Exhibit 99.1
LOAN SALE AGREEMENT
among
XXXXX FARGO STUDENT LOAN TRUST 2001-1
as Issuer,
XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION,
as Seller,
XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC,
as Depositor,
and
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November [o], 2001
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.01. Conveyance of Initial Financed Student Loans........................................................1
SECTION 2.02. Conveyance of Prefunded Loans and Serial Loans......................................................2
SECTION 2.03. Treatment as a Security Agreement...................................................................5
SECTION 2.04. Endorsement.........................................................................................6
ARTICLE III
The Financed Student Loans
SECTION 3.01. Representations and Warranties of Seller with Respect to the Financed Student Loans.................6
SECTION 3.02. Purchase; Repurchase; Reimbursement.................................................................6
SECTION 3.03. Repurchase Deposits.................................................................................9
ARTICLE IV
The Seller
SECTION 4.01. Representations of Seller...........................................................................9
SECTION 4.02. Existence...........................................................................................9
SECTION 4.03. Liability of Seller; Indemnities...................................................................10
SECTION 4.04. Merger or Consolidation of, or Assumption of the Obligations of, Seller............................11
SECTION 4.05. Limitation on Liabilities of Seller and Others.....................................................11
SECTION 4.06. Seller May Own Notes...............................................................................12
ARTICLE V
The Depositor
SECTION 5.01. Representations and Warranties of Depositor........................................................12
SECTION 5.02. Liability of Depositor; Indemnities................................................................13
SECTION 5.03. Merger or Consolidation of, or Assumption of the Obligations of Depositor..........................14
SECTION 5.04. Limitation on Liability of Depositor and Others....................................................14
ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment..........................................................................................15
SECTION 6.02. Protection of Interests in Trust...................................................................16
SECTION 6.03. Notices............................................................................................17
SECTION 6.04. Assignment.........................................................................................19
SECTION 6.05. Limitations on Rights of Others....................................................................19
SECTION 6.06. Severability.......................................................................................19
SECTION 6.07. Separate Counterparts..............................................................................19
SECTION 6.08. Headings...........................................................................................19
SECTION 6.09. Governing Law......................................................................................20
SECTION 6.10. Assignment to Indenture Trustee....................................................................20
SECTION 6.11. Non-Petition Covenants.............................................................................20
SECTION 6.12. Limitation of Liability of Eligible Lender Trustee and Indenture Trustee...........................20
SECTION 6.13. Agreement of Seller and Depositor..................................................................21
LOAN SALE AGREEMENT dated as of November [o], 2001, among XXXXX FARGO
STUDENT LOAN TRUST 2001-1, a Delaware trust (the "Issuer"), XXXXX FARGO BANK
SOUTH DAKOTA, NATIONAL ASSOCIATION, as seller (the "Seller"), XXXXX FARGO
STUDENT LOANS RECEIVABLES I, LLC, as depositor (the "Depositor"), and BANK
ONE, NATIONAL ASSOCIATION ("Bank One"), a national banking association, solely
as eligible lender trustee and not in its individual capacity (the "Eligible
Lender Trustee").
WHEREAS, the Depositor desires to purchase from the Seller a
portfolio of federally reinsured student loans purchased in the ordinary
course of business by the Seller; and
WHEREAS, the Depositor desires to transfer such student loans to the
Issuer and the Issuer desires to acquire such student loans from the
Depositor; and
WHEREAS, the Seller is willing to sell such student loans to the
Eligible Lender Trustee on behalf of the Depositor and the Issuer; and
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 [o], 2001, among the
Issuer, Xxxxx Fargo Bank Minnesota, National Association, as Administrator,
and Chase Manhattan Bank, 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 Depositor'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 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 Depositor (and, with respect to
legal title to the Initial Financed Student Loans, to the Eligible Lender
Trustee on behalf of the Depositor)
without recourse except as may be provided 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, the related Student Loan
Files and all rights and privileges relating thereto; (ii) all payments on or
collections received thereunder on and after the Cutoff Date net of interest
accrued thereunder prior to the Cutoff Date that is not to be capitalized,
including without limitation, Liquidation Proceeds and Recoveries; (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 the
Prefunding Account Closing Date Deposit, and in all investments and proceeds
thereof (including all income thereon); and (iv) all proceeds of any and all
of the foregoing.
(b) The Depositor (and, with respect to legal title to the Initial
Financed Student Loans, Bank One as Eligible Lender Trustee on behalf of the
Depositor), immediately after the purchase and sale described in Section
2.01(a) above but otherwise concurrently with the execution and delivery
hereof, does hereby sell, assign and otherwise convey to the Issuer (and, with
respect to the legal title to the Initial Financed Student Loans, to the
Eligible Lender Trustee on behalf of the Issuer) without recourse subject to
the Depositor's obligations herein and except as may be provided 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,
the related Student Loan Files and all rights and privileges relating thereto,
(ii) all payments on or collections received thereunder on and after the
Cutoff Date net of interest accrued thereunder prior to the Cutoff Date that
is not to be capitalized, including without limitation, Liquidation Proceeds
and Recoveries; (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 the Prefunding Account Closing Date Deposit, and in all
investments and proceeds thereof (including all income thereon); (iv) all of
its right, title and interest in and to this Agreement with respect to each
Initial Financed Student Loans; and (v) all proceeds of any and all of the
foregoing.
(c) In connection with the sale and assignment of Initial Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer, on the
Closing Date, the Depositor shall deposit the Reserve Account Initial Deposit
into the Reserve Account, the Prefunding Account Closing Date Deposit into the
Prefunding Account and the Collection Account Closing Date Deposit into the
Collection Account.
(d) On the Closing Date, the Depositor will deposit, or cause to be
deposited, into the Collection Account all amounts or collections received
under the Initial Financed Student Loans on and after the Cutoff Date net of
interest accrued thereunder prior to the Cutoff Date that is not to be
capitalized.
SECTION 2.02. Conveyance of Prefunded Loans and Serial Loans.
(a) Subject to the conditions set forth in paragraph (d) below, in
consideration of (i) the Issuer's delivery on the related Transfer Date to or
upon the order of the Depositor and (ii) the Depositor's delivery on the
related Transfer Date to or upon the order of the Seller of the Loan Purchase
Amount for each such Prefunded Loan or Serial Loan to be delivered to the
Depositor or the Seller, as applicable, the Seller does hereby sell, transfer,
assign, set over
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and otherwise convey to the Depositor, and the Depositor does hereby sell,
transfer, assign, set over and otherwise convey to the Issuer and with respect
to the legal title the Prefunded Loans and Serial Loans, to the Eligible
Lender Trustee on behalf of the Depositor or the Issuer, as applicable,
without recourse except as may be provided herein, (i) all right, title and
interest of the Seller in and to each Prefunded Loan and Serial 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 on and after the
related Subsequent Cutoff Date net of interest accrued thereunder prior to the
Subsequent Cutoff Date that is not to be capitalized, including without
limitation, Liquidation Proceeds and Recoveries, (iii) with respect each such
sale and conveyance by the Depositor, all of the Depositor's right, title and
interest in and to this Agreement with respect to each such Prefunded Loan or
Serial Loan and (iv) all proceeds of any and all of the foregoing.
(b)
(i) During the Funding Period, upon the tender of Prefunded 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 Loan Purchase Amounts for such Prefunded Loans will be
withdrawn from the Prefunding Account subject to the provisions of
Section 2(f) and Section 2(k) of the Administration Agreement, and will
be remitted as provided therein to the Depositor, and immediately
thereupon, by the Depositor to or upon the order of the Seller.
(c) After the Funding Period, upon the tender of Serial 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 Loan 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 the Depositor, and
immediately thereupon, by the Depositor to or upon the order of the Seller.
(d) The Seller shall transfer to the Depositor, and the Depositor
shall in turn transfer to the Issuer, the Prefunded Loans and Serial 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 and the Depositor shall have delivered to the
Eligible Lender Trustee and the Indenture Trustee a duly executed
transfer agreement (including executed signature pages by the other
parties thereto) in substantially the form of Exhibit B hereto (each, a
"Transfer Agreement"), which shall include supplements to Schedule A
hereto, listing such Prefunded Loans and Serial Loans;
(ii) the Seller shall have delivered, at least two days prior to
such Transfer Date, notice of such transfer to the Depositor, the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies,
including a listing of the designation and the aggregate principal
balance of such Prefunded Loans and Serial Loans;
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(iii) the Seller shall have deposited in the Collection Account all
amounts on or collections received in respect of the Prefunded Loans and
Serial Loans on and after each applicable Subsequent Cutoff Date;
(iv) as of the Transfer Date, each of the Seller and the Depositor
was not insolvent nor will it have been made insolvent by such transfer
nor is it aware of any pending insolvency;
(v) the Seller shall not have been informed by counsel to the Issuer
or the Indenture Trustee that such addition would result in a material
adverse federal or state tax consequence to the Issuer or the
Noteholders;
(vi) each of the Seller and the Depositor shall have delivered to
the Indenture Trustee and the Eligible Lender Trustee an Officers'
Certificate confirming as to itself the satisfaction of each condition
precedent specified in this paragraph (d);
(vii) the Seller shall have delivered on each May 1 and November 1,
commencing November 1, 2002 (A) to the Rating Agencies an Opinion of
Counsel with respect to the transfer of the Prefunded Loans and Serial
Loans, transferred to the Issuer since the later of the Closing Date or
the prior May 1 or November 1, 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, however,
that, notwithstanding the foregoing, 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; and provided, further, that
neither the Eligible Lender Trustee nor 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 the preceding proviso;
(viii) each of the Seller and the Depositor 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 Noteholders shall have been utilized in selecting
the Prefunded Loans or Serial Loans;
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(x) no Default or Event of Default shall have occurred under the
Indenture, no Servicer Default shall have occurred under the Servicing
Agreement and no Administrator Default shall have occurred under the
Administration Agreement; and
(xi) for each Transfer Date occurring after the Funding Period,
after giving effect to the conveyance of Serial Loans on such Transfer
Date, the amount of funds remitted for the purchase of Serial Loans on
such Transfer Date, and on each Transfer Date since the preceding
Quarterly Payment Date, shall not exceed the Net Principal Cash Flow
Amount for such Transfer Date minus the sum of (i) all amounts paid to
prepay any Add-on Consolidation Loan not held by the Issuer since the
last Quarterly Payment Date pursuant to Section 2(d)(iii)(A) of the
Administration Agreement and (ii) all amounts which the Administrator
reasonably estimates will be required to prepay Add-on Consolidation
Loans pursuant to Section 2(d)(iii)(A) of the Administration Agreement
during the remainder of the Collection Period.
SECTION 2.03. Treatment as a Security Agreement.
(a) 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 Prefunded Loans and Serial Loans pursuant to a related
Transfer Agreement shall constitute a valid 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 (as the asignee of the Depositor), a
first priority security interest in all of the Seller's right, title and
interest in, to and under the Initial Financed Student Loans and any Prefunded
Loans or Serial 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 Prefunded Loans or
Serial Loans conveyed thereby) shall each constitute a security agreement
under applicable law with respect to such loans.
(b) The parties intend that the conveyance of the Depositor's right,
title and interest in and to the Initial Financed Student Loans pursuant to
this Agreement and any Prefunded Loans and Serial Loans pursuant to a related
Transfer Agreement shall constitute a valid 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 Depositor shall be deemed to have granted, and
in such event do hereby grant to the Issuer, a first priority security
interest in all of the Depositor's right, title and interest in, to and under
the Initial Financed Student Loans and any Prefunded Loans or Serial 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 Prefunded Loans or Serial Loans
conveyed thereby) shall each constitute a security agreement under applicable
law with respect to such loans.
(c) If either 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
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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 or the Depositor. Each of the Seller and the
Depositor 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 and the other Basic Documents.
SECTION 2.04. Endorsement. Each of the Seller and the Depositor
hereby appoints each of the Eligible Lender Trustee and the Indenture Trustee
as the its true and lawful attorney-in-fact with full power of substitution to
endorse the Seller's and the Depositor's name, as applicable, on any
promissory note evidencing the Initial Financed Student Loans and any
Prefunded Loans or Serial 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. The Depositor 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, as of the applicable Transfer Date, in the case of the
Prefunded Loans and Serial Loans, as of the date of the relevant Assignment in
the case of any Qualified Substitute Student Loan, as of the date of
origination in the case of any Consolidation Loan added to the Trust during
the Funding Period and as of the applicable Add-on Consolidation Loan Funding
Date, in the case of any Consolidation Loan the principal balance of which is
increased by the principal balance of any related Add-on Consolidation Loan,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Depositor and to the
Eligible Lender Trustee on behalf of the Issuer (and both the origination of
such Consolidation Loans and the addition of the principal balance of any
Add-on Consolidation Loan) and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
SECTION 3.02. Purchase; Repurchase; Reimbursement.
(a) Upon discovery by the Seller, the Depositor, the Servicer, the
Eligible Lender Trustee or the Indenture Trustee of any breach of the Seller's
representations and warranties or other restrictions made by the Seller
pursuant to Section 3.01, the party discovering the breach shall give prompt
written notice to the others. Unless any such breach shall have been cured
within sixty (60) days after the Seller becomes aware or receives written
notice (whichever
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is earlier) of such breach, the Seller shall be obligated to
either (i) repurchase any Financed Student Loan in which the interests of the
Noteholders are materially and adversely affected by any such breach any day
during the first Monthly Collection Period succeeding the end of such 60-day
period or (ii) substitute a Qualified Substitute Student Loan in the manner
specified in this Section; provided, however, that it is understood that any
such breach that does not affect the 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 the 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 addition, if any such breach by the Seller does not trigger such a
repurchase obligation but does result in the refusal by the 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 sixty (60) 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 or
the Noteholders 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 or substitute for Financed Student
Loans or to reimburse the Issuer as provided above pursuant to this Section,
subject to the conditions contained herein.
(b) In consideration of and simultaneously with the purchase or
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 or in the case
of legal title thereto an eligible lender under the Higher Education Act
designated by the Seller.
(c) With respect to any Qualified Substitute Student Loan or Loans,
the Seller shall deliver to the Eligible Lender Trustee for the benefit of the
Indenture Trustee such documents and agreements together with a duly executed
Assignment in the form of Exhibit E hereto. Payments due with respect to
Qualified Substitute Student Loans shall be part of the Trust Estate on and
after the date of such Assignment. Upon such substitution, the Qualified
Substitute Student Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Student Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section 3.01
with respect to any such Student Loan. In addition, any such substitution
shall occur only upon satisfaction of each of the following conditions on or
prior to the date of the related Assignment:
(i) the Seller shall have deposited in the Collection Account all
collections in respect of the Qualified Substitute Student Loans on and
after each applicable date of Assignment;
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(ii) as of the date of the related Assignment, the Seller shall not
have been insolvent nor will it have been made insolvent by such transfer
nor is it aware of any pending insolvency;
(iii) such addition will not result in a material adverse Federal or
State tax consequence to the Issuer or the Noteholders;
(iv) the Seller shall have delivered (A) to the Rating Agencies, an
Opinion of Counsel with respect to each transfer of Qualified Substitute
Student Loans, 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
required by Section 6.02(f)(1) hereof; provided, however, 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; and
provided, further, that neither the Eligible Lender Trustee nor 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 (iv);
(v) 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;
(vi) no selection procedures believed by the Seller to be adverse to
the interests of the Noteholders shall have been utilized in selecting
the Qualified Substitute Student Loans; and
(vii) no Default or Event of Default shall have occurred under
the Indenture, no Servicer Default shall have occurred under the
Servicing Agreement and no Administrator Default shall have occurred
under the Administration Agreement.
Upon any such substitution and the deposit to the Collection Account
of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Eligible Lender
Trustee shall release any documentation held with respect to the Financed
Student Loan being substituted for (the "Deleted Student Loan") to the Seller
and shall execute and deliver at the Seller's direction such instruments of
transfer or assignment prepared by the Seller, in each case without recourse,
as shall be necessary to vest in the Seller, or (in the case of legal title
thereto an eligible lender under the Higher Education Act designated by the
Seller), the Eligible Lender Trustee's interest in any Deleted Student Loan
substituted for pursuant to this Section 3.02.
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For any month in which the Seller substitutes one or more Qualified
Substitute Student Loans for one or more Deleted Student Loans, the Servicer
will determine the amount (if any) by which as of the date of the relevant
Assignment the aggregate principal balance of all such Qualified Substitute
Student Loans is less than the aggregate principal balance of all such Deleted
Student Loans. The amount of such shortage (the "Substitution Adjustment
Amount") shall be deposited in the Collection Account by the Seller on or
before the date of the relevant Assignment.
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 when such amounts are due.
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, as of the applicable Transfer Date in the case
of the Prefunded Loans and Serial Loans, as of the date of the relevant
Assignment in the case of any Qualified Substitute Student Loan, and as of the
date of origination in the case of any Consolidation Loan added to the Trust
during the Funding Period and as of the applicable Add-on Consolidation Loan
Funding Date, in the case of a Consolidation Loan the principal balance of
which is increased by the principal balance of any related Add-on
Consolidation Loan, but shall survive the sale, transfer and assignment of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the
Depositor and to the Eligible Lender Trustee on behalf of the Issuer (and both
the origination of such Consolidation Loans and the addition of the principal
balance of any Add-on Consolidation Loan) and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
SECTION 4.02. Existence. Subject to Dection 4.04, during the term of
this Agreement, the Seller will keep in full force and effect its existence,
rights and franchises as a national banking association under the federal laws
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 and each other instrument or
agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby. The Seller is currently an
eligible lender under the Higher Education Act and shall maintain such status.
During the Funding Period, to the extent that the Seller shall not be an
eligible lender under the Higher Education Act with respect to federal Student
Loans, the Seller agrees to keep in full force and effect an agreement with
another entity qualified to be an eligible lender under the Higher Education
Act providing for such eligible lender meeting the requirements set forth in
the following sentence to hold title to the Seller's Student Loans in trust
for and on behalf of the Seller. The Seller shall not convey any Prefunded
Loans, Serial Loans or Qualified Substitute Student Loans if the eligible
lender holding legal title to such loan is not the Seller but another eligible
lender within the immediately preceding sentence, unless prior to
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such conveyance, such other eligible lender shall agree in writing to be
bound, in the conveyance of each such loan for which it acts as eligible
lender, by the provisions of this Agreement to the same extent as if it were
named separately from the Seller in each of such provisions.
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
Depositor, 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 taxes in connection with the issuance
and original sale of the Notes or asserted with respect to ownership of the
Financed Student Loans or federal or other income taxes arising out of
payments on the Notes) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Depositor, the Issuer, the Eligible Lender Trustee, the Indenture Trustee 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 costs, expenses, losses, claims, damages and liabilities arising
out of, or imposed upon such Person through, (i) the Seller's willful
misfeasance, bad faith or gross 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) any breach of any of the Seller's
representations, warranties or covenants contained herein, except that, with
respect to the representations and warranties made pursuant to Section 3.01,
the remedies for any breach thereof are limited as provided in Section 3.02..
(c) The Seller, on behalf of itself and the Depositor, 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 costs, expenses, 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.
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(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 or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, shall be the successor to the
Seller, respectively, 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
Seller 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 4.01 shall
have been breached, (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 or succession
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 and (iv) such
transaction will not result in a material adverse federal or state tax
consequence to the Issuer or the Noteholders and (v) the Seller 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, however, 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
shall not be incidental to its respective obligations under this Agreement,
and that in its opinion may involve it in any expense or liability.
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SECTION 4.06. Seller May Own Notes. The Seller and any Affiliate of
either may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller, as
the case may be or an Affiliate of either, except as expressly provided herein
or in any other Basic Document.
ARTICLE V
The Depositor
SECTION 5.01. Representations and Warranties of Depositor. The
Depositor makes the following representations and warranties. 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, as
of the applicable Transfer Date in the case of the Prefunded Loans and Serial
Loans, as of the date of the relevant Assignment in the case of any Qualified
Substitute Student Loan, and, in the case of the Seller, as of the date of
origination in the case of any Consolidation Loan added to the Trust during
the Funding Period and as of the applicable Add-on Consolidation Loan Funding
Date, in the case of a Consolidation Loan the principal balance of which is
increased by the principal balance of any related Add-on Consolidation Loan,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer (and both the
origination of such Consolidation Loans and the addition of the principal
balance of any Add-on Consolidation Loan) and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power an authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has power, authority and legal right to acquire, own and
sell the Financed Student Loans.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing and has
obtained all necessary licenses and approvals in each jurisdiction in which
the failure to so qualify or to obtain such licenses and approvals would, in
the reasonable judgment of the Depositor, materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement, the Trust Agreement, any of the other Basic
Documents, the Financed Student Loans or the Notes.
(c) Power and Authority. The Depositor has the power and authority
to execute, deliver and perform its obligations under this Agreement and other
Basic Documents to which it is a party. The Depositor has full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Issuer and has duly authorized such sale and assignment by
all necessary limited liability company action; and the execution, delivery
and performance of this Agreement and the other Basic Documents to which the
Depositor is a party has been duly authorized by the Depositor by all
necessary limited liability company action.
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(d) No Violation. The execution, delivery and performance by the
Depositor of this Agreement and the other Basic Documents to which the
Depositor is a party and the consummation of the transactions contemplated
hereby and thereby and the fulfillment of the terms hereof and thereof does
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 certificate of formation or limited liability company agreement of
the Depositor, or conflict with or violate any of the material terms of
provisions of or constitute (with or without notice or lapse of time, or both)
a default under, any indenture, agreement or other instrument to which the
Depositor 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 this Agreement);
nor violate any law or, to the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depository or its properties, which breach,
default, conflict, Lien or violation would have a material adverse effect on
the earnings, business affairs or business prospects of the Depositor.
(e) No Proceedings. There are no proceedings or investigations
pending, or to the Depositor's knowledge, threatened against the Depositor,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement or any other Basic Document, (ii)
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by the Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, the Basic Documents or the Notes or (iv) relating to the
Depositor and which might adversely affect the federal income tax attributes
of the Notes.
SECTION 5.02. Liability of Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement, which
obligations shall include the following:
(a) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee and the Noteholders
and any of the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee and the Indenture Trustee from and against any loss,
liability or expense incurred by reason of (i) the Depositor's willful
misfeasance, bad faith or negligence in the performances of its duties under
this Agreement or any other Basic Document to which it is a party, or by
reason of reckless disregard of its obligations and duties under this
Agreement or any other Basic Document to which it is a party and (ii) any
breach of any of the Depositor's representations, warranties or covenants
contained herein.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee, as the case may be, and
the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Depositor shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf
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of whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts to the Depositor,
without interest.
SECTION 5.03. Merger or Consolidation of, or Assumption of the
Obligations of Depositor.
(a) Any person (i) into which the Depositor may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Depositor shall be a party or (iii) which may succeed to the properties
and assets of the Depositor substantially as a whole, shall be the successor
to the Depositor, respectively, without the execution or filing of any
document or any further act by any of the parties to this Agreement; provided,
however, that the Depositor hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (A)
the surviving Depositor executes an agreement of assumption to perform every
obligation of the Depositor under this Agreement, (B) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 5.01 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, (C) the
Depositor 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 or succession 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, (D) such transaction will not result in a
material adverse federal or state tax consequence to the Issuer or the
Noteholders and (F) the Depositor shall have delivered to the Eligible Lender
Trustee and the Indenture Trustee an Opinion of Counsel either (1) 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 (2) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interests.
SECTION 5.04. Limitation on Liability of Depositor and Others.
(a) Neither the Depositor nor any of the directors, officers,
employee or agents of the Depositor shall be under any liability to the
Issuer, the Noteholders or the Certificateholders for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect
the Depositor or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance or bad faith in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement (except for errors in judgment). The Depositor, and its directors,
officers, employees and agents, may rely in good faith on the advice of
counsel or on any document of any kind prima facie property executed and
submitted by any Person in request of any matters arising under this
Agreement.
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(b) The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment. This Agreement may be amended by the
Seller, the Depositor and the Eligible Lender Trustee, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or
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; 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 in any material
respect the interests of any Noteholder.
This Agreement may also be amended from time to time by the Seller
and the Eligible Lender Trustee, the Indenture Trustee and the Noteholders of
Notes evidencing not less than a majority of the Outstanding Amount of the
Notes, for the purpose of adding 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; 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 any Swap Counterparties or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders
of which are required to consent to any such amendment, without the consent of
all outstanding Noteholders and any Swap Counterparties.
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 Depositor, the Administrator,
each Noteholder, the Indenture Trustee, the Servicer and each of the Rating
Agencies.
It shall not be necessary for the consent of 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.
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SECTION 6.02. Protection of Interests in Trust.
(a) Each of the Seller and the Depositor 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 or the Depositor, as applicable,
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, as soon as available following such filing.
(b) Each of the Seller and the Depositor 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 Section
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) Each of the Seller and the Depositor shall have an obligation to
give the Eligible Lender Trustee, the Indenture Trustee and the Rating
Agencies at least sixty (60) days prior written notice of any change of its
location for purposes of the UCC if, as a result thereof, 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 or the Depositor 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 or the Depositor, as applicable, 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 Depositor shall, to the extent required by applicable law,
cause 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, 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
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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; 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, however, 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. Unless otherwise agreed by the recipient, all
demands, notices and communications upon or to the Seller, the Depositor, the
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 or postage prepaid, first class mail), and shall be deemed to
have been duly given upon receipt;
(a) in the case of the Seller, to
Xxxxx Fargo Bank South Dakota, National Association
000 Xxxx 00xx Xxxxxx, X
Xxxxx Xxxxx, XX 00000
Attention:
Telephone:
Telecopy:
(b) in the case of the Depositor, to
Xxxxx Fargo Student Loans Receivables I, LLC
[o]
Attention:
Telephone:
Telecopy:
(c) in the case of the Servicer, to
Xxxxx Fargo Bank South Dakota, National Association
[o]
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[o]
Attention: [o]
Telephone:
Telecopy:
with a copy to
[o]
Telephone:
Telecopy:
(d) in the case of the Issuer, to
Xxxxx Fargo Student Loan Trust 2001-1
c/o Bank One National Association
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee;
(e) in the case of the Issuer or the Eligible Lender
Trustee, at the Corporate Trust Office of the Eligible
Lender Trustee;
(f) in the case of the Indenture Trustee, at its Corporate
Trust Office;
(g) in the case of the Administrator, to
Xxxxx Fargo Bank Minnesota, National Association
[o]
Attention:
Telephone:
Telecopy:
with a copy to
[o]
Attention:
Telephone:
Telecopy:
(h) in the case of Fitch, to
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000;
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(i) in the case of Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000; and
(j) in the case of Standard & Poor's,
a division of The XxXxxx-Xxxx Companies, Inc. to
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Telephone: 000-000-0000
Facsimile: 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 or the Depositor. This Agreement may be assigned by
the Eligible Lender Trustee only to its permitted successor pursuant to the
Trust Agreement or otherwise in accordance with Section 6.10.
SECTION 6.05. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, the Depositor, the
Issuer, and the Eligible Lender Trustee and for the benefit of the Indenture
Trustee, the Noteholders 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.
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SECTION 6.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, 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 and the
Depositor hereby acknowledge and consent 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 or the Depositor, acquiesce, petition or otherwise invoke or
cause the Issuer or the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor 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 or
the Depositor or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer or the Depositor.
SECTION 6.12 Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary (other
than as provided in subsection (d)), this Agreement has been signed by Bank
One, not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Depositor and the Issuer and in no event shall Bank One
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 (other
than as provided in subsection (d)), this Agreement has been accepted by Chase
Manhattan Bank not in its individual capacity but solely as Indenture Trustee
and in no event shall Chase Manhattan Bank 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.
(c) Notwithstanding any other provision in this Agreement or the
other Basic Documents, nothing in this Agreement or the other Basic Documents
shall be construed to limit the legal responsibility of the Eligible Lender
Trustee or the Indenture Trustee, to the U.S. Secretary of Education or a
Guarantor for any violations of statutory or regulatory requirements that may
occur with respect to loans held by the Eligible Lender Trustee or the
Indenture Trustee
-20-
pursuant to, or to otherwise comply with their obligations under, the Higher
Education Act or implementing regulations.
SECTION 6.13. Agreement of Seller and Depositor. 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 the
Agreement. The Depositor agreee 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 the Agreement.
[Signatures Follow on Next Page]
-21-
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.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as trustee on
behalf of the Issuer
By: __________________________
Name:
Title:
XXXXX FARGO BANK STUDENT LOANS RECEIVABLES I, LLC
By: _________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee
By: ______________________
Name:
Title:
Acknowledged and accepted as of the day and year first above written:
CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By: __________________________
Name:
Title:
-22-
SCHEDULE A
[List of Initial Financed Student Loans]
[Provided at Closing and on file with Indenture Trustee]
SA-1
EXHIBIT A
TO THE LOAN SALE AGREEMENT
XXXX OF SALE
For $_______ received, in accordance with the Loan Sale Agreement
(the "Loan Sale Agreement") dated as of November [o], 2001, among Xxxxx Fargo
Bank South Dakota, National Association, as seller (the "Seller"), Xxxxx Fargo
Student Loans Receivables I, LLC, as depositor (the "Depositor"), Xxxxx Fargo
Student Loan Trust 2001-1 (the "Issuer") and Bank One, National Association,
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 Depositor and, with respect to legal title, unto the
Eligible Lender Trustee on behalf of the Depositor, 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 on and after the Cutoff Date net of
interest accrued prior to the Cutoff Date that is not to be capitalized, (iii)
all funds on deposit from time to time in the Trust Accounts, including the
Reserve Account Initial Deposit and the Collection Account Closing Date
Deposit and the Prefunding Account Closing Date Deposit, 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.
Immediately after the purchase and sale described above and in
Section 2.01(a) of the Loan Sale Agreement, but otherwise concurrently with
the execution and delivery hereof, the Depositor (and, with respect to legal
title to the Initial Financed Student Loans, Bank One, National Association,
as Eligible Lender Trustee on behalf of the Depositor), does hereby sell,
assign and otherwise convey to the Issuer (and, with respect to the legal
title to the Initial Financed Student Loans, to the Eligible Lender Trustee on
behalf of the Issuer) without recourse (subject to the Depositor's obligations
set forth in the Loan Sale Agreement and except as may be provided in the Loan
Sale Agreement), (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, the related Student Loan Files and all rights and
privileges relating thereto, (ii) all payments on or collections received
thereunder on and after the Cutoff Date net of interest accrued thereunder
prior to the Cutoff Date that is not to be capitalized, including without
limitation, Liquidation Proceeds and Recoveries; (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 the Prefunding Account
Closing Date Deposit, and in all investments and proceeds thereof (including
all income thereon); and (iv) all proceeds of any and all of the foregoing.
A-1
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 Administration Agreement, dated as of
November [o], 2001, among XXXXX FARGO STUDENT LOAN TRUST 2001-1, as Issuer,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION as Administrator, and CHASE
MANHATTAN BANK, 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 [o], 2001.
XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION,
as Seller
By:_________________________________
Name:
Title:
XXXXX FARGO STUDENT LOAN RECEIVABLES I, LLC,
as Depositor
By:_________________________________
Name:
Title:
A-2
EXHIBIT B
TO THE
LOAN SALE AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. _____ of [PREFUNDED LOANS] [SERIAL LOANS] dated as of
______________, _____, among XXXXX FARGO STUDENT LOAN TRUST 2001-1, a Delaware
trust (the "Issuer"), XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION, as
seller (the "Seller"), XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC, as
depositor (the "Depositor"), and BANK ONE, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity but solely as Eligible
Lender Trustee of the Depositor and the Issuer (the "Eligible Lender
Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer, the Seller, the Depositor and the Eligible
Lender Trustee are parties to the Loan Sale Agreement dated as of November
[o], 2001 (as amended or supplemented, the "Loan Sale Agreement"); and
WHEREAS, the Seller, the Depositor, and the Eligible Lender Trustee
are parties to the Trust Agreement dated as of November [o], 2001 (as amended
or supplemented, the "Trust Agreement"); and
WHEREAS, pursuant to the Loan Sale Agreement, the Seller wishes to
convey the [Prefunded Loans] [Serial Loans] referred to in Section 2 (the
"Additional Student Loans") to the Eligible Lender Trustee on behalf of the
Depositor ; and
WHEREAS, pursuant to the Loan Sale Agreement, the Depositor wishes to
convey the Additional Student Loans to the Eligible Lender Trustee on behalf
of the Issuer; and
WHEREAS, the Eligible Lender Trustee, the Depositor 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 Administration Agreement, dated as of November [o], 2001,
among the Issuer, Xxxxx Fargo Bank Minnesota, National Association, as
Administrator, and Chase Manhattan Bank, as Indenture Trustee, 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.
B-2
"Transfer Date" means, with respect to the Additional Student Loans,
________________, _______.
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
Issuer's delivery to or upon the order of the Depositor and the Depositor's
delivery to or upon the order of the Seller of $__________, for Additional
Student Loans during the Funding Period, such amount being the Loan Purchase
Amounts of the Additional Student Loans and such amount to be paid from
amounts on deposit in the Prefunding Account subject to the provisions of
Section 2.02(b) of the Loan Sale Agreement and Section 2(f) and Section 2(k)
of the Administration Agreement and after the Funding Period such amount being
the sum of [o], 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 Depositor and immediately
thereafter, the Depositor does hereby sell, assign and otherwise convey,
without recourse (except as expressly provided in the Loan Sale Agreement), to
the Eliglbe 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, on and
after the related Subsequent Cutoff Date;
(c) with respect to each such sale and conveyance by the
Depositor, all of the Depositor's right, title and interest in and
to this Agreement with respect to such Prefunded Loan and Serial
Loan; and
(d) all proceeds of any and all of the foregoing.
4. Conditions Precedent. The obligation of the Depositor and 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) (and, if the trustee for the Seller with
respect to the Additional Student Loans is other than Xxxxx Fargo
Bank South Dakota, National Association, in Section 4.02) of the
Loan Sale Agreement shall have been satisfied.
B-2
(c) Delivery of Xxxx of Sale. The Seller and the Depositor, as
applicable, 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 Depositor and the Issuer such information as was reasonably
requested by the Depositor or the Issuer, as applicable (such
reasonableness to be determined solely by the Seller) 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) 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. Third-Party Beneficiaries. The Indenture Trustee is an express
third-party beneficiary and may enforce the provisions of this Agreement as if
it were a party hereto.
7. 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.
8. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York, 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.
9. Headings. The section headings hereof have been inserted for
convenience of reference only and hall 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.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION,not in its
individual capacity but solely as Eligible Lender
Trustee on behalf of the Trust
By: ____________________________________
Name:
Title:
BANK ONE, not in its individual capacity but solely as
Eligible Lender Trustee
By: ____________________________________
Name:
Title:
XXXXX FARGO STUDENT LOAN RECEIVABLES I, LLC,
as Depositor
By:_________________________________
Name:
Title:
XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION,
as Seller
By: ____________________________________
Name:
Title:
Acknowledged and accepted as of the date first above written:
CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee
By:_________________________________
Name:
Title:
B-5
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
B-6
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 November [o], 2001, among XXXXX FARGO BANK
SOUTH DAKOTA, NATIONAL ASSOCIATION, as seller (the "Seller"), XXXXX FARGO
STUDENT LOANS RECEIVABLES I, LLC, as depositor (the "Depositor"), XXXXX FARGO
STUDENT LOAN TRUST 2001-1 (the "Issuer") and BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Eligible Lender Trustee (the
"Eligible Lender Trustee") [and as ratified by [name of eligible lender if
other than BANK ONE, NATIONAL ASSOCIATION with respect to the Additional
Student Loans] pursuant to Section 4.02 of the Loan Sale Agreement] and the
Transfer Agreement No. ____ dated as of ________, ____ (the "Transfer
Agreement") among the Seller, the Depositor, the Issuer and the Eligible
Lender Trustee, the Seller does hereby sell, assign, transfer and otherwise
convey unto the Depositor, and with respect to legal title, unto the Eligible
Lender Trustee on behalf of the Depositor, without recourse (subject to the
obligations set forth in the Loan Sale Agreement), and immediately thereafter
the purchase and sale described above but otherwise concurrently with the
execution and delivery hereof, the Depositor does hereby sell, asssign,
transfer and otherwise convey unto the Issuer and, with respect to legal
title, unto the Eligible Lender Trustee on behalf of the Issuer, 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, on and after the Subsequent
Cutoff Date net of interest accrued thereunder prior to the Subsequent Cutoff
Date that is not to be capitalized, including without limitation, Liquidation
Proceeds and Recoveries; (iii) with respect to each such sale and conveyance
by the Depositor, all of the Depositor's right, title and interest in and to
this Agreement with respect to each such Prefunded Loan and Serial Loan 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
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, the Depositor or the Issuer 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 Depositor or the Issuer, as applicable,
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
B-7
Transfer Agreement and is to be governed by the Loan Sale Agreement
and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Transfer Agreement.
B-8
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to
be duly executed as of _________________, ______.
XXXXX FARGO BANK SOUTH DAKOTA,
NATIONAL ASSOCIATION
as Seller
By: ____________________________________
Name:
Title:
XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC
as Depositor
By: ____________________________________
Name:
Title:
B-9
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 acquired or originated by
the Seller in the ordinary course of its business, (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, and (D) provides that the rights with respect thereto are
assignable by the lender thereunder and its assignees without the consent of
or notice to any person other than as may be required by the Higher Education
Act and such notice has been or will be given. 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
SLS Loans, unsubsidized Xxxxxxxx Loans, and those Consolidation Loans for
which the related loan application was submitted prior to January 1, 1993) and
Special Allowance Payments from the Department and Guarantee Payments from the
Guarantor and qualifies the Guarantor to receive reinsurance payments thereon
from the Department. If such Financed Student Loan is a Prefunded Loan, or a
Qualified Substitute Loan and is, in either case, guaranteed by an Additional
Guarantor, the aggregate principal balance of all Financed Student Loans
guaranteed by such Additional Guarantor (measured as of the Subsequent Cutoff
Date for such Financed Student Loan) following the addition of such Financed
Student Loan to the Issuer, did not exceed 5% of the principal balance of all
Financed Student Loans as of such date, and the aggregate principal balance of
all Financed Student Loans guaranteed by all Additional Guarantors measured as
of such date, following such addition, did not exceed 20% of the principal
balance of all Financed Student Loans as of such date. The principal balance
of each Financed Student Loan is not subject to change by reason of
adjustments to the related Borrower's account after the Cutoff Date relating
to matters or events occurring prior to the Cutoff Date.
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 opening of business on the Cutoff Date with respect to the Initial
Financial Student Loans and the Subsequent Cutoff Date, with respect to the
Prefunded Loans and Serial Loans. With respect to any Consolidation Loan
originated by the Issuer or any Prefunded Loan, Serial Loan or Qualified
Substitute 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 origination, in the case of such Consolidation
Loan, and as of the opening of business on the applicable Subsequent Cutoff
Date in the case of a Prefunded Loan, Serial Loan or Qualified Substitute
Student Loan. With respect to any Consolidation Loan, the principal balance of
which has been increased by the
C-1
principal balance of any related Add-on Consolidation Loan, information for
each category set forth in Schedule A has been provided with respect to such
Add-on Consolidation Loan and such information is true and correct in all
material respects as of the related Add-on Consolidation Loan Funding Date. No
selection procedures believed to be adverse to the Noteholders 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 respects as of the Cutoff Date, and, after the Closing
Date, any computer tape regarding any Consolidation Loan, Prefunded Loan,
Serial Loan or Qualified Substitute Student Loan made available to the Issuer
and its assigns is true and correct in all respects as of the date of
origination, in the case of a Consolidation Loan originated by the Issuer, as
of the applicable Add-on Consolidation Loan Funding Date, in the case of a
Consolidation Loan the principal balance of which is increased by the
principal balance of any related Add-on Consolidation Loan, and as of the
applicable Subsequent Cutoff Date, in the case of a Prefunded Loan, Serial
Loan or a Qualified Substitute Student Loan.
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, at the time
of origination in the case of a Consolidation Loan originated by the Issuer
and as of the applicable Add-on Consolidation Loan Funding Date in the case of
a Consolidation Loan the principal balance of which is increased by the
principal balance of any Add-on Consolidation Loan, 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 270 days overdue as of the Cutoff Date or more than 180 days overdue 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 270 days
or 180 days, as applicable, 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; the Seller has not waived and shall not waive any of the foregoing
other than as permitted by the Basic Documents; and as of the Cutoff Date, not
more than 20% of the Initial Financed Student Loans are more than 30 days
overdue.
C-2
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. Except in the case of Consolidation Loans
originated by the Issuer, immediately prior to the transfer and sale of each
Financed Student Loan to the Issuer, 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 Depositor, the
Depositor has transferred and sold such Financed Student Loan to the Issuer
and the Eligible Lender Trustee on behalf of the Depositor has 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.
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
Qualified Substitute Student Loans, Prefunded Loans, or Serial Loans), as of
the date of origination (in the case of a Consolidation Loan originated by the
Issuer) or as of the applicable Add-on Consolidation Loan Funding Date (in the
case of a Consolidation Loan the principal balance of which is increased by
the principal balance of any related Add-on Consolidation Loan) 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 promissory
note evidencing each Financed Student Loan.]
12. U.S. Obligors. Less than [o]% of the Financed Student Loans are
due from Persons not having a mailing address in the United States of America.
13. Interest Accruing. Each Financed Student Loan is accruing
interest (whether or not such interest is being paid currently, by the
Borrower or by the Department, or is being capitalized) at the maximum
interest rate permitted by the Higher Education Act and qualifies for Special
Allowance Payments, except as expressly permitted by the Basic Documents.
14. Seller's Representations. The representations and warranties of
the Seller contained in Section 4.01 are true and correct.
C-3
EXHIBIT D
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. The Seller is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States and is an "eligible lender" for purposes of the
Higher Education Act.
2. Power and Authority of the Seller. The Seller has full legal
power and authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full legal power and authority to sell and assign the
property to be sold and assigned to and deposited with the Depositor (or with
the Eligible Lender Trustee on behalf of the Depositor) and the Seller has
duly authorized such sale and assignment to the Depositor (or to the Eligible
Lender Trustee on behalf of the Depositor) by all necessary action; and the
execution, delivery and performance of this Agreement have been duly
authorized by the Seller by all necessary 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.
4. No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof or thereof do not
conflict with, result in any material breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or
both) a material default under, the charter or by-laws of the Seller, or any
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 Seller or its properties.
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 or the
transactions contemplated hereby, (ii) seeking to prevent the consummation of
any transactions contemplated by this Agreement, (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 or (iv) seeking to affect
adversely the Federal or state income tax attributes of the Issuer or the
Notes.
6. All Consents. No action, including, without limitation, the
granting or issuing of any consent, permit, license, approval, or
authorization is required to be made on or
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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) except such actions, if any, as have
been taken.
7. Official Record. This Agreement and all other documents related
hereto to which the Seller is a party have been approved by the Seller's board
of directors, which approval is reflected in the minutes of such board, and
shall continuously from time to time of each such document's execution, be
maintained as an official record of the Seller.
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EXHIBIT E
TO THE LOAN SALE AGREEMENT
ASSIGNMENT
For value received, in accordance with the Loan Sale Agreement (the
"Loan Sale Agreement") dated as of November [o], 2001, among XXXXX FARGO BANK
SOUTH DAKOTA, NATIONAL ASSOCIATION as seller (the "Seller"), XXXXX FARGO
STUDENT LOAN TRUST 2001-1 (the "Issuer"), XXXXX FARGO STUDENT LOANS
RECEIVABLES I, LLC (the "Depositor") and BANK ONE, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Eligible Lender Trustee (the
"Eligible Lender Trustee"), the Seller (and, with respect to legal title to
the Initial Financed Student Loans, does hereby sell, assign, transfer and
otherwise convey unto the Eligible Lender Trustee on behalf of the Depositor,
without recourse (subject to the obligations set forth in the Loan Sale
Agreement), all right, title and interest in and to (i) the Qualified
Substitute Student Loan(s) indicated in Schedule A hereto (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/or collections received thereunder on
and after the date hereof 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 Depositor of
any obligation of the Seller to the borrowers of Additional Student Loans or
any other Person in connection with the Additional Student Loans or any
agreement or instrument relating to any of them.
Immediately after the purchase and sale described above and in
Section 2.01(a) of the Loan Sale Agreement, but otherwise concurrently with
the execution and delivery hereof, the Depositor (and, with respect to legal
title to the Initial Financed Student Loans, Bank One, National Association,
as Eligible Lender Trustee on behalf of the Depositor), does hereby sell,
assign and otherwise convey to the Issuer (and, with respect to the legal
title to the Initial Financed Student Loans, to the Eligible Lender Trustee on
behalf of the Issuer) without recourse (subject to the Depositor's obligations
set forth in the Loan Sale Agreement and except as may be provided in the Loan
Sale Agreement), (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, the related Student Loan Files and all rights and
privileges relating thereto, (ii) all payments on or collections received
thereunder on and after the Cutoff Date net of interest accrued thereunder
prior to the Cutoff Date that is not to be capitalized, including without
limitation, Liquidation Proceeds and Recoveries; (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 the Prefunding Account
Closing Date Deposit, and in all investments and proceeds thereof (including
all income thereon); and (iv) all proceeds of any and all of the foregoing.
In addition, the undersigned, by execution of this instrument, hereby
endorse the promissory notes evidencing each Additional Student Loan in favor
of the Eligible Lender Trustee on behalf of the Issuer, without recourse
(subject to the obligations set forth in the Loan
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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 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 Administration Agreement, dated as of
November [o], 2001 among the Issuer, Xxxxx Fargo Bank Minnesota, National
Association, as Administrator, and Chase Manhattan Bank, as Indenture Trustee,
which also contains rules as to usage that shall be applicable herein.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed as of November [o], 2001.
XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION
as Seller
By: ____________________________________
Name:
Title:
XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC
By: ____________________________________
Name:
Title:
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