Loans Released from Funding Note Lien. Each Funding Note Purchase Agreement shall require that, pursuant to the terms and provisions of the Transaction Documents and the third paragraph of Section 4A of this Agreement, in the event that the Funding Note Issuer elects to repay a portion of the related Funding Note that is less than the entire balance thereof, (i) no later than the third Business Day prior to such repayment, the Funding Note Issuer shall deliver to the Department a Loan Removal Data Schedule and (ii) the Funding Note Issuer shall select Loans to be released from the lien of the related Funding Note at random (selected in the manner specified by the related Funding Note Issuer to, and approved by, the Department prior to such selection) within each applicable academic year. Each Funding Note Purchase Agreement shall further provide that the following tests shall be conducted in sequential order for each Proposed Pool: (1) if the Proposed Pool of Loans selected in accordance with the preceding paragraph does not meet the Threshold Test with respect to the average Principal Balance, the Funding Note Issuer shall remove Loans from such Proposed Pool until it meets the Threshold Test with respect to the average Principal Balance, starting with, if the Proposed Pool exceeds the Threshold Test, the Loan with the highest Principal Balance and then the next highest Principal Balance (and so on) and, if the Proposed Pool was less than the Threshold Test, the Loan with the lowest Principal Balance and then the next lowest Principal Balance (and so on); (2) if the resultant Proposed Pool of Loans selected in accordance with clause (1) above does not meet the Threshold Test with respect to each category of school type, the Funding Note Issuer shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test by the greatest amount, until such category meets the Threshold Test, then, if such Proposed Pool does not meet the Threshold Test with respect to the remaining categories of school type, it shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test until the Threshold Test is met with respect to each category of school type; (3) if the resultant Proposed Pool of Loans selected in accordance with clauses (1) and (2) above does not meet the Threshold Test with respect to each category of payment status, the Funding Note Issuer shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test by the greatest amount, until such category meets the Threshold Test, then, if such Proposed Pool of Loans does not meet the Threshold Test with respect to the remaining categories of payment status, it shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test by the greatest amount, until such category meets the Threshold Test, and so on by category, until the Threshold Test is met with respect to each category of payment status; and (4) if the resultant Proposed Pool of Loans selected in accordance with clauses (1), (2) and (3) above does not meet the Threshold Test with respect to each category of loan type, the Funding Note Issuer shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test by the greatest amount, until such category meets the Threshold Test, then, if such Proposed Pool does not meet the Threshold Test with respect to the remaining categories of loan type, it shall randomly remove Loans from the category the Category Percentage of which exceeds the Threshold Test until the Threshold Test is met with respect to each category of loan type. provided, that, each Proposed Pool of Loans selected to be released from the lien of the related Funding Note pursuant to such Funding Note Purchase Agreement must include either all or none of the Eligible Loans made to any related Borrower (i.e. “by account”) other than Restricted Loans as defined in clause (ii) of the definition thereof.
Appears in 5 contracts
Samples: Put Agreement, Put Agreement, Put Agreement
