[Federal Register Volume 68, Number 10 (Wednesday, January 15, 2003)]
[Notices]
[Pages 2037-2045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-800]


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FARM CREDIT ADMINISTRATION


Market Access Agreement

AGENCY: Farm Credit Administration (FCA).

ACTION: Notice of Draft Amended and Restated Market Access Agreement; 
request for comments.

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SUMMARY: The FCA is publishing for comment the Draft Amended and 
Restated Market Access Agreement (Draft Restated MAA) proposed to be 
entered into by all of the banks of the Farm Credit System (System) and 
the Federal Farm Credit Banks Funding Corporation (Funding 
Corporation). This Draft Restated MAA is an update to the original MAA 
approved by the FCA on August 17, 1994, and published in the Federal 
Register on August 23, 1994 (59 FR 43344). The Draft Restated MAA sets 
forth the rights and responsibilities of each of the parties when the 
condition of a bank falls below pre-established financial thresholds.

DATES: The FCA is seeking comments from the public on the Draft 
Restated MAA and will take into consideration those comments prior to 
the decision to grant approval. Written comments must be received on or 
before February 14, 2003.

ADDRESSES: Send us your comments by electronic mail to ``[email protected]'' or through the Pending Regulations section of FCA's Web 
site, ``www.fca.gov.'' You may also send written comments to Andrew 
Jacob, Assistant Director, Office of Policy and Analysis, Farm Credit 
Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090, or 
by facsimile transmission to (703) 734-5784. You may review copies of 
all comments received at FCA's office in McLean, Virginia.

FOR FURTHER INFORMATION CONTACT: Samuel R. Coleman, CFA, Senior Policy 
Analyst, Office of Policy and Analysis, Farm Credit Administration, 
McLean, VA 22102-5090, (703) 883-4498, TTY (703) 883-4434,

 or

James M. Morris, Senior Counsel, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
2020.

SUPPLEMENTARY INFORMATION: System banks and the Funding Corporation 
entered into the original Market Access Agreement (MAA) on September 1, 
1994, to help control the risk of each System bank by outlining each 
party's respective rights and responsibilities in the event the 
condition of a System bank fell below certain financial thresholds. As 
part of the original MAA, System banks and the Funding Corporation 
agreed to periodic reviews of the terms of the MAA to consider whether 
any amendments were appropriate. The Draft Restated MAA updates the 
original MAA and provides for more stringent financial performance 
requirements on each System bank.
    The Draft Restated MAA, consistent with the approach of the 
original MAA, establishes certain financial thresholds at which 
conditions are placed on the activities of a bank or a bank's access to 
participation in Systemwide and consolidated obligations is restricted. 
The Draft Restated MAA establishes three categories, which are based on 
each bank's net collateral ratio, permanent capital ratio, and scores 
under the Contractual Inter-bank Performance Agreement (CIPA is an 
agreement among the System banks, the Farm Credit System Financial 
Assistance Corporation, and the Funding Corporation that establishes 
certain financial performance criteria).
    As a bank's financial condition declines, it moves into Category I, 
then Category II, and finally Category III. When a bank reaches 
Category I, it is required to provide certain additional information to 
a committee of bank and Funding Corporation representatives established 
under the Draft Restated MAA, the Monitoring and Advisory Committee, 
including information as to how it will improve its financial 
condition. When a bank reaches Category II, in addition to being 
required to provide additional information, the bank is limited to 
joining in the issuance of Systemwide and consolidated obligations only 
in those amounts necessary for the bank to be able to roll over its 
maturing debt. When the bank reaches Category III, the bank is 
precluded from joining in the issuance of Systemwide and consolidated 
obligations.
    The Draft Restated MAA includes provisions that enable a bank in 
Category II or III to request the opportunity to continue its access to 
the market. The Agreement also provides that the FCA may override a 
decision to impose Category III prohibitions on access to the market 
for a period of 60 days, which may be renewed for an additional 60-day 
period.
    The original MAA continues in effect until the Draft Restated MAA 
is approved by the necessary parties, including FCA. The FCA is 
publishing the Draft Restated MAA for comment by any interested member 
of the public. The FCA will take these comments into consideration 
prior to the decision to approve the Draft Restated MAA.
    Based on the foregoing, the FCA is now seeking public comment on 
the Draft Restated MAA as set forth below:

AMENDED AND RESTATED MARKET ACCESS AGREEMENT

AMONG

AgAmerica, FCB,

AGFIRST FARM CREDIT BANK,

AgriBank, FCB,

COBANK, ACB,

Farm Credit Bank Of Texas,

Farm Credit

Bank Of Wichita,

Western Farm Credit Bank

AND

Federal Farm Credit Banks Funding Corporation

    This AMENDED AND RESTATED MARKET ACCESS AGREEMENT (the 
``Restated MAA'') is entered into among AgAmerica, FCB, AgFirst Farm 
Credit Bank, AgriBank, FCB, CoBank, ACB, the Farm Credit Bank of 
Texas, the Farm Credit Bank of Wichita, the Western Farm Credit Bank 
and the Federal Farm Credit Banks Funding Corporation.
    WHEREAS, the Banks and the Funding Corporation entered into the 
Market Access Agreement, dated September 1, 1994 and effective as of 
November 23, 1994, referred to herein as ``the Agreement,'' for the 
reasons stated therein; and
    WHEREAS, the Agreement provides that the Banks and the Funding 
Corporation shall review the Agreement and consider whether any 
amendments to it are appropriate during the years 2000 and 2006 and 
at such more frequent intervals as the Banks and the Funding 
Corporation may agree; and
    WHEREAS, the Agreement provides that, in connection with such 
review, the Monitoring and Advisory Committee, referred to herein as 
the ``Committee,'' shall report to the boards of directors of the 
Banks and the Funding Corporation on the operation of the Agreement 
and recommend

[[Page 2038]]

any amendments the Committee considers appropriate; and
    WHEREAS, the Committee met on October 5-6, 2000, November 30, 
2000, November 2, 2001 and January 24, 2002 and recommended certain 
amendments for presentation to the Banks and the Funding Corporation 
(``Draft Restated MAA''); and
    WHEREAS, the boards of directors of the Banks and of the Funding 
Corporation approved the Draft Restated MAA in principle; and
    WHEREAS, thereafter, the Draft Restated MAA was sent to FCA for 
approval and to the Insurance Corporation for an expression of 
support; and
    WHEREAS, FCA published the Draft Restated MAA in the Federal 
Register and sought comments thereon; and
    WHEREAS, after considering the comments received, FCA approved 
the Restated MAA [, subject to certain conditions,] and a notice of 
such approval was published in the Federal Register; and
    WHEREAS, subsequently the Insurance Corporation expressed its 
support of the Restated MAA; and
    [WHEREAS, the Restated MAA includes further changes adopted to 
satisfy the conditions to FCA's approval; and]
    WHEREAS, the Parties are mindful of FCA's independent authority 
under Section 5.17(a)(10) of the Act to ensure the safety and 
soundness of Banks, FCA's independent authority under Sections 4.2 
and 4.9 of the Act to approve the terms of specific issuances of 
Debt Securities, the Insurance Corporation's independent authority 
under Section 5.61 of the Act to assist troubled Banks, and the 
Banks' independent obligations under Section 4.3(c) of the Act to 
maintain necessary collateral levels for Debt Securities; and
    WHEREAS, the Banks are entering into this Restated MAA pursuant 
to, inter alia, Section 4.2(c) and (d) of the Act; and
    WHEREAS, the Funding Corporation is prepared to adopt as the 
``conditions of participation'' that it understands to be required 
by Section 4.9(b)(2) of the Act each Bank's compliance with the 
terms and conditions of this Restated MAA; and
    WHEREAS, the Funding Corporation believes the execution and 
implementation of this Restated MAA will materially accomplish the 
objectives which it has concluded are appropriate for a market 
access program under Section 4.9(b)(2) of the Act; and
    WHEREAS, prior to the adoption of the Agreement, the Funding 
Corporation adopted and maintained in place a Market Access and Risk 
Alert Program designed to fulfill what it understood to be its 
responsibilities under Section 4.9(b)(2) of the Act with respect to 
determining ``conditions of participation,'' which Program was 
discontinued by the Funding Corporation in accordance with the terms 
of the Agreement; and
    WHEREAS, the Funding Corporation is entering into this Restated 
MAA pursuant to, inter alia, Section 4.9(b)(2) of the Act; and
    WHEREAS, the Parties believe that the execution and 
implementation of this Restated MAA will accomplish the objectives 
intended to be achieved by the Agreement,
    NOW THEREFORE, in consideration of the foregoing, the mutual 
promises and agreements herein contained, and other good and 
valuable consideration, receipt of which is hereby acknowledged, the 
Parties, intending to be legally bound hereby, agree as follows:

ARTICLE I--CATEGORIES

    Section 1.01. Scorekeeper. The Scorekeeper, for purposes of this 
Restated MAA, shall be the same as the Scorekeeper under Section 4.1 
of CIPA.
    Section 1.02. CIPA Oversight Body. The CIPA Oversight Body, for 
purposes of this Restated MAA, shall be the same as the Oversight 
Body under Section 6.1 of CIPA.
    Section 1.03. CIPA Scores. Net Composite Scores and Average Net 
Composite Scores, for purposes of this Restated MAA, shall be the 
same as those determined under Article II of CIPA and the Model 
referred to therein, as in effect on January 1, 1997, and as amended 
under CIPA or replaced by successor provisions under CIPA in the 
future, to the extent such future amendments or replacements are by 
agreement of all the Banks.
    Section 1.04. Net Collateral and Permanent Capital Ratios. Each 
Bank shall report to the Scorekeeper within fifteen days after the 
end of each month its Net Collateral Ratio and Permanent Capital 
Ratio as of the last day of that month. Should any Bank later 
correct or revise, or be required to correct or revise, any past 
financial data in a way that would cause any Net Collateral Ratio or 
Permanent Capital Ratio previously reported hereunder to have been 
different, the Bank shall promptly report a revised Ratio to the 
Scorekeeper. Should the Scorekeeper consider it necessary to verify 
any Net Collateral Ratio or Permanent Capital Ratio, it shall so 
report to the Committee, or, if the Committee is not in existence, 
to the CIPA Oversight Body, and the Committee or the CIPA Oversight 
Body, as the case may be, may verify the Ratios as it deems 
appropriate, through reviews of Bank records by its designees 
(including experts or consultants retained by it) or otherwise. The 
reporting Bank shall cooperate in any such verification, and the 
other Banks shall provide such assistance in conducting any such 
verification as the Committee or the CIPA Oversight Body, as the 
case may be, may reasonably request.
    Section 1.05. Category I. A Bank shall be in Category I if it 
(a) has an Average Net Composite Score of 50.0 or more, but less 
than 60.0, for the most recent calendar quarter for which an Average 
Net Composite Score is available, (b) has a Net Composite Score of 
45.0 or more, but less than 60.0, for the most recent calendar 
quarter for which a Net Composite Score is available, (c) has a Net 
Collateral Ratio of 103.00% or more, but less than 104.00%, for the 
last day of the most recent month, or (d) has a Permanent Capital 
Ratio of 7.00% or more, but less than 8.00%, for the period ending 
on the last day of the most recent month.
    Section 1.06. Category II. A Bank shall be in Category II if it 
(a) has an Average Net Composite Score of 35.0 or more, but less 
than 50.0, for the most recent calendar quarter for which an Average 
Net Composite Score is available, (b) has a Net Composite Score of 
30.0 or more, but less than 45.0, for the most recent calendar 
quarter for which a Net Composite Score is available, (c) has a Net 
Collateral Ratio of 102.00% or more, but less than 103.00%, for the 
last day of the most recent month, (d) has a Permanent Capital Ratio 
of 5.00% or more, but less than 7.00%, for the period ending on the 
last day of the most recent month, or (e) is in Category I and has 
failed to provide information to the Committee as required by 
Article III within two Business Days after receipt of written notice 
from the Committee of such failure.
    Section 1.07. Category III. A Bank shall be in Category III if 
it (a) has an Average Net Composite Score of less than 35.0 for the 
most recent calendar quarter for which an Average Net Composite 
Score is available, (b) has a Net Composite Score of less than 30.0 
for the most recent calendar quarter for which a Net Composite Score 
is available, (c) has a Net Collateral Ratio of less than 102.00% 
for the last day of the most recent month, (d) has a Permanent 
Capital Ratio of less than 5.00% for the period ending on the last 
day of the most recent month, or (e) is in Category II and has 
failed to provide information to the Committee as required by 
Article III within two Business Days after receipt of written notice 
from the Committee of such failure.
    Section 1.08. Highest Category. If a Bank would come within more 
than one Category by reason of the various provisions of Sections 
1.05 through 1.07, it shall be considered to be in the highest-
numbered Category for which it qualifies (e.g., Category III rather 
than Category II).
    Section 1.09. Notice by Scorekeeper. Within twenty days of the 
end of each month, after receiving the reports due under Section 
1.04 within fifteen days of the end of the prior month, the 
Scorekeeper shall provide to all Banks, all Associations discounting 
with or otherwise receiving funding from a Bank that is in Category 
I, II or III, FCA, the Insurance Corporation, the Funding 
Corporation if it is not the Scorekeeper, and either the CIPA 
Oversight Body or, if it is in existence, the Committee a notice 
identifying the Banks, if any, that are in Categories I, II and III, 
or stating that no Banks are in such Categories.

ARTICLE II--THE COMMITTEE

    Section 2.01. Formation. A Monitoring and Advisory Committee 
(the ``Committee'') shall be formed at the instance of the CIPA 
Oversight Body within seven days of the date that it receives a 
notice from the Scorekeeper under Section 1.09 that any Bank is in 
Category I, II or III (unless such a Committee is already in 
existence). The Committee shall remain in existence thereafter for 
so long as the most recent notice from the Scorekeeper under Section 
1.09 indicates that any Bank is in Category I, II or III. If not 
already in existence, the Committee may also be formed (a) at the 
instance of the CIPA Oversight Body at any other time, in order to 
consider a Continued Access Request that has been submitted or is 
expected to be submitted, (b) for purposes of preparing the reports 
described in Section 7.05, and (c) as provided for in Section 
8.04(b).

[[Page 2039]]

    Section 2.02. Composition. The Committee shall be made up of two 
representatives of each Bank and two representatives of the Funding 
Corporation. One of the representatives of each Bank shall be that 
Bank's representative on the CIPA Oversight Body. The other 
representative of each Bank shall be an individual designated by the 
Bank's board of directors, who may be a member of the Bank's board 
of directors or a senior officer of the Bank, in the discretion of 
the board. One of the representatives of the Funding Corporation 
shall be an outside director of the Funding Corporation designated 
by the Funding Corporation board of directors. The other 
representative of the Funding Corporation shall be designated by the 
board of directors of the Funding Corporation from among the members 
of its board and/or its senior officers. The removal and replacement 
of the Committee members designated directly by Bank boards of 
directors and by the Funding Corporation shall be in the sole 
discretion of each Bank board and of the Funding Corporation, 
respectively. A replacement for a member of the CIPA Oversight Body 
shall automatically replace such member on the Committee.
    Section 2.03. Authority and Responsibilities. The Committee 
shall have the authority and responsibilities specified in this 
Article II, in Sections 1.04, 3.01, 3.02, 3.05, 3.06, 4.02, 7.05, 
8.04 and 8.08, and in Article VI, and such incidental powers as are 
necessary and appropriate to effectuating such authority and 
responsibilities.
    Section 2.04. Meetings. The initial meeting of the Committee 
shall be held at the call of the Chairman of the CIPA Oversight Body 
or a majority of the Parties entitled to vote on Committee business 
(with each Party acting through at least one of its 
representatives). Thereafter, the Committee shall meet at the call 
of the Chairman of the Committee or a majority of the Parties 
entitled to vote on Committee business (with each Party acting 
through at least one of its representatives). Written notice of each 
meeting shall be given to each member by the Chairman or his or her 
designee not less than 48 hours prior to the time of the meeting. A 
meeting may be held without such notice upon the signing of a waiver 
of notice by all of the Parties entitled to vote on Committee 
business (with each Party acting through at least one of its 
representatives). A majority of the Parties entitled to vote on 
Committee business (with each Party acting through at least one of 
its representatives) shall constitute a quorum for the conduct of 
business, provided, however, that if a quorum cannot be raised after 
seven days of efforts, the Parties that attend a meeting upon proper 
notice thereafter shall constitute a quorum. A meeting may be held 
by a telephone conference arrangement allowing each speaker to be 
heard by all others in attendance.
    Section 2.05. Action Without a Meeting. Action may be taken by 
the Committee without a meeting if each Bank and the Funding 
Corporation (with each Party acting through at least one of its 
representatives) consents in writing to consideration of a matter 
without a meeting and a majority of the Parties entitled to vote on 
Committee business (with each Party acting through at least one of 
its representatives) approves the action in writing, which writings 
shall be kept with the minutes of the Committee.
    Section 2.06. Voting. Each Bank and the Funding Corporation 
shall have one vote on Committee business. Voting on Committee 
business (including recommendations on Continued Access Decisions, 
but not the ultimate vote on Continued Access Decisions, which is 
addressed in Article VI) shall be by a simple majority of the 
Parties entitled to vote on Committee business that are present 
(physically or by telephone) through at least one representative. If 
a Bank or the Funding Corporation has two representatives present, 
they shall agree in casting the vote of the Bank or the Funding 
Corporation, and if they cannot agree on a particular matter, that 
Bank or the Funding Corporation shall not cast a vote on that 
matter, and, in determining the necessary majority (but not in 
determining a quorum), shall not be counted as a Party entitled to 
vote on that matter.
    Section 2.07. Officers. The Committee shall elect from among its 
members a Chairman, a Vice Chairman, a Secretary and such other 
officers as it shall from time to time deem appropriate. The 
Chairman shall chair the meetings of the Committee and have such 
other duties as the Committee may delegate to him or her. The Vice 
Chairman shall perform such duties of the Chairman as the Chairman 
is unable to perform, and shall have such other duties as the 
Committee may delegate to him or her. The Secretary shall keep the 
minutes and maintain the minute book of the Committee. Other 
officers shall have such duties as the Committee may delegate to 
them.
    Section 2.08. Retention of Staff, Consultants and Experts. The 
Committee shall be authorized to retain staff, consultants and 
experts as it deems necessary and appropriate in its sole 
discretion.
    Section 2.09. Expenses. Any compensation of each member of the 
Committee for time spent on Committee business and for his or her 
out-of-pocket expenses, such as travel, shall be paid by the Party 
that designated that member to the Committee or to the CIPA 
Oversight Body. All other expenses incurred by the Committee shall 
be borne by the Banks and assessed by the Funding Corporation based 
on the formula then used by the Funding Corporation to allocate its 
operating expenses.
    Section 2.10. Custody of Records. All information received by 
the Committee pursuant to this Restated MAA, and all Committee 
minutes, shall be lodged, while not in active use by the Committee, 
at the Funding Corporation, and shall be deemed records of the 
Funding Corporation for purposes of FCA examination. The Parties 
agree that documents in active use by the Committee may also be 
examined by FCA.

ARTICLE III--PROVISION OF INFORMATION

    Section 3.01. Information To Be Provided By All Banks in 
Categories I, II and III. If a Bank is in Category I, II or III, as 
indicated in the most recent notice from the Scorekeeper under 
Section 1.09, and if the prior monthly notice by the Scorekeeper did 
not indicate that the Bank was in any Category, then the Bank shall 
within thirty days of receipt of the latest notice provide to the 
Committee: (a) a detailed explanation of the causes of its being in 
that Category, (b) an action plan to improve its financial situation 
so that it is no longer in any of the three Categories, (c) a 
timetable for achieving that result, (d) the materials and 
information listed in Attachment 1 hereto (in addition to fulfilling 
the other obligations specified in Attachment 1 hereto) and (e) such 
other pertinent materials and information as the Committee shall, 
within seven days of receiving notice from the Scorekeeper, request 
in writing from the Bank. Such Bank shall summarize, aggregate or 
analyze data, as well as provide raw data, in such manner as the 
Committee may request. Such information shall be promptly updated 
(without any need for a request by the Committee) whenever the facts 
significantly change, and shall also be updated or supplemented as 
the Committee so requests in writing of the Bank by such deadlines 
as the Committee may reasonably specify.
    Section 3.02. Additional Information To Be Provided By Banks in 
Categories II and III. If a Bank is in Category II or III, as 
indicated in the most recent notice from the Scorekeeper under 
Section 1.09, and if the prior monthly notice by the Scorekeeper did 
not indicate that the Bank was in Category II or III, then the Bank 
shall within thirty days of receipt of the latest notice provide to 
the Committee, in addition to the information required by Section 
3.01, the materials and information listed in Attachment 2 hereto 
(in addition to fulfilling the other obligations specified in 
Attachment 2 hereto). Such information shall be promptly updated 
(without any need for a request by the Committee) whenever the facts 
significantly change, and shall also be updated or supplemented as 
the Committee so requests in writing of the Bank by such deadlines 
as the Committee may reasonably specify.
    Section 3.03. Documents or Information Relating to 
Communications With FCA or the Insurance Corporation. 
Notwithstanding Sections 3.01 and 3.02, a Bank shall not disclose to 
the Committee any communications between the Bank and FCA or the 
Insurance Corporation, as the case may be, or documents describing 
such communications, except as consented to by, and subject to such 
restrictive conditions as may be imposed by, FCA or the Insurance 
Corporation, as the case may be. However, facts regarding the Bank's 
condition or plans that pre-existed a communication with FCA or the 
Insurance Corporation and then were included in such a communication 
are not barred from disclosure by this section. The Committee shall 
decide on a case-by-case basis whether to request copies of such 
communications and documents from FCA or the Insurance Corporation, 
as the case may be. Each Bank hereby consents to the disclosure of 
such communications and documents to the Committee if consented to 
by FCA or the Insurance Corporation, as the case may be. Nothing in 
this section shall preclude a Bank from making disclosures to the 
System Disclosure Agent necessary to allow the System Disclosure 
Agent to comply

[[Page 2040]]

with its obligations under the securities laws or other applicable 
law or regulations with regard to disclosure to investors.
    Section 3.04. Sources of Information; Certification. Information 
provided to the Committee under Sections 3.01 and 3.02 shall, to the 
extent applicable, be data used in the preparation of financial 
statements in accordance with generally accepted accounting 
principles, or data used in the preparation of call reports 
submitted to FCA pursuant to 12 C.F.R. pt. 621, subpt. B, as amended 
from time to time, or any successor thereto. A Bank shall certify, 
through its chief executive officer or, if there is no chief 
executive officer, a senior executive officer, the completeness and 
accuracy of all information provided to the Committee under Sections 
3.01 and 3.02.
    Section 3.05. Failure to Provide Information. If a Bank fails to 
provide information to the Committee as and when required under 
Sections 3.01 and 3.02, and does not correct such failure within two 
Business Days of receipt of the written notice by the Committee of 
the failure, then the Committee shall so advise the Scorekeeper.
    Section 3.06. Provision of Information to Banks. Any information 
provided to the Committee under Sections 3.01 and 3.02 shall be 
provided by the Committee to any Bank upon request. A Bank shall not 
have the right under this Restated MAA to obtain information 
directly from another Bank.
    Section 3.07. Cessation of Obligations. A Bank's obligation to 
provide information to the Committee under Section 3.01 shall cease 
as soon as the Bank is no longer in Category I, II or III, as 
indicated in the most recent notice from the Scorekeeper under 
Section 1.09. A Bank's obligation to provide to the Committee 
information under Section 3.02 shall cease as soon as the Bank is no 
longer in Category II or III, as indicated in the most recent notice 
from the Scorekeeper under Section 1.09.

ARTICLE IV--RESTRICTIONS ON MARKET ACCESS

    Section 4.01. Final Restrictions. As of the Effective Date, a 
Bank in Category II, as indicated in the most recent notice from the 
Scorekeeper under Section 1.09, (a) shall be permitted to 
participate in issues of Debt Securities only to the extent 
necessary to roll over the principal (net of any original issue 
discount) of maturing debt, and (b) shall comply with the Additional 
Restrictions.
    Section 4.02. Category II Interim Restrictions. From the day 
that a Bank receives a notice from the Scorekeeper that it is in 
Category II until (a) 10 days thereafter, if the Bank does not by 
that day submit a Continued Access Request to the Committee, or (b) 
if the Bank does by that day submit a Continued Access Request to 
the Committee, the seventh day following the day that notice is 
received that the Request is granted or denied, the Bank (i) may 
participate in issues of Debt Securities only to the extent 
necessary to roll over the principal (net of any original issue 
discount) of maturing debt unless the Committee, taking into account 
the criteria in Section 6.03, shall specifically authorize 
participation to a greater extent, and (ii) shall comply with the 
Additional Restrictions. Notwithstanding the foregoing, the Category 
II Interim Restrictions shall not go into effect if a Continued 
Access Request has already been granted in anticipation of the 
formal notice that the Bank is in Category II.
    Section 4.03. FCA Action. The Final Restrictions and the 
Category II Interim Restrictions shall go into effect without the 
need for case-by-case approval by FCA.
    Section 4.04. Cessation of Restrictions. The Final Restrictions 
and the Category II Interim Restrictions shall cease as soon as the 
Bank is no longer in Category II, as indicated in the most recent 
notice from the Scorekeeper under Section 1.09. The Bank shall 
continue, however, to be subject to such other obligations under 
this Restated MAA as may apply to it by reason of its being in 
another Category.

ARTICLE V--PROHIBITION OF MARKET ACCESS

    Section 5.01. Final Prohibition. As of the Effective Date, a 
Bank in Category III, as indicated in the most recent notice from 
the Scorekeeper under Section 1.09, (a) shall be prohibited from 
participating in issues of Debt Securities, and (b) shall comply 
with the Additional Restrictions.
    Section 5.02. Category III Interim Restrictions. From the day 
that a Bank receives a notice from the Scorekeeper that it is in 
Category III until (a) 25 days thereafter, if the Bank does not by 
that day submit a Continued Access Request to the Committee, or (b) 
if the Bank does by that day submit a Continued Access Request to 
the Committee, the seventh day following the day that notice is 
received that the Request is granted or denied, the Bank (i) may 
participate in issues of Debt Securities only to the extent 
necessary to roll over the principal (net of any original issue 
discount) of maturing debt, and (ii) shall comply with the 
Additional Restrictions. Notwithstanding the foregoing, the Category 
III Interim Restrictions shall not go into effect if a Continued 
Access Request has already been granted in anticipation of the 
formal notice that the Bank is in Category III.
    Section 5.03. FCA Action. The Category III Interim Restrictions 
shall go into effect without the need for case-by-case approval by 
FCA. The Parties agree that the Final Prohibition shall go into 
effect without the need for approval by FCA; provided, however, that 
FCA may override the Final Prohibition, for such time period up to 
60 days as FCA may specify (or, if FCA does not so specify, for 60 
days), by so ordering before the Effective Date, and may renew such 
an override once only, for such time period up to 60 additional days 
as FCA may specify (or, if FCA does not so specify, for 60 days), by 
so ordering before the expiration of the initial override period. If 
the Final Prohibition is overridden by FCA, the Category III Interim 
Restrictions shall remain in effect.
    Section 5.04. Cessation of Restrictions. The Final Prohibition 
and the Category III Interim Restrictions shall cease as soon as the 
Bank is no longer in Category III, as indicated in the most recent 
notice from the Scorekeeper under Section 1.09. The Bank shall 
continue, however, to be subject to such other obligations under 
this Restated MAA as may apply to it by reason of its being in 
another Category.

ARTICLE VI--CONTINUED ACCESS DECISIONS

    Section 6.01. Process. The process for action on Continued 
Access Requests shall be as follows:
    (a) Submission of Request. A Bank may submit a Continued Access 
Request for consideration by the Committee at any time, including 
(i) prior to formal notice from the Scorekeeper that it is in 
Category II or III, if the Bank anticipates such notice, and (ii) 
subsequent to the Effective Date of Final Restrictions or a Final 
Prohibition.
    (b) Committee Recommendation. After a review of the Request, the 
supporting information and any other pertinent information available 
to the Committee, the Committee shall arrive at a recommendation 
regarding the Request (including, if the recommendation is to grant 
the Request, recommendations as to the expiration date of the 
Continued Access Decision and as to any conditions to be imposed on 
the Decision). The Funding Corporation, drawing upon its expertise 
and specialized knowledge, shall provide to the Committee all 
pertinent information in its possession (and the Banks authorize the 
Funding Corporation to provide such information to the Committee for 
its use as provided herein, and, to that limited extent only, waive 
their right to require the Funding Corporation to maintain the 
confidentiality of such information). The Committee shall send its 
recommendation and a statement of the reasons therefore, including a 
description of any considerations that were expressed for and 
against the recommendation by members of the Committee during its 
deliberations, together with the Request, the supporting 
information, a report of how the members of the Committee voted on 
the recommendation, a report by the Funding Corporation concerning 
its position on the recommendation, and any other material 
information that was considered by the Committee, to all Banks and 
the Funding Corporation by overnight delivery service within 
fourteen days after receiving the Request. If the Committee fails to 
act within such fourteen-day period, the Continued Access Request 
shall be deemed forwarded to all Banks entitled to vote thereon for 
their consideration. If the Committee has failed to act, the Funding 
Corporation shall send to all Banks, within two days following the 
deadline for Committee action, a report concerning the position of 
the Funding Corporation on the Continued Access Request.
    (c) Vote on the Request. The Banks entitled to vote on the 
Request shall be all Banks other than those in Category II and III, 
as indicated in the most recent notice from the Scorekeeper under 
Section 1.09, and other than the Bank requesting the Continued 
Access Decision. Within ten days of receiving the Committee's 
recommendation and the accompanying materials (or, if the Committee 
failed to act within fourteen days, within ten days following the 
fourteenth day), the board of directors of each Bank entitled to 
vote on

[[Page 2041]]

the Request, or its designee, after review of the recommendation, 
the accompanying materials, the report of the Funding Corporation, 
and any other pertinent information, shall vote to grant or deny the 
Request (as modified or supplemented by any recommendations of the 
Committee as to the expiration date of the Continued Access Decision 
and as to conditions to be imposed on the Decision), and shall 
provide written notice of its vote to the Committee. If the 
Committee has recommended in favor of a Continued Access Decision, 
the vote of a Bank shall be either to accept or reject the 
Committee's recommendation, including the recommended expiration 
date and conditions; if the Committee has recommended against a 
Continued Access Decision or has failed to act, the vote of a Bank 
shall be either to grant the Continued Access Request on the terms 
requested by the requesting Bank, or to deny it. Failure to vote 
within the ten-day period shall be considered a ``no'' vote. A 
Continued Access Request shall be granted only upon a 75% Vote 
within the ten-day period, and shall be considered denied if a 75% 
Vote is not forthcoming by that day.
    (d) Notice. The Committee shall promptly provide written notice 
to the Parties, FCA and the Insurance Corporation of the granting or 
denial of the Request, and, if the Request was granted, of all the 
particulars of the Continued Access Decision.
    Section 6.02. Provision of Information to FCA and the Insurance 
Corporation. FCA and the Insurance Corporation shall be advised by 
the Committee of the submission of a Continued Access Request, shall 
be provided by the Committee with appropriate materials relating to 
the Request, and shall be advised by the Committee of the 
recommendation made by the Committee concerning the Request.
    Section 6.03. Criteria. The Committee, in arriving at its 
recommendation on a Continued Access Request, and the voting Banks, 
in voting on a Continued Access Request, shall consider (a) the 
present financial strength of the Bank in issue, (b) the prospects 
for financial recovery of the Bank in issue, (c) the probable costs 
of particular courses of action to the Banks and the Insurance Fund, 
(d) any intentions expressed by the Insurance Corporation with 
regard to assisting or working with the Bank in issue, (e) any 
existing lending commitments and any particular high-quality new 
lending opportunities of the Bank, (f) seasonal variations in the 
borrowing needs of the Bank, (g) whether the Bank's independent 
public accountants have included a Going Concern Qualification in 
the most recent combined financial statements of the Bank and its 
constituent Associations, and (h) any other matters deemed 
pertinent.
    Section 6.04. Expiration Date. A Continued Access Decision shall 
have such expiration date as the Committee recommends and is 
approved by a 75% Vote. If the Committee recommends against or fails 
to act on a Continued Access Request, and it is subsequently 
approved by a 75% Vote, the expiration date of the Continued Access 
Decision shall be the earlier of the date requested by the Bank or 
180 days from the date the Request is granted. A Continued Access 
Decision may be terminated prior to that date, or renewed for an 
additional term, upon a new recommendation by the Committee and 75% 
Vote. A Continued Access Decision (including any conditions to which 
it may be subject) will terminate automatically as soon as the Bank 
is no longer in the same Category as it was when it requested the 
Decision, as indicated in the most recent notice from the 
Scorekeeper under Section 1.09.
    Section 6.05. Conditions. A Continued Access Decision shall be 
subject to such conditions as the Committee recommends and are 
approved by a 75% Vote. If specifically approved by a 75% Vote, 
administration of the details of the conditions and ongoing 
refinement of the conditions to take account of changing 
circumstances can be left to the Committee or such subcommittee as 
it may establish for that purpose. Among the conditions that may be 
imposed on a Continued Access Decision are (a) a requirement of 
remedial action by the Bank, failing which the Continued Access 
Decision will terminate, (b) a requirement of other appropriate 
conduct on the part of the Bank (such as compliance with the 
Additional Restrictions), failing which the Continued Access 
Decision will terminate, and (c) specific restrictions on continued 
borrowing by the Bank, such as a provision allowing a Bank in 
Category II to borrow only for specified types of business in 
addition to rolling over the principal of maturing debt, or allowing 
such a Bank only to roll over interest on maturing debt in addition 
to rolling over the principal of maturing debt, or a provision 
allowing a Bank in Category III to roll over a portion of its 
maturing debt. The Committee shall be responsible for monitoring and 
determining compliance with conditions, and shall promptly advise 
the Parties of any failure by a Bank to comply with conditions. The 
Committee's determination with respect to compliance with conditions 
shall be final, until and unless overturned or modified in 
arbitration pursuant to Section 7.08.
    Section 6.06. FCA Action. The Parties agree that a Continued 
Access Decision shall go into effect without the need for approval 
by FCA, but that FCA may override the Continued Access Decision, for 
such time period as FCA may specify (or, if FCA does not so specify, 
until a new Continued Access Decision is made pursuant to a 
recommendation of the Committee and a 75% Vote, in which case it is 
again subject to override by FCA), by so ordering at any time.
    Section 6.07. Notice to FCA of Intent to File Continued Access 
Request. A Bank that receives notice that it is in Category III 
shall advise FCA, within ten days of receiving such notice, whether 
it intends to file a Continued Access Request.

ARTICLE VII--OTHER

    Section 7.01. Conditions Precedent. This Restated MAA shall go 
into effect on January 1, 2003, provided, however, that on or before 
that date each Party has executed a certificate in substantially the 
form of Attachment 3 hereto that all of the following conditions 
precedent have been satisfied: (a) the delivery to the Banks of an 
opinion of Covington & Burling in substantially the form of 
Attachment 4 hereto, (b) the delivery to the Funding Corporation of 
an opinion of Sutherland, Asbill & Brennan in substantially the form 
of Attachment 5 hereto, (c) adoption by each of the Banks and the 
Funding Corporation of a resolution in substantially the form of 
Attachment 6 hereto, (d) action by the Insurance Corporation, 
through its board, expressing its support for this Restated MAA, and 
(e) action by FCA, through its board, approving this Restated MAA 
pursuant to Section 4.2(c) and Section 4.2(d) of the Act, and 
(without necessarily expressing any view as to the proper 
interpretation of Section 4.9(b)(2) of the Act) approving this 
Restated MAA pursuant to Section 4.9(b)(2) of the Act insofar as 
such approval may be required, which action shall (i) indicate that 
the entry into and compliance with this Restated MAA by the Funding 
Corporation fully satisfy such obligations as the Funding 
Corporation may have with respect to establishing ``conditions of 
participation'' for market access under Section 4.9(b)(2), and (ii) 
contain no reservations or other conditions or qualifications except 
for those which may be specifically agreed to by the Funding 
Corporation's board of directors and the other Parties.
    Upon execution of its certificate, each Party shall forward a 
copy to the Funding Corporation, attn. Kathleen Mullarkey, General 
Counsel, which shall advise all other Parties when a complete set of 
certificates is received.
    If this Restated MAA becomes effective in accordance with this 
Section 7.01, the Agreement shall be amended and restated by this 
Restated MAA as of that date without further action of the Parties. 
If any term, provision, covenant or restriction of this Restated MAA 
is held by a court of competent jurisdiction or other authority to 
be invalid, void or unenforceable, the remainder of the terms, 
provisions, covenants and restrictions of this Restated MAA shall 
remain in full force and effect and shall in no way be affected, 
impaired or invalidated. If any term, provision, covenant or 
restriction of this Restated MAA that purports to amend a term, 
provision, covenant or restriction of the Agreement is held by a 
court of competent jurisdiction or other authority to be invalid, 
void or unenforceable, such term, provision, covenant or restriction 
of the Agreement shall be considered to have continued and to be 
continuing in full force and effect at all times since this Restated 
MAA has purported to be in effect. The parties agree that 
notwithstanding the occurrence of any of the foregoing events they 
will treat, to the maximum extent permitted by law, all actions 
theretofore taken pursuant to this Restated MAA as valid and binding 
actions of the parties.
    Section 7.02. Representations and Warranties. Each Party 
represents and warrants to the other Parties that (a) it has duly 
executed and delivered this Restated MAA, (b) its performance of 
this Restated MAA in accordance with its terms will not conflict 
with or result in the breach of or

[[Page 2042]]

violation of any of the terms or conditions of, or constitute (or 
with notice or lapse of time or both constitute) a default under any 
order, judgment or decree applicable to it, or any instrument, 
contract or other agreement to which it is a party or by which it is 
bound, (c) it is duly constituted and validly existing under the 
laws of the United States, (d) it has the corporate and other 
authority, and has obtained all necessary approvals, to enter into 
this Restated MAA and perform all of its obligations hereunder, and 
(e) its performance of this Restated MAA in accordance with its 
terms will not conflict with or result in the breach of or violation 
of any of the terms or conditions of, or constitute (or with notice 
or lapse of time or both constitute) a default under its charter 
(with respect to the Party Banks), or its bylaws.
    Section 7.03. Additional Covenants.
    (a) Each Bank agrees to notify the other Parties and the 
Scorekeeper if, at any time, it anticipates that within the 
following three months it will come to be in Category I, II or III, 
or will move from one Category to another.
    (b) Whenever a Bank is subject to Final Restrictions, a Final 
Prohibition, Category II Interim Restrictions, Category III Interim 
Restrictions, or a Continued Access Decision, the Committee shall 
promptly so notify the Funding Corporation, and the Funding 
Corporation shall take all necessary steps to ensure that the Bank 
participates in issues of Debt Securities only to the extent 
permitted thereunder. The Funding Corporation may rely on the 
determination of the Committee as to whether a Bank has complied 
with a condition to a Continued Access Decision.
    (c) Each Bank agrees that it will not at any time that it is in 
Category I, II or III, as indicated in the most recent notice from 
the Scorekeeper under Section 1.09, and will not without twelve 
months' prior notice to all other Banks and the Funding Corporation 
at any other time, either (i) withdraw, or (ii) modify, in a fashion 
that would impede the issuance of Debt Securities, the funding 
resolution it has adopted pursuant to Section 4.4(b) of the Act. 
Should a violation of this covenant be asserted, and should the Bank 
deny same, the funding resolution shall be deemed still to be in 
full effect, without modification, until arbitration of the matter 
is completed, and each Bank, by entering into this Restated MAA, 
consents to emergency injunctive relief to enforce this provision. 
Nothing in this Restated MAA shall be construed to restrict any 
Party's ability to take the position that a Bank's withdrawal or 
modification of its funding resolution is not authorized by law.
    (d) Each Bank agrees that it will not at any time that it is in 
Category I, II or III, as indicated in the most recent notice from 
the Scorekeeper under Section 1.09, and will not without twelve 
months' prior notice to all other Banks and the System Disclosure 
Agent at any other time, fail to report information to the System 
Disclosure Agent pursuant to the Disclosure Program for the issuance 
of Debt Securities and for the System Disclosure Agent to have a 
reasonable basis for making disclosures pursuant to the Disclosure 
Program. Should the System Disclosure Agent assert a violation of 
this covenant, and should the Bank deny same, the Bank shall furnish 
such information as the System Disclosure Agent shall request until 
arbitration of the matter is completed, and each Bank, by entering 
into this Restated MAA, consents to emergency injunctive relief to 
enforce this provision. Nothing in this Restated MAA shall be 
construed to restrict the ability of the System Disclosure Agent to 
comply with its obligations under the securities laws or other 
applicable law or regulations with regard to disclosure to 
investors.
    (e) Without implying that suit may be brought on any other 
matter, each Bank and the Funding Corporation specifically agree not 
to bring suit to challenge this Restated MAA or to challenge any 
Final Prohibition, Final Restrictions, Category II Interim 
Restrictions, Category III Interim Restrictions, Continued Access 
Decision, denial of a Continued Access Request or recommendation of 
the Committee with respect to a Continued Access Request arrived at 
in accordance with this Restated MAA. This provision shall not be 
construed to preclude judicial actions under the U.S. Arbitration 
Act, 9 U.S.C. '' 1-15, to enforce or vacate arbitration decisions 
rendered pursuant to Section 7.08, or for an order that arbitration 
proceed pursuant to Section 7.08.
    (f) The Funding Corporation agrees that it will not reinstitute 
the Market Access and Risk Alert Program, or adopt a similar such 
program for so long as both (i) this Restated MAA is in effect and 
(ii) Section 4.9(b)(2) of the Act is not amended in a manner which 
would require, nor is there any other change in applicable law or 
regulations which would require, the Funding Corporation to 
establish ``conditions of participation'' different from those 
contained in this Restated MAA. Should the condition described in 
(ii) no longer apply and the Funding Corporation adopt a market 
access program, this Restated MAA shall be deemed terminated. All 
Banks reserve the right to argue, if the conditions described in 
clauses (i) or (ii) of the preceding sentence should no longer apply 
and the Funding Corporation should adopt such a program, that any 
such program adopted by the Funding Corporation is contrary to law, 
either because Section 4.9(b)(2) of the Act does not authorize such 
a program, or for any other reason, and the entry by any Bank into 
this Restated MAA shall not be construed as waiving such right.
    (g) It is expressly agreed that the Agreement, FCA approval of 
the Agreement, this Restated MAA and FCA approval hereof do not 
provide any grounds for challenging FCA or Insurance Corporation 
actions with respect to the creation of or the conduct of 
receiverships or conservatorships. Without limiting the preceding 
statement, each Bank specifically and expressly agrees and 
acknowledges that it cannot, and agrees that it shall not, attempt 
to challenge FCA's appointment of a receiver or conservator for 
itself or any other System institution or FCA's or the Insurance 
Corporation's actions in the conduct of any receivership or 
conservatorship (i) on the basis of this Restated MAA or FCA's 
approval of this Restated MAA; or (ii) on the grounds that Category 
II Interim Restrictions, Final Restrictions, Category III Interim 
Restrictions, or Final Prohibitions were or were not imposed, 
whether by reason of FCA's or the Insurance Corporation's action or 
inaction or otherwise. The Banks jointly and severally agree that 
they shall indemnify and hold harmless FCA and the Insurance 
Corporation against all costs, expenses, and damages, including 
without limitation, attorneys' fees and litigation costs, resulting 
from any such challenge by any Party.
    Section 7.04. Termination. This Restated MAA shall terminate on 
December 31, 2011, or at an earlier date if so agreed in writing by 
75% of all the Banks. Commencing a year before December 31, 2011, 
the Parties shall meet to consider its extension. Except as provided 
in Section 7.03(f), it is understood that the termination of this 
Restated MAA shall not affect any rights and obligations of the 
Funding Corporation under Section 4.9(b)(2) of the Act.
    Section 7.05. Periodic Review. During the years 2003, 2006 and 
2009, and at such more frequent intervals as the Parties may agree, 
the Banks and the Funding Corporation, through their boards of 
directors, shall review this Restated MAA and consider whether any 
amendments to it are appropriate. In connection with such review, 
the Committee shall report to the boards on the operation of the 
Restated MAA and recommend any amendments it considers appropriate.
    Section 7.06. Confidentiality. The Parties may disclose this 
Restated MAA and any amendments to it and any actions taken pursuant 
to this Restated MAA to restrict or prohibit borrowing by a Bank. 
All other information relating to this Restated MAA shall be kept 
confidential and shall be used solely for purposes of this Restated 
MAA, except that, to the extent permitted by applicable law and 
regulations, such information may be disclosed by (a) the System 
Disclosure Agent under the Disclosure Program, (b) a Bank, upon 
coordination of such disclosure with the System Disclosure Agent, as 
the Bank deems appropriate for purposes of the Bank's disclosures to 
borrowers or shareholders; (c) a Bank as deemed appropriate for 
purposes of disclosure to transacting parties (subject, to the 
extent the Bank reasonably can obtain such agreement, to such a 
transacting party's agreeing to keep the information confidential) 
of material information relating to that Bank, or (d) any Party in 
order to comply with legal or regulatory obligations. 
Notwithstanding the preceding sentence, the Parties shall make every 
effort, to the extent consistent with legal requirements, securities 
disclosure obligations and other business necessities, to preserve 
the confidentiality of information provided to the Committee by a 
Bank and designated as ``Proprietary and Confidential.'' Any expert 
or consultant retained in connection with this Restated MAA shall 
execute a written undertaking to preserve the confidentiality of any 
information received in connection with this Restated MAA. 
Notwithstanding the foregoing, nothing in this Restated MAA shall 
prevent Parties from disclosing information to FCA or the Insurance 
Corporation.

[[Page 2043]]

    Section 7.07. Amendments. This Restated MAA may be amended only 
by the written agreement of all the Parties.
    Section 7.08. Dispute Resolution. All disputes between or among 
Parties relating to this Restated MAA shall be submitted to final 
and binding arbitration pursuant to the U.S. Arbitration Act, 9 
U.S.C. '' 1-15, provided, however, that any recommendation by the 
Committee regarding a Continued Access Request (including, if the 
recommendation is to grant the Request, recommendations as to the 
expiration date of the Continued Access Decision and as to any 
conditions to be imposed on the Decision), and any vote by a Bank on 
a Continued Access Request, shall be final and not subject to 
arbitration. Arbitrations shall be conducted under the Commercial 
Arbitration Rules of the American Arbitration Association before a 
single arbitrator. An arbitrator shall be selected within fourteen 
days of the initiation of arbitration by any Party, and the 
arbitrator shall render a decision within thirty days of his or her 
selection.
    Section 7.09. Governing Law. This Restated MAA shall be governed 
by and construed in accordance with the Federal laws of the United 
States of America, and, to the extent of the absence of Federal law, 
in accordance with the laws of the State of New York excluding any 
conflict of law provisions that would cause the law of any 
jurisdiction other than New York to be applied; provided, however, 
that in the event of any conflict between the U.S. Arbitration Act 
and applicable Federal or New York law, the U.S. Arbitration Act 
shall control.
    Section 7.10. Notices. Notices under this Restated MAA shall be 
in writing, shall be sent both by facsimile transmission and by 
overnight delivery service, and shall be deemed received on the 
Business Day after they are sent.
    Notices shall be addressed as follows unless such address is 
changed by written notice hereunder:

To AgAmerica, FCB:
AgAmerica, FCB
375 Jackson Street
St. Paul, MN 55101
Attention: President and Chief Executive Officer
Fax: 651-282-8494

To AgFirst Farm Credit Bank:
AgFirst Farm Credit Bank
Farm Credit Bank Building
1401 Hampton Street
Columbia, SC 29201
Attention: President and Chief Executive Officer
Fax: 803-254-1776

To AgriBank, FCB:
AgriBank, FCB
375 Jackson Street
St. Paul, MN 55101
Attention: President and Chief Executive Officer
Fax: 651-282-8494

To CoBank, ACB:
CoBank, ACB
5500 South Quebec Street
Englewood, CO 80111
Attention: President and Chief Executive Officer
Fax: 303-740-4002

To the Farm Credit Bank of Texas:
Farm Credit Bank of Texas
6210 Highway 290 East
Austin, TX 78723
Attention: President and Chief Executive Officer
Fax: 512-465-0775

To Farm Credit Bank of Wichita:
Farm Credit Bank of Wichita
Farm Credit Bank Building
245 North Waco
Wichita, KS 67202
Attention: President and Chief Executive Officer
Fax: 316-266-5126

To Western Farm Credit Bank:
Western Farm Credit Bank
Farm Credit Bank Building
245 North Waco
Wichita, KS 67202
Attention: President and Chief Executive Officer
Fax: 316-266-5126

To Federal Farm Credit Banks Funding Corporation:
Federal Farm Credit Banks Funding Corporation
10 Exchange Place
Suite 1401
Jersey City, NJ 07302
Attention: President and Chief Executive Officer
Fax: 201-200-8109

To the Farm Credit System Insurance Corporation:
Farm Credit System Insurance Corporation 1501 Farm Credit Drive
McLean, Virginia 22102
Attention: Chairman
Fax: 703-790-9088

To the Farm Credit Administration:
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090
Attention: Chairman
Fax: 703-734-5784

To the CIPA Oversight Body:
At such address and fax number as shall be supplied to the Parties 
from time to time by the Chairman of the CIPA Oversight Body.
    To the Committee:
At such address and fax number as shall be supplied by the 
Committee, which the Committee shall promptly transmit to each 
Party.
To a Scorekeeper other than the Funding Corporation:
At such address and fax number as shall be supplied by such 
Scorekeeper, which such Scorekeeper shall promptly transmit to each 
Party.

    Section 7.11. Headings; Conjunctive/Disjunctive; Singular/
Plural. The headings of any article or section of this Restated MAA 
are for convenience only and shall not be used to interpret any 
provision of the Restated MAA. Uses of the conjunctive include the 
disjunctive, and vice versa, unless the context clearly requires 
otherwise. Uses of the singular include the plural, and vice versa, 
unless the context clearly requires otherwise.
    Section 7.12. Successors and Assigns. Except as provided in the 
definitions of ``Bank'' and ``Banks'' in Article IX, this Restated 
MAA shall inure to the benefit of and be binding upon the successors 
and assigns of the Parties, including entities resulting from the 
merger or consolidation of one or more Banks.
    Section 7.13. Counterparts. This Restated MAA, and any document 
provided for hereunder, may be executed in one or more counterparts.
    Section 7.14. Waiver. Any provision of this Restated MAA may be 
waived, but only if such waiver is in writing and is signed by all 
Parties to this Restated MAA.
    Section 7.15. Entire Agreement. Except as provisions of CIPA are 
cited in this Restated MAA (which provisions are expressly 
incorporated herein by reference), this Restated MAA sets forth the 
entire agreement of the Parties and supersedes all prior 
understandings or agreements, oral or written, among the Parties 
with respect to the subject matter hereof.
    Section 7.16. Relation to CIPA. This Restated MAA and CIPA are 
separate agreements, and invalidation of one does not affect the 
other. Should CIPA be invalidated or terminated, the Parties will 
take the necessary steps to maintain those aspects of CIPA that are 
referred to in Sections 1.01, 1.02 and 1.03, and to replace the CIPA 
Oversight Body for purposes of continued administration of this 
Restated MAA.
    Section 7.17. Third Parties. Except as provided in Sections 
2.10, 3.03, 7.03(g), 7.21 and 7.22, this Restated MAA is for the 
benefit of the Parties and their respective successors and assigns, 
and no rights are intended to be, or are, created hereunder for the 
benefit of any third party.
    Section 7.18. Time Is Of The Essence. Time is of the essence in 
interpreting and performing this Restated MAA.
    Section 7.19. Statutory Collateral Requirement. Nothing in this 
Restated MAA shall be construed to permit a Bank to participate in 
issues of Debt Securities or other obligations if it does not 
satisfy the collateral requirements of Section 4.3(c) of the Act. 
For purposes of this Section, ``Bank'' shall include any System bank 
in conservatorship or receivership.
    Section 7.20. Termination of System Status. Nothing in this 
Restated MAA shall be construed to preclude a Bank from terminating 
its status as a System institution pursuant to Section 7.10 of the 
Act, or from at that time withdrawing, as from that time forward, 
the funding resolution it has adopted pursuant to Section 4.4(b) of 
the Act. A Bank that terminates its System status shall cease to 
have any rights or obligations under this Restated MAA, except that 
it shall continue to be subject to Article VIII with respect to 
claims accruing through the date of such termination of System 
status.
    Section 7.21. Restrictions Concerning Subsequent Litigation. It 
is expressly agreed by the Banks that (a) characterization or 
categorization of Banks, (b) information furnished to the Committee 
or other Banks, and (c) discussions or decisions of the Banks or 
Committee under this Restated MAA shall not be used in any 
subsequent litigation

[[Page 2044]]

challenging FCA's or the Insurance Corporation's action or inaction.
    Section 7.22. Effect of this Agreement. Neither this Restated 
MAA nor FCA approval hereof shall in any way restrict or qualify the 
authority of FCA or the Insurance Corporation to exercise any of the 
powers, rights, or duties granted by law to FCA or the Insurance 
Corporation.

ARTICLE VIII--INDEMNIFICATION

    Section 8.01. Definitions. As used in this Article VIII:
    (a) ``Indemnified Party'' means any Bank, the Funding 
Corporation, the Committee, the Scorekeeper, or any of the past, 
present or future directors, officers, stockholders, employees or 
agents of the foregoing.
    (b) ``Damages'' means any and all losses, costs, liabilities, 
damages and expenses, including, without limitation, court costs and 
reasonable fees and expenses of attorneys expended in investigation, 
settlement and defense (at the trial and appellate levels and 
otherwise), which are incurred by an Indemnified Party as a result 
of or in connection with a claim alleging liability to any non-Party 
for actions taken pursuant to or in connection with this Restated 
MAA. Except to the extent otherwise provided in this Article VIII, 
Damages shall be deemed to have been incurred by reason of a final 
settlement or the dismissal with prejudice of any such claim, or the 
issuance of a final nonappealable order by a court of competent 
jurisdiction which ultimately disposes of such a claim, whether 
favorably or unfavorably.
    Section 8.02. Indemnity. To the extent consistent with governing 
law, the Banks, jointly and severally, shall indemnify and hold 
harmless each Indemnified Party against and in respect of Damages, 
provided, however, that an Indemnified Party shall not be entitled 
to indemnification under this Article VIII in connection with 
conduct of such Indemnified Party constituting gross negligence, 
willful misconduct, intentional tort or criminal act, or in 
connection with civil money penalties imposed by FCA. In addition, 
the Banks, jointly and severally, shall indemnify an Indemnified 
Party for all costs and expenses (including, without limitation, 
fees and expenses of attorneys) incurred reasonably and in good 
faith by an Indemnified Party in connection with the successful 
enforcement of rights under any provision of this Article VIII.
    Section 8.03. Advancement of Expenses. The Banks, jointly and 
severally, shall advance to an Indemnified Party, as and when 
incurred by the Indemnified Party, all reasonable expenses, court 
costs and attorneys' fees incurred by such Indemnified Party in 
defending any proceeding involving a claim against such Indemnified 
Party based upon or alleging any matter that constitutes, or if 
sustained would constitute, a matter in respect of which 
indemnification is provided for in Section 8.02, so long as the 
Indemnified Party provides the Banks with a written undertaking to 
repay all amounts so advanced if it is ultimately determined by a 
court in a final nonappealable order or by agreement of the Banks 
and the Indemnified Party that the Indemnified Party is not entitled 
to be indemnified under Section 8.02.
    Section 8.04. Assertion of Claim.
    (a) Promptly after the receipt by an Indemnified Party of notice 
of the assertion of any claim or the commencement of any action 
against him, her or it in respect of which indemnity may be sought 
against the Banks hereunder (an ``Assertion''), such Indemnified 
Party shall apprise the Banks, through a notice to each of them, of 
such Assertion. The failure to so notify the Banks shall not relieve 
the Banks of liability they may have to such Indemnified Party 
hereunder, except to the extent that failure to give such notice 
results in material prejudice to the Banks.
    (b) Any Bank receiving a notice under paragraph (a) shall 
forward it to the Committee (which, if not in existence, shall be 
formed at the instance of such Bank to consider the matter). The 
Banks, through the Committee, shall be entitled to participate in, 
and to the extent the Banks, through the Committee, elect in writing 
on thirty days' notice, to assume, the defense of an Assertion, at 
their own expense, with counsel chosen by them and satisfactory to 
the Indemnified Party. Notwithstanding that the Banks, through the 
Committee, shall have elected by such written notice to assume the 
defense of any Assertion, such Indemnified Party shall have the 
right to participate in the investigation and defense thereof, with 
separate counsel chosen by such Indemnified Party, but in such event 
the fees and expenses of such separate counsel shall be paid by such 
Indemnified Party and shall not be subject to indemnification by the 
Banks unless (i) the Banks, through the Committee, shall have agreed 
to pay such fees and expenses, (ii) the Banks shall have failed to 
assume the defense of such Assertion and to employ counsel 
satisfactory to such Indemnified Party, or (iii) in the reasonable 
judgment of such Indemnified Party, based upon advice of his, her or 
its counsel, a conflict of interest may exist between the Banks and 
such Indemnified Party with respect to such Assertion, in which 
case, if such Indemnified Party notifies the Banks, through the 
Committee, that such Indemnified Party elects to employ separate 
counsel at the Banks' expense, the Banks shall not have the right to 
assume the defense of such Assertion on behalf of such Indemnified 
Party. Notwithstanding anything to the contrary in this Article 
VIII, neither the Banks, through the Committee, nor the Indemnified 
Party shall settle or compromise any action or consent to the 
entering of any judgment (x) without the prior written consent of 
the other, which consent shall not be unreasonably withheld, and (y) 
without obtaining, as an unconditional term of such settlement, 
compromise or consent, the delivery by the claimant or plaintiff to 
such Indemnified Party of a duly executed written release of such 
Indemnified Party from all liability in respect of such Assertion, 
which release shall be satisfactory in form and substance to counsel 
to such Indemnified Party. The Funding Corporation shall not be 
entitled to vote on actions by the Committee under this paragraph 
(b) or Section 8.08.
    Section 8.05. Remedies; Survival. The indemnification, rights 
and remedies provided to an Indemnified Party under this Article 
VIII shall be (i) in addition to and not in substitution for any 
other rights and remedies to which any of the Indemnified Parties 
may be entitled, under any other agreement with any other Person, or 
otherwise at law or in equity, and (ii) provided prior to and 
without regard to any other indemnification available to any 
Indemnified Party. This Article VIII shall survive the termination 
of this Restated MAA.
    Section 8.06. No Rights in Third Parties. This Restated MAA 
shall not confer upon any Person other than the Indemnified Party 
any rights or remedies of any nature or kind whatsoever under or by 
reason of the indemnification provided for in this Article VIII.
    Section 8.07. Subrogation; Insurance. Upon the payment by the 
Banks to an Indemnified Party of any amounts for which an 
Indemnified Party shall be entitled to indemnification under this 
Article VIII, if the Indemnified Party shall also have the right to 
recover such amount under any commercial insurance, the Banks shall 
be subrogated to such rights to the extent of the indemnification 
actually paid. Where coverage under such commercial insurance may 
exist, the Indemnified Party shall promptly file and diligently 
pursue a claim under said insurance. Any amounts paid pursuant to 
such claim shall be refunded to the Banks to the extent the Banks 
have provided indemnification payments under this Article VIII, 
provided, however, that recovery under such insurance shall not be 
deemed a condition precedent to the indemnification obligations of 
the Banks under this Article VIII.
    Section 8.08. Sharing in Costs. The Banks shall share in the 
costs of any indemnification payment hereunder as the Committee 
shall determine.

ARTICLE IX--DEFINITIONS

    The following definitions are used in this Restated MAA:
    ``Act'' means the Farm Credit Act of 1971, 12 U.S.C. 2001, et 
seq., as amended from time to time, or any successors thereto.
    The ``Additional Restrictions'' are that a Bank (a) shall manage 
its asset/liability mix so as not to increase, and, to the extent 
possible, so as to reduce or eliminate, any Interest-Rate 
Sensitivity Deduction in its Net Composite Score, and (b) shall not 
increase the dollar amount of any liabilities, or take any action 
giving rise to a lien or pledge on its assets, senior to its 
liability on Debt Securities other than (i) tax liabilities and 
secured liabilities arising in the ordinary course of business 
through activities other than borrowing, such as mechanic's liens or 
judgment liens, and (ii) secured liabilities, or an action giving 
rise to such a lien or pledge, incurred in the ordinary course of 
business as the result of issuing secured debt or entering into 
repurchase agreements, provided, however, that such debt issuances 
and agreements may be undertaken to the extent that the proceeds 
therefrom are used to repay the principal of outstanding Debt 
Securities and the value of the collateral securing the debt 
issuances or the agreements

[[Page 2045]]

(computed in the same manner as provided under Section 4.3(c) of the 
Act) does not exceed the amount of principal so repaid.
    ``Agreement'' means that certain Market Access Agreement, dated 
September 1, 1994 and effective as of November 23, 1994, among the 
Banks and the Funding Corporation.
    ``Associations'' means agricultural credit associations, federal 
land bank associations, federal land credit associations and 
production credit associations.
    ``Average Net Composite Score'' is defined in Section 1.03.
    ``Bank'' means a bank of the Farm Credit System, other than 
(except where noted) any bank in conservatorship or receivership.
    ``Banks'' means the banks of the Farm Credit System, other than 
(except where noted) any banks in conservatorship or receivership.
    ``Business Day'' means any day other than a Saturday, Sunday or 
Federal holiday.
    ``Business Plan'' means the business plan required under 12 
C.F.R. 618.8440, as amended from time to time, or any successors 
thereto.
    ``CIPA'' means that certain Amended and Restated Contractual 
Interbank Performance Agreement Among the Banks of the Farm Credit 
System, the Farm Credit System Financial Assistance Corporation and 
the Federal Farm Credit Banks Funding Corporation, the Scorekeeper, 
Dated as of January 1, 1997, as amended from time to time, or any 
successor thereto.
    ``CIPA Oversight Body'' is defined in Section 1.02.
    ``Category I'' is defined in Section 1.05.
    ``Category II'' is defined in Section 1.06.
    ``Category II Interim Restrictions'' means the requirements set 
forth in Section 4.02.
    ``Category III'' is defined in Section 1.07.
    ``Category III Interim Restrictions'' means the requirements set 
forth in Section 5.02.
    ``Collateral'' is defined as in Section 4.3(c) of the Act and 
the regulations thereunder, as amended from time to time, or any 
successors thereto.
    ``Collateralized Obligations'' means obligations required by 
Section 4.3(c) of the Act to be backed by collateral as set forth 
therein.
    The ``Committee'' is defined in Section 2.01.
    ``Continued Access Decision'' means a decision, subject to the 
procedures, terms and conditions described in Article VI, that Final 
Restrictions or a Final Prohibition not go into effect, or be 
lifted.
    ``Continued Access Request'' means a request for a Continued 
Access Decision.
    ``Days'' means calendar days, unless the term Business Days is 
used.
    ``Debt Securities'' means Systemwide and consolidated 
obligations issued through the Funding Corporation, within the 
meaning of Sections 4.2(c), 4.2(d) and 4.9 of the Act.
    ``Disclosure Program'' means the program established, pursuant 
to resolutions of the Banks and the Funding Corporation adopted in 
1987 and last substantively revised in 1994, for disclosure at the 
Systemwide level of financial and other information in connection 
with the issuance of Debt Securities, as amended from time to time, 
or any successor thereto.
    The ``Effective Date'' is (a) the tenth day after a Bank 
receives a notification from the Scorekeeper that it is in Category 
II or the twenty-fifth day after a Bank receives a notification from 
the Scorekeeper that it is in Category III, in each case if the Bank 
does not by that day submit a Continued Access Request to the 
Committee, or (b) if the Bank does by that day submit a Continued 
Access Request to the Committee, the seventh day following the day 
that notice is received that the Request is denied.
    ``FCA'' means the Farm Credit Administration.
    ``Final Prohibition'' means the requirements set forth in 
Section 5.01.
    ``Final Restrictions'' means the requirements set forth in 
Section 4.01.
    ``Funding Corporation'' means the Federal Farm Credit Banks 
Funding Corporation.
    ``Going Concern Qualification'' means a qualification expressed 
pursuant to Statement of Auditing Standards No. 59, ``The Auditor's 
Consideration of an Entity's Ability to Continue As a Going 
Concern.''
    ``Insurance Corporation'' means the Farm Credit System Insurance 
Corporation.
    ``Insurance Fund'' means the Farm Credit Insurance Fund 
maintained by the Insurance Corporation pursuant to Section 5.60 of 
the Act.
    ``Interest-Rate Sensitivity Deduction'' is defined as in Article 
II of CIPA, and the Model referred to therein, as amended from time 
to time, or any successor thereto.
    ``Liquidity Deficiency Deduction'' is defined as in Article II 
of CIPA, and the Model referred to therein, as amended from time to 
time, or any successor thereto.
    ``Net Collateral'' means a Bank's collateral as defined in 12 
C.F.R. 615.5050, as amended from time to time, or any successors 
thereto (except that eligible investments as described in 12 C.F.R. 
615.5140, as amended from time to time, or any successors thereto, 
are to be valued at their amortized cost), less an amount equal to 
that portion of the allocated investments of affiliated Associations 
that is not counted as permanent capital by the Bank.
    ``Net Collateral Ratio'' means a Bank's Net Collateral divided 
by Bank-only total liabilities (i.e., the total liabilities used to 
compute the net collateral ratio defined in 12 C.F.R. 615.5301(d), 
as amended from time to time or any successors thereto).
    ``Net Composite Score'' is defined in Section 1.03.
    ``Parties'' means the parties to this Restated MAA. A bank in 
conservatorship or receivership is not a party to this Restated MAA.
    ``Permanent Capital'' is defined as in Section 4.3A(a)(1) of the 
Act and the regulations thereunder, as amended from time to time, or 
any successors thereto.
    ``Permanent Capital Ratio'' means a Bank's Permanent Capital as 
a percentage of its Risk-Adjusted Asset Base.
    ``Person'' means any human being, partnership, association, 
joint venture, corporation, legal representative or trust, or any 
other entity.
    ``Risk-Adjusted Asset Base'' is defined as in 12 C.F.R. 
615.5210(e), as amended from time to time, or any successor thereto.
    ``Scorekeeper'' is defined in Section 1.01.
    ``75% Vote'' means an affirmative vote, through each voting 
Bank's board of directors or its designee, of at least 75% of those 
Banks that are entitled to vote on a matter.
    ``System'' means the Farm Credit System.
    ``System Disclosure Agent'' means the Funding Corporation or 
such other disclosure agent as all Banks shall unanimously agree 
upon, to the extent permitted by law or regulation. For purposes of 
this definition, ``Banks'' shall include any System bank in 
conservatorship or receivership.''

    Dated: January 9, 2003.
Jeanette C. Brinkley,
Secretary, Farm Credit Administration Board.
[FR Doc. 03-800 Filed 1-14-03; 8:45 am]
BILLING CODE 6705-01-P