Exhibit 99.1
LOAN PURCHASE AGREEMENT
This Loan Purchase Agreement made and entered into as of this 1st day of
May, 2007 by and between Nelnet Student Loan Trust 2007-1, a Delaware statutory
trust (the "Purchaser") acting by and through Zions First National Bank, not
individually but as eligible lender trustee (the "Trustee") under the Eligible
Lender Trust Agreement (as defined herein), and Nelnet Student Loan Funding,
LLC, a limited liability company organized and existing under the laws of the
State of Delaware and having its principal offices at 000 Xxxxx 00xx Xxxxxx,
Xxxxx 000, in the city of Lincoln, County of Lancaster, State of Nebraska,
acting by and through Zions First National Bank, not individually, but as
eligible lender trustee (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser, by and through the Trustee, desires to purchase
from the Seller certain FFELP Loans (as defined below) to assist students in
obtaining a post-secondary education, title to which will be held by the Trustee
pursuant to the Eligible Lender Trust Agreement, and the Seller desires to sell
certain FFELP Loans to the Purchaser, title to which will be held by and through
the Trustee, in accordance with the terms and conditions of this Loan Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
Section 1. DEFINITIONS.
"BORROWER" means the student or parent obligor under a FFELP Loan.
"CERTIFICATE OF INSURANCE" means a certificate of federal loan insurance
issued with respect to a FFELP Loan by the Secretary of Education pursuant to
the provisions of the Higher Education Act.
"CONTRACT OF INSURANCE" means an agreement between the Secretary of
Education and either the Trustee or the Seller providing for the insurance by
the Secretary of Education of the principal of and accrued interest on a FFELP
Loan to the maximum extent permitted under the Higher Education Act.
"CONVEYED PROPERTY" has the meaning set forth in Section 13 hereof.
"ELIGIBLE LENDER TRUST AGREEMENT" means the Eligible Lender Trust
Agreement dated as of May 1, 2007, between the Trustee and the Purchaser, as the
same may be amended, modified, supplemented, restated or otherwise altered.
1
"ELIGIBLE LOAN" means a FFELP Loan authorized to be acquired by the
Purchaser by and through the Trustee which on the date sold hereunder (i) is
either Insured or Guaranteed; (ii) if such FFELP Loan is a subsidized Xxxxxxxx
loan, qualifies the holder thereof to receive Interest Subsidy Payments and
Special Allowance Payments; if such FFELP Loan is a consolidation loan
authorized under Section 428C of the Higher Education Act, qualifies the holder
thereof to receive Interest Subsidy Payments and Special Allowance Payments to
the extent applicable; and if such FFELP Loan is a PLUS loan authorized under
Section 428B of the Higher Education Act, a SLS loan authorized under Section
428A of the Higher Education Act, or an unsubsidized Xxxxxxxx loan authorized
under Section 428H of the Higher Education Act, such FFELP Loan qualifies the
holder thereof to receive Special Allowance Payments; (iii) complies with each
representation and warranty with respect thereto contained in Exhibit E attached
hereto; and (iv) meets the other criteria set forth in the Loan Purchase
Regulations and is eligible for purchase under the terms of the Financing
Agreement.
"FEDERAL CONTRACTS" means all agreements between a Guarantee Agency and
the Secretary of Education providing for the payment by the Secretary of
Education of amounts authorized to be paid pursuant to the Higher Education Act,
including, but not limited to, reimbursement of amounts paid or payable upon
defaulted FFELP Loans and other student loans insured or guaranteed by any
Guarantee Agency and federal interest subsidy payments and Special Allowance
Payments, if applicable, to holders of qualifying student loans guaranteed by
any Guarantee Agency.
"FFELP LOANS" means those specific loans acquired by the Trustee, on
behalf of the Purchaser, from the Seller pursuant to this Loan Purchase
Agreement, inclusive of the promissory notes evidencing such loans and the
related documentation in connection with each thereof, which were originated
pursuant to the Federal Family Education Loan Program and the Higher Education
Act.
"FINANCING AGREEMENT" means the Indenture of Trust, dated as of May 1,
2007, by and between the Purchaser and the Indenture Trustee, as the same may be
amended, modified, supplemented, restated or otherwise altered, which is
utilized to finance the Purchaser's purchase of the FFELP Loans under this Loan
Purchase Agreement.
"GUARANTEE" or "GUARANTEED" means, with respect to a FFELP Loan, the
guarantee by the Guarantee Agency, in accordance with the terms and conditions
of the Guarantee Agreement, of the principal of and accrued interest on the
FFELP Loan to the maximum extent permitted under the Higher Education Act on
FFELP Loans which have been originated, held and serviced in full compliance
with the Higher Education Act, and the coverage of the FFELP Loan by the Federal
Contracts providing, among other things, for reimbursement to the Guarantee
Agency for losses incurred by it on defaulted FFELP Loans guaranteed by it to
the extent of the maximum reimbursement allowed by the Federal Contracts.
"GUARANTEE AGENCY" means a state agency or a private nonprofit
institution or organization which administers a Guarantee Program within a State
or any successors and assignees thereof administering the Guarantee Program
which has entered into a Guarantee Agreement with the Trustee on behalf of the
Purchaser.
2
"GUARANTEE AGREEMENT" means the Federal Contracts, an agreement between
a Guarantee Agency and either the Trustee or the Seller providing for the
Guarantee by such Guarantee Agency of the principal of and accrued interest on
FFELP Loans to Borrowers, made or acquired by the Trustee or the Seller from
time to time, and any other similar guarantee or agreement issued by a Guarantee
Agency to the Purchaser or the Trustee pertaining to FFELP Loans.
"GUARANTEED LOANS" means FFELP Loans that are Guaranteed.
"GUARANTEE PROGRAM" means a Guarantee Agency's student loan guaranty
program pursuant to which such Guarantee Agency guarantees or insures student
loans.
"HIGHER EDUCATION ACT" shall mean Title IV, Parts B, F and G, of the
Higher Education Act of 1965, as amended or supplemented and in effect from time
to time, or any successor enactment thereto, and all regulations promulgated
thereunder and any directives issued by the Secretary of Education.
"INDENTURE TRUSTEE" means Zions First National Bank acting in its
capacity as indenture trustee under the Financing Agreement, and not in its
individual capacity.
"INSURANCE" or "INSURED" or "INSURING" means, with respect to a FFELP
Loan, the insuring by the Secretary of Education (as evidenced by a Certificate
of Insurance or other document or certification issued under the provisions of
the Higher Education Act) under the Higher Education Act of the principal of and
accrued interest on such FFELP Loan to the maximum extent permitted under the
Higher Education Act for FFELP Loans originated, held and serviced in full
compliance with the Higher Education Act.
"INSURED LOANS" means FFELP Loans which are Insured.
"INTEREST SUBSIDY PAYMENTS" means interest subsidy payments received
from the Secretary of Education pursuant to Section 428 of the Higher Education
Act or similar payments authorized by federal law or regulation.
"LOAN PURCHASE AGREEMENT" means this Loan Purchase Agreement including
all exhibits and schedules attached hereto, and any addenda, supplements or
amendments hereto.
"LOAN PURCHASE DATE" means the date as described in Section 2(b) hereof.
"LOAN PURCHASE REGULATIONS" means the rules and regulations of the
Purchaser, as may be adopted by the Purchaser from time to time (with the
consent of any persons required under the terms of the Financing Agreement),
which pertain to the Program, which shall incorporate all requirements specified
in any indentures or other financing arrangements to which the Purchaser is
subject.
"LOAN TRANSFER SCHEDULE" means a written schedule on a form provided by
the Purchaser or its servicing agent identifying the Borrower on the FFELP Loans
purchased hereunder.
3
"MASTER NOTE" means a Master Promissory Note in the form mandated by
Section 432(m)(1)(D) of the Higher Education Act, as added by Pub. L. 105-244,
ss. 427,112 Stat. 1702 (1998) as amended by Public Law No: 106-554 (enacted
December 21, 2000) and as codified at 20 U.S.C. ss. 1082(m)(1).
"MPN LOAN" means a FFELP Loan evidenced by a Master Note.
"PROGRAM" means the Purchaser's FFELP Loan acquisition program under
which the Purchaser, acting by and through the Trustee will acquire FFELP Loans
to assist students in obtaining a post-secondary education.
"PURCHASER" means Nelnet Student Loan Trust 2007-1, a Delaware statutory
trust.
"SECRETARY OF EDUCATION" means the Commissioner of Education and the
Secretary of the United States Department of Education (who succeeded to the
functions of the Commissioner of Education pursuant to the Department of
Education Organization Act), or any officer, board, body, commission or agency
succeeding to the functions thereof under the Higher Education Act.
"SELLER" means Nelnet Student Loan Funding, LLC, a Delaware limited
liability company, which is performing this Loan Purchase Agreement by and
through its eligible lender trustee which is an "eligible lender" under the
criteria established by the Higher Education Act that has received an eligible
lender designation by the Secretary of Education with respect to Insured Loans
or from a Guarantee Agency with respect to Guaranteed Loans, identified in the
introduction to this Loan Purchase Agreement, which is selling FFELP Loans to
the Purchaser hereunder.
"SPECIAL ALLOWANCE PAYMENTS" means special allowance payments authorized
to be made by the Secretary of Education pursuant to Section 438 of the Higher
Education Act or similar allowances authorized from time to time by federal law
or regulation.
"TRUSTEE" means Zions First National Bank acting in its capacity as
eligible lender trustee under the Eligible Lender Trust Agreement, and not in
its individual capacity.
"UCC" means the Uniform Commercial Code as from time to time enacted and
in effect in an applicable jurisdiction.
Section 2. PURCHASE OF FFELP LOANS.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein, the Seller
agrees to sell to the Trustee, acting on behalf of the Purchaser, and
the Purchaser, acting by and through the Trustee under the Eligible
Lender Trust Agreement on behalf of the Purchaser, agrees to buy from
the Seller, a portfolio of FFELP Loans in the aggregate unpaid principal
amount as set forth in the applicable Loan Transfer Addendum
substantially in the form set forth in Exhibit A hereto and all other
Conveyed Property related to such FFELP Loans. Portfolios of FFELP Loans
and all other Conveyed Property related to such FFELP Loans may be
purchased hereunder from the Seller by the Purchaser by and through the
Trustee from time to time in the future, if the parties hereto execute
and deliver a related Loan Transfer Addendum for each such purchase of a
portfolio substantially in the form set forth in Exhibit A hereto, and
4
if the Seller executes and delivers to the Purchaser all documents
required under Section 4 hereof as of the applicable Loan Purchase Date.
Each such purchase of a portfolio of FFELP Loans shall be governed in
all respects by this Loan Purchase Agreement together with the Loan
Transfer Addendum pertaining to such portfolio. The Seller shall deliver
a Loan Transfer Schedule to the Purchaser, not less than five (5) days
prior to the applicable Loan Purchase Date. Consummation of the sale of
each portfolio of such FFELP Loan and all other Conveyed Property
related to such FFELP Loans pursuant to a Loan Transfer Addendum shall
require execution and delivery to the Purchaser of the Seller's Closing
Certificate in the form of Exhibit B hereto (and delivery of the
documents described in Exhibit B hereto), and execution and delivery by
the Seller of the blanket endorsement and xxxx of sale substantially in
the forms set forth in Exhibits C and D hereto, respectively. It is the
intention of the Seller that the transfer from the Seller to the Trustee
on behalf of the Purchaser constitutes a true sale of each FFELP Loans
sold hereunder and that neither the Seller's interest in nor title to
such FFELP Loans shall thereafter become or be deemed property of the
Seller for any purpose under applicable state or federal law, unless and
until such FFELP Loan is repurchased by the Seller pursuant to the terms
of this Loan Purchase Agreement.
(b) Delivery and payment for the FFELP Loans and all other
Conveyed Property related to the FELP Loans sold hereunder shall take
place at a location and on a date (the "Loan Purchase Date") to be
specified by the Purchaser. The applicable Loan Purchase Date shall be
the date set forth in the Loan Transfer Addendum pertaining to such
FFELP Loans.
(c) Subject to the terms and conditions of this Loan Purchase
Agreement, the Purchaser agrees to purchase the FFELP Loans by and
through the Trustee and all other Conveyed Property related to the FFELP
Loans sold hereunder at a price agreed upon and specified in the Loan
Transfer Addendum as set forth in Exhibit A. The Seller shall be
responsible for reporting to the Secretary of Education and, if required
by the provisions of the Higher Education Act, offsetting against
Interest Subsidy Payments and Special Allowance Payments made to the
Seller by the Secretary of Education the entire amount of any
origination fee which is authorized to be charged by the Higher
Education Act with respect to the FFELP Loans sold hereunder.
Additionally, the Seller shall, as a condition to the purchase by the
Purchaser of any FFELP Loan, be required to pay to the Purchaser on the
Loan Purchase Date the amount of any such origination fee which has not
at that time been used to offset such Special Allowance Payments or
Interest Subsidy Payments, to the extent that the Special Allowance
Payments or Interest Subsidy Payments received by the Trustee in
connection with such FFELP Loans shall be affected. Seller shall
continue due diligence servicing in compliance with the Higher Education
Act, at Seller's cost, up to the applicable Loan Purchase Date;
thereafter, servicing shall be paid for by, and shall be the
responsibility of, the Purchaser.
5
(d) Subject to the terms and conditions of this Loan Purchase
Agreement, Seller shall sell to the Purchaser, by and through the
Trustee, all FFELP Loans made to the same Borrower(s) which are held by
or on behalf of Seller (serial loans).
(e) The Seller hereby agrees that it will not consolidate any
FFELP Loan that the Seller sold to the Purchaser pursuant to this
Agreement which is a consolidation loan under Section 428C of the Higher
Education Act. In the event that the Seller consolidates any such FFELP
Loan, and the proceeds of the related consolidation loan are used to
repay the principal and interest due on such FFELP Loan, the Seller
shall pay to the Purchaser liquidated damages in an amount equal to the
percentage of the premium paid by the Purchaser to the Seller in
connection with the purchase of such FFELP Loan under this Agreement,
which percentage is equal to the percentage that the then outstanding
principal balance of such FFELP Loan is of the principal balance of such
FFELP Loan on it Loan Purchase Date hereunder (the "Liquidated Damages
Sum"). The parties hereto agree that (a) the Purchaser's actual damages
resulting from such consolidation by the Seller would be difficult to
calculate, (b) that the Liquidated Damages Sum is a reasonable estimate
of such actual damages and (c) the Liquidated Damages Sum shall
constitute liquidated damages, and not a penalty, forfeiture or return
of any portion of the purchase price for such FFELP Loan. The parties
hereto agree that payment of the Liquidated Damages Sum by the Seller to
the Purchaser shall be the sole and exclusive remedy of the Purchaser
and the Trustee for any consolidation of such FFELP Loan by the Seller
in breach of this breach of this paragraph, and the Purchaser and the
Trustee hereby waive any other claim either may have resulting from such
breach, including, without limitation any claim for indemnification or
consequential and incidental damages incurred by the Purchaser or the
Trustee.
Section 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
SELLER.
(a) With respect to FFELP Loans sold on a Loan Purchase Date, the
Seller hereby makes the representations and warranties set forth in
Exhibit E hereto as of such Loan Purchase Date. Each representation,
warranty, certification, covenant and agreement contained in this Loan
Purchase Agreement shall survive the applicable Loan Purchase Date.
(b) The Seller shall not organize under the law of any
jurisdiction other than the State under which it is organized as of the
date of this Loan Purchase Agreement (whether changing its jurisdiction
of organization or organizing under an additional jurisdiction) without
giving 30 days prior written notice of such action to the Purchaser.
Before effecting such change, the Seller shall prepare and file in the
appropriate filing office any financing statements or other statements
necessary to continue the perfection of the Purchaser's interests in the
FFELP Loans.
6
Section 4. CONDITIONS OF PURCHASE. The Purchaser's obligation to
purchase and pay for the FFELP Loans hereunder by and through the Trustee as of
any applicable Loan Purchase Date shall be subject to each of the following
conditions precedent:
(a) All representations, warranties and statements by or on
behalf of the Seller contained in this Loan Purchase Agreement shall be
true on the applicable Loan Purchase Date.
(b) Any notification to or approval by the Secretary of Education
or a Guarantee Agency required by the Higher Education Act or a
Guarantee Agreement as a condition to the assignment of the FFELP Loans
shall have been made or received and evidence thereof delivered to the
Purchaser.
(c) The entire interest of the Seller in each FFELP Loan shall
have been duly assigned by endorsement in the form set forth in Exhibit
C hereto, such endorsement to be without recourse except as provided in
Section 6 hereof.
(d) Physical custody and possession of the FFELP Loans (including
all information and documentation which is described in the Seller's
Closing Certificate as specified in Exhibit B hereto) shall be
transferred in the manner directed by the Purchaser.
(e) The Purchaser shall receive an opinion of the Seller's
counsel, dated as of the first Loan Purchase Date covering such first
sale and any other sale of FFELP Loans, in form and substance
satisfactory to the Purchaser and the Trustee to the effect that (i)
this Loan Purchase Agreement has been duly authorized, executed and
delivered by the Seller and constitutes the legal, valid, binding and
enforceable obligation of the Seller, (ii) the blanket endorsement and
xxxx of sale required by this Loan Purchase Agreement have been duly
authorized, executed and delivered by the Seller, (iii) with respect to
all Insured Loans being acquired, the applicable Contract of Insurance
has been duly authorized, executed and delivered by the Seller, (iv)
with respect to all Guaranteed Loans being acquired, the applicable
Guarantee Agreement has been duly authorized, executed and delivered by
the Seller, and (v) assuming the due execution and delivery thereof,
each FFELP Loan constitutes the legal, valid and binding obligation of
the Borrower (and of each endorser, if any) thereof, enforceable in
accordance with its terms, (vi) to the knowledge of the Seller's
counsel, the execution and delivery of this Loan Purchase Agreement, the
consummation of the transactions therein contemplated and compliance
with the terms, conditions and provisions of this Loan Purchase
Agreement do not and will not conflict with or result in a breach of any
of the terms, conditions or provisions of the charter, articles or
bylaws of the Seller or any agreement or instrument to which the Seller
is a party or by which it is bound or constitute a default thereunder,
(vii) to the knowledge of the Seller's counsel, the Seller is not a
party to or bound by any agreement or instrument or subject to any
charter or other corporation restriction or judgment, order, writ,
injunction, decree, law, rule or regulation which may materially and
adversely affect the ability of the Seller to perform its obligations
under this Loan Purchase Agreement, (viii) no consent, approval or
authorization of any government or governmental body, including, without
limitation, the Federal Deposit Insurance Corporation ("FDIC"), the
7
Comptroller of the Currency, the Board of Governors of the Federal
Reserve System or any state bank regulatory agency, is required in
connection with the consummation of the transactions contemplated in
this Loan Purchase Agreement, (ix) this Loan Purchase Agreement shall
constitute a security agreement under Delaware law and shall be
effective to create, in favor of the Purchaser, a perfected valid
security interest in the FFELP Loans subject to no prior liens, (x) if
the Purchaser and the Seller are affiliates, that if the Seller became a
debtor under the United States Bankruptcy Code, 11 U.S.C. xx.xx. 101 et
seq., as amended (the "Bankruptcy Code"), (1) Section 541(a)(1) of the
Bankruptcy Code would not apply to deem the FFELP Loans sold by the
Seller to the Purchaser and the proceeds therefrom as property of the
bankruptcy estate of the Seller and therefore (2) Section 362(a) of the
bankruptcy Code would not apply to stay payment to the Purchaser or its
assignees, (xi) if the Seller is the parent of the Purchaser, if the
Seller became a debtor under the Bankruptcy Code, a court would not
disregard the separate identity of the Purchaser so that the assets of
the Seller would be consolidated with and become a part of the Seller's
bankruptcy estate, and (xii) if the Seller is a bank or savings
association the deposits of which are insured by the FDIC (a "Bank") and
the FDIC were appointed as receiver or conservator of such Bank, a court
would not recharacterize the transfer and assignment of the FFELP Loans
to the Borrower as a pledge to secure a borrowing rather than a sale of
the FFELP Loans.
(f) Delivery by the Seller to the Purchaser on or before the
applicable Loan Purchase Date of the following documentation: Seller's
Closing Certificate in the form of Exhibit B hereto; blanket endorsement
in the form of Exhibit C hereto; xxxx of sale in the form of Exhibit D
hereto; UCC Financing Statements evidencing the transfer from the Seller
to the Trustee on behalf of the Purchaser, and UCC lien searches
sufficiently in advance of the Loan Purchase Date so as to permit review
thereof by the Purchaser to its satisfaction, if either or both are
requested by the Purchaser or a party to the Financing Agreement; and
UCC termination statements or releases, if any, to the extent necessary
to release any security interest granted by the Seller in any FFELP
Loan.
(g) Delivery by the Seller to the Purchaser, prior to the Loan
Purchase Date, of a fully executed and completed Loan Transfer Addendum
substantially in the form of Exhibit A hereto with respect to FFELP
Loans referred to in the xxxx of sale, and delivery of a Loan Transfer
Schedule as required in Section 2(a) hereof.
(h) Adequate funds are available to the Purchaser to finance the
purchase of FFELP Loans under this Loan Purchase Agreement.
(i) Delivery by the Seller of a closing certificate dated as of
the date of the first sale of FFELP Loans hereunder in form and
substance satisfactory to the Purchaser and Trustee and a certificate
dated as of the date of the first sale of FFELP Loans hereunder of the
certificates attached to the true sale/non-consolidation opinion and the
perfection opinion of Xxxxx Xxxx LLP, each dated as of approximately
even date therewith.
8
Section 5. REJECTION OF FFELP LOANS PRIOR TO SALE.
(a) If prior to the sale of a FFELP Loan under this Loan Purchase
Agreement (i) the Seller will be unable to make or furnish the
representations and warranties required to be made or furnished by it
pursuant to this Loan Purchase Agreement as to a FFELP Loan or (ii) the
Purchaser determines that the Seller will be unable to fulfill one or
more covenants or conditions of this Loan Purchase Agreement as to a
FFELP Loan, or (iii) the Purchaser, in its reasonable judgment, deems
that a FFELP Loan will not comply with the terms and conditions of this
Loan Purchase Agreement or will not be delivered in compliance with such
terms and conditions, or (iv) the Purchaser, in its reasonable judgment
deems that a FFELP Loan will be for any reason unacceptable to it, then
the Purchaser, within thirty days prior to the applicable Loan Purchase
Date, may refuse to accept and pay for such FFELP Loan (or any
substitute FFELP Loan offered by the Seller in lieu thereof) on the
applicable Loan Purchase Date and such FFELP Loan shall not be sold
under this Loan Purchase Agreement on such Loan Purchase Date..
(b) If the Purchaser rejects a FFELP Loan pursuant to Subsection
5(a), any such FFELP Loan shall be returned to the Seller by registered
mail, together with a letter identifying each returned FFELP Loan and
stating the basis for its return. The Purchaser shall cause any FFELP
Loan returned to the Seller which has been endorsed to the Trustee to be
endorsed by the Trustee to the Seller in the form set forth in Exhibit F
hereto.
(c) The liability of the Purchaser in connection with the loss of
or damage to any FFELP Loan to be returned to the Seller is limited to
such loss or damage occurring as a result of its gross negligence or
willful misconduct in handling or safekeeping FFELP Loans.
Section 6. REPURCHASE OBLIGATION. If:
(i) any representation or warranty made or furnished by the
Seller set forth in Exhibit E to this Loan Purchase
Agreement shall prove to have been materially incorrect as
of the applicable Loan Purchase Date;
(ii) the Secretary of Education or a Guarantee Agency, as the
case may be, refuses to honor all or part of a claim filed
with respect to a FFELP Loan (including any claim for
Interest Subsidy Payments, Special Allowance Payments,
Insurance, reinsurance or Guarantee payments) on account
of any circumstance or event that occurred prior to the
sale of such FFELP Loan to the Purchaser by and through
the Trustee;
9
(iii) on account of any circumstance or event that occurred
prior to the sale of a FFELP Loan to the Purchaser, by and
through the Trustee, a defense is asserted by a Borrower
(or endorser, if any) of the FFELP Loan with respect to
Borrower's obligation to pay all or any part of the FFELP
Loan, and the Purchaser, in good faith, believes that the
facts reported, if true, raise a reasonable doubt as to
the legal enforceability of such FFELP Loan; or
(iv) the instrument which Seller purports to be an Eligible
Loan is not, in fact, an Eligible Loan on its Loan
Purchase Date;
then the Seller shall repurchase such FFELP Loan upon the request of the
Purchaser by paying to the Purchaser the then outstanding principal balance of
such FFELP Loan multiplied by the percentage used to calculate the purchase
price in the applicable Loan Transfer Addendum (or such greater amount as may be
necessary to make the Purchaser and the Trustee whole in light of the purchase
price originally paid by the Purchaser for such loan), plus accrued and unpaid
interest and applicable Special Allowance Payments with respect to such FFELP
Loan from the Loan Purchase Date to and including the date of repurchase, plus
any amounts owed to the Secretary of Education with respect to the repurchased
FFELP Loan, plus any attorneys' fees, legal expenses, court costs, servicing
fees or other expenses incurred by the Purchaser and the Trustee in connection
with such FFELP Loan.
Section 7. NOTIFICATION TO BORROWERS. The servicing agent on behalf of
the Seller shall notify Borrowers under the FFELP Loans as required by the
Higher Education Act of the assignment and transfer to the Trustee of the
Seller's interest in such FFELP Loans and the Seller shall direct each Borrower
to make all payments thereon directly to the Purchaser or as it may otherwise
designate.
Section 8. OBLIGATIONS TO FORWARD PAYMENTS AND COMMUNICATIONS.
(a) The Seller shall promptly remit, or cause to be remitted, to
the Purchaser all funds received by the Seller after the applicable Loan
Purchase Date which constitute payments of principal or interest
(including Interest Subsidy Payments) or Special Allowance Payments
accrued after the applicable Loan Purchase Date with respect to any
FFELP Loan.
(b) The Seller shall immediately transmit to the Purchaser any
communication received by the Seller after the applicable Loan Purchase
Date with respect to a FFELP Loan or the Borrower under such a FFELP
Loan. Such communication shall include, but not be limited to, letters,
notices of death or disability, adjudication of bankruptcy and similar
documents and forms requesting deferment of repayment or loan
cancellations.
Section 9. PAYMENT OF EXPENSES AND TAXES. Each party to this Loan
Purchase Agreement shall pay its own expenses incurred in connection with the
preparation, execution and delivery of this Loan Purchase Agreement and the
transactions herein contemplated, including, but not limited to, the fees and
disbursements of counsel; provided, however, that Seller shall pay any transfer
or other taxes and recording or filing fees payable in connection with the sale
and purchase of the FFELP Loans.
10
Section 10. INDEMNIFICATION. The Seller specifically acknowledges that the
Purchaser, in obtaining financing, will be making representations and warranties
regarding the FFELP Loans sold hereunder based in part on the accuracy of the
Seller's representations and warranties in this Loan Purchase Agreement. The
Seller agrees to indemnify and save the Trustee, the Purchaser and the parties
to the Financing Agreement (together with each of their respective successors,
assignees, officers, directors, agents and employees) harmless of, from and
against any and all loss, liability, cost, damage or expense, including
reasonable attorneys' fees and costs of litigation, incurred by reason of any
breach of the Seller's warranties, representations or covenants hereunder or any
false or misleading representations of the Seller or any failure to disclose any
matter which makes the warranties and representations herein misleading or any
inaccuracy in any information furnished by the Seller in connection herewith,
excluding, however, any loss attributable to credit losses due to defaulted
FFELP Loans or which would otherwise constitute credit recourse; provided,
however, it is understood that all risks relating to the collectibility of FFELP
Loans transferred to the Purchaser, acting by and through the Trustee, under
this Agreement are assumed by the Purchaser and the aforesaid indemnity shall
not be construed to cover such risks.
Section 11. SPECIAL PROVISIONS.
(a) The Seller hereby represents and warrants that the Seller is
transferring all of its right title and interest in the MPN Loans to the
Purchaser, that it has not assigned any interest in such MPN Loans
(other than security interests that have been released or ownership
interests that the Seller has reacquired) to any person other than the
Purchaser, and that no prior holder of the MPN Loans has assigned any
interest in such MPN Loans (other than security interests that have been
released or ownership interests that such prior holder has reacquired)
to any person other than a predecessor in title to the Seller. The
Seller hereby covenants that the Seller shall not attempt to transfer to
any other person any interest in any MPN Loan assigned hereunder.
(b) The Seller hereby authorizes the Purchaser to file a UCC
financing statement identifying the Seller as debtor and the Purchaser
as secured party and describing the FFELP Loans sold pursuant to this
Loan Purchase Agreement. The preparation or filing of such UCC-1
financing statement is solely for additional protection of the
Purchaser's interest in the FFELP Loans and shall not be deemed to
contradict the express intent of the Seller and the Purchaser that the
transfer of FFELP Loans under this Loan Purchase Agreement is an
absolute assignment of such FFELP Loans and is not a transfer of such
FFELP Loans as security for a debt.
Section 12. OTHER PROVISIONS.
(a) The Seller shall, at its expense, furnish to the Purchaser
such additional information concerning the Seller's student loan
portfolio as the Purchaser may reasonably request.
11
(b) The Seller shall, at its expense, execute all other documents
and take all other steps as may be requested by the Purchaser or the
Trustee from time to time to effect the sale hereunder of the FFELP
Loans.
(c) The provisions of this Loan Purchase Agreement cannot be
waived or modified unless such waiver or modification be in writing and
signed by the parties hereto. Inaction or failure to demand strict
performance shall not be deemed a waiver.
(d) This Loan Purchase Agreement shall be governed by the laws of
the State of Nebraska.
(e) All covenants and agreements herein contained shall extend to
and be obligatory upon all successors of the respective parties hereto.
(f) This Loan Purchase Agreement may be simultaneously executed
in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
(g) If any provision of this Loan Purchase Agreement shall be
held, deemed to be or shall, in fact, be inoperative or unenforceable as
applied in any particular situation, such circumstances shall not have
the effect of rendering the provision in question inoperative or
unenforceable in any other situation or of rendering any other provision
or provisions herein contained invalid, inoperative or unenforceable to
any extent whatsoever. The invalidity of any one or more phrases,
sentences, clauses or paragraphs herein contained shall not affect the
remaining portions of this Loan Purchase Agreement or any part hereof.
(h) All notices, requests, demands or other instruments which may
or are required to be given by either party to the other shall be in
writing, and each shall be deemed to have been properly given when
served personally on an officer of the party to whom such notice is
given or upon expiration of a period of 48 hours from and after the
postmark thereof when mailed, postage prepaid, by registered or
certified mail, requesting return receipt, by overnight courier, or by
telecopy, addressed as follows:
12
If to the Purchaser:
Nelnet Student Loan Trust 2007-1
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to the Trustee at:
Zions First National Bank
Corporate Trust Division
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xx 00000
Attention: Xxxxx X. Xxxx - VP & Trust Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Seller, addressed in the manner as set forth in the first
paragraph of this Loan Purchase Agreement.
Either party may change the address and name of the addressee to which
subsequent notices are to be sent to it by notice to the others given as
aforesaid, but any such notice of change, if sent by mail, shall not be
effective until the fifth day after it is mailed.
(i) This Loan Purchase Agreement may not be terminated by either
party hereto except in the manner and with the effect herein
specifically provided for.
(j) Time is of the essence in this Loan Purchase Agreement.
(k) This Loan Purchase Agreement shall not be assignable by the
Seller, in whole or in part.
(l) No remedy by the terms of this Loan Purchase Agreement
conferred upon or reserved to the Purchaser is intended to be exclusive
of any other remedy, but each and every such remedy shall be cumulative
and in addition to every other remedy given under this Loan Purchase
Agreement or existing at law or in equity (including, without
limitation, the right to such equitable relief by way of injunction) or
by statute on or after the date of this Loan Purchase Agreement.
(m) Acts to be taken by the Purchaser with respect to acquiring
and holding title to FFELP Loans hereunder shall be taken by the Trustee
as directed by the Purchaser, which qualifies as an "eligible lender"
trustee under the Higher Education Act, and all references herein to the
Purchaser shall incorporate by this reference the fact that the Trustee
will be acquiring and holding title to FFELP Loans on behalf of the
Purchaser, all as required under the Higher Education Act.
(n) The parties hereto acknowledge that the Trustee and the
Indenture Trustee shall be third party beneficiaries of this Loan
Purchase Agreement with the power and right to enforce the provisions
thereof, and the Trustee and the Indenture Trustee may become an
assignee of the Purchaser. The foregoing creates a permissive right on
the part of such third party beneficiaries, and such third party
beneficiaries shall be under no duties or obligations hereunder.
13
(o) This Loan Purchase Agreement has been made and entered into
not only for the benefit of the Purchaser and Seller but also for the
benefit of the Indenture Trustee in connection with the financing of
Eligible Loans as defined in the Financing Agreement, and upon
assignment by the Purchaser to the Indenture Trustee, its provisions may
be enforced not only by the parties to this Loan Purchase Agreement but
by the Indenture Trustee. The foregoing creates a permissive right on
behalf of the Indenture Trustee and the Indenture Trustee shall not be
under any duties or obligations hereunder.
(p) This Loan Purchase Agreement shall inure to the benefit of
the Trustee, the Indenture Trustee and their successors and assigns.
Without limiting the generality of the foregoing, all representations,
covenants and agreements in this Loan Purchase Agreement which expressly
confer rights upon the Trustee or the Indenture Trustee shall be for the
benefit of and run directly to, the Trustee and the Indenture Trustee,
and the Trustee and the Indenture Trustee shall be entitled to rely on
and enforce such representations, covenants and agreements to the same
extent as if each were a party hereto. The foregoing creates a
permissive right on behalf of the Trustee and the Indenture Trustee, and
neither the Trustee nor the Indenture Trustee shall be under any duties
or obligations hereunder.
(q) If there is an Event of Default (as defined in the Financing
Agreement) under the Financing Agreement and the Indenture Trustee
forecloses on its security interest on the Eligible Loans, then the
Indenture Trustee shall assume all duties and obligations of the
Purchaser hereunder.
Section 13. SECURITY INTEREST. The parties to this Loan Purchase
Agreement intend that the conveyance of the Seller's right, title and interest
in and to the FFELP Loans sold pursuant to this Loan Purchase Agreement (the
"Student Loans" shall constitute an absolute sale, conveying good title free and
clear of any liens, claims, encumbrances or rights of others from the Seller to
the Purchaser. The parties to this Loan Purchase Agreement intend that the
arrangements with respect to the Student Loans shall constitute a purchase and
sale of such Student Loans and not a loan. In the event, however, that it were
determined by a court of competent jurisdiction that the transactions evidenced
by this Loan Purchase Agreement shall constitute a loan and not a purchase and
sale, the party receiving notice of such determination shall give notice of such
determination to the other party and to the Trustee. This Loan Purchase
Agreement constitutes a "security interest" under Article 9 of the applicable
UCC and the Seller hereby grants to the Purchaser a first priority "security
agreement" under Article 9 of the applicable UCC in all of the Seller's right,
title and interest, whether now owned or hereafter acquired, in, to and under
all accounts, general intangibles, chattel paper, instruments, documents, goods,
investment property, money, deposit accounts, certificates of deposit, letters
of credit, advices of credit and other property consisting of, arising from or
related to the following collateral property ("Conveyed Property"):
14
(a) all Student Loans;
(b) all revenues and recoveries of principal from Student Loans,
including all borrower payments and reimbursements of principal and
accrued interest on default claims received from any Guarantee Agency,
on and after the applicable Loan Purchase Date;
(c) any other revenues and recoveries of principal and interest
and other payments and reimbursements of principal and accrued interest
received with respect to any Student Loan and any other collection of
cash with respect to such Student Loan (including, but not limited to,
Interest Subsidy Payments, Special Allowance Payments, finance charges
and payments representing the repurchase of any Student Loan or rebate
of premium thereon) received or deemed to have been received and all
other cash collections, tax refunds and other cash proceeds of the
Conveyed Property, received on and after the applicable Loan Purchase
Date;
(d) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Student Loans, whether pursuant to the contract related to such Student
Loans or otherwise;
(e) all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, punch
cards, data processing software and related property and rights)
maintained with respect to Student Loans otherwise in respect of the
Conveyed Property; and
(f) all proceeds of the foregoing (including, but not by way of
limitation, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind,
and other forms of obligations and receivables or other liquidated
property which at any time constitute all or part or are included in the
proceeds of any of the foregoing property).
The Seller agrees that from time to time, at its expense, it will
properly execute and deliver all further instruments and documents (including,
without limitation, UCC-1 financing statements and custodian agreements with the
Servicer), and take all further action that the Purchaser may reasonably request
in order to perfect, protect or more fully evidence the Purchaser's interest in
the Conveyed Property or to enable the Purchaser to exercise or enforce any of
its rights hereunder. The Seller hereby authorizes the Purchaser to file each
UCC financing statement and each related UCC financing amendment, if any,
(together with such other instruments or documents) and in such form as are
determined by the Purchaser to be necessary or desirable, in each case, on
behalf of the Seller (the terms of which shall be binding on the Seller).
Section 14. INFORMATION AND REPORTING. Upon the Purchaser's request,
Seller shall furnish to the Purchaser: (a) Seller's most recent audited
financial statement prepared in accordance with generally accepted accounting
principles and duly certified by nationally recognized independent certified
public accountants selected by Seller, as well as Seller's most recent unaudited
financial statement and balance sheet; (b) an updated audited financial
statement prepared in accordance with generally accepted accounting principles
and duly certified by nationally recognized independent certified public
accountants selected by Seller; and (c) such other financial information as the
Purchaser may reasonably request from time to time. Seller shall verify and
reconcile FFELP Loan disbursements and cancellations of FFELP Loans sold
hereunder, in such manner as the Purchaser may reasonably request from time to
time. Seller shall furnish to the Purchaser a certificate of good standing.
15
Section 15. LIMITATION OF LIABILITY OF DELAWARE TRUSTEE. Notwithstanding
anything contained herein to the contrary, this instrument has been executed by
M&T Trust Company of Delaware, not in its individual capacity, but solely in its
capacity as Delaware Trustee, and in no event shall M&T Trust Company of
Delaware in its individual capacity or any beneficial owner of the Purchaser
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Purchaser hereunder, as to all of which recourse shall
be had solely to the assets of the Purchaser.
[BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.
NELNET STUDENT LOAN TRUST 2007-1 NELNET STUDENT LOAN FUNDING, LLC
By: M&T Trust Company of Delaware, not By: Nelnet Student Loan Funding
in its individual capacity, but solely Management Corporation, as Manager
as Delaware Trustee and Special Member
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------- ------------------------------
Title: Vice President Xxxxxxx X. Xxxxxxxxx
------------------------------ Vice President
17
EXHIBIT A TO LOAN PURCHASE AGREEMENT
LOAN TRANSFER ADDENDUM
This Loan Transfer Addendum (the "Addendum") is made and entered into as
of the ___ day of May, 2007, by and between Nelnet Student Loan Trust 0000-0
(xxx "Xxxxxxxxx") and Nelnet Student Loan Funding, LLC (the "Seller").
WHEREAS, the parties hereto entered into that Loan Purchase Agreement
dated as of May 1, 2007 (the "Loan Purchase Agreement"), and the Seller wishes
to sell a portfolio of FFELP Loans (as defined in the Loan Purchase Agreement)
to the Purchaser, pursuant to and in accordance with the terms and conditions of
the Loan Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Definitions. All capitalized terms in this Addendum shall have
the same meanings given to them in the Loan Purchase Agreement,
unless otherwise specifically stated herein.
2. Purchase of FFELP Loans. Subject to the terms and conditions of
the Loan Purchase Agreement and in reliance upon the
representations, warranties and covenants as set forth in the
Loan Purchase Agreement, the Seller hereby sells, transfers,
assigns, sets over and otherwise conveys to the Purchaser,
acting by and through the Trustee, without recourse, all of its
right, title and interest in and to the, a portfolio of FFELP
Loans identified in the Loan Transfer Schedule attached hereto,
having an aggregate outstanding principal balance of
approximately $____ billion and all other Conveyed Property
related to the FFELP Loans (the "Current Purchase Portfolio").
3. Purchase Price. Subject to the terms and conditions of the Loan
Purchase Agreement, the Purchaser hereby purchases the Current
Purchase Portfolio at a purchase price equal to 100% of the
aggregate unpaid principal balance of the FFELP Loans included
therein plus 100% of the accrued and unpaid interest thereon,
each as of the Loan Purchase Date set forth in Section 4 hereof.
4. Loan Purchase Date. The Loan Purchase Date shall be May 22,
2007.
5. Representations and Warranties. The Seller hereby makes all the
representations and warranties set forth in the Loan Purchase
Agreement as of the Loan Purchase Date set forth in Section 4
hereof.
18
6. Effect on Loan Purchase Agreement. This Addendum sets forth the
terms of purchase and sale solely with respect to the Current
Purchase Portfolio. This Addendum shall have no effect upon any
other sale or purchase of any FFELP Loans consummated or
contemplated prior to or after the Loan Purchase Date, and all
other terms, conditions and agreements contained in the Loan
Purchase Agreement shall remain in full force and effect. Prior
or subsequent purchases and sales of FFELP Loans shall each be
governed by a separate Loan Transfer Addendum. The terms and
provisions of the Loan Purchase Agreement form a part of, and
are incorporated by this reference into, this Loan Transfer
Addendum.
7. Special Terms. [Reserved]
NELNET STUDENT LOAN TRUST 2007-1 NELNET STUDENT LOAN FUNDING, LLC
By: Nelnet Student Loan Funding
By: M&T Trust Company of Delaware, not Management Corporation, as Manager
in its individual capacity, but solely and Special Member
as Delaware Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
By: /s/ Xxxxxx X. Xxxxx Vice President
-------------------------------
Title: Vice President
19
EXHIBIT B TO LOAN PURCHASE AGREEMENT
SELLER'S CLOSING CERTIFICATE
Nelnet Student Loan Funding (the "Seller") does hereby certify that the
following documents, where applicable to each FFELP Loan (as defined in the Loan
Purchase Agreement) dated May 1, 2007 including all exhibits and schedules
attached thereto, and any applicable addenda, supplements or amendments thereto
(the "Agreement"), by and between the Seller and Nelnet Student Loan Trust
2007-1 (the "Purchaser") acquired under the Loan Transfer Addendum (as defined
in the Agreement) dated as of May ___, 2007 by and between the Seller and the
Purchaser, have heretofore been furnished to the Purchaser or are simultaneously
herewith delivered in accordance with the instructions of the Purchaser,
pursuant to subsection 4(d) of the Agreement:
Department of Education application or Guarantee Agency
application, as supplemented
Interim note(s) for each Loan that is not an MPN Loan
Payout note(s) for each Loan that is not an MPN Loan
Disclosure and Loan information statement
Certificate of Insurance and Contract of Insurance with
respect to each Insured Loan (or certified copy thereof)
Guarantee Agreement, Agreement for Participation in the
Guaranteed Loan Program and Notification of Loan
Approval by the Guarantee Agency with respect to each
Guaranteed Loan (or certified copy thereof)
Any other documentation held by the Seller relating to
the history of such FFELP Loan
Secretary of Education and Guarantee Agency Loan
Transfer Statements
Uniform Commercial Code financing statement, if any,
securing any interest in an FFELP Loan to be Financed,
and an executed termination statement related thereto
Evidence of Loan disbursement
Any other document required to be submitted with a claim to the Guarantee
Agency.
20
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered by an officer hereunto duly authorized as of the Loan
Purchase Date, May 22nd, 2007.
Nelnet Student Loan Funding, LLC
By: Nelnet Student Loan Funding
Management Corporation, as Manager
And Special Member
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President
21
EXHIBIT C TO LOAN PURCHASE AGREEMENT
BLANKET ENDORSEMENT OF
STUDENT LOAN PROMISSORY NOTES
Pursuant to the Loan Purchase Agreement dated May 1, 2007, the
undersigned (the "Seller"), by execution of this instrument, hereby endorses all
promissory notes purchased by Zions First National Bank as eligible lender
trustee (the " Trustee") on behalf of Nelnet Student Loan Trust 2007-1 (the
"Purchaser") This endorsement is in blank, unrestricted form. This endorsement
is without recourse, except as provided under the terms of the Loan Purchase
Agreement. All right, title, and interest of Seller in and to the promissory
notes and related documentation identified in the attached loan ledger are
transferred and assigned to Trustee on behalf of the Purchaser.
This endorsement may be further manifested by attaching this instrument
or a facsimile hereof to each or any of the Promissory Notes and related
documentation acquired by the Trustee on behalf of the Purchaser from Seller, or
by attaching this instrument to the loan ledger schedule, as the Purchaser may
require or deem necessary.
Dated as of this 22nd day of May, 2007.
Zions First National Bank, solely in its
capacity as trustee on behalf of
Nelnet Student Loan Funding, LLC
By: /s/ Xxxxx X. Xxxx
------------------------------------
Title: Vice President
------------------------------------
22
EXHIBIT D TO LOAN PURCHASE AGREEMENT
XXXX OF SALE
FOR VALUE RECEIVED, Nelnet Student Loan Funding, LLC (the
"Seller"), pursuant to the terms and conditions of that certain Loan Purchase
Agreement dated as of May 1, 2007 (the "Agreement") between the Seller and
Nelnet Student Loan Trust 2007-1 (the "Purchaser") does hereby grant, sell,
assign, transfer and convey to Zions First National Bank, solely in its capacity
as trustee (the "Trustee") on behalf of the Purchaser and its successors and
assigns, all right, title and interest of the Seller in and to the following:
(1) The FFELP Loans described in Annex I attached hereto, including
the guarantee of the Loans issued by a guarantee agency pursuant
to the Federal Family Education Loan Program (20 U.S.C. ss. 1071
et seq.);
(2) All promissory notes and related documentation evidencing the
indebtedness represented by such FFELP Loans;
(3) All other Conveyed Property related to such FFELP Loans; and
(4) All proceeds of the foregoing including, without limitation, all
payments made by the obligor thereunder or with respect thereto,
all guarantee payments made by any guarantee agency with respect
thereto, and all interest benefit payments and special allowance
payments with respect thereto made under Title IV, Part B, of the
Higher Education Act of 1965, as amended, and all rights to
receive such payments, but excluding any proceeds of the sale
made hereby.
TO HAVE AND TO HOLD the same unto the Trustee on behalf of the
Purchaser, its successors and assigns, forever. This Xxxx of Sale is made
pursuant to and is subject to the terms and provisions of the Agreement, and is
without recourse, except as provided in the Agreement.
IN WITNESS WHEREOF, the Seller has caused this instrument to be
executed by one of its officers duly authorized to be effective as of the ___
day of May, 2007.
Zions First National Bank, solely in
its capacity as trustee on behalf of
Nelnet Student Loan Funding, LLC
By:
------------------------------------
Title:
------------------------------------
23
EXHIBIT E TO LOAN PURCHASE AGREEMENT
REPRESENTATIONS AND WARRANTIES OF SELLER
A. Any information furnished by the Seller to the Purchaser, or the
Purchaser's agents with respect to a FFELP Loan, including the Loan Transfer
Schedule attached to the Loan Transfer Addendum, is true, complete and correct.
B. The amount of the unpaid principal balance of each FFELP Loan is due
and owing, and no counterclaim, offset, defense or right to rescission exists
with respect to any FFELP Loan which can be asserted and maintained or which,
with notice or lapse of time could be asserted and maintained by the Borrower
against the Trustee or the Purchaser as assignee thereof. The Seller has taken
all reasonable actions to assure that no maker of a FFELP Loan has or may
acquire a defense to the payment thereof. No FFELP Loan carries a rate of
interest less than, or in excess of, the applicable rate of interest required by
the Higher Education Act. If the Higher Education Act permits Sellers to charge
an interest rate less than the applicable rate of interest, no FFELP Loan
purchased hereunder bears interest at a rate lower than the applicable rate of
interest; provided, however, that the Purchaser may approve, in its sole
discretion, in writing, interest reductions which are part of a borrower
repayment incentive program of Seller, the terms of which have been fully
described in detail and in writing to the Purchaser.
C. Each FFELP Loan has been duly executed and delivered and constitutes
the legal, valid and binding obligations of the maker (and the endorser, if any)
thereof, enforceable in accordance with its terms.
D. Each FFELP Loan complies in all respects with the requirements of the
Higher Education Act and the Loan Purchase Regulations and is an Eligible Loan,
as that term is defined in the Loan Purchase Agreement.
E. The Seller or Seller's eligible lender trustee has applied for and
received the Secretary of Education's or a Guarantee Agency's designation, as
the case may be, as an "Eligible Lender" under the Higher Education Act, and the
Seller has entered into all agreements required to be entered into for
participation in the Federal Family Education Loan Program under the Higher
Education Act.
F. The Seller and the Seller's eligible lender trustee on behalf of
Seller is the sole owner and holder of each FFELP Loan and has full right and
authority to sell and assign the same free and clear of all liens, pledges or
encumbrances, other than FFELP Loans that have been submitted for claim to a
Guarantee Agency; no FFELP Loan has been pledged or assigned for any purpose
other than for submission of claim to a Guarantee Agency; and each FFELP Loan is
free of any and all liens, charges, encumbrances and security interests of any
description. The Purchaser has a valid and perfected first priority security
interest in the Conveyed Property.
24
G. Each FFELP Loan is either Insured or Guaranteed; such Insurance or
Guarantee, as the case may be, is in full force and effect, is freely
transferable as an incident to the sale of each FFELP Loan; all amounts due and
payable to the Secretary of Education or a Guarantee Agency, as the case may be,
have been paid in full by the Seller.
H. There are no circumstances or conditions that exist with respect to
any FFELP Loan, the Borrower thereunder or the creditworthiness of said Borrower
that would reasonably cause prudent private investors to regard on the
applicable Loan Purchase Date any of the FFELP Loans as an unacceptable
investment, or adversely affect the value or marketability thereof, the
insurance thereof and any applicable Guarantee.
I. Each FFELP Loan was made in compliance with all applicable local,
State and federal laws, rules and regulations, including, without limitation,
all applicable nondiscrimination, truth-in-lending, consumer credit and usury
laws.
J. The Seller has carefully reviewed the Loan Purchase Regulations
supplied by the Purchaser and has complied with the Loan Purchase Regulations.
K. The FFELP Loans pursuant to the Loan Purchase Agreement include all
FFELP Loans of any one Borrower held by the Seller.
L. The Seller has, and its officers acting on its behalf have, full
legal authority to engage in the transactions contemplated by the Loan Purchase
Agreement; the execution and delivery of the Loan Purchase Agreement, the
consummation of the transactions herein contemplated and compliance with the
terms, conditions and provisions of the Loan Purchase Agreement do not conflict
with or result in a breach of any of the terms, conditions or provisions of the
charter, articles or bylaws of the Seller or any agreement or instrument to
which the Seller is a party or by which it is bound or constitute a default
thereunder; the Seller is not a party to or bound by any agreement or instrument
or subject to any charter or other corporation restriction or judgment, order,
writ, injunction, decree, law, rule or regulation which may materially and
adversely affect the ability of the Seller to perform its obligations under the
Loan Purchase Agreement and the Loan Purchase Agreement constitutes a valid and
binding obligation of the Seller enforceable against it in accordance with its
terms, and no consent, approval or authorization of any government or
governmental body, including, without limitation, the Federal Savings and Loan
Insurance Corporation, the Federal Deposit Insurance Corporation, the
Comptroller of the Currency, the Board of Governors of the Federal Reserve
System or any state bank regulatory agency, is required in connection with the
consummation of the transactions herein contemplated.
M. The Seller is duly organized, validly existing and in good standing
under the laws of its applicable jurisdiction and has the power and authority to
own its assets and carry on its business as now being conducted.
25
N. The Seller and any independent servicer have each exercised due
diligence and reasonable care in making, administering, servicing and collecting
the FFELP Loans, and the Seller has conducted a reasonable investigation of
sufficient scope and content to enable it duly to make the representations and
warranties contained in this Exhibit E. The Seller is solely responsible for the
payment of the costs and expenses incident to origination of FFELP Loans,
without any right of reimbursement therefor from the Purchaser.
O. With respect to all Insured FFELP Loans being acquired, Insurance is
in effect with respect thereto; the applicable Contract and Certificates of
Insurance are valid and binding upon the parties thereto in all respects
material to the security for any bonds and/or notes issued by the Purchaser or
its assignee; and the Seller is not in default in the performance of any of its
covenants and agreements made in respect thereof.
P. With respect to all Guaranteed FFELP Loans being acquired, a
Guarantee Agreement is in effect with respect thereto and is valid and binding
upon the parties thereto in all respects material to the security of the bonds
and/or notes issued by the Purchaser or its assignee to finance the FFELP Loans;
and the Seller is not in default in the performance of any of its covenants and
agreements made in such Guarantee Agreement.
Q. The Seller does not (i) discriminate by pattern or practice against
any particular class or category of students by requiring, as a condition to the
receipt of a student loan, that a student or his family maintain a business
relationship with the Seller, except as may be permitted under applicable laws
or (ii) discriminate on the basis of race, gender, color, creed or national
origin.
R. The FFELP Loans are a representative sample of all student loans held
by the Seller with respect to the educational institution attended by, or the
age, sex, race, national origin or place of residence of, the Borrower to whom
such loans were made, or with respect to any other identifying characteristic of
such Borrowers.
S. Each instrument transferred to the Purchaser under the Loan Purchase
Agreement is a FFELP Loan which constitutes an Eligible Loan.
T. No promissory note evidencing a FFELP Loan bears any apparent
evidence of forgery or alteration or is otherwise so irregular or incomplete as
to call into question its authenticity.
U. Except as may have been disclosed by the UCC lien search required by
Section 4(f) of the Loan Purchase Agreement for the Seller, no other financing
statements or assignment filings naming the Seller as debtor or assignor under
its legal name or trade names has been filed.
V. The fair salable value of the assets on a going concern basis of the
Seller and its subsidiaries, on a consolidated basis, as of the time of each
sale of FFELP Loans hereunder is in excess of the total amount of their
liabilities.
26
EXHIBIT F TO LOAN PURCHASE AGREEMENT
ACKNOWLEDGMENT
The assignment of the within promissory note and related documents to
(DO NOT COMPLETE) under a Loan Purchase Agreement between ____________________
and ____________________, dated as of ____________________, _____, did not
become effective thereunder, and no rights in the same have been conveyed
thereby.
Dated: (DO NOT COMPLETE)
27
