Exhibit 99.1
EXECUTION COPY
LOAN SALE AGREEMENT
among
SIGNET STUDENT LOAN TRUST 1996-A,
as Issuer,
SIGNET BANK,
as Seller,
and
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November 1, 1996
LOAN SALE AGREEMENT dated as of November 1,
1996, among SIGNET STUDENT LOAN TRUST 1996-A, a
Delaware trust (the "Issuer"), SIGNET BANK, a
Virginia banking corporation, as Seller, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking
association, solely as eligible lender trustee and
not in its individual capacity (the "Eligible Lender
Trustee").
WHEREAS the Issuer desires to purchase from the Seller a
portfolio of federally reinsured student loans originated or acquired in the
ordinary course of business by the Seller;
WHEREAS the Seller is willing to sell such student loans to
the Eligible Lender Trustee on behalf of the Issuer;
WHEREAS the Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to, such student
loans on behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of November 1, 1996, among
the Issuer, the Seller, as Administrator, and The Bank of New York, as Indenture
Trustee, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.01. Conveyance of Initial Financed Student Loans.
(a) In consideration of the Issuer's delivery to or upon the order of the Seller
on the Closing Date of the net proceeds from the sale of the Notes and the
Certificates and the other amounts to be distributed from time to time to the
Seller in accordance with the terms of this Agreement, the Seller does hereby,
as evidenced by a duly executed Xxxx of Sale in the form of Exhibit A hereto,
sell, assign, and otherwise convey to the Issuer (or, in the case of the Initial
Financed Student Loans (as
defined below), to the Eligible Lender Trustee on behalf of the Issuer) without
recourse (subject to the obligations herein): (i) all right, title and interest
in and to the Initial Financed Student Loans, and all obligations of the
Obligors thereunder, together with all documents relating thereto, including the
related Student Loan Files and all rights and privileges relating thereto, (ii)
all payments on or collections received thereunder after the Cutoff Date; (iii)
all of its right, title and interest in all funds on deposit from time to time
in the Trust Accounts, including the Reserve Account Initial Deposit and all
investments and proceeds thereof (including all income thereon); and (iv) all
proceeds of any and all of the foregoing.
(b) In connection with the sale and assignment of
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust, on
the Closing Date, the Seller shall deposit the Reserve Account Initial Deposit
into the Reserve Account.
(c) On the Closing Date, the Seller will deposit into the
Pre-Funding Account $16,552,201.22 and will deposit into the Reserve Account
$6,317,145.00 from the net proceeds of the sale of the Notes and the
Certificates.
(d) On the Closing Date, the Seller will deposit, or
cause to be deposited, into the Collection Account all amounts or collections
received under the Initial Financed Student Loans after the Cutoff Date through
and including the second Business Day preceding the Closing Date.
SECTION 2.02. Conveyance of Additional Student Loans to the
Eligible Lender Trustee on Behalf of the Trust. (a) Subject to the conditions
set forth in paragraph (d) below, in consideration of the Issuer's delivery on
the related Transfer Date to or upon the order of the Seller of the Purchase
Amount for each such Additional Student Loan to be delivered to the Seller, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer (or, in the case of the right, title and interest to the Additional
Student Loans, to the Eligible Lender Trustee on behalf of the Issuer), (i) all
right, title and interest of the Seller in and to each Additional Student Loan
and all obligations of the Obligors thereunder, together with all documents, the
related Student Loan Files and all rights and privileges relating thereto, (ii)
all payments on or collections received thereunder after the related Subsequent
Cutoff Date and (iii) all proceeds of any and all of the foregoing.
(b) During the Funding Period, upon the tender of any
Additional Student Loans by the Seller on the related Transfer Date and the
satisfaction of the conditions set forth in subsection (d) of this Section 2.02,
the Eligible Lender Trustee will so inform the Administrator and the Indenture
Trustee, and
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the Purchase Amounts for such Additional Student Loans will be withdrawn from
the Pre-Funding Account, subject to the provisions of Section 2(f) of the
Administration Agreement, and will be remitted to or upon the order of the
Seller.
(c) After the Funding Period, upon the tender of
Additional Student Loans by the Seller on the related Transfer Date and the
satisfaction of the conditions set forth in subsection (d) of this Section 2.02,
the Eligible Lender Trustee will so inform the Administrator and the Indenture
Trustee, and the Purchase Amounts for such Serial Loans will be withdrawn from
amounts on deposit in the Collection Account, as provided in Section 2(d) of the
Administration Agreement, and will be remitted, as provided therein to or upon
the order of the Seller; provided, however, that, the Seller shall not tender or
convey any Additional Student Loans to the Issuer after the January 2002
Distribution Date.
(d) The Seller shall transfer to the Issuer the
Additional Student Loans for a given Transfer Date and the other property and
rights related thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to such Transfer
Date:
(i) the Seller shall have delivered to the Eligible Lender
Trustee and the Indenture Trustee a duly executed written assignment
(including an acceptance by the Eligible Lender Trustee and the
Indenture Trustee) in substantially the form of Exhibit B hereto (each,
a "Transfer Agreement"), which shall include supplements to Schedule A
hereto, listing such Additional Student Loans;
(ii) the Seller shall have delivered, at least two days
prior to such Transfer Date, notice of such transfer to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies,
including a listing of the type of loan and the aggregate principal
balance of such Additional Student Loans;
(iii) the Seller shall have deposited in the Collection
Account all amounts on or collections received in respect of the
Additional Student Loans after each applicable Subsequent Cutoff Date;
(iv) as of the Transfer Date, the Seller was not insolvent
nor will it have been made insolvent by such transfer nor is it aware
of any pending insolvency;
(v) such addition will not result in a material adverse
Federal or State tax consequence to the Issuer, the Noteholders or the
Certificateholders;
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(vi) the Seller shall have delivered to the Indenture
Trustee and the Eligible Lender Trustee an Officers' Certificate
confirming the satisfaction of each condition precedent specified in
this paragraph (d);
(vii) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of the
Additional Student Loans transferred to the Issuer on such Transfer
Date, substantially in the form of the Opinion of Counsel delivered to
the Rating Agencies on the Closing Date, and (B) to the Eligible Lender
Trustee and the Indenture Trustee the Opinion of Counsel as required by
Section 6.02(f)(1) hereof; provided that no opinion shall be required
under either subclause (A) or (B) unless the Seller, the Eligible
Lender Trustee or the Indenture Trustee determines that, with regard to
the most recent opinion on the matters described in either such
subclause that was delivered with respect to the Financed Student Loans
(whether on the Closing Date or thereafter under this subsection or
under another provision of the Basic Documents), the conclusion of, or
the reasoning underlying, such opinion is no longer correct in all
material respects due to a change in law or regulations or the ruling
of a court, an administrative tribunal or a regulatory or other
governmental authority; upon making any such determination, whichever
of the Seller, the Eligible Lender Trustee and the Indenture Trustee
makes such determination shall notify the others and the Rating
Agencies in writing as to the nature of such changes; provided,
further, that none of the Eligible Lender Trustee or the Indenture
Trustee shall have any obligation to monitor changes in laws or
regulations or the rulings of courts or other governmental agencies for
the purpose of making any determination described in this clause
(d)(vii);
(viii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the
Trust Estate and the first perfected security interest of the Indenture
Trustee in the Collateral;
(ix) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders or the Noteholders
shall have been utilized in selecting the Additional Student Loans;
(x) no Event of Default shall have occurred under the
Indenture, no Servicer Default shall have occurred under the Master
Servicing Agreement and no Administrator Default shall have occurred
under the Administration Agreement;
(xi) after giving effect to the conveyance of Additional
Student Loans on each Transfer Date, (a) the
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aggregate of the Purchase Amounts, as of the respective Transfer Dates,
of all of the Additional Student Loans purchased by the Issuer since
the Closing Date shall not exceed $45,000,000 and (b) the aggregate
outstanding principal balance (including accrued borrower interest
thereon if and to the extent that such interest is not then payable and
will, pursuant to the terms of the applicable loan, be capitalized and
added to the principal balance of such loan) of the Financed Student
Loans (I) made to Borrowers for the purpose of attending proprietary or
vocational institutions shall not exceed 8% of the Pool Balance as of
such Transfer Date, (II) made to Borrowers for the purpose of attending
proprietary or vocational institutions or two-year institutions shall
not exceed 13% of the Pool Balance as of such Transfer Date and (III)
that are PLUS Loans shall not exceed 10% of the Pool Balance as of such
Transfer Date;
(xii) for each Transfer Date occurring after the Funding
Period, after giving effect to the conveyance of any Additional Student
Loans on such Transfer Date, the amount of funds remitted for the
purchase of Additional Student Loans on such Transfer Date, and on each
Transfer Date since the preceding Distribution Date, shall not exceed
the Net Principal Cash Flow Amount (calculated for the Collection
Period ending in the preceding calendar month or, if no Collection
Period ended in the preceding calendar month, calculated for each
preceding calendar month during the current Collection Period); and
(xiii) each Additional Student Loan conveyed to the Trust on
such Transfer Date shall have a final scheduled payment due no later
than the Final Maturity Date.
provided, however, that the Seller shall not incur any liability as a result of
transferring Additional Student Loans on any Transfer Date at a time when the
condition set forth in clause (v) was not satisfied, if at the time of such
transfer the Authorized Officers of the Seller, after reasonable inquiry of
counsel to the Seller, were not aware of any fact that would reasonably suggest
that such condition would not be satisfied as of such date.
SECTION 2.03. Treatment as a Security Agreement. The parties
intend that the conveyance of the Seller's right, title and interest in and to
the Initial Financed Student Loans pursuant to this Agreement and any Additional
Student Loans pursuant to a related Transfer Agreement shall constitute a
purchase and sale and not a loan. If such conveyance is deemed to be a loan and
not a sale, then the parties also intend and agree that the Seller shall be
deemed to have granted, and in such event do hereby grant to the Issuer, a first
priority
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security interest in all of the Seller's right, title and interest in, to and
under the Initial Financed Student Loans and any Additional Student Loans and
the other items specified in Sections 2.01 and 2.02, and that this Agreement
(with respect to the Initial Financed Student Loans) and any applicable Transfer
Agreement (with respect to the Additional Student Loans conveyed thereby) shall
each constitute a security agreement under applicable law with respect to such
loans. If such conveyance is deemed to be a loan and not a sale, the Issuer may,
to secure the Issuer's own borrowings under the Indenture, repledge all or any
portion of such loans and the other items specified in Sections 2.01 and 2.02
hereof pledged to the Issuer and not released from the security interest of this
Agreement at the time of such pledge. Such a repledge may be made by the Issuer
with or without a repledge by the Issuer of its rights under this Agreement, and
without further notice to or acknowledgement from the Seller. The Seller waives,
to the extent permitted by applicable law, all claims, causes of action and
remedies whether legal or equitable (including any rights of set-off) against
the Issuer or any assignee of the Issuer relating to such action by the Issuer
in connection with the transactions contemplated by this Agreement, each
Transfer Agreement, the Trust Agreement and the Indenture.
SECTION 2.04. Endorsement. The Seller hereby appoints each of
the Eligible Lender Trustee and the Indenture Trustee as the Seller's true and
lawful attorney-in-fact with full power of substitution to endorse the Seller's
name on any promissory note evidencing the Initial Financed Student Loans and
any Additional Student Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and 2.02. The Seller acknowledges
and agrees that this power of attorney shall be construed as a power coupled
with an interest, shall be irrevocable as long as the Trust Agreement remains in
effect and shall continue in effect until the Trust Agreement terminates.
ARTICLE III
The Financed Student Loans
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Financed Student Loans. The Seller represents and warrants with
respect to the Financed Student Loans as set forth in Exhibit C hereto. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, in the case of the Initial Financed
Student Loans, and as of the applicable Transfer Date, in the case of the
Additional Student Loans, but shall survive the sale, transfer and assignment of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the
Issuer and the
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pledge thereof to the Indenture Trustee pursuant to the Indenture.
SECTION 3.02. Repurchase upon Breach; Reimbursement. Upon
discovery by the Seller, the Master Servicer, any Servicer, any Subservicer, the
Eligible Lender Trustee or the Indenture Trustee of any breach of the Seller's
representations and warranties made by the Seller pursuant to Section 3.01 or
Section 4.01, the party discovering the breach shall give prompt written notice
to the others. Unless any such breach shall have been cured within 120 days
after the Seller becomes aware or receives written notice (whichever is earlier)
of such breach, the Seller shall be obligated to repurchase any Financed Student
Loan in which the interests of the Noteholders or the Certificateholders are
materially and adversely affected by any such breach as of the first day
succeeding the end of such 120-day period that is the last day of a Monthly
Collection Period; provided, that, it is understood that any such breach that
does not affect any Guarantor's obligation to guarantee payment of such Financed
Student Loan to the Eligible Lender Trustee will not be considered to have a
material adverse effect for this purpose and it is further understood that any
dispute as to whether a Guarantor's obligation has been so affected will be
resolved by the decision of the Indenture Trustee for so long as Notes are
Outstanding and thereafter by the Eligible Lender Trustee. In consideration of
and simultaneously with the repurchase of a Financed Student Loan, the Seller
shall remit the Purchase Amount therefor, in the manner specified in Section
3.03, and the Issuer shall execute such assignments and other documents
reasonably requested by the Seller in order to effect such transfer. Upon any
such transfer of a Financed Student Loan, legal title to, and beneficial
ownership and control of, the related Student Loan File will thereafter belong
to the Seller. In addition, if any such breach by the Seller does not trigger
such a repurchase obligation but does result in the refusal by a Guarantor to
guarantee all or a portion of the accrued interest, or the loss (including any
obligation of the Issuer to repay the Department) of certain Interest Subsidy
Payments and Special Allowance Payments, then, unless such breach, if curable,
is cured within 120 days, the Seller shall reimburse the Issuer by remitting an
amount equal to all such non-guaranteed interest amounts and such forfeited
Interest Payments and Special Allowance Payments in the manner specified in
Section 3.03. Subject to the provisions of Section 4.03, the sole remedy of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Noteholders or
the Certificateholders with respect to a breach of representations and
warranties pursuant to Section 3.01, and the agreement contained in this
Section, shall be to require the Seller to repurchase Financed Student Loans or
to reimburse the Issuer as provided above pursuant to this Section, subject to
the conditions contained herein.
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SECTION 3.03. Repurchase Deposits. The Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amount
with respect to Purchased Student Loans and all other amounts to be paid by the
Seller under Section 3.02 and Section 5.01 when such amounts are due.
SECTION 3.04 Incentive Loans and Incentive Deposits. Pursuant
to the Master Servicing Agreement, the Master Servicer may establish the terms
of, terminate or change the terms of any Incentive Program with respect to a
Financed Student Loan in accordance with the terms of such program, provided
such termination or change is not prohibited by the Higher Education Act or
other applicable law, upon notice to the Eligible Lender Trustee and the
Indenture Trustee. Until the effective date of any termination, the Seller shall
deposit into the Collection Account the Incentive Deposit with respect to such
Incentive Financed Student Loan as provided below. In the event that the Seller
fails to make such deposit, the terms of such Incentive Program shall be such
that the Borrower shall be obligated to make such payment and such Incentive
Program shall terminate as to the related loan.
The Seller shall deposit or cause to be deposited into the
Collection Account no later than the Business Day preceding each Distribution
Date the aggregate Incentive Deposits with respect to Incentive Financed Student
Loans in the Trust as of the last day of the related Collection Period. Such
deposits shall be considered deposits in respect of interest or, if such deposit
is made in respect of a principal reduction on an Incentive Financed Student
Loan, of principal on such Incentive Financed Student Loans for all purposes of
the Basic Documents, and shall be deemed to have been deposited into the
Collection Account for all such purposes as of such last date of such Collection
Period.
ARTICLE IV
The Seller
SECTION 4.01. Representations of Seller. The Seller represents
as set forth in Exhibit D hereto. Such representations speak as of the execution
and delivery of this Agreement and as of the Closing Date in the case of the
Initial Financed Student Loans, and as of the applicable Transfer Date in the
case of the Additional Student Loans, but shall survive the sale, transfer and
assignment of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture.
SECTION 4.02. Existence. Subject to Section 4.04 hereof,
during the term of this Agreement, the Seller will keep
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in full force and effect its existence, rights and franchises as a banking
corporation under the laws of the jurisdiction of its organization and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Basic Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby.
SECTION 4.03. Liability of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee and the Indenture Trustee and
their officers, directors, employees and agents from and against any
taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein and in the other Basic
Documents (except any such income taxes arising out of fees paid to the
Eligible Lender Trustee or the Indenture Trustee), including any sales,
gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not
including the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Financed Student
Loans or Federal or other income taxes arising out of distributions on
the Certificates and the Notes) and costs and expenses in defending
against the same.
(b) The Seller shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders and the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee from and against any and all reasonable costs and
expenses and any and all losses, claims, damages and liabilities in
each case arising out of, or imposed upon such Person through, (i) the
Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement
and (ii) the Seller's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes
and the Certificates.
(c) The Seller shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Eligible Lender Trustee
and its officers, directors, employees and agents from and against, all
reasonable costs and expenses
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and all losses, claims, damages, obligations and liabilities arising
out of, incurred in connection with or relating to the Trust Agreement,
the other Basic Documents, the Trust Estate, the acceptance or
performance of the trusts and duties set forth herein and in the Trust
Agreement or the action or the inaction of the Eligible Lender Trustee
hereunder and under the Trust Agreement, except to the extent that such
cost, expense, loss, claim, damage, obligation or liability: (i) shall
be due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Eligible Lender Trustee, (ii) shall arise
from any breach by the Eligible Lender Trustee of its covenants under
any of the Basic Documents; or (iii) shall arise from the breach by the
Eligible Lender Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant
to this paragraph, the Eligible Lender Trustee's choice of legal
counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
(d) The Seller shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate (other than those
taxes expressly excluded from the Seller's responsibilities pursuant to
the parentheticals in paragraph (a) above).
Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
and the termination of this Agreement or the Indenture or the Trust Agreement,
as applicable, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 4.04. Merger or Consolidation of, or Assumption of the
Obligations of Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party, (c) which may succeed to the properties and assets of
the Seller substantially as a whole or (d) to which the student lending business
of the Seller shall otherwise be transferred substantially as a whole, shall be
the successor to the Seller without the execution or filing of any document or
any further act by any of the parties to this Agreement; provided, however, that
the Seller hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
entity, if other than the Seller,
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executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, (ii) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 3.01 or 4.01 shall have
been breached and no Servicer Default, Event of Default or Administrator Default
and no event that, after notice or lapse of time, or both, would become a
Servicer Default, Event of Default or Administrative Default shall have occurred
and be continuing, (iii) the Seller shall have delivered to the Eligible Lender
Trustee and the Indenture Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, succession or transfer and
such agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and that the Rating Agency Condition shall have been
satisfied with respect to such transaction or, in the case of a transfer
pursuant to clause (d) to a Person that is a Non-Code Entity, notice of such
transfer and assumption shall have been delivered to each Rating Agency, (iv)
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the Noteholders or the Certificateholders and (v)
unless the Seller is the surviving entity, the surviving entity shall have
delivered to the Eligible Lender Trustee and the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of the
Eligible Lender Trustee and Indenture Trustee, respectively, in the Financed
Student Loans and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests.
SECTION 4.05. Limitation on Liabilities of Seller and Others.
The Seller and any director or officer or employee or agent of the Seller may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder (provided that such reliance shall not limit in any way the
Seller's obligations under Section 3.02). The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 4.06. Seller May Own Certificates or Notes. The Seller
and any Affiliate of the Seller may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights as it
would have if it were not the Seller or an Affiliate of the Seller, except as
expressly provided herein or in any other Basic Document.
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ARTICLE V
Termination
SECTION 5.01. Termination. (a) Optional Purchase of All
Financed Student Loans. As of the last day of any Collection Period immediately
preceding a Distribution Date as of which the then outstanding Pool Balance is
10% or less of the sum of the Initial Pool Balance and the Initial Pre-Funded
Amount, the Seller or its designee shall have the option to purchase the Trust
Estate, other than the Trust Accounts. To exercise such option, the Seller shall
deposit in the Collection Account an amount equal to the Minimum Purchase Price
for the Financed Student Loans and the related rights with respect thereto, plus
the appraised value of any such other property held by the Trust other than the
Trust Accounts, such value to be determined by an appraiser mutually agreed upon
by the Master Servicer, the Eligible Lender Trustee and the Indenture Trustee,
and shall succeed to all interests in and to the Trust.
(b) Insolvency of Company. Upon any sale of the assets
of the Trust pursuant to Section 9.02 of the Trust Agreement, the Seller shall
cooperate with and assist the Administrator consistent with the provisions of
the Administration Agreement with respect to Company insolvency.
ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment. This Agreement may be amended by the
Seller and the Eligible Lender Trustee, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders or in connection with a transaction described in Section 4.04
hereof; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture
Trustee, adversely affect the interests of any Noteholder or any
Certificateholder.
This Agreement may also be amended from time to time by the
Seller and the Eligible Lender Trustee, with the consent of the Indenture
Trustee, the Noteholders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the Certificateholders of Certificates
evidencing not less than a majority of the Certificate Balance, for the purpose
of adding
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any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Financed Student Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the Noteholders
or the Certificateholders of which are required to consent to any such
amendment, without the consent of all outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment or consent
(or, in the case of the Rating Agencies, five Business Days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to the Seller, the Administrator, the Indenture
Trustee, the Master Servicer and each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall receive upon request and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 6.02(f). The Eligible Lender Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 6.02. Protection of Interests in Trust. (a) The
Seller shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain, and protect the interest of
the Issuer, the Eligible Lender Trustee and the Indenture Trustee in the
Financed Student Loans and in the proceeds thereof. The Seller shall deliver
(or cause to be delivered) to the Eligible Lender Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, on or prior to the date of transfer of any Financed Student
Loans to the Trust.
13
(b) The Seller shall not change its name, identity or
corporate structure in any manner that would, could, or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of ss.9-402(7) of the UCC, unless it
shall have given the Eligible Lender Trustee and the Indenture Trustee at least
five (5) days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller shall have an obligation to give the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies at least
five (5) days prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment.
(d) If at any time the Seller shall propose to sell,
grant a security interest in, or otherwise transfer any interest in student
loans to any prospective purchaser, lender or other transferee, the Seller shall
give to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if they
shall refer in any manner whatsoever to any Financed Student Loan, shall
indicate clearly that such Financed Student Loan has been sold and is owned by
the Issuer and has been pledged to the Indenture Trustee.
(e) The Seller shall, to the extent required by
applicable law, cause the Certificates and the Notes to be registered with the
Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within
the time periods specified in such sections.
(f) The Seller shall deliver to the Eligible Lender
Trustee and the Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto and within 120 days after the
initial Transfer Date and on each Transfer Date to the extent required
pursuant to Section 2.02(d)(vii), an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans,
and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (B) stating that, in the
opinion of such
14
counsel, no such action shall be necessary to preserve and protect such
interest; and
(2) within 120 days after the beginning of each calendar
year beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a date
during such 120-day period, either (A) stating that, in the opinion of
such counsel, all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Eligible Lender Trustee and the Indenture
Trustee in the Financed Student Loans, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest;
provided that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.06(b)
of the Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above
shall specify (as of the date of such opinion and given all applicable laws as
in effect on such date) any action necessary to be taken in the following year
to preserve and protect such interest.
SECTION 6.03. Notices. All demands, notices and communications
upon or to the Seller, the Master Servicer, the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Administrator or the Rating Agencies under
this Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested (or in the form of telex or facsimile notice,
followed by written notice delivered as aforesaid), and shall be deemed to have
been duly given upon receipt;
(a) in the case of the Seller, to
Signet Bank
0 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) in the case of the Master Servicer and
Administrator, to
Signet Bank
0 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
15
(c) in the case of the Issuer, to
Signet Student Loan 1996-A,
c/o First Chicago Delaware Inc., Trustee
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to the Eligible Lender Trustee at the
Corporate Trust Office of the Eligible Lender Trustee
(d) in the case of the Issuer or the Eligible Lender
Trustee, at the Corporate Trust Office of the
Eligible Lender Trustee;
(e) in the case of the Indenture Trustee, at its
Corporate Trust Office;
(f) in the case of Fitch, to
Fitch Investors Service, L.P.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Telecopy : (000) 000-0000;
in the case of Moody's to
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000; and
in the case of Standard & Poor's, to
Standard & Poor's Ratings Group
00 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000.
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 6.04. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 4.04, this Agreement
may not be assigned by the Seller. This Agreement may only be assigned by the
Eligible Lender Trustee to its permitted successor pursuant to the Trust
Agreement.
SECTION 6.05. Limitations on Rights of Others. The
provisions of this Agreement are solely for the benefit of the
16
Seller, the Issuer, and the Eligible Lender Trustee and for the benefit of the
Certificateholders, the Indenture Trustee and the Noteholders, as third party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 6.06. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 6.07. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 6.08. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 6.09. Governing Law. This Agreement shall be construed
in accordance with the laws of the Commonwealth of Virginia, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
SECTION 6.10. Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and grant
by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit
of the Noteholders of a security interest in all right, title and interest of
the Issuer in, to and under the Financed Student Loans or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 6.11. Non-Petition Covenants. Notwithstanding any
prior termination of this Agreement, the Seller shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any Federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer
17
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
SECTION 6.12. Limitation of Liability of Eligible Lender
Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to
the contrary, this Agreement has been signed by The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall The First National Bank of
Chicago in its individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto as to all of which recourse shall be had solely to the assets of
the Issuer.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been accepted by The Bank of New York not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 6.13. Agreement of Seller. The Seller agrees to
execute and deliver such instruments and to take such actions as the Eligible
Lender Trustee, the Issuer, or the Indenture Trustee may reasonably request in
order to effectuate the terms and carry out the purposes of this Agreement.
SECTION 6.14. Confidentiality. (a) The Eligible Lender Trustee
and its agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Seller, disclose to third parties (including Noteholders
or Certificateholders) or use such information, in any manner whatsoever, in
whole or in part, except as expressly permitted under this Agreement or as
required to fulfill an obligation of the Eligible Lender Trustee under this
Agreement, in which case such Confidential Information shall be revealed only to
the extent required for the purpose of fulfilling an obligation of the Eligible
Lender Trustee under this Agreement. Notwithstanding the above, Confidential
Information may be disclosed to the extent required by law or legal process,
provided that the Eligible Lender Trustee gives prompt written notice to the
Seller of the nature and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the
contrary, the Seller shall not be obligated to disclose to any
18
Person (i) any information regarding Obligors, the disclosure of which is
prohibited by applicable law, or (ii) any information relating to the strategic
plans or opportunities of its student lending business.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
SIGNET STUDENT LOAN TRUST
1996-A,
by
THE FIRST NATIONAL BANK OF CHICAGO, not
in its individual capacity but solely as
Eligible Lender Trustee on behalf of the
Trust,
by /s/ XXXXXXX X. XXXXXX
---------------------------------
Name: XXXXXXX X. XXXXXX
Title: ASSISTANT VICE PRESIDENT
SIGNET BANK,
as Seller
by /s/ XXXXXXX XXXXXXX
--------------------------------
Name: XXXXXXX XXXXXXX
Title: Sr. VICE PRESIDENT
THE FIRST NATIONAL BANK OF CHICAGO, not
in its individual capacity but solely as
Eligible Lender Trustee,
by /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: XXXXXXX X. XXXXXX
Title: ASSISTANT VICE PRESIDENT
19
Acknowledged and accepted
as of the day and year first
above written:
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee,
by /s/ XXXXXX X. LASER
-------------------------
Name: XXXXXX X. LASER
Title: ASSISTANT VICE PRESIDENT
20
SCHEDULE A
TO THE
LOAN SALE AGREEMENT
Schedule of Student Loans
[To be supplied by Signet at Closing.]
21
EXHIBIT A
TO THE LOAN SALE AGREEMENT
XXXX OF SALE
For value received, in accordance with the Loan Sale Agreement
(the "Loan Sale Agreement") dated as of November 1, 1996, among Signet Bank, as
seller (the "Seller"), Signet Student Loan Trust 1996-A (the "Trust"), and The
First National Bank of Chicago, not in its individual capacity but solely as
Eligible Lender Trustee (the "Eligible Lender Trustee"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Initial Financed Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and/or collections received
thereunder after the Cutoff Date, (iii) all funds on deposit from time to time
in the Trust Accounts, including the Reserve Account Initial Deposit and the
Initial Pre-Funded Amount, and in all investments and proceeds thereof
(including all income thereon) and (iv) all proceeds of any and all of the
foregoing (including but not limited to proceeds derived from the voluntary or
involuntary conversion of any of the Initial Financed Student Loans into cash or
other liquidated property, such as proceeds from the applicable Guarantee
Agreement). The foregoing sale does not constitute and is not intended to result
in any assumption by the Eligible Lender Trustee or the Trust of any obligation
of the Seller to the borrowers of Initial Financed Student Loans or any other
Person in connection with the Initial Financed Student Loans or any agreement or
instrument relating to any of them.
In addition, the undersigned, by execution of this instrument,
hereby endorses the promissory notes evidencing each Initial Financed Student
Loan described in Schedule A to the Loan Sale Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Loan Sale Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Xxxx of Sale is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Loan Sale Agreement and is to be governed by the Loan Sale
Agreement.
Capitalized terms used but not defined herein shall have the
meaning assigned to them in Appendix A to the
A-1
Administration Agreement, dated as of November 1, 1996, among Signet Student
Loan Trust 1996-A, as Issuer, Signet Bank, as Administrator, and The Bank of New
York, as Indenture Trustee, which also contains rules as to usage that shall be
applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of
Sale to be duly executed as of November 1, 1996.
SIGNET BANK, as Seller
by
-------------------------
Name:
Title:
A-2
EXHIBIT B
TO THE
LOAN SALE AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. _____ Of ADDITIONAL STUDENT LOANS dated as of
______________, _____, among SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust
(the "Issuer"), SIGNET BANK, as seller (the "Seller") and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, not in its individual capacity
but solely as Eligible Lender Trustee of the Issuer (the "Eligible Lender
Trustee").
W I T N E S S E T H:
WHEREAS the Issuer, the Seller and the Eligible Lender Trustee
are parties to the Loan Sale Agreement dated as of November 1, 1996 (as amended
or supplemented, the "Loan Sale Agreement");
WHEREAS the Seller, as depositor, Signet Student Loan
Corporation, as Company, and the Eligible Lender Trustee are parties to the
Trust Agreement dated as of November 1, 1996 (as amended or supplemented, the
"Trust Agreement");
WHEREAS pursuant to the Loan Sale Agreement, the Seller wishes
to convey the Additional Student Loans referred to in Section 2 (the "Additional
Student Loans") to the Eligible Lender Trustee on behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are
willing to accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions and Usage. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in
Appendix A to the Loan Sale Agreement, which also contains rules of construction
and usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"Subsequent Cutoff Date" means, with respect to each
Additional Student Loan, the date specified as such on Schedule A
hereto.
"Transfer Date" means, with respect to the Additional Student
Loans, ________________, _______.
B-1
2. Schedule of Financed Student Loans. Attached hereto as
Schedule A is a supplement to Schedule A to the Loan Sale Agreement listing the
Additional Student Loans to be conveyed on the Transfer Date to the Eligible
Lender Trustee on behalf of the Issuer pursuant to this Agreement.
3. Conveyance of Additional Student Loans. In consideration
of the Issuer's delivery to or upon the order of the Seller of $___________
(such amount being the Purchase Amounts of the Additional Student Loans and such
amount to be paid, during the Funding Period, from amounts on deposit in the
Pre-Funding Account subject to the provisions of Section 2.02(b) of the Loan
Sale Agreement and Section 2(f) of the Administration Agreement and after the
Funding Period from amounts on deposit in the Collection Account), the Seller
does hereby sell, assign and otherwise convey, without recourse (except as
expressly provided in the Loan Sale Agreement), to the Eligible Lender Trustee
on behalf of the Issuer:
(a) All right, title and interest in and to the Additional
Student Loans and all obligations of the Obligors thereunder, together
with all documents, the related Student Loan Files and all rights and
privileges relating thereto;
(b) all payments on or collections received thereunder,
after the related Subsequent Cutoff Date; and
(c) all proceeds of any and all of the foregoing.
4. Conditions Precedent. The obligation of the Issuer to
acquire the Additional Student Loans hereunder is subject to the satisfaction,
on or prior to the Transfer Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Seller in Sections 3.01 and
4.01 of the Loan Sale Agreement shall be true and correct as of the
Transfer Date.
(b) Loan Sale Agreement Conditions. Each of the
conditions set forth in Section 2.02(d) of the Loan Sale Agreement
shall have been satisfied.
(c) Delivery of Xxxx of Sale. The Seller shall have
delivered a Xxxx of Sale substantially in the form of Annex A hereto.
(d) Additional Information. The Seller shall have
delivered to the Issuer such information as was reasonably requested by
the Issuer to satisfy itself as to (i) the accuracy of the
representations and warranties set forth in Sections 3.01 and 4.01 of
the Loan Sale Agreement and (ii)
B-2
the satisfaction of the conditions set forth in this Section 4.
5. Ratification of Agreement. As supplemented by this
Agreement, the Loan Sale Agreement is in all respects ratified and confirmed and
the Loan Sale Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
6. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
7. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Virginia, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
8. Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
B-3
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
SIGNET STUDENT LOAN TRUST 1996-A,
by
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee,
by __________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee,
by ___________________________
Name:
Title:
SIGNET BANK, as Seller
by
___________________________
Name:
Title:
Acknowledged and accepted as
of the date first above written:
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Indenture Trustee,
by _________________________
Name:
Title:
B-4
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
B-5
ANNEX A
TO THE TRANSFER AGREEMENT
XXXX OF SALE
For value received, in accordance with the Loan Sale Agreement
(the "Loan Sale Agreement") dated as of [ ], 1996, among Signet Bank, as seller
(the "Seller"), Signet Student Loan Trust 1996-A (the "Trust") and The First
National Bank of Chicago, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee") ratified by the Transfer
Agreement No. ____ dated as of ______, ______ (the "Transfer Agreement") among
the Seller, the Trust and the Eligible Lender Trustee, the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Additional Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and collections received
thereunder, after the Subsequent Cutoff Date and (iii) all proceeds of any and
all of the foregoing (including but not limited to proceeds derived from the
voluntary or involuntary conversion of any of the Additional Student Loans into
cash or other liquidated property, such as proceeds from the applicable
Guarantee Agreement). The foregoing sale does not constitute and is not intended
to result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Seller to the borrowers of the Additional Student Loans or any
other person in connection with the Additional Student Loans or any agreement or
instrument relating to any of them.
In addition, the undersigned, by execution of this instrument,
hereby endorses the promissory notes evidencing each Additional Student Loan
described in Schedule A to the Transfer Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Loan Sale Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Loan Sale Agreement and the Transfer Agreement and is to be
governed by the Loan Sale Agreement and the Transfer Agreement.
B-6
Capitalized terms used but not defined herein shall have the
meaning assigned to them in the Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of
Sale to be duly executed as of ________________, ______.
SIGNET BANK, as Seller
by
---------------------
Name:
Title:
B-7
EXHIBIT C
TO THE LOAN SALE AGREEMENT
1. Characteristics of Financed Student Loans. Each Financed
Student Loan (A) was originated in the United States of America, its
territories, its possessions or other areas subject to its jurisdiction
by an "eligible lender" under the Higher Education Act in the ordinary
course of its business to an eligible borrower under applicable law and
agreements and was fully and properly executed by the parties thereto,
(B) was originated or acquired by the Seller in the ordinary course of
its business, and (C) provides or, when the payment schedule with
respect thereto is determined, will provide for payments on a periodic
basis that fully amortizes the principal amount of such Financed
Student Loan by its maturity, as such maturity may be modified in
accordance with any applicable deferral or forbearance periods granted
in accordance with applicable laws and restrictions, including those of
the Higher Education Act or the applicable Guarantee Agreement, and
yield interest at the rate applicable thereto. Each Financed Student
Loan is guaranteed by an eligible guarantor under the Higher Education
Act and qualifies the holder thereof to receive Interest Subsidy
Payments (other than unsubsidized SLS Loans, unsubsidized Xxxxxxxx
Loans, unsubsidized PLUS Loans, and unsubsidized Consolidation Loans)
and Special Allowance Payments (except for any immaterial portion of
Consolidation Loans that refinanced HEAL Loans and that are part of the
Initial Financed Student Loans) from the Department and Guarantee
Payments from the applicable Guarantor and qualifies the applicable
Guarantor to receive reinsurance payments thereon from the Department.
2. Schedule of Financed Student Loans. The information set
forth in Schedule A to this Agreement is true and correct in all
material respects as of the close of business on the Cutoff Date. With
respect to any Additional Student Loan conveyed to the Issuer after the
Closing Date, information for each category set forth in Schedule A has
been provided with respect to such loan and such information is true
and correct in all material respects, as of the date of the close of
business on the applicable Subsequent Cutoff Date. No selection
procedures believed to be adverse to the Noteholders or the
Certificateholders were utilized in selecting any Financed Student
Loan. The computer tape regarding the Initial Financed Student Loans
made available to the Issuer and its assigns is true and correct in all
material respects as of the Cutoff Date and, after the Closing Date,
any computer tape regarding any Additional Student Loan made available
to the Issuer and its assigns is true and correct in all material
respects as of the applicable Subsequent Cutoff Date.
C-1
3. Compliance with Law. Each Financed Student Loan complied at
the time of origination and at the time of the execution of this
Agreement or the applicable Transfer Agreement or Assignment, as the
case may be, in all material respects with all applicable requirements
of local, state, and federal laws, rules and regulations which govern
the making of such Financed Student Loan including the requirements of
the applicable Guarantee Agreement.
4. Binding Obligation. The terms and conditions of each
Financed Student Loan are consistent with the application of the
Borrower, all signatures for the Financed Student Loans are genuine and
the Borrower Note evidencing each Financed Student Loan has been duly
executed and delivered and constitutes the legal, valid, and binding
obligation of the Borrower enforceable in accordance with its terms.
5. No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or threatened or exists with
respect to any Financed Student Loan.
6. No Default. No Financed Student Loan has a payment that is
more than 90 days overdue as of the Cutoff Date or as of the applicable
Subsequent Cutoff Date, as the case may be, and, except as permitted in
this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has occurred;
and, except for payment defaults continuing for a period of not more
than 90 days, no continuing condition that with notice or the lapse of
time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Financed Student Loan
has arisen; and the Seller has not waived and shall not waive any of
the foregoing other than as permitted by the Basic Documents.
7. Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
Financed Student Loans from the Seller to the Eligible Lender Trustee
on behalf of the Issuer and that the beneficial interest in and title
to such Financed Student Loans not be part of the estate of the Seller
in the event of the appointment of a receiver with respect to the
Seller. Immediately prior to the transfer and sale of each Financed
Student Loan to the Trust, each Borrower Note is owned by the Seller
and the Seller has good title to each Financed Student Loan, free and
clear of any lien, charge, encumbrance, or other interest therein and
immediately upon the transfer and sale of such Financed Student Loan to
the Trust, the Eligible Lender Trustee on behalf of the Issuer will
have good title to such Financed Student Loan free and clear of any
lien, charge, encumbrance, or other interest therein except as
contemplated by the Basic Documents. The
C-2
Seller's computer files relating to the Financed Student Loans have
been marked to indicate that such Financed Student Loans have been sold
to the Trust.
8. All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Eligible Lender Trustee on
behalf of the Issuer a first perfected ownership interest in the
Financed Student Loans, and to give the Indenture Trustee a first
perfected security interest therein, have been made.
9. No Bankruptcies. No Borrower of any Financed Student Loan
as of the Cutoff Date or the applicable Subsequent Cutoff Date (in the
case of Additional Student Loans) was noted in the related Student Loan
File as being currently involved in a bankruptcy proceeding.
10. Lawful Assignment. No Financed Student Loan has been
originated in, or is subject to the laws of, any jurisdiction under
which the origination, sale, transfer and assignment of such Financed
Student Loan or any Financed Student Loan under this Agreement, each
Transfer Agreement or the Indenture is unlawful, void or voidable.
11. One Original. There is only one original executed copy
of the promissory note evidencing each Financed Student Loan.
12. Accounts. Each Financed Student Loan may be pledged or
transferred as an "account" as defined in the UCC.
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EXHIBIT D
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. The Seller has been
organized and is existing as a banking corporation in good standing
under the laws of the Commonwealth of Virginia and is authorized to do
business in every state in which it is doing business as well as the
state in which it is organized and incorporated.
2. Power and Authority of the Seller. The Seller has the
corporate power and authority to execute and deliver this Agreement and
to carry out its terms; the Seller has full corporate power and
authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer (or with the Eligible Lender Trustee on
behalf of the Issuer) and the Seller has duly authorized such sale and
assignment to the Issuer (or to the Eligible Lender Trustee on behalf
of the Issuer) by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been duly authorized by
the Seller by all necessary corporate action.
3. Binding Obligation. This Agreement has been executed and
delivered by the Seller and, assuming authorization, execution, and
delivery by the other parties thereto, this Agreement constitutes a
valid obligation of the Seller enforceable against it in accordance
with the express terms of this Agreement, except as enforcement thereof
may be limited by the bankruptcy, insolvency, reorganization,
moratorium, liquidation, readjustment of debt, or other federal or
state laws or equitable principles relating to or affecting the
enforcement of creditor's rights or the rights of creditors of banks
the deposit accounts of which are subject to the FDIC.
4. No Violation. The consummation of the transactions
contemplated by this Agreement or the Administration Agreement and the
fulfillment of the terms hereof or thereof do not conflict with, result
in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the
articles of incorporation or by-laws of the Seller, or any material
indenture, agreement or other instrument to which the Seller is a party
or by which it shall be bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the Basic Documents); nor violate any law or, to the knowledge of the
Seller, any order, rule or regulation applicable to the Seller of any
court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
D-1
Seller or its properties. The consummation of the transactions
contemplated by this Agreement or by the Administration Agreement and
the fulfillment of the terms hereof and thereof will not result in the
loss of any Guarantee Payments by the Trust or any reinsurance payments
with respect to any Financed Student Loans by the applicable Guarantor.
5. No Proceedings. There is no action, suit, claim,
investigation, or proceeding, in any such case whether pending or to
the knowledge of the Seller, threatened against the Seller before any
court, governmental agency, or arbitrator (i) asserting the invalidity
of this Agreement, the Indenture or any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of
the Notes or the Certificates or the consummation of any transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) seeking to
affect adversely the Federal or state income tax attributes of the
Issuer, the Notes or the Certificates.
6. All Consents. No action, including, without limitation, the
granting or issuing of any consent, permit, license, approval, or
authorization which is required to be made on or prior to the date of
this Agreement in connection with the sale of Financed Student Loans
under this Agreement (with the possible exception of routine filings
which, if not made, will not render the Seller liable to any material
penalties or will not result in the transactions contemplated by this
Agreement being subject to challenge) is required.
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