement”) made and entered into as of July
24, 2009; and
 
WHEREAS, the parties desire to amend the Master Agreement as set forth herein in
order to, among other things, enable the purchase and sale of loans made to
certain power supply borrowers to CFC; and
 
WHEREAS, the parties have executed this Amendment as a written agreement
intended to modify the Master Agreement pursuant to Section 6.04 thereof.
 
NOW, THEREFORE, the parties to this Amendment, in the capacities hereinabove set
forth, in consideration of the mutual agreements and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, do hereby
undertake and otherwise agree as follows:
 
ARTICLE I
Amendments
 
Section 1.01.  Additional Definitions.  The following defined terms and their
definitions are hereby added to Section 1.01 of the Master Agreement and placed
in alphabetical order together with the existing defined terms:
 
Debt to EBITDA Ratio:  with respect to any Member, the ratio obtained by
dividing the amount of such Member’s Long-Term Debt by its EBITDA, with the
quotient expressed as a numerical value.
 
EBITDA:  with respect to any Member, an amount equal to the sum of:  (i) net
margins, (ii) Interest Expense on Long-Term Debt, (iii) income taxes, and (iv)
Depreciation and Amortization Expense, all as calculated in accordance with
Accounting Requirements.

 

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Federal Energy Regulatory Commission (“FERC”): an independent regulatory agency
whose function is to regulate the electric, natural gas, hydroelectric and oil
pipeline industries in the United States.

FERC Form 1:  the annual reporting form designated as such by FERC that is
required to be filed under the Federal Power Act by electric utilities subject
to FERC jurisdiction.

Form 12:  the reporting form designated as such by RUS, or in the event a
Borrower does not borrow from RUS, the reporting form designated as such by CFC
for its Class B Members, including any secondary forms carrying designations
such as “Form 12a”, “Form12b”, and the like.

G&T Trend Analysis:  an annual report generated by the Seller containing key
financial and operating ratios and other growth indicators for each Class B
Member.

Indenture Borrower: any Eligible Class A Member or Eligible Class B Member that
has issued Mortgage Notes secured by a Mortgage in the form of an indenture of
trust that permits the issuance of additional Mortgage Notes under the terms and
conditions set forth therein, but without the consent of existing noteholders.
 
Section 1.02.  Amended Defined Terms and Definitions.  The defined terms
“Compliance Certification,” “Eligible Class B Member,” “Mortgage,” “Qualified
Loan” and “Servicing File,” and their respective definitions set forth in
Section 1.01 of the Master Agreement, are hereby deleted and replaced in their
entirety with the following defined terms and definitions:
 
Compliance Certification:  The annual certification by a Borrower to CFC under
the related Loan Agreement or, in the case of Indenture Borrowers, a comparable
annual certification submitted under the terms of the indenture.
 
Eligible Class B Member:  Each Class B Member that satisfies the following
criteria on the Sale Date of such Member's Qualified Loan:
 
(i)           Such Member’s Average Equity to Total Capitalization Ratio is at
least 25%;
 
 
(ii)
Such Member’s Average Modified Debt Service Coverage Ratio—G&T is at least 1.15;

 
 
(iii)
Such Member’s Average Equity to Total Assets Ratio is at least 10%;

 
 
(iv)
Such Member’s Debt to EBITDA Ratio is no greater than 12; and

 
 
(v)
Such Member’s Qualified Loan has a Facility Rating of “4.9” or lower.

 
Mortgage:  An original mortgage, deed of trust or other instrument that
constitutes a first lien on an interest in real property securing a Mortgage
Note.  Such Mortgage may be an RUS form of mortgage, a CFC form of mortgage, the
form specified by another lender and agreed to by CFC, or an indenture of trust
substantially in the form as is usual and customary for rural electric utility
borrowers.  It is understood that some of the Mortgages provide that one or more
promissory notes may be secured by such Mortgage without being specifically
identified in such Mortgage and without such Mortgage being amended to reflect
such fact.

 

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Qualified Loan:  A loan, or an interest in a loan, for an electric or telephone
facility that satisfies the following criteria:
 
 
i.
The Borrower is either an Eligible Class A Member or an Eligible Class B Member
that has received, or is eligible to receive, a loan from RUS under the Rural
Electrification Act of 1936.

 
 
ii.
Such loan is a fixed or variable rate term loan that was closed by the
Seller.  At the time of sale, such loan has an outstanding principal amount of
up to $15 million (or any higher amount permitted by Farmer Mac and specified as
the Purchase Price for a Qualified Loan in the applicable Commitment Letter) and
a remaining period until maturity in the range of one (1) to thirty-five (35)
years, provided that if such loan provides for an interest rate reset, the
resets shall occur no more frequently than once every month.  Such loan is
secured by substantially all of the assets of the Borrower.  Such assets may
also secure one or more prior or future loans made by the Seller, RUS or another
party to the same Borrower.

 
 
iii.
Such loan is payable in full upon maturity or amortizes on a level principal or
level debt service basis.

 
 
iv.
Interest is payable on such loan monthly, semi-annually or annually, as
specified in the applicable Commitment Letter.  Unless otherwise specified in
the related Commitment Letter, interest due under the loan shall be calculated
on the basis of a 360-day year consisting of twelve 30-day months.

 
 
v.
The documentation for such loan provides that in the event of prepayment of a
fixed rate loan on any date other than an interest reset date, the Borrower must
pay a Prepayment Premium.

 
 
vi.
The full amount of such loan is advanced by the time of sale and no further
draws are permitted.

 
 
vii.
At the time of the sale, the Seller will have at least one other loan to the
same Borrower in the Seller's portfolio.  In addition, at the time of sale, it
will be the intention of the Seller to maintain a credit relationship with such
Borrower until such time as the loan to such Borrower purchased by the Purchaser
pursuant to this Master Agreement is repaid in full.

 
 
viii.
No event of default with respect to such loan shall have been declared by the
Seller and be continuing at the time of sale.

 
 
ix.
Such loan is a performing loan and is not more than thirty (30) days delinquent
in payment.

 
 

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x.
Such loan shall have been documented in accordance with the Seller's existing
practices and procedures at the time, and in form and substance that are
substantially similar to the documentation used by Seller for loans of similar
character in the Seller’s own loan portfolio as of the Sale Date, provided that
prior to its sale hereunder to the Purchaser, the Mortgage Note and related Loan
Agreement will be prepared and will include all of the provisions of a Qualified
Loan contemplated by this Master Agreement.

 
 
xi.
The principal balance of such loan, when aggregated with (x) the aggregate
principal balance of all loans to the same Borrower previously sold hereunder,
(y) the aggregate principal balance of all Other Pledged Obligations with
respect to the same Borrower and (z) the aggregate principal balance of all
Other Sold Obligations with respect to the same Borrower, will not exceed
$35,000,000 (or any higher amount permitted by Farmer Mac and communicated to
CFC in writing).

 
 
xii.
The principal balance of such loan, when aggregated with (x) the aggregate
principal balance of all loans to the same Borrower previously sold hereunder
and (y) the aggregate principal balance of all Other Sold Obligations with
respect to the same Borrower, will not exceed $15,000,000 (or any higher amount
permitted by Farmer Mac and communicated to CFC in writing).

 
 
xiii.
With respect to any loan, the Borrower of which is a Class B Member, the
principal balance of such loan, when aggregated with (x) the aggregate principal
balance of all other loans to Class B Members previously sold hereunder, (y) the
aggregate principal balance of all Other Sold Obligations with respect to Class
B Members and (z) the aggregate principal balance of all Other Pledged
Obligations with respect to Class B Members, will not exceed 20% (or any higher
percentage permitted by Farmer Mac and communicated to CFC in writing) of the
sum of (a) the aggregate principal balance of all loans sold hereunder, (b) the
aggregate principal balance of all Other Pledged Obligations and (c) the
aggregate principal balance of all Other Sold Obligations.

 
 
xiv.
With respect to any loan, the Borrower of which is a Class B Member, the
principal balance of such loan, when aggregated with (x) the aggregate principal
balance of all other loans to Class B Members previously sold hereunder and
(y) the aggregate principal balance of all Other Sold Obligations with respect
to Class B Members, will not exceed 10% (or any higher percentage permitted by
Farmer Mac and communicated to CFC in writing) of the sum of (a) the aggregate
principal balance of all loans sold hereunder, (b) the aggregate principal
balance of all Other Pledged Obligations and (c) the aggregate principal balance
of all Other Sold Obligations.

 
 
xv.
With respect to any loan, the Borrower of which is a Class B Member, the
documentation for such loan contains a representation and warranty from the
Borrower as of the Sale Date that the Borrower has not acquired, or committed to
acquire, an ownership interest in any nuclear energy generating facility built
or planned to be built after January 1, 2010.

 
 

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xvi.
Unless otherwise specified in the related Commitment Letter, the repayment terms
of such Qualified Loan shall not provide a conversion option exercisable by the
Borrower to convert to a different loan product.

 
Servicing File:  The comprehensive set of files maintained in an organized
format by the Master Servicer to properly document all current and pertinent
information related to a Qualified Loan.  These files may consist of documents
maintained in hard copy form or easily accessible electronic data and shall
include at a minimum the following documents pertaining to each Qualified Loan:
 
 
i.
a copy of the most recent Compliance Certification by an officer of the related
Borrower;

 
 
ii.
the most recent fiscal year-end certified audit of such Borrower;

 
 
iii.
with respect to Class A Members, a copy of the most recent unaudited annual
financial statements of such Borrower (which may be set forth on a Seller form
or Form 7);

 
 
iv.
with respect to Class A Members, copies of the Form 7 of such Borrower for each
of the three most recent years;

 
 
v.
with respect to Class A Members, the most recent Key Ratio Trend Analysis, as
available;

 
 
vi.
with respect to Class B Members, a copy of the most recent unaudited annual
financial statements of such Borrower (which may be set forth on a Seller form,
Form 12, or FERC Form 1, as applicable);

 
 
vii.
with respect to Class B Members, copies of the Form 12, or FERC Form 1, as
applicable,  of such Borrower for each of the three most recent years;

 
 
viii.
with respect to Class B Members, the most recent G&T Trend Analysis, as
available;

 
 
ix.
the most recent narrative with respect to such Borrower, as prepared by the
Seller;

 
 
x.
the most recent Borrower Rating of such Borrower;

 
 
xi.
all correspondence between the Master Servicer and such Borrower that pertains
to the Qualified Loan sold under this Master Agreement, or to the collateral by
which it is secured, from origination of the Qualified Loan until payoff or
foreclosure; and

 
 

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xii.
documentation of any loan servicing actions taken with respect to the Qualified
Loan.

 
Section 1.03.  Amended Defined Term.  The defined term “Total Assets Ratio” in
Section 1.01 of the Master Agreement (but not the definition associated
therewith), is hereby amended to read “Total Assets.”
 
Section 1.04.  Other Conforming Amendments.
 
A.           Section 4.03(i)(vi) of the Master Agreement is hereby deleted in
its entirety and replaced with the following:
 
(vi) The Mortgage obligates the related Borrower to take out and maintain the
classes and amounts of insurance coverages which conform to generally accepted
utility industry standards for such classes and amounts of coverages of
utilities of the size and character of such Borrower and the Borrower is in
compliance with such obligations.  The Mortgage obligates the Borrower
thereunder to maintain all such insurance at the Borrower's cost and expense,
and on the Borrower's failure to do so, authorizes the holder of the Mortgage
(or, in the case of an Indenture Borrower, the trustee thereunder) to advance or
to procure from others all sums required to maintain such insurance at
Borrower's cost and expense and to seek reimbursement therefor from the
Borrower.
 
B.           Section 5.01(d) of the Master Agreement is hereby amended by adding
the following to the end thereof:
 
Notwithstanding the foregoing, the Purchaser acknowledges and agrees that, with
respect to a Mortgage Note for a Qualified Loan made to an Indenture Borrower,
the noteholder’s ability to waive, modify, amend or vary any term of the related
indenture, and its ability to exercise remedies thereunder, is governed and may
be limited by the terms contained in such indenture as applicable to all
noteholders.  However, no provision of any indenture or any other document
related to a Qualified Loan to an Indenture Borrower shall prevent, restrict or
otherwise encumber the Master Servicer’s ability to fulfill its obligations with
respect to the 10 Business Day Notice requirement set forth above, or the Master
Servicer’s obligation to notify the Purchaser of the events specified in this
Section 5.01(d), except to the extent that noteholders under an indenture have
the ability to waive an event of default under such indenture (but not an event
of default under the Loan Agreement or Mortgage Note associated with such
Qualified Loan) in accordance with the terms thereof.

 

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ARTICLE II
Miscellaneous
 
Section 2.01.  Defined Terms.  Capitalized terms used herein and not otherwise
defined have the meanings assigned to them in the Master Agreement.
 
Section 2.02.  Authorized Officers.  The manual or facsimile signature of any
individual appearing on this Amendment, or any document or certificate issued
pursuant to this Amendment, and which is designated as the signature of a
Responsible Officer of any Person, shall constitute conclusive evidence that
such individual is, in fact, authorized to execute such document,
notwithstanding that such authorization may have lapsed prior to the effective
date of such document.
 
Section 2.03.  Entire Agreement.  This Amendment contains the entire agreement
between the parties regarding the modifications made to the Master
Agreement.  Except as explicitly modified by this Amendment, each and every
term, condition, exhibit, and provision of the Master Agreement shall remain in
full force and effect.
 
Section 2.04.  Governing Law.  The terms of this Amendment shall be governed by,
and construed in accordance with, federal law.  To the extent federal law
incorporates state law, that state law shall be the laws of the State of New
York.
 
Section 2.05.  Counterparts.  This Amendment may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
 
IN WITNESS WHEREOF, the parties hereto hereby execute this Amendment as of the
day and year first above written.
 
[signatures on following page]

 

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FEDERAL AGRICULTURAL MORTGAGE CORPORATION, as Purchaser
 
By:  
  
Name:  
Title:
 
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, as Seller and Master
Servicer
 
By:
  
 
John J. List
 
Senior Vice President - Member Services
General Counsel

 

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